Secura Ins. Co. v. Illinois Farmers Ins.

• Decision Date: 23 January 2009
• Docket Number: No. 105991.,105991.
• Parties: SECURA INSURANCE COMPANY, Appellee, v. ILLINOIS FARMERS INSURANCE COMPANY, Appellant.
• Court: Illinois Supreme Court

902 N.E.2d 662

232 Ill.2d 209

SECURA INSURANCE COMPANY, Appellee, v. ILLINOIS FARMERS INSURANCE COMPANY, Appellant.

No. 105991.

Supreme Court of Illinois.

January 23, 2009.

Danny L. Worker, Zacarias R. Chacon, of Lewis Brisbois Bisgaard & Smith LLP, Chicago, for appellant.

Jon P. Malartsik, of Paulsen, Malec & Malartsik, Ltd., Wheaton, for appellee.

OPINION

Chief Justice FITZGERALD delivered the judgment of the court, with opinion:

Plaintiff Secura Insurance Company (Secura) filed a declaratory judgment action against Illinois Farmers Insurance Company (Farmers) in the circuit court of Du Page County. Secura sought a declaration that a policy of automobile insurance issued by Farmers to Paul Stech obligated Farmers to defend and indemnify Bogoja Muzikoski, doing business as B & A Automotive Repair (B & A Automotive), with regard to an accident involving Stech's automobile. After cross-motions for summary judgment were filed, the trial court granted summary judgment in favor of Farmers. Secura filed a notice of appeal, but did not include a certificate or affidavit indicating the date of filing with the circuit court clerk. The appellate court denied Farmers' motion to dismiss the appeal due to failure to timely file the appeal, and found in favor of Secura on the merits of the case. 377 Ill.App.3d 536, 315 Ill.Dec. 933, 878 N.E.2d 159. We granted leave to appeal (210 Ill.2d R. 315) and find that the notice of appeal was not timely filed, thus depriving the appellate court of jurisdiction. We therefore vacate the judgment of the appellate court and dismiss the appeal.

BACKGROUND

The facts are not in dispute. On October 21, 2000, in the course of his employment, B & A Automotive employee Daniel Dill was driving a 1995 Chevrolet Blazer owned by Paul Stech when Dill was involved in an accident with a vehicle driven by Vincent Henehan. B & A Automotive was insured at the time of the accident under a commercial liability policy issued by Secura with limits of $1 million. Stech and his Chevrolet Blazer were insured by Farmers under a policy of automobile insurance. Henehan and his wife subsequently sued Dill and B & A Automotive seeking damages. In this underlying action, the Henehans alleged that Dill was an agent and employee of B & A Automotive at the time of the accident. This lawsuit later settled out of court for $1 million.

Secura initially defended both B & A Automotive and Dill in the underlying action under the commercial liability policy. The underlying plaintiffs voluntarily dismissed Dill and accepted a settlement from Secura on behalf of B & A Automotive.

Secura filed a complaint against Farmers in the circuit court of Du Page County. It sought a declaration that Farmers owed B & A Automotive defense and indemnity obligations under the automobile policy. Secura also sought a bad-faith finding against Farmers. Farmers asserted affirmative defenses to Secura's complaint. The parties filed cross-motions for summary judgment. Among Farmers' arguments were that B & A, as an employer of Dill, did not qualify as an "insured person" under the policy's definition. The policy states that employers of "insured persons" are excepted from coverage. Secura responded that section 7-317(b)(2) of the Illinois Vehicle Code (625 ILCS 5/7-317(b)(2) (West 2004)) does not permit an insurer to exclude permissive employers from coverage. Further, according to Secura, even if section 7-317(b)(2) granted such permission, Farmers' employers exclusion offends public policy as articulated in the equal treatment test set forth by this court in Progressive Universal Insurance Co. of Illinois v. Liberty Mutual Fire Insurance Co., 215 Ill.2d 121, 293 Ill.Dec. 677, 828 N.E.2d 1175 (2005), and State Farm Mutual Automobile Insurance Co. v. Smith, 197 Ill.2d 369, 259 Ill.Dec. 18, 757 N.E.2d 881 (2001).

On March 17, 2006, the trial court granted Farmers' motion for summary judgment and denied Secura's motion for summary judgment. The trial court declared that Farmers owed no duty to defend or indemnify B & A Automotive. It found the Farmers policy clearly and unambiguously excluded Muzikoski as an insured and also did not violate Illinois law or public policy.

Secura then sought reconsideration of the trial court's March 17, 2006, order. This motion was denied on May 17, 2006. The circuit court received Secura's notice of appeal on June 20, 2006.

Farmers filed a motion to dismiss for want of jurisdiction in the appellate court. The appellate court initially granted Farmers' unopposed motion to dismiss Secura's appeal for want of jurisdiction and issued its mandate on December 21, 2006. After the appeal was dismissed, however, Secura moved to recall the mandate, for leave to respond to Farmers' motion instanter and to rehear Farmers' motion to dismiss.

