Piser v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 12 November 2010
• Docket Number: No. 1-09-3379.,1-09-3379.
• Citation: 405 Ill.App.3d 341,345 Ill.Dec. 201,938 N.E.2d 640
• Parties: Jonathan H. PISER, Plaintiff-Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

938 N.E.2d 640

405 Ill.App.3d 341

345 Ill.Dec. 201

Jonathan H. PISER, Plaintiff-Appellant,

v.STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellee.

No. 1-09-3379.

Appellate Court of Illinois, First District, Fifth Division.

Nov. 12, 2010.

Eugene E. Murphy, Jr., John N. Hourihane, Jr., John H. Scheid, Jr., Murphy & Hourihane, L.L.C., Chicago, IL, for Plaintiff-Appellant.

Rick L. Hammond, Eric W. Moch, Johnson & Bell, Ltd., Chicago, IL, for Defendant-Appellee.

Justice TOOMIN delivered the opinion of the court:

[345 Ill.Dec. 206, 405 Ill.App.3d 343]

In this appeal, we determine whether breach of an insurance cooperation clause is a valid defense constituting "other affirmative matter" barring a claim pursuant to section 2-619(a)(9) of the Illinois Code of Civil Procedure (735 ILCS 5/2-619(a)(9) (West 2008)). We also consider whether defendant complied with foundational and evidentiary requirements for supporting affidavits, and whether plaintiff's failure to respond with a counteraffidavit entitles defendant to dismissal as a matter of law.

Plaintiff, Jonathan H. Piser, brought claims against his insurer, State Farm Mutual Automobile Insurance Company (State Farm), for breach of contract and vexatious and unreasonable delay pursuant to section 155 of the Insurance Code (215 ILCS 5/155 (West 2006)). State Farm moved to dismiss pursuant to section 2-619(a)(9) based on its policy's cooperation clause, relying on its adjustor's affidavit and materials attached thereto requesting production of documentation to which plaintiff never responded. The circuit court granted the motion. For the following reasons, we affirm.

BACKGROUND

Plaintiff insured his 2003 Harley Davidson with defendant, State Farm. Piser had purchased his motorcycle in 2003 and had it customized at a cost of more than $60,000. Plaintiff claimed his vehicle was stolen on September 23, 2006. He filed a police report and notified State Farm of the loss. State Farm's claim representative, Ronald Gottardo, investigated the claim, which included an unsworn interview of plaintiff that encompassed approximately three hours. Gottardo also requested plaintiff to execute a financial authorization to enable State Farm to obtain a copy of plaintiff's credit report, a routine procedure employed to determine whether the insured has a financial motive to file a false claim. Gottardo followed up with a second request in writing on October 26, 2006. Plaintiff did not comply, and State Farm was unable to obtain the credit report. Pursuant to its policy provisions, State Farm also requested that plaintiff appear for an examination

[345 Ill.Dec. 207, 938 N.E.2d 646]

under oath by a State Farm attorney. Although several notices were directed to plaintiff, he failed to respond to the request.

State Farm further requested documentation regarding plaintiff's financial status, including his income tax returns for the previous three years, a list of all credit and charge account, loans, and personal and business bank account statements for the year leading up to the date of the loss (September 2005 through September 2006). Three letters were sent by State Farm requesting these materials, and Gottardo also requested that plaintiff provide the documentation before andafter his interview with him. Despite these requests, the materials were never received. In turn, State Farm denied plaintiff's claim.

Plaintiff filed the instant cause of action for breach of contract on September 3, 2008. In response, State Farm moved to dismiss pursuant to sections 2-615 and 2-619 of the Illinois Code of Civil Procedure (735 ILCS 5/2-615, 2-619 (West 2008)). The section 2-615 motion was based on "commingled relief," whereas the section 2-619 motion was based on plaintiff's failure to cooperate. The court denied State Farm's section 2-619 motion and granted the section 2-615 motion without prejudice.

Plaintiff amended his complaint to add a count for vexatious and unreasonable delay in refusing to pay the claim, pursuant to section 155 of the Insurance Code (215 ILCS 5/155 (West 2006)), in addition to a count for breach of contract. State Farm again filed a motion to dismiss pursuant to section 2-619, alleging plaintiff's failure to cooperate barred his claim. State Farm asserted that under its policy, plaintiff was required to cooperate and provide requested documentation. The circuit court granted the motion and dismissed the amended complaint with prejudice. Plaintiff timely appealed.

ANALYSIS

Plaintiff contends that the circuit court erred in granting State Farm's motion to dismiss because breach of its policy's cooperation clause is not a defense constituting "other affirmative matter" necessary to defeat plaintiff's claim pursuant to section 2-619(a)(9) (735 ILCS 5/2-619(a)(9) (West 2008)). According to plaintiff, the section 2-619 motion merely constituted an attempt to negate the allegations in plaintiff's complaint with arguments and evidence presenting State Farm's version of the facts. Plaintiff maintains that the court made a premature factual determination and improperly weighed State Farm's materials in dismissing his complaint pursuant to section 2-619(a)(9) of the Illinois Code of Civil Procedure. 735 ILCS 5/2-619(a)(9) (West 2008).

