Addison Ins. Co. v. Fay

• Decision Date: 23 January 2009
• Docket Number: No. 105752.,105752.
• Citation: 328 Ill.Dec. 858,232 Ill.2d 446,905 N.E.2d 747
• Parties: ADDISON INSURANCE COMPANY, Appellee, v. Donna FAY et al., Appellants.
• Court: Illinois Supreme Court

905 N.E.2d 747

232 Ill.2d 446

328 Ill.Dec. 858

ADDISON INSURANCE COMPANY, Appellee, v. Donna FAY et al., Appellants.

No. 105752.

Supreme Court of Illinois.

January 23, 2009.

Rehearing Denied March 23, 2009.

Clifford W. Horwitz, Jay R. Luchsinger, Michael D. Carter, of Horwitz, Horwitz & Associates, Ltd., Chicago, for appellant Laura Shackelford.

Michael G. Mahoney, of Burke, Mahoney & Wise, Chicago, for appellant Donna Fay.

Cassiday Schade, LLP, Chicago (Jean M. Golden, Deborah A. Martin-Sheridan, Jamie L. Hull, Julie A. Teuscher and Brian A. Schroeder, of counsel), for appellee.

OPINION

Justice GARMAN delivered the judgment of the court, with opinion:

Plaintiff, Addison Insurance Company, brought this declaratory action in the circuit court of Will County against the defendants, the estates of two young boys who were injured as a result of an Addison policyholder's negligent maintenance of its property. The insured's liability is not at issue in this case. Rather, this court is asked to determine whether the injuries to the boys constitute a single or multiple occurrences under the terms of Addison's insurance policy.

BACKGROUND

At about 5 p.m. on April 30, 1997, Laura Shackelford watched her 14-year-old son, Everett Hodgins, leave her home. Hodgins left with his 15-year-old friend, Justice Carr. Shackelford believed the two boys had planned to go fishing. The two frequently fished in a nearby Commonwealth Edison cooling lake.

The two boys did not return that night. Around 10:30 p.m., Donna Fay, Justice Carr's mother, reported her son missing. The police responded that night and conducted a search. However, the police were unable to locate either boy at that time.

On May 3, 1997, the boys' bodies were found in an excavation pit on land near Justice Carr's home. The land belonged to Donald Parrish. At the time, Parrish operated a business from the property. Parrish was insured by the plaintiff, Addison Insurance Company (Addison).

The pit in which the boys were found was partially filled with water. The sand and clay around the pit was saturated, creating what an engineer testified is called a "quick condition."¹ A quick condition is one where a cushion of water prevents the soil from supporting a load of weight and can result in that load sinking and becoming trapped.

Carr and Hodgins fell prey to this condition. The boys were found at the edge of the pool of water, trapped in the wet clay and sand. Justice Carr was found facing the north bank of the pit. The lower half of his body was partially submerged in the water, and both of his legs were trapped in the sand and clay. Everett Hodgins was found facing south, toward Carr and the water. Hodgins had one leg trapped in the sand. His other leg was free. Although the two boys were facing different directions, both bodies were close in proximity and indeed were physically touching.

Both boys had been exposed to the cold water and cold weather during the time they had been missing. The doctor who performed the autopsy on each of the boys, Dr. Blum, concluded that the immediate cause of Hodgins's death was hypothermia. Dr. Blum determined that the immediate cause of Carr's death was drowning secondary to hypothermia. Addison's forensic expert, Dr. Case, concurred with Dr. Blum's findings. Neither of the physicians could conclude with any certainty the time of death of either boy, or how closely in time the boys had perished.

Witnesses for both parties acknowledged that Hodgins's and Carr's actions between the time they left Shackelford's home and the time they were found cannot be known. However, the investigators at the scene concluded that the boys had been trapped while returning home to get out of a storm that swept in during the evening of April 30. The boys used the Parrish property as a shortcut to Carr's house, which was very close to the pit. Testimony indicated that Carr's home was approximately 100 to 150 yards from where the boys were found.

The investigators concluded that when the boys reached the pit and the water, Carr attempted to jump across the water. In doing so, Carr became trapped. The investigators also concluded that Hodgins then attempted to help his friend out of the sand and clay, but became trapped himself. However, the investigators could not conclude how much time had elapsed between Carr's and Hodgins's entrapments, or whether the two boys were even together when Carr became trapped.

The families of the two boys initially brought suit against Donald Parrish. As Parrish's insurer, Addison agreed to settle the claims for an amount equal to the policy's limits. However, the parties dispute which policy limit applies. Addison's insurance policy with Parrish provides for a "General Aggregate Limit" of $2 million. The policy also contains an "Each Occurrence" limit of $1 million. Addison brought this declaratory action to resolve whether the boys' deaths constituted one or two occurrences, and therefore whether Addison was obligated to pay $1 million or $2 million to the defendants.

