Jordan v. Standard Mut. Ins. Co.

• Decision Date: 09 June 1964
• Docket Number: Gen. No. 11873
• Citation: Jordan v. Standard Mut. Ins. Co., 199 N.E.2d 423, 50 Ill.App.2d 12, 8 A.L.R.3d 1338 (Ill. App. 1964)
• Parties: , 8 A.L.R.3d 1338 Gerald H. JORDAN, a Minor, by Richard James Jordan, his brother and next friend, Appellee, v. STANDARD MUTUAL INSURANCE COMPANY, a corporation, Appellant, v. Blanche D. JORDAN, Individually and as administrator of the Estate of Richard Jordan, Deceased, etc., Appellee.
• Court: Appellate Court of Illinois

Page 423

199 N.E.2d 423

50 Ill.App.2d 12, 8 A.L.R.3d 1338

Gerald H. JORDAN, a Minor, by Richard James Jordan, his

brother and next friend, Appellee, v. STANDARD MUTUAL INSURANCE COMPANY, a corporation, Appellant, v. Blanche D. JORDAN, Individually and as administrator of the

Estate of Richard Jordan, Deceased, etc., Appellee.

Gen. No. 11873.

Appellate Court of Illinois, Second District.

June 9, 1964.

Crowley, Sprecher, Barrett & Karaba, Chicago, for appellant.

Carbary & Carbary, Elgin, O'Brien, Burnell, Puckett & Barnett, Aurora, for appellee.

SCHEINEMAN, Justice.

This is an appeal from a judgment against the defendant insurance company for $10,000, the limit of its policy, plus interest and costs, and a judgment denying the prayer of its third party complaint.

This grew out of prior suit in which Gerald Jordan, a minor, by his brother as next friend, had obtained a judgment for $15,000.00 against the estate of his deceased father. His mother was the nominal defendant, as administrator, and the deceased was the named insured in a policy issued by defendant.

There was a two-car collision in which Richard Jordan was the driver of one and his son was a guest therein, and the other car was driven by Rudolph Franciscy in which there were three guests. Both drivers were killed, and all the occupants injured, so that litigation resulted.

Mrs. Jordan, as administrator, sued the estate of Rudolph Franciscy, and there was a counterclaim filed by his administrator, to which there was an answer denying negligence or willful or wanton misconduct. The son was also a party plaintiff originally, by Mrs. Jordan as his mother and next friend, and after her withdrawal, by his brother, Richard James Jordan, as next friend. This suit was settled, the guardianship receiving $4,500 and the estate $5,000 with the approval in both courts.

There was also a suit by the three passengers in the other car against both estates which resulted in substantial verdicts and judgments against the Franciscy estate and not guilty in favor of the Jordan estate.

Another suit, a wrongful death action by the Franciscy estate against the Jordan estate, resulted in a verdict for the Franciscy estate, reversed on appeal under doctrine of estoppel by verdict. Franciscy v. Jordan, 43 Ill.App.2d 344, 193 N.E.2d 219.

Finally, the minor plaintiff by his brother as next friend in the present suit, sued his mother as administrator of his father's estate, alleging willful and wanton misconduct on the part of his father. As previously stated, this resulted in a $15,000 verdict and judgment for the boy, affirmed on appeal by the Appellate Court, 35 Ill.App.2d 265, 182 N.E.2d 365, and leave to appeal was denied by the Supreme Court.

The defendant company seeks to avoid liability on the ground that Mrs. Jordan, standing in the shoes of her deceased husband, the insured, violated the assistance and cooperation clause of the policy by directing and managing a cause of action as guardian of the estate of her minor son against herself as administrator of her husband's estate.

In support of this claim defendant charges 'collusive conduct' on the part of Mrs. Jordan, failure to cooperate in defense of the suit against the husband, and, in effect that her actions amount to constructive fraud in conceiving and instigating a suit against herself. It is charged that the attorneys for plaintiff in this suit were also attorneys for her in all the other litigation; that she and her attorneys knew that her husband was found not guilty of negligence in the suit by the three persons in the Franciscy car; that she and her attorneys alleged her husband's freedom from negligence in the wrongful death action against the Franciscy estate which was settled; that the substitution of her son, Richard, in her place as next friend for her son Gerald, was a sham and that in doing so she was actually suing herself; that she assigned to Gerald any claims she might have had due to expenditures made by her on his behalf, and authorized Gerald to sue her; that as guardian of the estate of her son, Gerald, she petitioned for authority to expend funds to pay attorneys for prosecuting a suit against herself, and thus hired attorneys to sue herself.

Plaintiff replies that Mrs. Jordan, at all times, cooperated with defendant in all suits arising out of the occurrence; that she attended court whenever and wherever requested; that she complied with every request of the defendant in matters of defense and settlement of claims. Furthermore, it is claimed that if there were any breach of the cooperative clause, the defendant waiyed it by failing to elect to disclaim promptly, which has been held to be required. Allstate Insurance Co. v. Keller, 17 Ill.App.2d 44, 149 N.E.2d 482, 70 A.L.R.2d 1190; Krutsinger v. Ill. Casualty Co., 10 Ill.2d 518, 141 N.E.2d 16.

The applicable conditions of the policy are as follows:

'5. Assistance and Cooperation of the Insured--Parts 1 & 3; The insured shall cooperate with the company and, upon the company's request, attend hearings and trials, and assist in making settlements, securing and giving evidence, obtaining the attendance of witnesses and in the conduct of the suits. The insured shall not, except at his own costs, voluntarily make any payment, assume any obligation or incur any expenses other than for such immediate medical and surgical relief to others as shall be imperative at the time of the accident.

'6. * * * No action shall lie against the company unless, as a condition precedent thereto, there shall have been full compliance with all the terms of this policy * * *.'

It is apparent that the purpose of these conditions is to protect the insurer in its defense, on any suits brought against the insured and covered under the policy. We do not find in this clause that it is an obligation of the insured to prevent the filing of any legitimate claim under the policy, or to assist the insurance company in evading a just claim. In effect, it requires the insured to tell the truth as to the facts known to him, and to do nothing that would prevent the insurance company from fairly defending itself, nor incur any obligation or expense that could be made a claim against it.

The fact that Mrs. Jordan is the surviving spouse of her husband and administrator of his estate, as well as guardian of her minor son's estate, and also is considered as taking the place of the insured under the policy, does not alter her responsibilities under the cooperative clause, neither does it impose any additional burdens upon her. The question is still whether she was willing to and did cooperate with the company in the defense of the claim of her son by assisting it, insofar as she...