American Country Ins. Co. v. Bruhn
| Decision Date | 30 June 1997 |
| Docket Number | No. 2-96-0921,2-96-0921 |
| Citation | 289 Ill.App.3d 241,682 N.E.2d 366,224 Ill.Dec. 805 |
| Parties | , 224 Ill.Dec. 805 AMERICAN COUNTRY INSURANCE COMPANY, Plaintiff-Appellant, v. Marjorie BRUHN, as Adm'r of the Estate of Kristeen Anne Kaufman, Deceased, et al., Defendants-Appellees. |
| Court | United States Appellate Court of Illinois |
Alvin R. Becker, Timothy M. Kelly, Beermann, Swerdlove, Woloshin, Barezky, Becker, Genin & London, Chicago, for American Country Ins. Co.
Larry M. Amoni, Kathleen M. Krist, Law Offices of Larry M. Amoni, P.C., Aurora, for Marjorie Bruhn Administrator.
Irving Slutzky, Slutzky & Slutzky, Niles, for Todd Raymond Nebel.
The plaintiff, American Country Insurance Company, appeals from an order of the circuit court of Kane County which entered judgment in favor of the defendants, Marjorie Bruhn, administrator of the estate of Kristeen Anne Kaufman (deceased), and Todd Raymond Nebel, in a declaratory judgment suit after the close of the plaintiff's case. We reverse.
On December 17, 1988, while driving his automobile, Nebel struck and killed two pedestrians, Kristeen and Lee Kaufman, on West Highland Avenue in Aurora, Illinois. The police questioned Nebel about the accident in June 1989, but Nebel denied involvement. Nebel concealed his involvement in the accident until January 21, 1992, when he was questioned again by the police and admitted his involvement in the accident.
On February 18, 1992, the People of the State of Illinois indicted Nebel in a two-count indictment, alleging that Nebel committed the offense of reckless homicide in the deaths of Kristeen and Lee Kaufman. Ill.Rev.Stat.1991, ch. 38, par. 9--3 (now 720 ILCS 5/9--3 (West 1994)). On May 6, 1992, the State amended its indictment to include a third count, alleging that Nebel committed the felony offense of leaving the scene of a personal injury accident. Ill.Rev.Stat.1991, ch. 95 1/2, par. 11--401 (now 625 ILCS 5/11--401(b) (West 1994)).
On May 6, 1992, Nebel entered a plea of guilty in the offense of leaving the scene of a personal injury accident. The assistant State's Attorney provided the court with the factual basis for the guilty plea:
"If the State's witnesses were called, those witnesses would establish proof beyond a reasonable doubt that on or about December 17, 1988, this Defendant before you, Todd R. Nebel, committed the offense of leaving the scene of a personal injury accident, which is a Class IV felony, * * * in that said Defendant intentionally failed to stop the vehicle he was driving after that vehicle was involved in an accident at 548 West Highland Avenue, in Aurora, Kane County, Illinois, in which Kristeen Kaufman and Lee Kaufman were killed as a result of that accident, and thereafter failed to report the accident to any police station or sheriff's office near the place where the accident occurred within three hours after the accident, and there was no physical incapacity of the Defendant which would obviate that duty."
Thereafter, the trial judge inquired, "Is this about what the State's evidence would show if we went to trial?" In response Nebel replied, "Yes."
On July 27, 1992, Bruhn commenced a three-count action against Nebel alleging that on December 17, 1988, while operating a motor vehicle, Nebel struck and killed Kristeen Kaufman. Count I alleged negligence, count II alleged wrongful death, and count III alleged intentional infliction of emotional distress. In August 1992, Nebel notified the plaintiff of the accident, but refused to provide a statement. The plaintiff undertook the defense of Nebel but filed a reservation of rights.
On March 30, 1993, the plaintiff filed a complaint for declaratory judgment against Nebel and Bruhn. The plaintiff alleged that it issued an automobile insurance policy to Nebel that was in effect at the time of the accident. However, the complaint also alleged that it had no duty to defend or indemnify Nebel with respect to the death of Kristeen Kaufman because Nebel failed to comply with the notice and cooperation provisions of the insurance contract. The insurance policy at issue provides:
"PART E--DUTIES AFTER AN ACCIDENT OR LOSS
We must be notified promptly of how, when and where the accident or loss happened. Notice should also include the names and addresses of any injured persons and of any witnesses.
