American Serv. Ins. CO v. CITY of CHICAGO
| Decision Date | 17 September 2010 |
| Docket Number | No. 1-09-1693.,1-09-1693. |
| Citation | 404 Ill.App.3d 769,935 N.E.2d 715,343 Ill.Dec. 707 |
| Parties | AMERICAN SERVICE INSURANCE CO., Plaintiff-Appellant, v. CITY OF CHICAGO, Defendant-Appellee, (Medmarc Casualty Insurance Co., Plaintiff, David Carrillo, Sylvia Vargas, and Josue Lamontagne, Defendants.) |
| Court | United States Appellate Court of Illinois |
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Newman Raiz, LLC, Chicago (James P. Newman, William H. Ransom), for Appellant.
Mara S. Georges, Corporation Counsel of the City of Chicago, Chicago (Benna Ruth Solomon, Myriam Zreczny Kasper, Jennifer Erickson Baak, of counsel), for Appellee.
This is an interlocutory appeal. The trial court dismissed the two claims which plaintiff American Service Insurance Company (ASI) had brought against defendant City of Chicago, on the ground that these two claims were now moot. In this interlocutory appeal, plaintiff ASI appeals the dismissal of these two claims. For the reasons discussed below, we reverse the partial dismissal order and remand for proceedings consistent with this opinion.
This appeal involves two separate types of actions. First, the City of Chicago (City) filed administrative actions against David Carrillo, Sylvia Vargas and Josue Lamontagne who were all involved in separate motor vehicle accidents that resulted in damage to City property. The automobile liability insurance policies belonging to Carrillo and Vargas were issued by ASI; and Lamontagne's policy was issued by Medmarc Casualty Insurance Company (Medmarc).
The second type of action was a suit filed in the circuit court of Cook County by ASI and Medmarc in which the insurance companies sought to defeat any liability by them for coverage for these administrative judgments. It is this suit which is the subject of this appeal. In this circuit court suit, the defendants were: the City, which had sought administrative judgments from the policyholders; and the policyholders themselves.
In the circuit court action, plaintiff ASI sought and obtained default orders against the ASI policyholders. As a result, defendant City moved to dismiss ASI's claims against it on the grounds that, since plaintiff ASI had already obtained default orders against the policyholder defendants, it lacked standing to pursue the policyholders' claims; and that ASI's claims were now moot. The trial court granted the motion, which resulted in a partial dismissal of the case.
The only claims that were dismissed by the trial court were the claims of plaintiff ASI against defendant City. The claims that were not dismissed were: (1) plaintiff Medmarc's claims against the City; (2) plaintiff Medmarc's claims against the sole Medmarc policyholder, Josue Lamontagne; and (3) plaintiff ASI's claims against the two ASI policyholders, David Carrillo and Sylvia Vargas. Even though the dismissal was only partial, the trial court found no reason to delay the appeal of its order and this interlocutory appeal followed.
Plaintiffs ASI and Medmarc are insurance companies that are doing business in Illinois and that provide policies of automobile liability insurance to Illinois residents.
The sole appellant is plaintiff ASI, and it appeals the trial court's order dismissing, with respect to ASI only, counts I and II. These two counts are the counts of the complaint against the City. Plaintiff Medmarc is not a party to this appeal, because the trial court stayed counts I and II with respect to plaintiff Medmarc, and stayed counts III, IV and V with respect to both plaintiffs, pending the outcome of this appeal.
The sole appellee is defendant City of Chicago (City). None of the policyholder defendants filed appearances or chose to file briefs in this appeal. There appears to be some confusion concerning who the policyholder defendants are. In its notice of appeal, plaintiff ASI listed the policyholder defendants as David Carrillo, Sylvia Vargas and Josue Lamontagne. These are also the same policyholder defendants listed in the caption of both the trial court's dismissal order and plaintiffs' third amended complaint, which was the subject of the dismissal order. However, in the caption on its appellate briefs, plaintiff ASI listed the policyholder defendants as Jan Kisielewski, 1 David Carrillo, Sylvia Vargas and Stanislaw Brzeszcz. 2 By contrast, in the caption to its appellate brief, defendant City listed the individual defendants as provided in plaintiff's notice of appeal. In this opinion, for the purpose of determining the appropriate policyholder defendants, we have relied on the notice of appeal, as well as the dismissal order and plaintiffs' own complaint.
