author: JUSTICE McCUSKEY

text:
    COHEN FURNITURE COMPANY, Plaintiff-Appellee and Cross-Appellant, v. ST. PAUL INSURANCE COMPANY OF ILLINOIS, Defendant-Appellant and Cross-Appellee.
    Third District
    No. 3—90—0241
    Opinion filed June 11, 1991.

      Johnson & Bell, of Chicago (James S. Stickles, Jr., of counsel), for appellant.
    James W. Springer, of Kavanagh, Scully, Sudow, White & Frederick, P.C., of Peoria (David J. Dubicki, of counsel), for appellee.
   JUSTICE McCUSKEY

delivered the opinion of the court:

Defendant appeals the trial court’s determination that the replacement cost insurance coverage in the policy issued by defendant required defendant to indemnify plaintiff for the cost of a fire suppression system which plaintiff incorporated into its reconstructed building.

Plaintiff filed a cross-appeal disputing the trial court’s determination that defendant was justified in subtracting from the amount it paid to plaintiff, pursuant to business interruption insurance, tax depreciation of the building destroyed by fire, for the period between the fire and defendant’s occupation of the replacement building.

We reverse the trial court’s determination granting plaintiff’s motion for partial summary judgment with respect to the fire suppression system. We deny plaintiff’s cross-appeal and uphold the trial court’s resolution granting defendant’s motion for partial summary judgment with respect to the tax depreciation issue.

On March 17, 1987, an accidental fire destroyed a building which plaintiff operated as a furniture store. The original building, which was constructed in 1971, did not contain a fire suppression system.

In 1978, the Jacksonville, Illinois, building code (Code) was amended to require the installation of a fire suppression system in the construction of all new buildings similar to the destroyed building. Following the loss, plaintiff replaced the old store with a new building which, in accordance with the mandate of the Code, included a $54,000 fire suppression system. The cost of the new building was less than the policy’s limit on building coverage.

The defendant’s policy was issued approximately 16 years after the construction of the original building and approximately eight years after the change in Code. Defendant agreed to, and did, pay plaintiff the cost of the new building, subject only to its refusal to pay for the fire suppression system. The parties disagree as to whether the terms of the insurance policy obligate the defendant to indemnify plaintiff for the cost of the fire suppression system.

Subsequent to the fire, defendant paid to plaintiff the sum due to replace the building but excluded the $54,000 amount plaintiff incurred for the installation of the fire suppression system. Pursuant to the plaintiff’s business interruption insurance policy with defendant, defendant deducted $19,581 as a depreciation allowance. Defendant contends that the $19,581 depreciation allowance was a “noncontinuing” expense which was made unnecessary by the fire, and therefore, properly deducted under the business interruption policy provisions. Other expenses which defendant deducted as noncontinuing were: commissions, purchased labor — net, customer service, sales training, supplies/samples — net, miscellaneous selling expenses, advertising, store occupancy, delivery, office services, and general and administrative expenses. Plaintiff disputes in its cross-appeal the validity of defendant’s deduction for tax depreciation in the amount of $19,581.

After submission of motions for partial summary judgment and oral argument on the issue of payment for the fire suppression system, the trial court entered judgment in favor of plaintiff in the amount of $54,000 plus interest. With respect to the issue of deduction of depreciation, the trial court granted defendant’s motion for partial summary judgment and entered judgment in favor of defendant.

The present dispute concerns the construction of the parties’ contract and principles of insurance law. In order to determine whether defendant was liable to pay plaintiff for the suppression system, the construction and intent of the provisions of replacement cost coverage must be examined. An insurance policy should be enforced as written if its provisions are clear and unambiguous. (Severs v. Country Mutual Insurance Co. (1982), 89 Ill. 2d 515, 434 N.E.2d 290.) Courts should not torture the language of a policy to find coverage where none clearly exists. Murphy v. Peterson (1984), 129 Ill. App. 3d 952, 473 N.E.2d 480.

