Hapag-Lloyd (America), Inc. v. Home Ins. Co.

• Decision Date: 31 March 2000
• Docket Number: No. 1-99-2445.,1-99-2445.
• Citation: 729 N.E.2d 36,246 Ill.Dec. 36,312 Ill. App.3d 1087
• Parties: HAPAG-LLOYD (AMERICA), INC., Plaintiff-Appellant, v. HOME INSURANCE COMPANY; Three I Truck Line, Inc.; CRST International, Inc.; Connecticut Indemnity Company; United National Insurance Company; Federal Insurance Company; William Vasilion and Northern Trust Company, as Plenary Co-Guardians of the Estate of Diane Vasilion; William Vasilion, Indiv.; Richard Wegner; and Ragina Wegner, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

729 N.E.2d 36

312 Ill. App.3d 1087

246 Ill.Dec. 36

HAPAG-LLOYD (AMERICA), INC., Plaintiff-Appellant, v. HOME INSURANCE COMPANY; Three I Truck Line, Inc.; CRST International, Inc.; Connecticut Indemnity Company; United National Insurance Company; Federal Insurance Company; William Vasilion and Northern Trust Company, as Plenary Co-Guardians of the Estate of Diane Vasilion; William Vasilion, Indiv.; Richard Wegner; and Ragina Wegner, Defendants-Appellees.

No. 1-99-2445.

Appellate Court of Illinois, First District, Fifth Division.

March 31, 2000.

Quinlan & Crisham, Ltd., Chicago (William R. Quinlan, Thomas M. Crisham, John F. Kennedy, of counsel), for Appellant.

Pretzel & Stouffer, Chartered, Chicago (Robert Marc Chemers, Michael A. Clarke, of counsel), for Appellee Home Insurance.

Jenner & Block, Chicago (John H. Mathias, Jr., Robert T. Markowski, Christopher C. Dickinson, Sean M. Anderson, of counsel), for Appellee Three I Truck Line.

Hinshaw & Culbertson, Chicago (Thomas M. Hamilton, Joshua G. Vincent, Kent J. Cummings, of counsel), for Appellee Connecticut Indemnity.

Justice GREIMAN delivered the opinion of the court:

Plaintiff, Hapag-Lloyd (America), Inc. (Hapag-Lloyd), was a codefendant with Three I Truck Line (Three I) in an underlying tort action brought by defendants Diane Vasilion, William Vasilion, Richard Wegner, and Ragina Wegner (Vasilion/Wegner parties). Hapag-Lloyd brought suit seeking a declaration that insurance policies issued by Home Insurance Company (Home), Connecticut Indemnity Company (Connecticut), and Federal Insurance Company (Federal) all provide coverage for the adverse judgment entered against Hapag-Lloyd and Three I in the underlying tort action, where they were found to be jointly and severably liable for $42 million.¹ Prior to this action, Home filed a lawsuit in the United States District Court for the Northern District of Illinois (the Federal Action) seeking a declaration that it was not required to provide insurance coverage to Three I for the underlying tort judgments because Three I failed to provide Home timely notice of its claim. Both Home and Three I moved to dismiss or stay Hapag-Lloyd's complaint, pursuant to section 2-619(a)(3) of the Code of Civil Procedure (735 ILCS 5/2-619(a)(3) (West 1998)), on the basis that Home had already filed the Federal Action.

On June 30, 1999, the trial court granted Home and Three I's motion to stay and ruled that Three I's interests in the Federal Action were "substantially similar" to Hapag-Lloyd's interest in the state action and, therefore, that the two actions involved the "same parties." The trial court also found that because the Federal Action involved some of the same facts as the state action, the two were for the "same cause."

Hapag-Lloyd appeals, claiming that the circuit court erred in granting the motion to stay because the state action does not involve the same parties or the same cause as the Federal Action. Furthermore, Hapag-Lloyd claims that the trial court abused its discretion in not properly addressing factors which, if given appropriate considerations, would have weighed against a stay. For the reasons that follow, we reverse the trial court's order granting Home and Three I's motion to stay and remand the matter to the circuit court.

Generally, we will apply a de novo standard of review to a motion to dismiss because the motion does not require the trial court to weigh facts or determine credibility. Miller v. Thomas, 275 Ill.App.3d 779, 786, 211 Ill.Dec. 897, 656 N.E.2d 89 (1995), citing Federal Insurance Co. v. St. Paul Fire & Marine Insurance Co., 271 Ill.App.3d 1117, 1121, 208 Ill.Dec. 404, 649 N.E.2d 460 (1995), and Cruz v. Illinois Masonic Medical Center, 271 Ill.App.3d 383, 384, 208 Ill.Dec. 10, 648 N.E.2d 932 (1995). However, when such a motion to dismiss is inherently procedural, such as a section 2-619(a)(3) motion seeking dismissal because another action is pending between the same parties for the same cause, the motion urges the trial court to weigh several factors to determine if it is appropriate for an action to proceed. Miller, 275 Ill.App.3d at 786, 211 Ill.Dec. 897, 656 N.E.2d 89; see also Katherine M. v. Ryder, 254 Ill.App.3d 479, 487, 193 Ill. Dec. 883, 627 N.E.2d 42 (1993); Kellerman v. MCI Telecommunications Corp., 112 Ill.2d 428, 447, 98 Ill.Dec. 24, 493 N.E.2d 1045 (1986). Due to this weighing of evidence, the courts in both Katherine M. and Kellerman considered their motions to dismiss under an abuse of discretion standard, the required alternative. Katherine M., 254 Ill.App.3d at 487, 193 Ill.Dec. 883, 627 N.E.2d 42; Kellerman, 112 Ill.2d at 447, 98 Ill.Dec. 24, 493 N.E.2d 1045 (both citing A.E. Staley Manufacturing Co. v. Swift & Co., 84 Ill.2d 245, 252-53, 50 Ill. Dec. 156, 419 N.E.2d 23 (1980)). Here, the record reflects that the trial court did weigh the factors in determining whether extrinsic facts surrounding the motion could justify a stay. As a result, the standard we are to use in making our determination is whether the trial court abused its discretion in deciding to grant the stay. Kaden v. Pucinski, 263 Ill.App.3d 611, 615, 200 Ill.Dec. 129, 635 N.E.2d 468 (1994), citing Zurich Insurance Co. v. Raymark Industries, Inc., 213 Ill.App.3d 591, 594-95, 157 Ill.Dec. 655, 572 N.E.2d 1119 (1991).

