Illinois Valley Minerals Corp. v. Royal-Globe Ins. Co.

• Decision Date: 05 April 1979
• Docket Number: No. 78-199,ROYAL-GLOBE,78-199
• Citation: 388 N.E.2d 253,70 Ill.App.3d 296,26 Ill.Dec. 629
• Parties: , 26 Ill.Dec. 629 ILLINOIS VALLEY MINERALS CORPORATION, Plaintiff-Appellant, v.INSURANCE COMPANY, a corporation, and Richard Brimm, d/b/a Fox Valley Marine Service, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 253

388 N.E.2d 253

70 Ill.App.3d 296, 26 Ill.Dec. 629

ILLINOIS VALLEY MINERALS CORPORATION, Plaintiff-Appellant, v. ROYAL-GLOBE INSURANCE COMPANY, a corporation, and Richard Brimm, d/b/a Fox Valley Marine Service Defendants-Appellees.

No. 78-199.

Appellate Court of Illinois, Third District.

April 5, 1979.

Craig M. Armstrong and Robert L. Carter, Armstrong & Carter, Ottawa, for plaintiff-appellant.

Robert L. Kiesler and Marvin D. Berman, Goldenson, Kiesler, Berman & Brenner, Chicago, for defendants-appellees.

ALLOY, Justice:

This is an appeal from the trial court's entry of summary judgment in a declaratory judgment action filed by Illinois Valley Minerals Corporation (hereinafter "IVM") against defendant Royal-Globe Insurance Company (hereinafter "Royal").

In the declaratory judgment action, IVM sought to require that Royal provide insurance coverage to the defendant Richard Brimm, d/b/a Fox Valley Marine Service, under a liability policy issued by Royal to Brimm. IVM's claims as against Brimm result from property damage suffered by IVM on or about January 11, 1976, as a result of the alleged negligence of Brimm in the handling of certain barges at the marine service facility.

Royal moved for summary judgment in the declaratory judgment action, and alleged that Brimm had failed to provide notice within a reasonable time, as is required by the provisions of the liability policy involved. The trial court entered summary judgment in favor of the insurer, Royal. Brimm was not a party to the declaratory judgment action and has filed no brief in this Court on the appeal of that case. The question now before the Court on appeal by IVM, is whether the trial court's entry of summary judgment was proper. This involves a determination of whether the trial court properly determined that the issue of reasonableness of the notice was a properly disputed question for the jury or whether the trial court, where there is no issue of fact, may make such determination.

The undisputed evidence in the record discloses that Richard Brimm, operator of Fox Valley Marine Service, was issued a liability policy by Royal on December 13, 1974. The relevant portion of that policy provided:

"* * * that in the event of any occurrence which may result in loss, damage and/or expense, for which this company is or may become liable under this insurance, notice thereof shall be given to this company as soon as practicable, * * *."

On January 11, 1975, Brimm, in the course of operating his marine service, allegedly allowed certain barges within his control to break loose and cause damage to IVM's dock and piling equipment on the Illinois River. IVM promptly notified Brimm of the occurrence by mailgram on January 17, 1975, in which they informed him that IVM would hold Brimm liable for all property damage done by the errant barges.

Despite this prompt notification from IVM concerning damage and liability, Brimm gave no notice to his insurer Royal at that time. The record also discloses that during the following month Brimm was in contact several times with one of Royal's agents, concerning another matter having to do with the marine service, but, nevertheless, Brimm failed to inform the Royal agent of the January 11 occurrence or of IVM's stated intent to hold Brimm liable for the resulting damages. The insurer Royal was first advised of the January 11, 1975, occurrence by a letter, dated July 18, 1975 (more than 6 months later) which was received from the injured party IVM. The letter informed Royal that barges had escaped from Fox Valley Marine Service on January 11, 1975, and that the charges for repairs done and expenses incurred by IVM, due to the damage from the barges, amounted to $18,285.96. Royal promptly responded by letter to IVM, informing IVM that Royal had no previous notice of the occurrence from their insured, and that the lack of notice violated the express terms of Royal's liability policy. On the basis of the breach of the provisions of the policy, Royal declined liability.

