Am. Access Cas. Co. v. Alassouli

• Decision Date: 29 April 2015
• Docket Number: No. 1–14–1413.,1–14–1413.
• Citation: 31 N.E.3d 803
• Parties: AMERICAN ACCESS CASUALTY COMPANY, Plaintiff–Appellant, v. Farid ALASSOULI and Eileen Benson, Defendants–Appellees.
• Court: United States Appellate Court of Illinois

31 N.E.3d 803

AMERICAN ACCESS CASUALTY COMPANY, Plaintiff–Appellant

v.Farid ALASSOULI and Eileen Benson, Defendants–Appellees.

No. 1–14–1413.

Appellate Court of Illinois, First District, Third Division.

April 29, 2015.

Brianne M. Connell, of James P. Newman & Associates, Inc., of St. Charles, IL, for appellant.

Dean Haritos and Cynthia Ramirez, both of Morse Bolduc & Dinos, LLC, of Chicago, IL, for appellees.

OPINION

Justice HYMAN

delivered the judgment of the court, with opinion.

¶ 1 Farid Alassouli made a left turn in front of Eileen Benson as she was driving through an intersection. To avoid hitting Alassouli's car, Benson made an evasive maneuver and struck the front end of another car. Benson made a claim against Alassouli's insurer, American Access Casualty Company (AACC). AACC tried to obtain information about the accident from Alassouli by leaving phone messages, which were not returned, and conducting a skip trace. When AACC could not locate Alassouli, it filed this declaratory judgment action seeking adjudication that it owes no duty to defend or indemnify Alassouli or Benson because Alassouli breached the insurance policy's cooperation clause. The trial court granted Benson's motion for summary judgment on the basis that AACC had not established substantial prejudice by Alassouli's breach of the cooperation clause.

¶ 2 We affirm. AACC failed to present evidence that: (i) it acted with reasonable diligence to secure Alassouli's cooperation in its investigation; (ii) Alassouli's failure to cooperate was willful; or (iii) Alassouli's breach of the cooperation clause substantially prejudiced it.

¶ 3 BACKGROUND

¶ 4 On May 1, 2011, Farid Alassouli turned left from 79th Street onto Roberts Road in Bridgeview, Illinois, just in front of Eileen Benson's car as she passed through the intersection. To avoid striking Alassouli's car, Benson swerved, but then struck the front end of a car driven by Jacek Sader. Police cited Alassouli for failing to yield to oncoming traffic.

¶ 5 After the accident, Benson made a claim against Alassouli's AACC insurance policy for damages. An AACC claims adjuster, Cary Loseau, called Alassouli to clarify the facts surrounding the accident and obtain necessary information regarding the events leading up to the accident. Alassouli answered the call and identified himself. But once Loseau told Alassouli that AACC would be recording his statements, Alassouli hung up. Loseau immediately placed another call that went to voicemail, left a “detailed message regarding the need for additional information and informed Alassouli of the importance of returning the call.” Five days later, AACC called Alassouli at the same number, leaving a message with his roommate, who promised that he would have Alassouli return the call. Alassouli never called back. AACC made two more phone calls, leaving messages, but again, no response from Alassouli. AACC then conducted a skip trace that revealed nothing about Alassouli's whereabouts. In total, AACC's efforts spanned 13 days and included 5 phone calls and a skip trace.

¶ 6 On December 10, 2012, AACC filed a declaratory action against Alassouli and Benson seeking an adjudication that it owes no duty to defend or indemnify Alassouli for any claim arising out of the accident. AACC maintains that it has no duty to defend or indemnify because Alassouli breached the insurance policy's cooperation clause when he failed to communicate with AACC after the numerous phone calls and messages. Benson appeared and filed an answer; Alassouli failed to appear or answer, and the trial court entered a default order against him. (Benson also filed a separate personal injury complaint against Alassouli in the circuit court of Cook County).

¶ 7 AACC's cooperation clause provides:

“The insured shall cooperate with the Company and, upon the Company's request or through attorneys selected by the Company to represent the insured must * * * (b) assist in making settlements, securing and giving evidence, obtaining the attendance of witnesses and in the conduct of any legal proceedings in connection with the subject matter of this insurance * * * (i) allow the Company to take signed and recorded statements and answer all questions we may ask when and as often as we may require; (j) submit to examinations under oath as often as the Company requires, outside the presence of any other insured or person to be examined under oath * * *. The company has no duty to provide coverage under this policy unless there has been full compliance with these responsibilities * * *.”

¶ 8 On June 5, 2013, AACC filed a motion for summary judgment, arguing it owes no duty to defend or indemnify Alassouli because he breached the cooperation clause. The trial court denied the motion. A few months later, Benson filed a motion for summary judgment against AACC, arguing that Alassouli did not breach the insurance policy, as a matter of law, because AACC neither showed that it had been substantially prejudiced by the breach nor exercised due diligence in attempting to contact Alassouli. In support, Benson attached affidavits of Sader and Jose De Anda.

