Transport Ins. Co. v. Old Republic Ins. Co.

• Decision Date: 20 July 1972
• Docket Number: No. 54575,54575
• Parties: TRANSPORT INSURANCE COMPANY, a corporation, Plaintiff-Appellee, v. OLD REPUBLIC INSURANCE COMPANY, a corporation, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

Page 755

286 N.E.2d 755

6 Ill.App.3d 844

TRANSPORT INSURANCE COMPANY, a corporation, Plaintiff-Appellee, v. OLD REPUBLIC INSURANCE COMPANY, a corporation, Defendant-Appellant.

No. 54575.

Appellate Court of Illinois, First District, Third Division.

July 20, 1972.

Kenneth J. Brundage and Sidney Z. Karasik, Chicago, for defendant-appellant.

Hinshaw, Culbertson, Moelmann, Hoban & Fuller, John L. Kirkland and D. Kendall Griffith, Chicago, for plaintiff-appellee.

DEMPSEY, Justice.

In 1964 the plaintiff, Transport Insurance Company, executed a re-insurance agreement with the defendant, Old Republic Insurance Company. According to its terms Transport as re-insurer agreed to reimburse the insurer, Old Republic, for all losses incurred by the insurer in excess of $15,000 per claim on an accident liability policy, with the re-insurer subject to a maximum liability of $485,000 respecting each accident or occurrence. The $15,000 of liability retained by the insurer was termed the retention.

Subsequently an action was brought in Florida against an insured of Old Republic for personal injuries incurred by a minor. Damages of $450,000 were sought. Shortly before the conclusion of the jury trial, the case was settled with the injured plaintiff receiving $75,000. The negotiations for the settlement were conducted by Transport Insurance. When Old Republic learned that an agreement had been reached and that the case had not gone to the jury, it refused to be liable for its retention of $15,000 since it had not been informed of the last-minute settlement negotiations. Further correspondence between Transport and Old Republic did not resolve the issue of the insurer's liability, and Transport brought this action for a declaratory judgment. It requested the court to find that no dispute existed between the parties so as to bring into effect the arbitration clause of their contract, and asked the court to hold that Old Republic had surrendered its retention.

Old Republic filed an answer which denied that it had made an irrevocable surrender of its retention. Transport moved for judgment on the pleadings. Following oral arguments the court granted the motion. It found that Old Republic had surrendered its retention without condition or restriction, that there was no dispute between the parties necessitating arbitration and that Transport was entitled to the damages it requested.

Old Republic contends that the pleadings and exhibits disclose a material, genuine issue of fact, and that the court erred in granting Transport's motion. The right to judgment on the pleadings is established by statute. Ill.Rev.Stat., 1969, ch. 110, para. 45(5). As is the case with a motion for summary judgment, a motion for judgment on the pleadings presents the court with a question of law as to whether there is an issue of fact to be tried. American National Bank & Trust Co. v. Lembesis, 116 Ill.App.2d 5, 253 N.E.2d 126 (1969); Bleck v. Cosgrove, 32 Ill.App.2d 267, 177 N.E.2d 647 (1961).

The personal injury trial took place between October 29 and November 1, 1968. According to Old Republic's answer in the present action, on October 30th a representative of Transport contacted LeRoy Garr, Old Republic's claims manager, and Garr agreed to contribute the entire retention of $15,000 so that a specific offer of $75,000 might be made by the representatives of Transport to settle the personal injury litigation. In the defendant's answer to plaintiff's motion for judgment on the pleadings, the term 'one-shot' was used to describe the offer apparently to indicate that it was to be made only...