The trial court found that the injuries to Carr and Hodgins were the result of two occurrences. The court acknowledged that the evidence can be viewed "in ways that tend to support both sides [sic] positions." However, the court found the evidence sufficient to show that the causes of death were different, and that the circumstances immediately prior to the deaths were different.

The appellate court reversed. Relying on this court's decision in Nicor, Inc. v. Associated Electric & Gas Insurance Services Ltd., 223 Ill.2d 407, 307 Ill.Dec. 626, 860 N.E.2d 280 (2006), and a decision by a New Jersey appellate court with similar facts, Doria v. Insurance Co. of North America, 210 N.J.Super. 67, 509 A.2d 220 (1986), the appellate court concluded that the boys' deaths were "so closely linked in time and space as to be considered by a reasonable person as one `occurrence.'" 376 Ill.App.3d 85, 91, 314 Ill.Dec. 680, 875 N.E.2d 190.

The substantive issue presented to this court is whether the deaths of Justice Carr and Everett Hodgins constitute a single occurrence or separate occurrences under the terms of Parrish's insurance policy. For the reasons that follow, we conclude that the deaths of Carr and Hodgins constitute two separate occurrences.

ANALYSIS

I. Standard of Review

The construction of a provision of an insurance policy is a question of law, subject to de novo review. Nicor, 223 Ill.2d at 416, 307 Ill.Dec. 626, 860 N.E.2d 280. Both parties accept this standard with respect to determining the meaning of "occurrence" under the policy.

However, Addison contends that the findings of the trial court should also be reviewed de novo in determining the number of occurrences. In contrast, defendants argue that the appellate court improperly disregarded the trial court's factual findings in concluding that the boys came to the pit together and were trapped moments apart. Defendants instead argue that this court should apply a manifest weight standard in reviewing the trial court's findings.

Defendants cite three cases in support of their position, Marx Transport, Inc. v. Air Express International Corp., 379 Ill. App.3d 849, 318 Ill.Dec. 158, 882 N.E.2d 1281 (2008), Dean Management, Inc. v. TBS Construction, Inc., 339 Ill.App.3d 263, 274 Ill.Dec. 161, 790 N.E.2d 934 (2003), and Clean World Engineering, Ltd. v. MidAmerica Bank, FSB, 341 Ill.App.3d 992, 275 Ill.Dec. 630, 793 N.E.2d 110 (2003). Each of these cases is inapposite.

First, in Marx Transport the standard of review was not at issue. Both parties agreed that the court should adopt the manifest weight standard, and the court conducted no analysis as to whether that standard was correct. Marx Transport, 379 Ill.App.3d at 854, 318 Ill.Dec. 158, 882 N.E.2d 1281.

Dean Management and Clean World Engineering also fail to support defendants' claim. Nothing within the appellate court's opinion in either case indicates that the trial court relied exclusively on documentary evidence. Indeed, the appellate court in Dean Management referred to several witnesses' testimony at trial. Dean Management, 339 Ill.App.3d at 268, 274 Ill.Dec. 161, 790 N.E.2d 934 ("Dostal corroborated Kehm's testimony at trial").

What Dean Management and Clean World Engineering do reflect is the general proposition that a reviewing court should not overturn a trial court's findings merely because it does not agree with the lower court. Bazydlo v. Volant, 164 Ill.2d 207, 214-15, 207 Ill.Dec. 311, 647 N.E.2d 273 (1995). Instead, the reviewing court should overturn those findings only if they are against the manifest weight of the evidence. Bazydlo, 164 Ill.2d at 214-15, 207 Ill.Dec. 311, 647 N.E.2d 273.

The appellate court in Dean Management cites Bazydlo for that very proposition. Defendant Shackelford also quotes Bazydlo in its reply brief. However, the defendants overlook, and indeed omit from the quotation, language articulating the rationale behind applying a manifest weight standard to the trial court's findings.

This court in Bazydlo stated that "[t]he trial judge, as the trier of fact, is in a position superior to a reviewing court to observe witnesses while testifying, to judge their credibility, and to determine the weight their testimony should receive." Bazydlo, 164 Ill.2d at 214-15, 207 Ill.Dec. 311, 647 N.E.2d 273. See also Clean World Engineering, 341 Ill.App.3d at 997, 275 Ill.Dec. 630, 793 N.E.2d 110.

In this case, the trial court heard no live testimony. Both parties acknowledged at oral argument that all testimony was submitted by admitting discovery depositions into evidence. The trial court was not required to gauge the demeanor and credibility of witnesses. See State Bank of Clinton v. Barnett, 250 Ill. 312, 315, 95 N.E. 178 (1911). Instead, the trial court made factual findings based upon the exact record presented to both the appellate court and to this court. Without having heard live testimony, ...