The policy in the instant case contained the following provisions:

“How We’ll Figure Your Loss
Actual cash value coverage. If indicated in the Coverage Summary, we’ll consider the value of covered buildings to be the actual cash value of your interest in the building at the time of the loss. If a covered building is damaged or destroyed while coverage is in effect, we’ll pay either the cost of repairing or replacing the building with similar kind and quality or the actual cash value at the time of loss, whichever is less. But the most we’ll pay for any loss from any one event is the Limit of Coverage shown in the Coverage Summary.
Replacement Cost. Unless otherwise indicated, we’ll pay the cost of repairing or replacing damaged property without deduction for depreciation. But we won’t pay more than the smallest of the following:
1. the limit of coverage that applies to the property;
2. the amount you actually spend in repairing or replacing the property with property of similar kind and quality; or
3. the amount it would cost to replace the damaged item at the time of the loss with property of similar kind and quality to be used for the same purpose on the same site.”

The policy also contained the following provision under the heading, “Property Exclusions — Losses We Won’t Cover,” which provided in pertinent part:

“Building laws. We won’t cover loss that is caused directly or indirectly by the enforcement of any law governing the use, construction, repair or demolition of buildings or other structures, including removal of debris. Such loss is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.”

The policy summary dated November 14, 1986, indicates that the plaintiff had replacement cost coverage under the policy.

On appeal, the defendant contends the trial court erred in finding that the policy covered the cost of the fire suppression system. Noting the building laws exclusion, the defendant argues that the additional cost of rebuilding the store with the required fire suppression system was the result of the enforcement of a local building ordinance; thus, this cost was excluded from coverage. The defendant also argues that the fire suppression system is not covered by replacement cost insurance.

When an exclusionary clause is relied upon to deny coverage, its applicability must be clear and free from doubt. (Trovillion v. United States Fidelity & Guaranty Co. (1985), 130 Ill. App. 3d 694, 474 N.E.2d 953.) In the instant case, the policy excluded losses “caused directly or indirectly by the enforcement of any law governing ***, construction, repair *** of buildings.” The City of Jacksonville ordinance required the fire suppression system to be installed in the newly constructed building. This increased cost of rebuilding is a direct result of the enforcement of the ordinance and falls squarely within the terms of the building laws exclusion.

We find no merit to plaintiff’s contention that under the defendant’s interpretation of the provision no rebuilding costs would be recoverable because all costs are increased by laws and regulations. The record indicates that other than the cost of the fire suppression system, the defendant paid all other costs of reconstruction. Thus the defendant is not attempting to use the building laws exclusion to escape its obligations to cover replacement costs.

The plaintiff also argues that the building laws exclusion should be held unenforceable as against the public policy of this State. The plaintiff concedes that there is no Illinois case which directly addresses this issue. The cases cited by the parties in arguing this point are readily distinguishable on their facts or on the issue of law presented. For example, most of the cases relied on by the plaintiff (e.g., Hertog v. Milwaukee Mutual Insurance Co. (Minn. App. 1987), 415 N.W.2d 370; Stahlberg v. Travelers Indemnity Co. (Mo. App. 1978), 568 S.W.2d 79; Unified School District No. 285 v. St. Paul Fire & Marine Insurance Co. (1981), 6 Kan. App. 2d 244, 627 P.2d 1147) involve the enforceability of such exclusionary provisions in States which have valued policy statutes. Valued policy statutes require that in cases of total loss the insurer must pay the whole amount mentioned in the policy. (Hertog v. Milwaukee Mutual Insurance Co. (Minn. App. 1987), 415 N.W.2d 370.) Courts in these States have limited the reach of these exclusionary provisions when insurers attempt to use them to limit their liability, in cases of a total loss, to less than the face value of the policy.