¶ 9 Sader, in his affidavit, stated he saw Alassouli attempt to make a left turn in front of Benson without properly yielding, causing Benson to make an evasive maneuver to avoid hitting Alassouli. In evading Alassouli's car, Sader stated, Benson collided with the front end of Sader's car. De Anda, an independent witness, reported that he saw a “medium sized sedan” make a left turn directly in front of a sport utility vehicle (SUV), and the SUV had to make an evasive maneuver to avoid contact with the sedan. While the SUV successfully avoided the sedan, it struck another car that was stopped at a red light. De Anda's affidavit does not identify the drivers.

¶ 10 AACC responded to Benson's motion for summary judgment and filed a cross-motion for summary judgment. AACC argued that Alassouli's breach of the cooperation clause was willful and, therefore, prejudice is presumed. AACC attached affidavits from AACC claims adjuster Cary Loseau and Gunther Polak, a private investigator retained to locate Alassouli about two years after the incident. Loseau recounted the efforts he made to contact Alassouli via five telephone calls and the skip trace. Polak stated that he went to Alassouli's known address in Justice, Illinois, but a new tenant lived in the apartment and had no knowledge of its former occupants. Polak talked to neighbors in the apartment building who also were unable to provide any information. Polak obtained no additional or updated information from the vehicle registration or driver's license. Polak stated that a skip trace showed a post office box address in Bedford Park, Illinois, as well as a “very recent mid-year 2013” address in San Diego, California. But Polak was unable to verify the information and no telephone number, published or unpublished, was at the California address in Alassouli's name. Finally, the post office box in Bedford Park was closed and a forwarding address led to another apartment building in Justice. Polak visited the new apartment building but did not find any trace of Alassouli at that location or elsewhere. (Polak's affidavit is dated January 10, 2014, and the record suggests that his investigation occurred in the latter half of 2013.)

¶ 11 Following the hearing on the cross-motions for summary judgment, the trial court entered judgment in favor of Benson because AACC failed to show Alassouli's failure to cooperate substantially prejudiced it.

¶ 12 STANDARD OF REVIEW

¶ 13 “Summary judgment is appropriate where the pleadings, depositions, admissions, and affidavits show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law.” Direct Auto Insurance Co. v. Beltran, 2013 IL App (1st) 121128, ¶ 43, 376 Ill.Dec. 182, 998 N.E.2d 892

. A triable issue of fact exists “where there is a dispute as to material facts, or where, the material facts being undisputed, reasonable persons might draw different inferences from the facts.” (Internal quotation marks omitted). Wolfram Partnership, Ltd. v. LaSalle National Bank, 328 Ill.App.3d 207, 215, 262 Ill.Dec. 404, 765 N.E.2d 1012 (2001). An appellate court reviews a disposition of summary judgment de novo.

Beltran, 2013 IL App (1st) 121128, ¶ 43, 376 Ill.Dec. 182, 998 N.E.2d 892.

¶ 14 ANALYSIS

¶ 15 AACC argues that the trial court erred in granting summary judgment on the grounds that AACC failed to show it was substantially prejudiced by Alassouli's breach of the cooperation clause. Specifically, AACC contends it need not establish prejudice, but, in any event, did show prejudice by Alassouli's breach of the cooperation clause.

¶ 16 General principles of contract law govern insurance contracts. Waste Management, Inc. v. International Surplus Lines Insurance Co., 144 Ill.2d 178, 191, 161 Ill.Dec. 774, 579 N.E.2d 322 (1991)

. The terms of the contract define and control the scope of duties imposed on an insurer and the insured. Id. Courts should enforce clear and unambiguous provisions of insurance contracts according to their plain meaning. Id. at 191–92, 161 Ill.Dec. 774, 579 N.E.2d 322.

¶ 17 A cooperation clause prevents collusion between the insured and injured and enables an insurer to prepare its defense to a claim. M.F.A. Mutual Insurance Co. v. Cheek, 66 Ill.2d 492, 496, 6 Ill.Dec. 862, 363 N.E.2d 809 (1977)

. “Any condition in the policy requiring cooperation on the part of the insured is one of great importance [citation], and its purpose should be observed [citation].” Waste Management, 144 Ill.2d at 191, 161 Ill.Dec. 774, 579 N.E.2d 322. The insurer usually has little or no knowledge of the facts surrounding a claim, while the insured has knowledge of the facts. Id. at 204, 161 Ill.Dec. 774, 579 N.E.2d 322. Thus, the insurer depends on the insured for fair disclosure. Id. The insured has no duty to assist the insurer in any effort to...