A person seeking coverage must:
1. Cooperate with us in the investigation, settlement or defense of any claim or suit.
2. Promptly send us copies of any notices or legal papers received in connection with the accident or loss.
3. Submit, as often as we reasonably require, to physical exams by physicians we select."
On February 14, 1994, the plaintiff filed a motion for summary judgment in its declaratory judgment action. On March 16, 1994, Bruhn filed a response to the motion for summary judgment claiming that Nebel's notice in August 1992 was reasonable and timely under the circumstances because he had successfully concealed his involvement in the accident for three years. Bruhn also argued that judgment on the plaintiff's declaratory judgment action should be stayed because it was premature based on the underlying wrongful death claim. On June 14, 1994, Judge R. Peter Grometer denied the plaintiff's motion for summary judgment and stayed final resolution of the declaratory judgment action until the wrongful death action was resolved. The plaintiff filed an interlocutory appeal based on the court's decision to stay the declaratory judgment action. This court affirmed the trial court's decision in a Rule 23 order (No. 2--94--0760 (April 28, 1995)).
On December 7, 1995, Bruhn and Nebel caused a stipulated judgment to be entered in the wrongful death case. The judgment was entered against Nebel as to counts I, II, and III of Bruhn's complaint, in the amount of $25,000, plus costs. However, the judgment provided that the award could only be collected from whatever rights Nebel had in his insurance policy and not from Nebel's personal assets.
A bench trial based on the declaratory judgment action began on July 10, 1996. The parties stipulated to the admission of the following documents: the automobile insurance policy issued to Nebel by the plaintiff; Nebel's answer to an interrogatory; Nebel's indictment; Nebel's oral guilty plea; Nebel's written guilty plea; the judgment order in the criminal case; the summons and complaint in the wrongful death claim filed by Bruhn against Nebel; and the judgment in favor of Bruhn in the wrongful death claim.
The plaintiff called only one witness, Arthur Siemers, who testified that he had been a claim representative for 30 years and had been employed by the plaintiff for the last 22 years. Siemers stated that Nebel was insured by the plaintiff on December 17, 1988. The policy required Nebel to provide the plaintiff with prompt notice of any accident. Siemers stated that Nebel first provided the plaintiff with notice of the accident on August 26, 1992, when Nebel called Siemers. While speaking with Nebel, Siemers filled out an accord form, which is used in the ordinary course of the plaintiff's business to record the first report of an accident. The accord form was admitted into evidence. Siemers asked Nebel for a recorded statement in order to assess liability for the accident, but Nebel refused to comply. Siemers recorded Nebel's refusal. This document was also admitted into evidence.
Nebel's attorney later told Siemers that Nebel had concealed the accident from the police for three years. Nebel's attorney sent Siemers copies of the police reports and some investigative materials prepared by the police. The police reports and investigative materials indicated that Nebel lied about his involvement in the accident when questioned by the police in June 1989, but later admitted his involvement when the police questioned him again on January 21, 1992. Nebel explained his concealment by saying that he listened to some people who gave him bad advice. The trial court admitted the police reports and investigative materials into evidence.
Siemers stated that he believed the plaintiff had policy defenses based on Nebel's late notice and lack of cooperation; therefore, Siemers dictated a reservation of rights letter, recommended that counsel be retained to file a declaratory judgment action, and referred the wrongful death suit to counsel for defense. Siemers also stated that, based on Nebel's late notice and refusal to give a statement, the plaintiff was unable to undertake a meaningful investigation of the accident.
On cross-examination, Siemers admitted that he did not view the scene of the accident or canvass the neighborhood looking for witnesses. Siemers further stated that the plaintiff did not undertake any investigation of the accident and never asked Nebel to undergo a physical examination. Siemers also stated that the summons and complaint he received from Nebel could constitute sufficient notice under the duty promptly to send notice of any legal papers in connection with an accident.
Siemers also stated that there were three basic areas that the plaintiff investigated when adjusting an insurance claim: damages, proximate cause, and liability. Siemers stated that the plaintiff would not have investigated the damages because there had been two deaths in the case. With regard to proximate cause, adjusters or outside investigators would ordinarily speak with neighbors or anyone who may have witnessed the accident, would get a weather report for the day, and then review the police report.
At the close of the plaintiff's case, the defendants moved for a finding pursuant to section 2--1110 of the Code of Civil Procedure (735 ILCS 5/2--1110 (West 1994)). Judge Melvin E. Dunn granted the defendants' motion, stating:
"[M]y feeling is that the notice was made properly, given the circumstances; that Mr. Nebel could not be expected to come forward and voluntarily admit to a...
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