In re Country Mut. Ins. Co.
| Decision Date | 26 September 2007 |
| Docket Number | No. 103463.,103463. |
| Parties | In re COUNTRY MUTUAL INSURANCE COMPANY et al. (Steve Carr, etc., appellee, v. Harold Vogelzang, appellant). |
| Court | Illinois Supreme Court |
This appeal involves a third-party action brought by Steve Carr, d/b/a Carr Construction, against Harold Vogelzang, a Country Mutual Insurance Company agent, in a declaratory judgment action filed by Country Mutual to determine whether it is obligated to defend and indemnify Carr in an action for damages brought against him and his subcontractors by homeowners Ruth Rollings and Dana Bowyer. Carr has sought recovery from Vogelzang on the theory that Vogelzang owed him a duty to exercise ordinary care and skill in procuring the insurance policy at issue here and that if Country Mutual is correct that there is no coverage under that policy, then Vogelzang should be required to compensate him for any damages, including costs of defense, he incurs in the Rollings/Bowyer litigation.
Carr's third-party action is clearly conditional in nature. Carr cannot recover from Vogelzang unless (1) Carr is found liable for damages in the Rollings/Bowyer litigation and Country Mutual is found to have no obligation to indemnify Carr for those damages; or (2) Country Mutual has no duty to defend Carr against the claims asserted against him by Rollings and Bowyer.
Based upon our review of the record and briefs as supplemented by the parties during the pendency of this appeal, it is clear that the first of these circumstances will never occur. Rollings and Bowyer have settled their claims against Carr. Under that settlement, Carr was not required to pay any damages, and the action against him was dismissed with prejudice, eliminating the possibility that he may have to pay damages to Rollings and Bowyer in the future. There being no damages, Country Mutual's duty to indemnify Carr is not triggered. There being no need for indemnification, Vogelzang cannot be held liable for failing to provide Carr with a policy that would provide such indemnification.
The second circumstance under which Carr could proceed against Vogelzang is also absent. An insurer may not justifiably refuse to defend an action against its insured unless it is clear from the face of the underlying complaint that the allegations set forth in that complaint fail to state facts that bring the case within or potentially within the insured's policy coverage. General Agents Ins. Co. of Am., Inc. v. Midwest Sporting Goods Co., ...
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