Plaintiff asserts that Home and Three I have not established the two threshold requirements necessary for the trial court to grant section 2-619(a)(3) relief and that the trial court ignored critical discretionary factors. This statute provides:

"2-619 Involuntary dismissal based upon certain defects or defenses. (a) Defendant may, within the time for pleading, file a motion for dismissal of the action or for other appropriate relief upon any of the following grounds. If the grounds do not appear on the face of the pleading attacked the motion shall be supported by affidavit:

* * *

(3) That there is another action pending between the same parties for the same cause." 735 ILCS 5/2-619 (West 1998).

It is, therefore, the burden of every section 2-619(a)(3) movant to demonstrate through clear and convincing evidence that the two actions involve both the same parties and the same cause. Yet even if a movant has met its burden and established both the same parties and the same cause requirements, "the decision to grant or deny defendant's [movant's] section 2-619(a)(3) motion is discretionary with the trial court." Kellerman, 112 Ill.2d at 447,98 Ill.Dec. 24,493 N.E.2d 1045, citing People ex rel. Department of Public Aid v. Santos, 92 Ill.2d 120, 125, 65 Ill.Dec. 21, 440 N.E.2d 876 (1982). In its discretion, the trial court should consider four factors: (1) comity; (2) the prevention of multiplicity, vexation, and harassment; (3) the likelihood of obtaining complete relief in a foreign jurisdiction; and (4) the res judicata effect of a foreign judgment in the local forum. Kellerman, 112 Ill.2d at 447-48,98 Ill.Dec. 24,493 N.E.2d 1045, citing Santos, 92 Ill.2d at 130,65 Ill.Dec. 21,440 N.E.2d 876.

To the extent that the Federal Action and the state action did not involve the same parties, we note first that this requirement does not mean that the parties to both litigations must be identical. Schnitzer v. O'Connor, 274 Ill.App.3d 314, 318, 210 Ill.Dec. 630, 653 N.E.2d 825 (1995), citing Skipper Marine Electronics, Inc. v. Cybernet Marine Products, 200 Ill. App.3d 692, 695-96, 146 Ill.Dec. 361, 558 N.E.2d 324 (1990). Rather, all that is necessary is that the litigants' interests are sufficiently similar, even though the litigants differ in name or number. Katherine M. v. Ryder, 254 Ill.App.3d at 487, 193 Ill.Dec. 883, 627 N.E.2d 42; Schnitzer, 274 Ill.App.3d at 318, 210 Ill.Dec. 630, 653 N.E.2d 825 (both citing Skipper Marine, 200 Ill.App.3d at 695-96, 146 Ill.Dec. 361, 558 N.E.2d 324). We are mindful that such differences in name and number should not be totally overlooked, but observe that they are not determinative of different parties.

It is uncontested that the Federal Action literally does not involve the same parties as the state action because Hapag-Lloyd, Connecticut, Federal, and the Vasilion/Wegner parties were all unnamed in the Federal Action. However, by itself, this fact is not enough to dissuade Illinois courts from a finding of same parties. Katherine M., 254 Ill.App.3d at 487, 193 Ill.Dec. 883, 627 N.E.2d 42. For example, in Kapoor v. Fujisawa Pharmaceutical Co., 298 Ill.App.3d 780, 788-89, 232 Ill.Dec. 910, 699 N.E.2d 1095 (1998), the plaintiff filed suit in a state court against two corporations and a number of individuals, while the two corporations had a prior suit pending against him in federal court. The court held that the parties were the same even though the individual defendants were not parties in the federal action. Furthermore, in West Bend Mutual Insurance Co. v. Salemi, 158 Ill.App.3d 241, 251, 110 Ill.Dec. 608, 511 N.E.2d 785 (1987), a co-insured plaintiff brought suit in federal court against an insurance company, after which the company brought suit against both insureds in state court. The court again held that the parties were the same despite the fact that one of the co-insureds was not a party to the federal suit.

In instances such as these, this court has overlooked party differences in name or number where more subtle, but significant, similarities abounded. To note, in Kapoor and Salemi, both adversarial parties in the underlying dispute were also adversarial parties in the action at hand. In other words, this court was quick to find that there were the same parties when both adversaries in the action at hand were named parties in the underlying action. This is not true of the present case, so that these cases are distinguished as to parties, like Hapag-Lloyd, which were named in one action but not the other.

Our courts have also noted certain instances when the same party requirement should be relaxed. Zurich Insurance Co. v. Baxter...