Empire Fire & Marine Ins. Co. v. Faith Truck Lines, Inc.
| Decision Date | 30 December 1988 |
| Docket Number | No. 86-1096,86-1096 |
| Citation | 533 N.E.2d 441,178 Ill.App.3d 356,127 Ill.Dec. 569 |
| Parties | , 127 Ill.Dec. 569 EMPIRE FIRE & MARINE INSURANCE COMPANY, Plaintiff-Appellant, v. FAITH TRUCK LINES, INC., Raphael Corrizal, Ira Moore, Wieslaw Cebula, Andrzy Nowakowski and Boleslaw Benedyk, Defendants (Jerry Adams, Denato Balice, Electronic Plating Company, Inc. and K & A Steel Chemicals, Inc., Defendants-Appellees). |
| Court | United States Appellate Court of Illinois |
Dowd & Dowd, Ltd. (Michael E. Dowd, Marybeth Jacobsen and Philip J. McGuire, Chicago, of counsel), for plaintiff-appellant Empire Fire & Marine Ins. Co.
Tressler, Soderstrom, Maloney & Priess (Robert S. Soderstrom, Shaun McParland and Kimberly Kentra Gralen, Chicago, of counsel), for defendant-appellee Jerry Adams.
Michael W. Rathsack, Chicago, for defendant-appellee Electronic plating co.
Plaintiff, Empire Fire & Marine Insurance Company (Empire), filed a declaratory judgment action against defendants, Faith Truck Lines (Faith), a trucking company, seeking a declaration that under the provisions of their insurance policy, Empire had no duty to defend or indemnify Faith and Faith's driver, Jerry Adams, both Empire's insureds, for claims or judgments arising from an explosion. Following a bench trial, the trial court held that Empire was bound to assume the obligations of the defense and indemnification of Faith and Adams and entered judgment in favor of the defendants. Empire appeals. We affirm.
The facts are as follows. On July 19, 1982, Jerry Adams, a truck driver for defendant, Faith, delivered a load of hydrochloric acid, purchased from K & A Steel Chemicals (K & A) by Electronic Plating, to Electronic Plating. During the course of Adams' delivery of the acid at Electronic Plating, a chemical reaction and explosion occurred inside the tank into which the acid was being pumped, chlorine gas escaped from the tank and several people in the vicinity were overcome by fumes.
Charlie Woodard, president and owner of Faith, telephoned Bruce Reinger, president of IMC Insurance Agency, the afternoon of July 19, 1982, and notified him of the accident. Faith had acquired most of its insurance through the IMC Insurance Agency. Reinger and IMC were not expressly designated authorized agents of Empire. Clemens & Associates in Bloomington was the only authorized agent of Empire in the State of Illinois. However, from the inception of Faith's original policy with Empire, on October 22, 1979, and during the subsequent renewal periods leading up to the July 19, 1982 accident, Faith gave notice of all claims against it to Reinger, who then reported the claims to Clemens and Clemens notified Empire, which never objected to this procedure. Empire used Reinger and IMC as intermediaries or agents in contacting Faith for delivery of Faith policies, billing, collecting premiums and other matters related to the policies.
On July 26, 1982, Reinger mailed a written report to Fireman's Fund Insurance Companies, which he believed covered Faith's loss under a general liability policy. Fireman's Fund contends that it did not receive notice of the accident until June 10, 1983.
In January 1983, Electronic Plating brought suit against Faith, Adams and K & A seeking compensation and punitive damages for property losses incurred as a result of the accident. Faith forwarded documents pertaining to the suit to Reinger, who did not forward the papers to anyone else. A default judgment was entered against Faith. Faith sent notice of the default to Reinger. After Reinger received notice of the default judgment, Reinger contacted Fireman's Fund to inquire about the status of the claim. Fireman's Fund advised Reinger that Faith's policy with Fireman's Fund did not cover the accident and suggested that Reinger contact Faith's automobile insurance carrier. By early July 1983, Reinger contacted Clemens about the accident. On July 8, 1983, Clemens forwarded notice of the loss to Empire.
The subject insurance policy, Empire Business Auto Policy number BA955062, was issued to Faith in 1979. Faith was the only insured named in the policy, which stated, inter alia, "Anyone else is an insured while using with your permission a covered auto you own, hire or borrow * * *." (Original emphasis.) The policy also provided that Empire would pay "all sums the insured legally must pay as damages because of bodily injury or property damage * * * caused by an accident and resulting from the ownership, maintenance or use of a covered auto." (Original emphasis.) Other pertinent provisions include:
"WORDS AND PHRASES WITH SPECIAL MEANING * * *
A. 'You ' and 'your ' mean the person or organization shown as the named insured in ITEM ONE of the declarations.
B. 'We ', 'us' and 'our' mean the company providing the insurance.
* * *
* * *
A. YOUR DUTIES AFTER ACCIDENT OR LOSS.
1. You must promptly notify us or our agent of any accident or loss. You must tell us how, when and where the accident or loss happened. You must assist in obtaining the names and addresses of any injured persons and witnesses.
2. Additionally, you and other insureds must:
* * *
(b.) Immediately send us copies of any notices or legal papers received in connection with the accident or loss * * *." (Original emphasis.)
The policy did not define the term "agent." However, "Clemens & Associates" appears...
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