Country Mut. Ins. Co. v. Under Constr. & Remodeling, Inc.
| Docket Number | 1-21-0600 |
| Decision Date | 22 December 2021 |
| Citation | 2021 IL App (1st) 210600,196 N.E.3d 590,458 Ill.Dec. 286 |
| Parties | COUNTRY MUTUAL INSURANCE COMPANY, Plaintiff-Appellee, v. UNDER CONSTRUCTION AND REMODELING, INC., and Kazimierz Szymanski, Defendants (Kazimierz Szymanski, Defendant-Appellant). |
| Court | United States Appellate Court of Illinois |
David M. Barish and Abdu-Raheem Igbadume, of Katz, Friedman, Eagle, Eisenstein, Johnson, Bareck & Bertuca, P.C., of Chicago, for appellant.
David W. Porter and Rita Louise Lowery Gitchell, of Chilton Yambert Porter LLP, of Geneva, for appellee.
¶ 1 Defendant Kazimierz Szymanski1 was allegedly injured while working for his employer, defendant Under Construction and Remodeling, Inc. (Under Construction), and filed a workers’ compensation claim. Plaintiff Country Mutual Insurance Company, which had issued a workers’ compensation insurance policy to Under Construction, sought to investigate Szymanski's claim and contacted Under Construction for information. When Under Construction failed to respond after repeated attempts to reach it, plaintiff filed a complaint for declaratory judgment in the circuit court of Cook County, alleging that plaintiff owed no duty to defend or indemnify Under Construction because Under Construction had breached the insurance policy's cooperation clause. Under Construction did not file an appearance in the lawsuit, and the court entered a default judgment against it. Plaintiff then moved for summary judgment, which was granted on the basis of Under Construction's breach of the cooperation clause. Szymanski appeals, and for the reasons set forth below, we reverse and remand.
¶ 3 The facts underlying the instant appeal are taken from plaintiff's complaint and the exhibits attached thereto, as well as plaintiff's motion for summary judgment. Since the issue on appeal turns on the adequacy of plaintiff's attempts to contact Under Construction, we relate the facts concerning that issue in some detail.
¶ 4 On June 28, 2016, Under Construction submitted an application for a workers’ compensation insurance policy with plaintiff, using an insurance agent named Kathy Spiewak. According to the application, Under Construction had been in business since 2010 and was in the business of "siding installation—all types—residential dwelling." The application also provided that Under Construction had three full-time employees and listed a mailing address on Clark Lane in Des Plaines. The owner of the business was listed as Jan Kaznecki, and the application included Kaznecki's phone number and e-mail address.
¶ 5 The insurance policy at issue on appeal was a renewal policy with a policy period from May 17, 2019, through May 17, 2020; as with the application, the renewal policy was issued using Spiewak as the insurance agent. The policy listed an address on Lincoln Avenue in Chicago as the business address, and Kaznecki was listed as the owner. Part four of the policy discussed "Your Duties if Injury Occurs" and provided, in full:
The insurance policy did not contain a schedule or list of employees, other than listing Kaznecki as an "Excluded Owner, LLC member or Executive Officer" in an endorsement.
¶ 6 On November 20, 2019, Szymanski filed an application for adjustment of claim with the Illinois Workers’ Compensation Commission. Szymanski alleged that he injured his left shoulder on July 2, 2019, while working for Under Construction, and had orally notified his employer of the accident. Szymanski listed the Lincoln Avenue address as Under Construction's address.
¶ 7 Plaintiff commissioned an "audit" of Under Construction, covering the period of June 1, 2018, through June 1, 2019, which it received on December 7, 2019; plaintiff refers to this audit as a "Premium Audit" in its brief on appeal, and does not claim that this audit had any connection with Szymanski's claim. The audit listed an address on Lincoln Avenue in Chicago as the business address, and continued to list Kaznecki as the owner. The contact details for the business provided "John Kaznecki"2 as the contact, at the same phone number as provided in the initial application, but with a different e-mail address. Payroll lists on the audit named a total of four individuals: Jan Kaznecki and three individuals identified as installers; Szymanski is not included on these payroll lists.
¶ 8 As explained in further detail below, between January 3, 2020, and April 17, 2020, plaintiff attempted to contact Under Construction in connection with Szymanski's claim on nine occasions, without success.
¶ 9 On April 20, 2020, plaintiff filed a complaint for declaratory judgment against defendants, seeking a finding that it owed no duty to defend or indemnify Under Construction in connection with Szymanski's workers’ compensation claim. In count I of its complaint, plaintiff alleged that Szymanski was not an employee of Under Construction on the date of his alleged accident, so plaintiff's insurance policy did not apply. In count II of its complaint, plaintiff alleged that Under Construction had failed to cooperate with plaintiff's investigation, so plaintiff had no obligation to defend or indemnify Under Construction in connection with Szymanski's workers’ compensation claim.
¶ 10 Due to the COVID-19 pandemic, the sheriff's office declined to serve defendants, and a special process server was appointed to serve them. Szymanski was personally served on August 3, 2020, and filed an appearance and answer on August 14, 2020. With respect to Under Construction, the address for Under Construction on the initial summons and on an alias summons was the Lincoln Avenue address. However, a second alias summons listed an address on Oxford Avenue in Chicago and provided the name of Chester Grochowski as Under Construction's registered agent.3 The affidavit of the special process server indicated that Under Construction was served at the Oxford Avenue address on September 24, 2020, and that a copy of the summons and complaint were personally served on Grochowski.
¶ 11 On November 6, 2020, plaintiff filed a motion for default judgment against Under Construction, which had failed to file an appearance or answer. On November 16, 2020, the trial court granted plaintiff's motion, further finding that Under Construction would be bound by any decision by the court as to the issues raised in the complaint.4
¶ 12 On January 5, 2021, plaintiff filed a motion for summary judgment. The sole argument raised in the motion for summary judgment was that Under Construction had breached the cooperation clause of the insurance policy and, therefore, plaintiff was not obligated to defend or indemnify it for any claims arising from Szymanski's alleged injury.5 Plaintiff claimed that it had exercised a reasonable degree of diligence in seeking Under Construction's cooperation, making "numerous" phone calls and sending "repeated" letters in an effort to discuss Szymanski's claim with Under Construction, beginning in January 2020. In June 2020, plaintiff's "Special Investigation Unit" attempted to contact Under Construction through e-mails and phone calls, but was unsuccessful. In July 2020, a representative from the special investigation unit physically visited the address that was listed with the Secretary of State's office in an attempt to make contact, but was able only to leave a business card and letter.6 Plaintiff claimed that Under Construction's silence "constitute[d] a willful refusal to cooperate." Plaintiff further claimed that it was "greatly prejudiced" in its ability to obtain all necessary facts to defend the claim. Accordingly, plaintiff claimed that the breach of the insurance policy's cooperation clause meant that plaintiff had no duty to defend or indemnify Under Construction with respect to Szymanski's claim as a matter of law.
¶ 13 Attached to the motion for summary judgment was the affidavit of Jennifer Shepherd, a claims representative with plaintiff, who was assigned to handle Szymanski's claim. In her affidavit, Shepherd averred that, through its investigation, plaintiff had attempted to contact Under Construction in the following ways: (1) "January 3, 2020: Telephone call unanswered, voicemail full"; (2) "January 7, 2020: Telephone call unanswered, voicemail full"; (3) ; (4) ; (5) "February 27, 2020: Telephone call unanswered, voicemail full"; (6) ; (7) ; (8) "April 10, 2020: Telephone call unanswered, voicemail full"; (9) ; (10) ; (11) ; (12) ; (13) ...
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