Denkewalter v. Wolberg

• Decision Date: 26 March 1980
• Docket Number: No. 79-634,79-634
• Citation: 82 Ill.App.3d 569,37 Ill.Dec. 883,402 N.E.2d 885
• Parties: , 37 Ill.Dec. 883 Kim R. DENKEWALTER, John Garrido, Daniel Bartozewski and Charles Barranco, Plaintiffs-Appellants, v. Marvin WOLBERG, Defendant-Appellant, and The New Hampshire Insurance Company, a Foreign Corporation; Bowes & Company, Inc., an Illinois Corporation; C. W. Service Agency, Inc., a corporation; and Casualty Underwriters, Inc., a corporation, Defendants-Appellees, and Glenn P. Sapa, a licensed and qualified insurance broker in the State of Illinois; and Morency & Associates, Inc., an Illinois Corporation, Defendants.
• Court: United States Appellate Court of Illinois

Page 885

402 N.E.2d 885

82 Ill.App.3d 569, 37 Ill.Dec. 883

Kim R. DENKEWALTER, John Garrido, Daniel Bartozewski and Charles Barranco, Plaintiffs-Appellants, v. Marvin WOLBERG, Defendant-Appellant and The New Hampshire Insurance Company, a Foreign Corporation Bowes & Company, Inc., an Illinois Corporation; C. W Service Agency, Inc., a corporation; and Casualty Underwriters, Inc., a corporation, Defendants-Appellees and Glenn P. Sapa, a licensed and qualified insurance broker in the State of Illinois; and Morency & Associates, Inc., an Illinois Corporation, Defendants.

No. 79-634.

Appellate Court of Illinois, First District, Third Division.

March 26, 1980.

Denkewalter & Associates, Ltd., Philip H. Corboy & Associates, Chicago (Philip H. Corboy and Michael W. Rathsack, Chicago, of counsel), for plaintiffs-appellants.

Frank K. Heap, John J. Verscaj, Bell, Boyd, Lloyd, Haddad & Burns, Timothy G. Keating, French & Rogers, Barry L. Kroll, David A. Novoselsky, Jacobs, Williams & Montgomery, Ltd., Robert Marc Chemers, Joseph B. Lederleitner, Pretzel, Stouffer, Nolan & Rooney, Chicago, for defendants.

McNAMARA, Justice:

Plaintiffs, Kim R. Denkewalter, John Garrido, Daniel Bartozewski, and Charles Barranco, brought this action for declaratory judgment seeking to establish the existence of a contract of insurance between themselves and defendant New Hampshire Insurance Company. Glenn P. Sapa and his employer, Morency & Associates, Inc., plaintiffs' insurance agents, also were named as defendants. Plaintiffs subsequently joined as defendant, Marvin Wolberg, the person who was injured as a result of plaintiff Bartozewski's alleged negligence in the operation of plaintiffs' motorboat. Wolberg's legs were severed in the accident. Plaintiffs also named insurance brokers Bowes & Company, Inc., C. W. Service Agency, Inc., and Casualty Underwriters, Inc. (hereinafter "broker defendants") as additional party defendants. The trial court granted the motions of New Hampshire and the broker defendants to dismiss plaintiffs' second amended complaint for failure to state a cause of action as to those defendants. The declaratory judgment action is still pending in the trial court against Sapa, Morency, and Wolberg. Plaintiffs and defendant Wolberg appeal the order which dismissed the action against appellees New Hampshire and broker defendants.

Plaintiffs' second amended complaint, filed on October 17, 1978, set forth the following relevant allegations. On July 7, 1976, plaintiffs applied to the Bank of Ravenswood for a loan on their boat. They were advised by the bank's loan officer, Ronald L. Ludewig, that insurance coverage was a prerequisite for loan approval. Denkewalter then contacted Sapa and Morency to act as plaintiffs' agents in procuring insurance coverage on the boat.

The complaint further alleged that on July 20, 1976, Sapa telephoned Denkewalter and informed him that he had bound insurance coverage on the boat in the amount of $300,000 with New Hampshire; that Sapa also indicated that he and Morency had used the brokerage services of the broker defendants in procuring the insurance. Denkewalter informed Ludewig by telephone that insurance had been bound. Ludewig in turn telephoned Sapa. Sapa "instructed" Ludewig that he had obtained and bound insurance with New Hampshire. Sapa stated that the bank would receive the policy within 30 days. Based upon Sapa's representations, plaintiffs' loan application was approved.

The complaint further charged that on July 27, 1976, while Bartozewski was operating the boat he was involved in the aforementioned accident; that Wolberg had sued the plaintiffs; and that despite demands, New Hampshire refused to defend plaintiffs in the Wolberg suit. The complaint charged that Sapa acted individually, severally and in concert with the broker defendants in binding insurance coverage with New Hampshire, and that New Hampshire's refusal to defend constituted a breach of an insurance contract. The complaint asserted that an actual controversy existed between plaintiffs and defendants.

Plaintiffs asked the court to determine the rights and liabilities of the parties with respect to insurance coverage, and specifically, to declare that New Hampshire was plaintiffs' insurance carrier. Alternatively, plaintiffs sought a declaration that defendants were liable to defend and pay any judgment which might be entered against them in the Wolberg litigation on the ground that defendants' conduct caused plaintiffs to rely detrimentally on Sapa's representation that insurance had been bound. Among the exhibits attached to the complaint was a letter written by Denkewalter formally demanding that New Hampshire defend plaintiffs, and indicating it was his "understanding that Morency & Associates, Inc. received permission from Bowes & Company Inc. who had received authorization to bind from the New Hampshire group."

Appellees' motion to dismiss urged that the second amended complaint did not state a cause of action against them because it failed to plead allegations of fact showing that they had any contractual relationship with plaintiffs, or that they induced Sapa to make the alleged representations concerning insurance coverage. After considering the pleadings, memoranda, and arguments of counsel, the trial court granted the motion to strike and dismiss the second amended complaint as to appellees and ordered the cause to proceed against the remaining defendants.

The sole issue presented on appeal is whether plaintiffs' second amended complaint for declaratory judgment stated a cause of action as to appellees. The issue in an action for declaratory judgment is whether, under the facts alleged, there is a substantial controversy between parties having adverse legal interests of sufficient immediacy and reality to warrant declaratory relief. (Wood v. School District No. 65 (1974), 18 Ill.App.3d 33, 309 N.E.2d 408.) Although the provision for declaratory relief should be construed liberally, a complaint for declaratory judgment must still state a cause of action upon which relief may be granted. (Preferred Risk Mutual Insurance Co. v. Hites (1970), 125 Ill.App.2d 144, 259 N.E.2d 815; see Gouker v. Winnebago County Board of Supervisors (1967), 37 Ill.2d 473, 228 N.E.2d 881.) Accordingly, a trial court may properly grant a motion to dismiss a complaint for declaratory judgment if the plaintiff is not entitled to the relief sought under the facts alleged in the complaint. See Preferred Risk Mutual Insurance co. v. Hites ; Goldberg v. Valve Corp. of America (1967), 89 Ill.App.2d 383, 233 N.E.2d 85.

A motion to strike or dismiss a pleading admits all facts well pleaded together with all reasonable inferences which can be drawn from those facts. (See Paschen v. Village of Winnetka (1979), 73 Ill.App.3d 1023, 29 Ill.Dec. 749, 392 N.E.2d 306; Miller v. Veterans of Foreign Wars of United States (1965), 56 Ill.App.2d 343, 206 N.E.2d 316.) Such a motion does not admit conclusions of law or conclusions of fact unsupported by allegations of ...