The court allowed the motion to recall the mandate and vacated the order dismissing the appeal. The appellate court also allowed Secura to supplement the record with a letter to the circuit court dated June 16, 2006, and ruled that the motion be taken with the case. No affidavit or certificate of service was filed, however.

The appellate court then denied Farmers' motion to dismiss in its written opinion. The appellate court ruled that it was not deprived of jurisdiction to hear Secura's appeal because the failure to comply with the rules was "harmless error" and there was no showing of prejudice to Farmers. 377 Ill.App.3d at 541, 315 Ill. Dec. 933, 878 N.E.2d 159.

Turning to the merits, the appellate court held that the provision of Farmers' policy excepting from the definition of insured person "[a]ny person or organization, other than you or a family member, who is the employer of any insured person" was void as against Illinois public policy as expressed by the Illinois Vehicle Code (625 ILCS 5/1-100 et seq. (West 2004)) and the Illinois Safety and Family Financial Responsibility Law (625 ILCS 5/7-317(b)(2), (b)(3) (West 2004)). 377 Ill. App.3d at 547, 315 Ill.Dec. 933, 878 N.E.2d 159. We granted leave to appeal. 210 Ill.2d R. 315.

ANALYSIS

A reviewing court must ascertain its jurisdiction before proceeding in a cause of action, regardless of whether either party has raised the issue. People v. Smith, 228 Ill.2d 95, 106, 319 Ill.Dec. 373, 885 N.E.2d 1053 (2008); R.W. Dunteman Co. v. C/G Enterprises, Inc., 181 Ill.2d 153, 159, 229 Ill.Dec. 533, 692 N.E.2d 306 (1998). Therefore, before we may consider the merits, we must determine the threshold question of whether the appellate court improvidently took jurisdiction over Secura's appeal.

The timely filing of a notice of appeal is both jurisdictional and mandatory. 134 Ill.2d R. 301; People v. Smith, 228 Ill.2d 95, 104, 319 Ill.Dec. 373, 885 N.E.2d 1053 (2008); Niccum v. Botti, Marinaccio, DeSalvo & Tameling, Ltd., 182 Ill.2d 6, 7, 230 Ill.Dec. 593, 694 N.E.2d 562 (1998); R.W. Dunteman, 181 Ill.2d at 159, 229 Ill.Dec. 533, 692 N.E.2d 306. At issue is Secura's appeal of the trial court's May 17, 2006, order denying its motion for reconsideration. By operation of Rule 303(a)(1), Secura's notice was due at the circuit court clerk's office within 30 days, or by June 16, 2006. See 210 Ill.2d R. 303(a)(1) (notice of appeal must be filed within 30 days after the entry of the order disposing of the last pending postjudgment motion directed against the judgment or order). There is no dispute that the circuit court did not receive the notice of appeal on that date.

However, the notice of appeal may be filed by mail pursuant to Rule 373 (155 Ill.2d R. 373). In the Harrisburg-Raleigh case, we stated that a "notice of appeal, unlike many other papers filed in the circuit court, is closely related to the appellate process." Harrisburg-Raleigh Airport Authority v. Department of Revenue, 126 Ill.2d 326, 127 Ill.Dec. 944, 533 N.E.2d 1072 (1989). We concluded that it was "therefore appropriate that the promailing policy of Rule 373 should be applied to the filing of a notice of appeal under Rule 303(a)." Harrisburg-Raleigh Airport Authority, 126 Ill.2d at 341-42, 127 Ill.Dec. 944, 533 N.E.2d 1072. Rule 373, entitled "Date of Filing Papers in Reviewing Court; Certificate or Affidavit of Mailing," states:

"Unless received after the due date, the time of filing records, briefs or other papers required to be filed within a specified time will be the date on which they are actually received by the clerk of the reviewing court. If received after the due date, the time of mailing shall be deemed the time of filing. Proof of mailing shall be as provided in Rule 12(b)(3)." 155 Ill.2d R. 373.

There is no dispute here that Secura's notice of appeal was received after the due date. Therefore, Rule 373 directs that we look to Rule 12(b)(3). Rule 12, entitled "Proof of Service in the Trial and Reviewing Courts; Effective Date of Service" states, in part:

"(a) Filing. When service of a paper is required, proof of service shall be filed with the clerk.

(b) Manner of Proof. Service is proved:

(1) by written acknowledgment signed by the person served;

(2) in case of service by personal delivery, by certificate of the attorney, or affidavit of a person, other than an attorney, who made delivery;

(3) in case of service by mail, by certificate of the attorney, or affidavit of a person other than the attorney, who deposited the paper in the mail, stating the time and place of mailing, the complete address which appeared on the envelope, and the fact that proper postage was prepaid; or

(4) in case of service by facsimile transmission, by certificate of the attorney or affidavit of a person other than the attorney, who transmitted the paper via facsimile machine, stating the time and place of transmission, the telephone number to which the transmission was sent, and the number of pages transmitted." 145 Ill.2d R. 12.

At issue is subpart (3) of Rule 12(b), concerning service by mail. We therefore must determine if Secura's mailing fulfilled the...