Konstant Prod.S Inc v. Liberty Mut. Fire Ins. Co.

• Decision Date: 04 May 2010
• Docket Number: No. 1-09-0080.,1-09-0080.
• Citation: 401 Ill.App.3d 83,929 N.E.2d 1200,341 Ill.Dec. 121
• Parties: KONSTANT PRODUCTS, INC., Roger W. Meyers and St. Paul Fire and Marine Insurance Company, Individually and as Subrogee of Konstant Products, Inc. and Roger W. Meyers, Plaintiffs-Appellants,v.LIBERTY MUTUAL FIRE INSURANCE COMPANY, Ricky Feltes and Patricia L. Feltes, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

401 Ill.App.3d 83

929 N.E.2d 1200

341 Ill.Dec. 121

KONSTANT PRODUCTS, INC., Roger W. Meyers and St. Paul Fire and Marine Insurance Company, Individually and as Subrogee of Konstant Products, Inc. and Roger W. Meyers, Plaintiffs-Appellants,v.LIBERTY MUTUAL FIRE INSURANCE COMPANY, Ricky Feltes and Patricia L. Feltes, Defendants-Appellees.

No. 1-09-0080.

Appellate Court of Illinois,

First District, Second Division.

May 4, 2010.

COPYRIGHT MATERIAL OMITTED

Cassiday Schade LLP, Chicago, IL (Jamie L. Hull and Deborah A. Martin-Sheridan, of counsel), for Appellant.

Judge, James & Kujawa, LLC, Park Ridge, IL (Jay S. Judge, Andrew G. Witik, of counsel), for Appellee.

Justice KARNEZIS delivered the opinion of the court:

Plaintiffs Konstant Products, Inc. (Konstant), Roger W. Meyers (Meyers) and St. Paul Fire and Marine Insurance Company (St. Paul) individually and as subrogee of Konstant and Meyers, appeal from the circuit court's order granting summary judgment in favor of defendants Liberty Mutual Fire Insurance Company (Liberty Mutual), Ricky Feltes (Feltes) and his wife, Patricia Feltes. On appeal, plaintiffs contend the circuit court erred in (1) concluding that an allegation made by Feltes in his original complaint constituted a judicial admission; (2) failing to consider extrinsic evidence when determining Liberty Mutual's obligations to Meyers and Konstant; and (3) failing to consider Feltes' second amended complaint in determining Liberty Mutual's duty to defend. For the following reasons, we affirm.

BACKGROUND

This cause of action arose as a result of an accident occurring at Konstant Products' facility in Quincy, Illinois, in which Feltes was injured. On April 1, 2003, Feltes, during the course of his employment with Alter Scrap Co., drove an Alter Scrap truck to Konstant Products' facility to pick up a dumpster of scrap iron and load it onto his truck. As Feltes stood in front of the truck, it began to roll forward and pinned Feltes between the truck and the dumpster. Meyers, a Konstant Products employee, heard Feltes' cries for help and got into the truck. In attempting to back the truck away from Feltes, Meyers placed it in the wrong gear and drove the truck into Feltes. Feltes filed a verified complaint against Konstant Products and Meyers. In paragraph 6A of the complaint, he alleged that Meyers negligently and carelessly operated the truck “against [Feltes'] verbal request.” St. Paul, Konstant Products' commercial liability insurer, accepted and undertook the defense of Konstant Products and Meyers. St. Paul then tendered the defense to Alter Scrap's auto carrier, Liberty Mutual, on the basis that the Liberty Mutual auto policy provided coverage for Meyers as a “permitted user” of the Alter Scrap truck. Liberty Mutual subsequently denied the tender because it contended that Meyers was not a permissive user since the verified complaint expressly alleged that Meyers operated the vehicle against Feltes' objections. Feltes subsequently filed a second amended verified complaint, which omitted paragraph 6A. St. Paul continued defending Konstant and Meyers and ultimately settled the lawsuit on their behalf for $40,000.

Thereafter, St. Paul filed a declaratory judgment action seeking a declaration that Liberty Mutual had a duty to defend Konstant and Meyers in connection with the Feltes' lawsuit and further sought reimbursement of defense costs and the $40,000 settlement payment. Ultimately, both Liberty Mutual and St. Paul filed cross-motions for summary judgment. The court granted Liberty Mutual's motion, from which plaintiffs now appeal.