As explained above, there are only three policyholder defendants: Carrillo and Vargas, who owned vehicles insured by plaintiff ASI; and Lamontagne, who owned a vehicle insured by plaintiff Medmarc. While operating their respective vehicles, Carrillo, Vargas and Lamontagne were all involved in separate motor vehicle collisions which resulted in damage to City property.
Defendant City filed administrative complaints in which it alleged that the policyholder defendants violated several sections of the Chicago Municipal Code. In these complaints, defendant City sought money for property damage repairs, statutory penalties, attorney fees and administrative costs. The administrative complaints were brought before administrative hearing officers, in the City's Department of Administrative Hearings.
For example, the administrative complaint against defendant Carrillo contained three counts, and all three counts sought money pursuant to section 8-4-120 of the Chicago Municipal Code, (Chicago Municipal Code, § 8-4-120 amended July 29, 1998)), which provides that any person injuring city property shall be fined between $200 and $500. The second count was brought pursuant to section 1-20-020 (Chicago Municipal Code, § 1-20-020 (amended July 21, 2004)), which permitted the City to recover costs; and the third count was brought pursuant to section 1-20-060 (Chicago Municipal Code, § 1-20-060 (amended July 21, 2004)), which authorized the City to recover attorney fees and collection costs. Although the complaint's prefatory paragraphs alleged that defendant's actions had violated provisions of the Illinois Vehicle Code, the three counts sought monies only pursuant to specific Municipal Code sections.
The third amended complaint, filed March 5, 2009, is the subject of the trial court's dismissal order. In counts I and II, plaintiffs sought relief against defendant City. Plaintiffs sought injunctive relief in count I and declaratory relief in count II. In these counts, plaintiffs allege that the City's administrative tribunals lacked subject matter jurisdiction over motor vehicle collisions; that the City's administrative complaints violated the Illinois Constitution's guarantee of a jury trial for tort claims; and that statutory law also did not permit recovery for automobile collisions in administrative tribunals.
In counts III, IV and V, plaintiffs sought relief against the policyholder defendants. In count III, plaintiffs sought a declaration that the damages alleged by defendant City were not covered under the policies issued by plaintiffs. In count IV, plaintiff ASI claimed a policy defense of late notice against policyholder defendant Carrillo; and in count V, plaintiff Medmarc also claimed late notice against defendant Lamontagne.
As noted above, there are two different types of actions involved on this appeal, and default orders occurred in both types. First, there are the underlying administrative actions by the City against the policyholders, in which the City is the plaintiff and the policyholders are the defendants. Second, there is this suit, filed by the plaintiff insurance companies in the circuit court of Cook County, in which the City is now a defendant, as are the policyholders.
In one of the underlying administrative actions, the City nonsuited the action. On December 17, 2007, the City nonsuited its administrative complaint against policyholder David Carrillo. On April 5, 2007, the City had previously obtained a default judgment against Carrillo in the amount of $12,518.08. The notice of the default judgement informed Carrillo that he had 21 days to file a petition to vacate with the Department of Administrative Hearings (DOAH). In its complaint, ASI admits that it received notice of the claim from Carrillo on February 15, 2007, long before the entry of the default judgment. The City states in its appellate brief that Carrillo subsequently filed a motion before DOAH to set aside the judgment, and that the City then nonsuited its administrative suit on December 17, 2007. 3
In the other underlying administrative action against an ASI policy holder, the City obtained a default judgment against policyholder Sylvia Vargas on April 23, 2007, in the amount of $9,979.18.
In the circuit court action, plaintiff ASI moved for and obtained default orders against both ASI policyholder defendants, Carrillo and Vargas. The trial court granted plaintiff ASI a default order against Carrillo on January 7, 2008, and against Vargas on January 7, 2008. 4
The appellate record does not indicate that plaintiff Medmarc moved for a default order against Lamontagne, the sole Medmarc policyholder named in the complaint; and the City did not move to dismiss plaintiff Medmarc on that ground.
Defendant City claimed that, in December 2007, it stopped using the administrative complaint at issue in this suit and replaced it with a new complaint. In its appellate brief, defendant City stated: ...
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