In Hewins v. London Assurance Corp. (1903), 184 Mass. 177, 68 N.E. 62, the insureds suffered a partial loss due to fire. The issue presented was whether the referees, in determining the amount of damages to which the insureds were entitled, “had the right to take into consideration the increased cost of repairing the building by reason of the building laws.” Twelve separate policies were involved. Eleven of the policies contained the following provision: “In case of any loss or damage, the company *** shall either pay the amount for which it shall be liable, which amount, if not agreed upon, shall be ascertained by award of referees, as hereinafter provided, or replace the property with other of the same kind and goodness, or it may *** notify the insured of its intention to rebuild or repair the premises.” It was agreed that the cost of fully indemnifying the insureds was greater if the building laws were considered. The court held, “While it is true that by reason of their existence [the building laws] the loss caused by the ravages of the fire was greater than it otherwise would have been, it is none the less true that the sole operating cause of the change in the building was the fire, and, as above stated, in the absence of any provision in the policy expressly excluding from the damages the part arising out of that condition, that part is not to be excluded, but is to be regarded as primarily the result of the fire, or as ‘loss or damage by fire.’ ” (Hewins v. London Assurance Corp. (1903), 184 Mass. 177, 181-82, 68 N.E. 62, 64.) The insurers were therefore liable for the increased costs resulting from the building law requirements.

The twelfth policy provided that in the case of loss, the loss or damage “shall in no event exceed what it would cost the insured to repair or replace the same with material of like kind and quality.” A second provision provided that the insurer would not be liable “beyond the actual value destroyed by fire for loss occasioned by ordinance or law regulating construction or repair of buildings, or by interruption of business, manufacturing processes or otherwise.” The court found that when the two provisions were construed together, they modified “the general rule as to the measure of the loss by fire in such case as this, and that the fair construction of these two clauses taken together is that such portion of the damage caused by the change in the condition of the building as arises from the existence of the building laws, whether regarded as a condition or a cause, is not to be considered as a loss or damage by fire, but is to be excluded from consideration, and the loss is to be estimated as if there were no building laws affecting the situation.” (Hewins v. London Assurance Corp. (1903), 184 Mass. 177, 182-83, 68 N.E. 62, 64.) Under this policy, because of the explicit exclusion found in the policy, the insurer was not liable for the costs attributable to the building law requirements.

Although the Hewins case is not completely on point, it is the most widely cited case upholding building laws exclusions in insurance policies, and we find it instructive. The plaintiff offers no reasoned explanation for why the building laws exclusion found in the defendant’s policy should be found to contravene the laws or public policy of the State of Illinois. We can find no reason to so hold. As an aside we note that the record indicates that the defendant offers an endorsement which changes the basic policy to cover losses resulting from the enforcement of building laws.

We need not address the defendant’s argument concerning the scope of replacement cost insurance, since in any event we would find coverage excluded by the building laws exclusion.

In sum, we find the expense attributable to the installation of the fire suppression system was excluded from coverage under the building laws exclusion contained in plaintiff’s insurance policy. We find the exclusion is clear and unambiguous and does not contravene the public policy of this State. Therefore, the trial court erred in granting the plaintiff’s motion for partial summary judgment on the issue of the fire suppression system.

The second dispute between the parties and the source of plaintiff’s cross-appeal emanates from the business interruption section of the insurance policy. This section states, in relevant part:

“Loss of Earnings and Extra Expense
We’ll cover your actual loss of earnings and extra expenses incurred because of necessary or potential interruption of business caused by covered direct damage to the building or business contents at an insured location.
Your Loss of Earnings
By earnings we mean your normal operating expenses including payroll, taxes, interest, rent and other such expenses. Earnings also include your net profit after you pay these operating expenses as well as any rent you receive on covered property. But we won’t include any charges and expenses which become unnecessary during the halt in your business operations. In figuring earnings, we’ll weigh the performance of your business before the loss and what its performance probably would have been after-wards had no loss occurred.
Your Extra Expenses
Extra expenses are any necessary operating expenses over and above what it would normally cost you to conduct your business had no damage occurred.”

The purpose of business interruption insurance is to provide a recovery for loss of net profits and necessary earned expenses. Additionally, as with all insurance, insurance should comport with Illinois public policy indemnifying the insured for the loss, but not providing a windfall profit. (Beman v. Springfield Fire & Marine Insurance Co. (1940), 303 Ill. App. 554, 25 N.E.2d 60; Patterson v. Durand Farmers Mutual Fire Insurance Co. (1940), 303 Ill. App. 128, 24 N.E.2d 740.) A recovery should provide the insured with net profit, which he/she would have earned during the interruption, plus cash expenditures which were necessary so that he would be able to reopen after the interruption. (Di Leo v. United States Fidelity & Guaranty Co. (1969), 109 Ill. App. 2d 28, 248 N.E.2d 669.) To cover charges and expenses against profit, the insured must establish that they are “normal charges and expenses that are necessary to adequate resumption of the assured’s operations.” DiLeo, 109 Ill. App. 2d at 41, 248 N.E.2d at 675-76.

