Wert v. Burke

• Decision Date: 02 April 1964
• Docket Number: Gen. No. 49196
• Citation: 197 N.E.2d 717,47 Ill.App.2d 453
• Parties: Herbert WERT and Thelma Wert, Plaintiffs-Appellees, v. Alice BURKE and Francis Lietz, individually and d/b/a 'Jump In,' Louis Jannotto, Elizabeth Jannotto and Adrian Schapendonk, Defendants-Appellees. Allstate Insurance Company, Intervenor-Appellant.
• Court: United States Appellate Court of Illinois

Page 717

197 N.E.2d 717

47 Ill.App.2d 453

Herbert WERT and Thelma Wert, Plaintiffs-Appellees, v. Alice BURKE and Francis Lietz, individually and d/b/a 'Jump In,' Louis Jannotto, Elizabeth Jannotto and Adrian Schapendonk, Defendants-Appellees Allstate Insurance Company, Intervenor-Appellant.

Gen. No. 49196.

Appellate Court of Illinois, First District, Third Division.

April 2, 1964.

Hinshaw, Culbertson, Moelmann & Hoban, Chicago, Oswell G. Treadway, Chicago, of counsel, for appellant.

J. V. Schaffenegger, Richard Jemilo, Chicago, James P. Chapman, Chicago, of counsel, for appellees.

SCHWARTZ, Presiding Justice.

This is an appeal from an order denying the petition of Allstate Insurance Company for leave to intervene in this suit for personal injuries sustained by the plaintiffs as the result of a collision between an automobile driven by the insured plaintiff Herbert Wert, with Thelma Wert as a guest passenger, and one driven by Adrian Schapendonk, presumably an uninsured motorist. The principal issue presented is whether the insurance company has shown that the reprentation of its interest in this litigation is or may be inadequate and that it will or may be bound by the judgment in the case.

The complaint consists of two counts. Count one states a cause of action under the dramshop act against defendants Alice Burke and Francis Lietz, who operated the tavern, and against defendants Jannotto who owned the premises. It charges that Burke and Lietz sold alcoholic liquor to defendant Schapendonk causing his intoxication, as a result of which he drove his automobile into the automobile in which the plaintiffs were riding. Count two states a case against defendant Schapendonk only and alleges that he was guilty of negligent, wilful and wanton misconduct. Schapendonk admits liability and takes issue only on the question of damages.

The policy issued to plaintiff Herbert Wert by Allstate is referred to as 'uninsured motorist coverage.' It provides 'protection against bodily injury by uninsured automobiles'; and agrees that it will pay to the insured all sums the insured is legally entitled to recover as damages from the owner or operator of an uninsured automobile, caused by accident and arising out of the ownership, maintenance or use of such automobile.

The policy contains a provision which excludes bodily injury with respect to which the insured, without the consent of the insurance company, had made any settlement or had prosecuted to judgment any action for such injuries, and another provision that a determination of the amount the insured was legally entitled to recover was to be made by agreement between insured and insurer. Originally, policies of this type contained provisions for arbitration, but this was held invalid in Levy v. American Auto. Ins. Co., 31 Ill.App.2d 157, 175 N.E.2d 607. Allstate, however, proposed arbitration, which was rejected.

The right to intervene is governed by statute. Ill.Rev.Stat., ch. 110, § 26.1 (1963). This provides that on timely application, intervention shall be permitted as of right, when the representation of the applicant's interest 'is or may be inadequate and the applicant will or may be bound by a judgment, decree or order * * *.' A second section of the act provides that intervention shall be allowed within the discretion of the court when an applicant's claim or defense and the main action have a question of law or fact in common. Our courts are liberal in the construction of the act and in granting the right to intervene where the court has discretion. Bredberg v. City of Wheaton, 24 Ill.2d 612, 182 N.E.2d 742; Mensik v Smith, 18 Ill.2d 572, 166 N.E.2d 265. We will, however, consider whether intervention should be allowed as of right.

Of the two conditions required for intervention as of right, that is, (1) that representation of the applicant's interest is or may be inadequate; and (2) that the applicant is or may be bound by the judgment, we will first consider the latter requirement.

A policy similar to the one here involved, but with some distinguishing features, was before this court in Levy v. American Auto. Ins. Co., 31 Ill.App.2d 157, 175 N.E.2d 607. The plaintiff there obtained a judgment by default against a motorist who was alleged to be uninsured and then brought suit on the policy. A provision for arbitration was included in the policy, as was a provision for written consent before the insured could institute suit against an uninsured motorist. The company refused to give its consent unless the plaintiff submitted its dispute to arbitration. The court held that an agreement to arbitrate claims which might arise in futuro was not valid in this state and that the company could not refuse to give its consent to the institution of the suit by the plaintiff. (The Uniform Abritration Act was later amended to provide for arbitration of claims in futuro, but it has no application to the instant case. Ill.Rev.Stat., ch. 10, § 101 (1963).) While the judgment was reversed and the cause remanded on the ground that the non-insurance of the third party was not proved by competent evidence, that case has been accepted by the parties as authority for the proposition that the insurance company will be bound by the judgment entered in the suit now before us.

In Boughton v. Farmers Ins. Exch., 354 P.2d 1085 (Okl., 1960), 79 A.L.R.2d 1245, quoted with approval in the Levy case, supra, a similar policy was involved. The insured had obtained a judgment against an uninsured motorist. The insurance company did not participate in the action, although it had notice, but insisted that by the terms of the policy the question of liability and extent of damages were required to be determined by arbitration. The court held that the provision for arbitration was invalid and that the issue of liability and extent of damages were determined by the judgment in the principal case.

It is clear from the foregoing cases that an insurance company which insures against injuries caused by an accident which arises out of the ownership or use of an...