On May 21, 1976, IVM filed a negligence suit against Brimm for the property damage it had suffered as a result of the January 11 accident. When Royal was advised of the suit in September, it refused to appear and defend on behalf of Brimm in the negligence action. IVM then filed the instant declaratory judgment action. It sought to require Royal to defend Brimm in the negligence action and to provide liability coverage. Royal, in its answer, raised an affirmative defense based upon lack of reasonable notice of the underlying occurrence. The trial court, after examining the undisputed facts, found for defendant Royal, and found as a matter of law that Royal was relieved of its duty to defend by reason of the lack of notice within a reasonable time. The trial court, accordingly, entered summary judgment in favor of Royal.

The rules applicable to summary judgment are well known and are as stated in Econo Lease Inc. v. Noffsinger (1976), 63 Ill.2d 390, 393, 349 N.E.2d 1:

"A motion for summary judgment will be granted if the pleadings, depositions, admissions and affidavits on file reveal that there is no genuine issue as to any material fact and that the movant is entitled to a judgment or decree as a matter of law." See: Ill.Rev.Stat.1977, ch. 110, par. 57(3).

The rules with respect to notice provisions in liability policies, similar to that present in the instant case, are also well established, and are to the effect that:

"Generally, courts have followed the rule that the insured has a duty to notify the insurer within a reasonable time after the accident. The determination of what constitutes a reasonable period of time depends upon the facts and circumstances in a particular case. A lengthy passage of time is not an absolute bar to coverage provided the insured has a justifiable excuse for the delay. However, an insured's lack of diligence is not overlooked merely because the insurer has failed to show actual prejudice due to the delay, although this factor may be considered by the court. Generally, the actions of the insured are scrutinized under a standard of reasonableness in determining whether he gave notice as soon as it was practicable for him to do so." McFarlane v. Merit Insurance Co. (1st Dist. 1978), 58 Ill.App.3d 616, 619, 16 Ill.Dec. 176, 177-178, 374 N.E.2d 951, 952-953. (Citations omitted.)

While the question of reasonableness is usually a fact question for the jury, as stated in Kenworthy v. Bituminous Casualty Co. (4th Dist. 1975), 28 Ill.App.3d 546, 548, 328 N.E.2d 588, 590:

" * * * it has also been held that if there is no controversy as to the facts, the question of reasonableness is for the judge to decide."

In INA Insurance Company v. City of Chicago (1st Dist. 1978), 62 Ill.App.3d 80, 83, 19 Ill.Dec. 519, 521-2, 379 N.E.2d 34, 36-7, the court upheld the lower court's grant of summary judgment in favor of an insurer based upon the failure of the insured's diligence in the matter of giving the required notice. In finding that reasonable notice had not been given, the court commented upon the notice provisions in the insurance policies and stated:

"The purpose of a notice requirement such as the one found in the INA policy is to enable the insurer to make a timely and thorough investigation of the injury claim. * * * Such provisions are not considered technical requirements, but rather are valid prerequisites to coverage." (Citations omitted.)

On the basis of the principles applicable to the issue before us in the instant case, we should give consideration to the undisputed facts which are found in the record and recited by the trial judge. The barge incident referred to in the instant case occurred on January 11, 1975, and prompt notice thereof was given to the insured Brimm by IVM, the injured party. Brimm, despite the opportunity available to him after the accident, did not inform his insurer Royal of the occurrence or the claims being asserted by IVM. As we have noted earlier in the course of this opinion, in the month following the accident, Brimm was in contact with an agent for Royal, but made no mention of the January 11 accident and damage. Royal's first notice of the accident came in mid-July, 1975, more than 6 months after the accident, when it received IVM's statement of charges based upon the occurrence.

While we want to make it clear that notice by an injured party to an insurer is as good as notice provided by the insured (Rivolta v. Kaplan (1st Dist. 1977), 49 Ill.App.3d 910, 920, 7 Ill.Dec. 176, 364 N.E.2d 337), the notice received in the instant case came after more than 6 months had expired from the date of the accident, and after all repairs to the dock and pilings owned by IVM had been completed. Under such circumstances, Royal was deprived of any opportunity to make a timely and thorough investigation of the claim, one of the central purposes of the notice provisions. The record discloses no valid excuse, in fact, no excuse whatsoever, for the delay in the giving of notice on the part of the insured Richard Brimm. It was IVM's burden to produce affidavits in opposition to the summary judgment motion, which was filed by Royal and supported by affidavits. If there...