The amount in dispute between the parties is $19,581. This amount represents a portion of the amount plaintiff deducted on its income tax return for depreciation of the destroyed building and its improvements. The deduction accrued from March 18, 1987, to October 31, 1987 (the period of time from the fire until plaintiff moved into its new building).

Plaintiff states that depreciation on the destroyed building should not have been deducted from the amount due plaintiff under the “loss of earnings and extra expense” provisions of the policy because depreciation is neither an expense nor an operating expense. Plaintiff argues, in essence, that the depreciation charged against income for the period of business interruption should become part of net profit as defined by the policy {i.e., net profit is defined by the policy to be greater than net profit for income tax purposes, because for the purpose of this insurance, net profit would include the allocation for depreciation).

Plaintiff’s argument is misplaced. The policy specifically excludes charges, as well as expenses, that become unnecessary. Even the Illinois Supreme Court considers an allocation for depreciation to be an “operating expense” (see Peoples Gas Light & Coke Co. v. Slattery (1939), 373 Ill. 31, 59, 25 N.E.2d 482, 496-97; Downers Grove Community High School District No. 99 v. Board of Education of Non-high School District (1946), 329 Ill. App. 208, 214, 67 N.E.2d 605, 608), as do other courts, e.g., Daley v. W.H. Stotts (W.D. Okla. 1954), 126 F. Supp. 555, wherein the court described depreciation as “an operating expense”; and authors, e.g., R. Morrison, Business Interruption Insurance, Its Theory and Practice; and E.C. Bardwell, New Profits, Business Interruption Insurance (3d Ed. 1976).

In projecting loss of earnings under the business interruption policy, defendant subtracted from the earnings the “noncontinuing expenses,” i.e., expenses which were saved as a result of the fact the business was not in operation. These correspond to expenses which became unnecessary during the halt in plaintiff’s business. Thus, the determinative issue is whether depreciation on a destroyed building is unnecessary and non-continuing during the period of interruption.

A case most similar to the present dispute is Fidelity-Phenix Fire Insurance Co. v. Benedict Coal Corp. (4th Cir. 1933), 64 F.2d 347. There, the court was asked to determine whether depreciation on property which had been destroyed should be allowed as a fixed charge in determining the insured’s business interruption loss. The policy stated as follows:

“[T]his company shall be liable under this policy for the actual loss sustained consisting of:
1. Net profits on the business which is thereby prevented; 2. Such fixed charges and expenses as must necessarily continue during a total or partial suspension of business, to the extent only that such fixed charges and expenses would have been earned had no fire occurred ***.” Fidelity, 64 F.2d at 350.

In discussing the nature of this type of insurance, the court stated that its purpose was to

“indemnify the assured against losses arising from the interruption of business by fire or other catastrophe insured against; and lost profits and fixed charges and expenses which continue and which would have been earned if the business had gone on are the losses naturally arising from such interruption.” Fidelity, 64 F.2d at 352.

This type of loss is to be determined in a practical way without confinement to that with which the insured keeps his books for income tax purposes. (64 F.2d at 352.) Accordingly, the loss would consist of a loss of profits plus fixed charges and expenses which necessarily continue and which would have been earned if the business had not been interrupted. 64 F.2d at 352.

Pursuant to this analysis, the court concluded that depreciation on a destroyed building during the period of interruption was an unnecessary charge and therefore should not be an element of the loss. The court stated:

“[Depreciation on property which has been destroyed is not to be allowed as a fixed charge, even though it must be considered in estimating profits [i.e., a reduction in profit] which would have been earned if the business had gone on; for manifestly property which has been destroyed cannot depreciate.” 64 F.2d at 353.

