Criterion Ins. Co. v. Reed

• Decision Date: 12 December 1978
• Docket Number: No. 78-217,78-217
• Citation: 66 Ill.App.3d 925,23 Ill.Dec. 19,383 N.E.2d 786
• Parties: , 23 Ill.Dec. 19 CRITERION INSURANCE COMPANY, a corporation, Plaintiff-Appellee, v. Robert L. REED, Roland A. Eigenrauch and Loretta Lynn Eigenrauch, Defendants. Appeal of COUNTRY MUTUAL INSURANCE COMPANY, Intervenor.
• Court: United States Appellate Court of Illinois

Page 786

383 N.E.2d 786

66 Ill.App.3d 925, 23 Ill.Dec. 19

CRITERION INSURANCE COMPANY, a corporation, Plaintiff-Appellee, v. Robert L. REED, Roland A. Eigenrauch and Loretta Lynn Eigenrauch, Defendants Appeal of COUNTRY MUTUAL INSURANCE COMPANY, Intervenor.

No. 78-217.

Appellate Court of Illinois, Fifth District.

Dec. 12, 1978.

Philip G. Feder, Ducey & Feder, Ltd., Belleville, for intervenor-appellant.

Michael B. Constance, Edward J. Szewczyk, Donovan, Hatch & Constance, Belleville, for plaintiff-appellee.

GEORGE J. MORAN, Presiding Justice:

Country Mutual Insurance Company, intervenor in a declaratory judgment action brought by plaintiff Criterion Insurance Company, appeals from a February 2, 1978 order of the circuit court of Madison County finding the plaintiff had effectively canceled its policy of insurance with one Robert Reed prior to an automobile accident involving defendant Reed and defendants Roland and Loretta Eigenrauch, who had in turn contracted with intervenor for uninsured motorist coverage.

The pertinent facts are as follows: On February 21, 1974 defendant Robert Reed contacted an independent insurance agent, Jim Apple, whose office was located in Alton, Illinois. Although Apple did not wish to insure the defendant, he offered to telephone an insurance company located in Washington, D.C., in order to accommodate Reed. The call was placed to the plaintiff, Criterion Insurance Company. At the conclusion of the conversation, one of plaintiff's employees informed Apple: "O.K., we'll cover him * * * tell the man he is insured." The Illinois agent then phoned the operator, determined the charge for the call and requested reimbursement of that amount from the defendant. No other compensation was paid for Apple's assistance.

Several weeks later defendant received through the mail a policy of insurance issued March 29, 1974 with a stated policy period of February 21, 1974 through February 21, 1975. The policy was delivered to defendant at his Fort Knox, Kentucky address. On May 21, 1974 plaintiff mailed the defendant at the above address a notice of cancellation for nonpayment of premium effective June 5, 1974. On July 11, 1974 Reed was involved in an automobile accident with defendants Eigenrauch in Washington County, Illinois. The Eigenrauchs filed an action against Reed in Madison County for personal injuries suffered as a result of the accident. On the same day plaintiff Criterion Insurance Company instituted this action seeking a declaration of its rights and liabilities under its insurance contract with Reed.

The court allowed Country Mutual's petition for leave to intervene. In its answer to plaintiff's petition for a declaratory judgment, intervenor alleged that due to plaintiff's failure to comply with the method of notification of cancellation prescribed in Ill.Rev.Stat.1973, ch. 73, par. 755.4 and 755.6, the defendant Reed's policy of insurance was in full force and effect on July 11, 1974, the date of the accident with defendants Eigenrauch.

After considering stipulations of fact and memoranda of law submitted by the two insurance companies involved, the circuit court of Madison County entered an order on February 2, 1978 finding that the cancellation procedure employed by plaintiff effectively terminated its liability under the policy issued to the defendant Reed. The order reads:

"The remaining active parties in this case, i.e. Criterion Insurance Company and Country, through their respective attorneys, have stipulated to the factual situation and have agreed to submit the cause to the Court for determination based on that stipulation and the material referred to therein. Both parties have submitted memoranda which also point up the factual situation. There would be no point in repeating the facts in detail upon which this determination...