Security Ins. Co. of Hartford v. Mato
| Decision Date | 07 April 1969 |
| Docket Number | Gen. No. 68--76 |
| Citation | 246 N.E.2d 685,108 Ill.App.2d 203 |
| Parties | SECURITY INSURANCE COMPANY OF HARTFORD, a corporation, Successor to New Amsterdam Casualty Company, a corporation, Plaintiff-Appellee, v. Julius MATO and David Toth, Defendants-Appellants. |
| Court | United States Appellate Court of Illinois |
Coe, Rubinstein & Shafran, Robert A. Holstein, Burton I. Weinstein, Chicago, for defendants-appellants.
McKenna, Storer, Rowe, White & Haskell, Chicago, for plaintiff-appellee.
This is a declaratory judgment action brought by plaintiff insurance company to obtain determination as to whether defendant, Julius Mato, was insured by it at the time he had an automobile accident in which he and defendant, David Toth, were both injured. Defendant Mato filed a counter-complaint seeking expenses, costs and attorney fees relating to his own injuries and for defense of the suit brought by Toth against Mato. Plaintiff and Mato filed motions for summary judgment and presented pleadings, affidavits, depositions, exhibits and memoranda of law. The court decided the case based on this material and entered judgment holding that no policy existed between plaintiff and Mato and that plaintiff company had no obligation to defend the action brought by Toth against Mato. The defendant's motion after judgment was denied by the trial court, leading to this appeal by the defendants.
In July of 1963, defendant Mato purchased an insurance policy from Dann Brothers, Inc. of Chicago, Illinois, general agents for the New Amsterdam Casualty Company, Security Insurance Group, the plaintiff in this action, to cover an automobile which he owned. Mato had purchased other insurance from Dann Brothers, including a Homeowner's Policy. Most of his dealings with the agent were over the phone. The policy issued on his automobile was designated Select Automobile Policy No. 29--030663, a direct billing policy. The policy covered a period from July 17, 1963, to January 17, 1964, and for the subsequent self-renewal six month periods. It provided liability insurance in the amount of $100,000 for each occurrence, medical expenses of $3,000 for each person, uninsured motorists coverage of $20,000 for each occurrence, accidental death benefit of $1,000, comprehensive coverage for actual cash value of the automobile, $200 for personal effects, and towing coverage of $25 per disablement.
The automobile insured under this policy was a 1955 Mercury. Thereafter, the policy was renewed for successive six-month periods from January 17, 1964, to July 17, 1964, and from July 17, 1964, to January 17, 1965. On each occasion he was billed for a premium of $36 and paid as required.
On or about May 11, 1965, Mato called Dann Brothers and asked to speak with Donald Dann. Mato identified himself to Mr. Dann and indicated he had replaced the 1955 Mercury with a 1958 Ford, for which he wished the same coverage as he had on the Mercury. Mr. Dann said, . A secretary came to the phone and stated that according to the file his automobile insurance policy had lapsed as a result of his failure to pay the premium when due in January of 1965. She stated, however, that the problem would be rectified and he would be covered and that Dann Brothers would send out a confirmation of the new coverage within a few days. She then asked for certain information concerning the new automobile which Mato did not have at hand. He inquired about payment and was told not to send any money until he received a bill. Mr. Dann then returned to the phone and thanked Mato for calling and stated, 'don't worry about a thing, you have the same insurance you had before; enjoy your car'. Within a day or two Mato again called Dann Brothers and talked to someone he believed to be the same secretary he had talked to on the first occasion, supplied the necessary information regarding his automobile, including the serial number.
On May 15, 1965, Mato received in the mail at his home from Dann Brothers, Inc., two papers stapled together. The first was a small sheet entitled 'Endorsement'. It was dated May 14, 1965, and said 'This endorsement forms a part of your policy and should be attached to the same without fail.' It reflected automobile coverage under New Amsterdam Casualty policy No. 29--030663. Attached to this paper was one entitled 'Amendment of Declarations (Select Automobile Policy)'. This item showed that it was endorsement #1 and contained a description of the car. It contained the same coverage as he had on his old Mercury, showed an effective date of May 11, 1965, attached to and forming part of Policy No. 29--030663 issued to Julius Mato and dated May 14, 1965. This endorsement was signed by both the president and secretary of New Amsterdam Casualty Company and countersigned by Armand L. Dann, one of the Dann Brothers who signed as authorized representative.
On June 20, 1965, Mato was involved in an automobile accident in which he was the driver and defendant Toth was a guest passenger. Both were severely injured. During his convalescence Mato was interviewed by a representative of plaintiff company, who took a written statement from him. A short time later a second representative of plaintiff company came to Mato's place of business and took a statement. Both of these representatives of plaintiff company told Mato that he had nothing to worry about since he had complete coverage. He was instructed to send his medical bills to the plaintiff and complete the necessary Proof of Loss forms, which he did. During this time a representative of plaintiff's Claim Department advised Mato that plaintiff would take care of everything.
Some months later another representative of plaintiff took another statement from him. Within a few days after the accident, plaintiff company was apprised of the fact that it might have a policy defense and notified Dann Brothers, Inc. that 'This policy was lapsed 2/1/65 for nonpayment'. This notification was received by Dann Brothers, Inc., on June 25, 1965. On that same day Dann Brothers wrote Mato 'We never received notification that you desired reinstatement, therefore, nothing further was done with your policy'. Plaintiff undertook to defend Mato and it was not until approximately 16 months after the accident that Plaintiff adopted an adverse position to Mato...
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