In American Insurance Co. v. Pickering Lumber Corp. (N.D. Cal. 1949), 87 F. Supp. 512, the court held that a charge for depreciation on a destroyed building was unnecessary and should not be included as an amount of the loss. The policy provided that a loss consisted of:

“Item I: The net profits on the business which is thereby prevented;
Item II: Fixed charged and expenses only to the extent to which they would have been earned had no fire occurred, as follows: *** depreciation *** and such other fixed charges and expenses which must necessarily continue during a total or partial suspension of business.” (Emphasis in original.) American, 87 F. Supp. at 519.

The court sustained the referee’s position because it recognized that the phrase “which must necessarily continue” substantially limited the class of charges and expenses “which would normally have been earned.” American, 87 F. Supp. at 519.

Further support can be found in the case of Eastern Associated Coal Corp. v. Aetna Casualty & Surety Co. (3d Cir. 1980), 632 F.2d 1068, wherein the court defined a “noncontinuing” or “unnecessary” expense. The court stated as follows:

“Paragraph 10 — b sets forth a formula precisely limiting the scope of recovery. The policy states that the business interruption loss shall not exceed ‘the reduction in earnings less charges and expenses which do not necessarily continue during the interruption.’ A close analysis of the terms of this formula demonstrates that it is subject to only one reasonable interpretation. “ ***
The second element of the formula is the phrase ‘charges and expenses which do not necessarily continue during the interruption.’ This language refers to expenses that the insured business incurs during normal operations which, because of the work stoppage, it does not need to incur during the interruption, such as fuel to run machinery in the mine. Thus, the second element of the formula refers to expenses which could properly be discontinued during the interruption.” Eastern, 632 F.2d at 1077.

The Eastern court agreed with the defendant’s computation and respective position that depreciation was a “noncontinuing” expense which should be deducted from the first element of the formula: earnings (i.e., total net sales value of production). 632 F.2d at 1078 n.16.

For further support of the contention that depreciation allowance on a destroyed building is a charge which becomes unnecessary during the business interruption, see: E.S. Wilson, Business Interruption Coverage A Basic Primer Non-Allowable Expenses in Business Interruption Losses, American Bar Association Journal: Depreciation:

“The depreciation on the insured’s buildings is based on obsolescence and the depreciation on the furniture, fixtures and equipment is based on wear and tear. The depreciation charge should not be allowed as a proper continuing expense on the furniture, fixtures and equipment during the period of interruption. It should be allowed on the building only if the damage to the building is very slight.
Undamaged property, such as automobiles, other real property and furniture, fixtures and equipment located in that real property, would continue to be a proper charge. However, that charge should only be allowed at a reduced rate since the use of that property would be reduced during the period of interruption.” (Emphasis added.)

We believe the defendant properly deducted the depreciation charge because it was a charge which became unnecessary during the business interruption. Moreover, an allowance for the depreciation can only be deducted during the useful life of an asset. A taxpayer cannot depreciate a nonexisting asset. Therefore, it is clear that once an asset has been destroyed, an insured cannot charge a depreciation expense. See, e.g., Fidelity-Phenix Fire Insurance Co. v. Benedict Coal Corp. (4th Cir. 1933), 64 F.2d 347.

The policy at issue clearly and unambiguously provides that the actual loss under the loss of earnings coverage shall not “include any charges and expenses which become unnecessary during the halt in *** business operations.” Accordingly, defendant was correct when it excluded the item of depreciation on the destroyed building in determining the actual loss recoverable under the policy. The depreciation which had been a charge could not continue after the fire and therefore became unnecessary. The trial court was correct in granting defendant’s motion for partial summary judgment on the issue of deduction for depreciation.

In conclusion, we hold that the trial court erred by granting plaintiff’s motion for partial summary judgment in the amount of $54,000 plus interest. We further hold that the trial court did not err by granting defendant’s motion for partial summary judgment on the issue of deduction for depreciation. Accordingly, plaintiff’s cross-appeal is denied.

Affirmed in part; reversed in part.

STOUDER, P.J., and BARRY, J., concur.


source: Caselaw Access Project

license: Public Domain

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. LARRY RIAL, Defendant-Appellant.
    Third District
    No. 3—90—0082
    Opinion filed June 5, 1991.
    Rehearing denied July 2, 1991.