ANALYSIS

On appeal, plaintiffs contend the circuit court erred in concluding that paragraph 6A of the original complaint constituted a judicial admission that was binding throughout the litigation for purposes of determining Liberty Mutual's duty to defend. Specifically, paragraph 6A alleged:

“Against Plaintiff's verbal request, [Meyers] negligently and carelessly entered Plaintiff's vehicle, against Plaintiff's request and drove the vehicle into the dumpster three (3) times causing Plaintiff each time to be pinned between the truck and the dumpster.”

Feltes' second amended complaint was identical to the original complaint, except that paragraph 6A was omitted. The circuit court, in granting Liberty Mutual's motion for summary judgment, found that Feltes' allegation in the original complaint that Meyers did not have permission to drive the truck was a binding judicial admission that “did not go away” merely by filing an amended complaint.

Judicial admissions are formal admissions in the pleadings that have the effect of withdrawing a fact from issue and dispensing wholly with the need for proof of the fact. Robins v. Lasky, 123 Ill.App.3d 194, 198, 78 Ill.Dec. 655, 462 N.E.2d 774 (1984). Illinois law is well established that when a pleading is verified it remains part of the record even upon the filing of an amended pleading. Robins v. Lasky, 123 Ill.App.3d 194, 198, 78 Ill.Dec. 655, 462 N.E.2d 774 (1984). A party's admissions contained in an original verified pleading are judicial admissions that still bind the pleader even after the filing of an amended pleading that supercedes the original. Yarc v. American Hospital Supply Corp., 17 Ill.App.3d 667, 670, 307 N.E.2d 749 (1974). Moreover, any admissions that are not the product of mistake or inadvertence also bind the pleader throughout the litigation. Rynn v. Owens, 181 Ill.App.3d 232, 235, 129 Ill.Dec. 909, 536 N.E.2d 959 (1989).

Here, it is undisputed that the original verified complaint contained Feltes' admission in paragraph 6A that unequivocally stated that Feltes did not grant Meyers permission to use the truck. Additionally, there is no evidence or assertion that this admission was a result of a mistake or inadvertence. Thus, Feltes' judicial admission remained binding on him throughout the litigation, notwithstanding the amended complaint.

The admission also remained binding on Liberty Mutual in determining its duty to defend. Our supreme court has made clear that Illinois adheres to an “eight corners” analysis when determining a carrier's duty to defend. Valley Forge Insurance Co. v. Swiderski Electronics, Inc., 223 Ill.2d 352, 363, 307 Ill.Dec. 653, 860 N.E.2d 307 (2006) (stating a court must compare the facts alleged in the underlying complaint to the relevant provisions of the insurance policy to determine duty to defend); see also Pekin Insurance Co. v. Dial, 355 Ill.App.3d 516, 519, 291 Ill.Dec. 400, 823 N.E.2d 986 (2005) (stating a court should apply the “eight corners rule”-that is the court should compare the four corners of the underlying tort complaint with the four corners of the insurance policy to determine whether facts alleged in the underlying complaint fall within or potentially within coverage). Therefore, if a judicial admission remains binding on Feltes throughout the litigation (including all subsequent amended pleadings), then Feltes' admission must also be considered binding on Liberty Mutual because Liberty Mutual's duty to defend is specifically determined by allegations contained within the four corners of the underlying complaint.

We find this court's decision in State Security Insurance Co. v. Linton, 67 Ill.App.3d 480, 23 Ill.Dec. 811, 384 N.E.2d 718 (1978), helpful since it also involved a judicial admission that affected whether an insurance carrier had a duty to defend. In Linton, the court held that the plaintiff's judicial admission that the court found binding on the defendant was also binding on the insurance carrier in determining the carrier's duty to defend. Linton, 67 Ill.App.3d at 484-85, 23 Ill.Dec. 811, 384 N.E.2d 718 (finding that the defendant's judicial admission in the answer to the insurer's declaratory judgment complaint was determinative in showing that a policy exclusion applied and barred coverage under the policy).

Plaintiffs also contend that the circuit court improperly concluded that its review was confined to the original complaint and that the court should have considered evidence outside of the complaint in determining Liberty...