"A section 2-619 motion admits as true all well-pleaded facts, along with reasonable inferences that can be gleaned from those facts." Porter v. Decatur Memorial Hospital, 227 Ill.2d 343, 352, 317 Ill.Dec. 703, 882 N.E.2d 583, 588 (2008). The motion admits the legal sufficiency of the plaintiff's complaint but asserts affirmative defenses or other matter that avoids or defeats the plaintiff's claim. DeLuna v. Burciaga, 223 Ill.2d 49, 59, 306 Ill.Dec. 136, 857 N.E.2d 229, 236 (2006). "The phrase 'affirmative matter' encompasses any defense other than a negation of the essential allegations of the plaintiff's cause of action."Kedzie & 103rd Currency Exchange, Inc. v. Hodge, 156 Ill.2d 112, 115, 189 Ill.Dec. 31, 619 N.E.2d 732, 735 (1993). An " '[a]ffirmative matter' is something in the nature of a defense that completely negates the cause of action or refutes crucial conclusions of law or conclusions of material fact contained in or inferred

[345 Ill.Dec. 208, 938 N.E.2d 647]

from the complaint." Golden v. Mullen, 295 Ill.App.3d 865, 869, 230 Ill.Dec. 256, 693 N.E.2d 385, 389 (1997), citing Fancher v. Central Illinois Public Service Co., 279 Ill.App.3d 530, 534, 216 Ill.Dec. 55, 664 N.E.2d 692, 695 (1996). "The trial court must construe the motion and supporting documents in the light most favorable to the nonmovant." Tolan & Son, Inc. v. KLLM Architects, Inc., 308 Ill.App.3d 18, 24, 241 Ill.Dec. 427, 719 N.E.2d 288, 293 (1999). We review the trial court's rulings on section 2-619 motions de novo. DeLuna, 223 Ill.2d at 59, 306 Ill.Dec. 136, 857 N.E.2d at 236.¹

In addressing plaintiff's first argument we abide by long-standing Illinois precedent that an insured's failure to cooperate is indeed a valid defense, and thus can be set forth as other affirmative matter barring a claim. "With regard to cooperation clauses, the Illinois Supreme Court has noted that '[a]ny condition in the policy requiring cooperation on the part of the insured is one of great importance [citation], and its purpose should be observed [citation].' " Employers Reinsurance Corp. v. E. Miller Insurance Agency, Inc., 332 Ill.App.3d 326, 337-38, 265 Ill.Dec. 943, 773 N.E.2d 707, 715-16 (2002), quoting Waste Management, Inc. v. International Surplus Lines Insurance Co., 144 Ill.2d 178, 191-92, 161 Ill.Dec. 774, 579 N.E.2d 322, 327 (1991).² "Typically the insurer has little or no knowledge of the facts surrounding a claimed loss, while the insured has exclusive knowledge of such facts. The insurer is, therefore, dependent on its insured for fair and complete disclosure;hence, the duty to cooperate." Waste Management, Inc., 144 Ill.2d at 204, 161 Ill.Dec. 774, 579 N.E.2d at 333. The cooperation clause obligates the insured to "disclose all of the facts within his knowledge and otherwise to aid the insurer in its determination of coverage under the policy." Waste Management, Inc., 144 Ill.2d at 204, 161 Ill.Dec. 774, 579 N.E.2d at 333. See also Jordan v. Standard Mutual Insurance Co., 50 Ill.App.2d 12, 18, 199 N.E.2d 423, 427 (1964). The insurer is entitled "to gain as much knowledge and information as may aid it in its investigation, or as may otherwise be significant to the insurer in determining its liability under the policy and in protecting against fraudulent claims." Waste Management, Inc., 144 Ill.2d at 204, 161 Ill.Dec. 774, 579 N.E.2d at 333.

We likewise determine that the affidavit and supporting materials submitted by State Farm in support of the motion to dismiss did not simply constitute a denial of plaintiff's allegations; rather, they raised additional affirmative matter barring

[345 Ill.Dec. 209, 938 N.E.2d 648]

his claim—breach of the cooperation clause. Plaintiff's citation to Consumer Electric Co. v. Cobelcomex, Inc., 149 Ill.App.3d 699, 703, 103 Ill.Dec. 135, 501 N.E.2d 156, 159 (1986), for the proposition that "where the affirmative matter is merely evidence upon which defendant expects to contest an ultimate fact stated in the complaint, section 2-619(a)(9) should not be used" is of no avail. Although plaintiff generally pled in his amended complaint that he "satisfied all of his obligations under the insurance policy," State Farm raised the affirmative matter of plaintiff's breach of the cooperation clause in its policy. "While a section 2-619 motion admits all well-pled facts, it does not admit conclusions of law." Klopfer v. Court of Claims, 286 Ill.App.3d 499, 508, 221 Ill.Dec. 876, 676 N.E.2d 679, 686 (1997).

Further, "the very principles of law which govern contracts generally apply with equal force to contracts of insurance." Waste Management, Inc., 144 Ill.2d at 191, 161 Ill.Dec. 774, 579 N.E.2d at 327, citing Zitnik v. Burik, 395 Ill. 182, 186, 69 N.E.2d...