      Larry J. Rial, of Joliet, appellant pro se.

    Edward Burmila, Jr., State’s Attorney, of Joliet (Elizabeth A. Klug, of State’s Attorneys Appellate Prosecutor’s Office, of counsel), for the People.
   JUSTICE McCUSKEY

delivered the opinion of the court;

A jury convicted the defendant, Larry Rial, of attempted murder, armed robbery, aggravated kidnapping, and armed violence. The trial court vacated the armed violence conviction and sentenced the defendant to concurrent terms of 30, 30, and 15 years’ imprisonment, respectively. This court affirmed his conviction on appeal. (People v. Rial (3d Dist. 1983), No. 3— 83—0276 (unpublished order under Supreme Court Rule 23).) Thereafter, the defendant filed a post-conviction petition, which the trial court dismissed without a hearing. The defendant appeals that dismissal. We affirm.

The record shows that the defendant filed a pro se post-conviction petition and thereafter counsel was appointed to represent him. The defendant continued to file pro se supplemental and amended petitions. Thereafter, defendant’s counsel filed a motion to withdraw as counsel, stating that no amendments to the defendant’s pro se petitions could be made and that no constitutional issues existed which could be presented to the court.

The trial court granted defense counsel’s motion, and the defendant proceeded on his pro se petitions. The State filed a motion to dismiss the petitions, and the trial court granted the motion.

On appeal, the defendant first argues that he was denied effective assistance of counsel due to the trial court’s error in allowing his post-conviction counsel to withdraw.

In a post-conviction case, compliance with Supreme Court Rule 651(c) (87 Ill. 2d 651(c)), which requires certification that the attorney consulted with the petitioner, examined the record, and made any necessary changes in the petition, is sufficient representation. People v. Robinson (1987), 160 Ill. App. 3d 366, 513 N.E.2d 603.

Here, the record shows that the defendant’s counsel complied with Supreme Court Rule 651(c). In his motion to withdraw, counsel certified the following: (1) he had consulted with the defendant on two occasions; (2) he had examined the entire record of the trial proceedings and the common law record; and (3) it was his opinion no amendments to the defendant’s pro se petition were necessary based on counsel’s conclusion that no constitutional issues existed which could properly be presented to the court in a post-conviction proceeding. The record also shows the trial court conducted a hearing on counsel’s motion before granting it.

Based on the record, we find that defense counsel adequately consulted with the defendant and would have been aware of any necessary amendments to the petition. As such, we conclude defendant’s counsel complied with Rule 651(c) and rendered effective assistance.

The defendant next argues the trial court erred in dismissing his petition without a hearing. He alleges he was entitled to a hearing due to the fact his petition raised eight errors that occurred below.

The defendant’s first two alleged errors concern ineffective assistance of counsel.

A defendant is not entitled as a matter of right to an evidentiary hearing on a post-conviction petition alleging incompetency of counsel. (People v. Hanrahan (1985), 132 Ill. App. 3d 640, 478 N.E.2d 31.) Conclusional allegations concerning the competency of counsel are not sufficient to require a post-conviction hearing. (People v. Howard (1981), 94 Ill. App. 3d 797, 419 N.E.2d 702.) Furthermore, a defendant who alleges incompetency must show that counsel’s shortcomings affected the outcome of the proceedings. (People v. Albanese (1984), 104 Ill. 2d 504, 473 N.E.2d 1246.) Denial of an evidentiary hearing on a post-conviction petition is discretionary with the trial court, and its decision will not be reversed absent an abuse of that discretion. People v. Hanrahan (1985), 132 Ill. App. 3d 640, 478 N.E.2d 31.

In the case at hand, the defendant first contends that his counsel was ineffective because counsel was running for public office and as such was not able to devote adequate time to the defendant’s case. He alleges that due to this, counsel failed to adequately interview witnesses and investigate.

When the defendant attacks the competency of his counsel for failing to call or contact witnesses, he must attach affidavits from those witnesses to his post-conviction petition and explain the significance of their testimony. (People v. Carmickle (1981), 97 Ill. App. 3d 917, 424 N.E.2d 78.) Here, the defendant has failed to support his allegations with affidavits from witnesses pointing out testimony that would have been favorable to him or would have affected the outcome of the proceedings. As such, we cannot say his counsel was ineffective.

The defendant next alleges his counsel was ineffective for failing to file a motion to suppress evidence. Specifically, he states that evidence found in his home was improperly admitted because he never gave the police consent to search his home.

The record shows that Deputy Sheriff Raymond Compton testified the defendant gave him permission to search his home. The defendant does not cite, nor were we able to find, any evidence in the record contradicting Compton’s testimony. Accordingly, we find the defendant’s contention to be without merit.

The defendant raises a number of different issues wherein he contends he is entitled to an evidentiary hearing due to errors of constitutional dimension.

A defendant is not entitled to an evidentiary hearing as a matter of right, but has the burden of showing a substantial denial of his constitutional rights. (People v. Hanrahan (1985), 132 Ill. App. 3d 640, 478 N.E.2d 31.) The denial of an evidentiary hearing on a post-conviction petition is discretionary with the trial court, and its decision will not be reversed absent a manifest abuse of discretion. People v. Reed (1980), 84 Ill. App. 3d 1030, 405 N.E.2d 1065.

The defendant first argues the trial court erred in dismissing his petition because the State withheld evidence favorable to him. He contends that four witnesses conspired against him and the State failed to turn over a diary which contained evidence of the conspiracy. In addition, the State withheld information regarding the victim’s criminal history.

The suppression by the State of material evidence favorable to an accused which was requested by the defense is a violation of due process. (People v. Morgan (1979), 76 Ill. App. 3d 302, 395 N.E.2d 103.) In the case at hand, the defendant has failed to support his claim the State withheld evidence. Regarding his contention the State failed to provide him with information on the victim’s criminal history, the record shows the State did give him that information.

As to his contention the State withheld a diary, we note the defendant has failed to supply this court with a record cite showing he requested the State to provide it. More importantly, he has failed to file any affidavits from witnesses testifying that such a diary actually existed or, if it did exist, that the State knew about it and withheld it from the defendant.

The defendant next argues that he is entitled to a hearing because of the State’s use of perjured testimony. He alleges that witnesses Bales, Keagle, Harris, and Buie all conspired against him and perjured themselves at his trial.

At the onset, we note Buie and Keagle did not testify at the defendant’s trial. Once again, the defendant has supplied us with mere conclusions of errors. He has failed to provide record cites showing what testimony was allegedly false. Furthermore, he has failed to file affidavits or point to any evidence that supports his contention that the witnesses perjured themselves or conspired against him.

The defendant next contends he is entitled to a hearing due to trial court misconduct. He alleges the court committed the following errors: (1) denied him a copy of his codefendant’s trial transcripts; (2) denied his attorney the right to impeach a witness; (3) withheld information regarding his codefendant’s mental instability; and (4) responded to two jury questions without notifying the defendant that questions had been posed.

We find the defendant’s allegations to be without merit. Regarding the first contention, the record shows the trial court held that the defendant could have a copy of the codefendant’s transcripts. The court found, however, the defendant was not entitled to a free copy of it and if he wanted it he would have to pay the expenses.

We find the trial court’s decision was correct. While the law holds that an indigent defendant is entitled to a free transcript of his own trial (Griffin v. Illinois (1956), 351 U.S. 12, 100 L. Ed. 891, 76 S. Ct. 585), it does not hold he is entitled to a free transcript of someone else’s trial.

The defendant’s second contention is the court erred in not allowing defense counsel to impeach a witness. However, he has failed to provide this court with a record cite showing where this alleged error occurred. In addition, he has failed to file affidavits showing what witness could have been impeached and what evidence could have been used to impeach the witness. As such, we cannot conclude any error occurred.

The defendant’s third contention is the trial court erred in withholding information from him. The defendant is apparently arguing a trial court has the responsibility of supplying a defendant with evidence. However, he has failed to cite any cases that support this proposition, and as such, we find his contention to be without merit.

The defendant’s fourth contention regarding court misconduct is that the trial court answered two questions posed by the jury without notifying him.

Once again the defendant has failed to provide a record cite showing where these errors occurred. Our review of the record shows the jury sent one question to the court. In addition, the record tends to show the defendant and his attorney were present to discuss the answer that was given to the jury.

The defendant next argues he is entitled to a hearing because of police misconduct. Specifically, he alleges the police threatened Stacie Rial in connection with this case.

The defendant filed an affidavit from Stacie stating the police threatened to arrest her unless she gave them some letters. However, he has failed to show how this amounts to a substantial denial of a constitutional right since he did not establish that these letters were used against him at trial.

The defendant next argues he is entitled to a hearing because he was not properly informed of all his rights regarding a speedy trial. Specifically, he contends he was not told that if he waived his right to a speedy trial in the case at hand, it would affect his rights in all other pending cases wherein he was a defendant.

We find the defendant’s contention to be irrelevant. He has not shown how his waiver in this case prejudiced him or how it possibly affected the outcome of this proceeding.

The defendant next argues he was denied meaningful access to the courts. He alleges the trial court improperly allowed his post-conviction counsel to withdraw and then improperly denied his repeated requests for appointment of new counsel.

As we have previously held, the trial court properly allowed defense counsel to withdraw pursuant to Supreme Court Rule 651. Regarding the defendant’s contention that other counsel should have been appointed, we find the record does not support this. Here, the defendant told the trial court he was prepared to represent himself for the remainder of the hearings on his post-conviction petition. As such, we decline to allow the defendant to complain of a procedure he himself requested.

The defendant next contends his petition was improperly dismissed since the court’s decision was based solely on defense counsel’s statement that no constitutional issues existed.

Once again the record fails to support the defendant’s contention. Instead, it shows the State filed a motion to dismiss which included a memorandum that addressed each of the issues raised in the petitions.

The defendant’s final argument is that the jury instruction for attempted murder was defective because it did not state that the intent to kill was a necessary element of the crime.

This same issue was addressed in People v. Roberts (1979), 75 Ill. 2d 1, 387 N.E.2d 331. There, the court held that the giving of the defective attempted murder instruction did not constitute the denial of a constitutional right cognizable under the Post-Conviction Hearing Act (Ill. Rev. Stat. 1987, ch. 38, par. 122—1 et seq.). We agree and as such find the defendant was not entitled to a hearing on this issue.

In conclusion, we find the defendant’s allegations did not sustain his burden so as to require an evidentiary hearing. His allegations were either mere conclusions not supported by the record or affidavits, or were allegations regarding matters that did not raise a constitutional issue.

Accordingly, the judgment of the circuit court of Will County is affirmed.

Affirmed.

STOUDER, P.J., and BARRY, J., concur.


author: JUSTICE INGLIS

text:
      In re ESTATE OF THOMAS ROBERT HOPKINS, Deceased (Terri-Beth Brown, Petitioner-Appellee, v. Nancy L. Hopkins, Respondent-Appellant; Borg-Warner Corporation, Respondent).
    Second District
    Nos. 2—90—0894, 2—90—1007 cons.
    Opinion filed June 7, 1991.

      Arvey, Hodes, Costello & Burman, of Chicago (Joel S. Siegel, of counsel), for appellant.
    Nisen & Elliott and Stephen P. Bedell, of Gardner, Carton & Douglas, both of Chicago (John Kevin Kneafsey, of counsel), for appellee.
   JUSTICE INGLIS

delivered the opinion of the court:

Petitioner, Terri-Beth Brown, and respondent, Nancy L. Hopkins, each filed a motion for summary judgment asking that Borg-Warner Corporation be directed to distribute to the respective movant the benefits due under a Borg-Wamer Investment Plan (Plan) as a result of the death of the Plan’s participant, Thomas Robert Hopkins, the decedent. The trial court granted Terri-Beth’s motion for summary judgment and denied Nancy’s. Subsequently, the trial court ordered Borg-Warner to distribute the decedent’s benefits to Terri-Beth. Nancy timely appeals both orders, and the appeals have been consolidated. On appeal, the following issues are raised: (1) whether the antenuptial agreement entered into between the decedent and Nancy precludes Nancy from receiving decedent’s benefits under the Plan and (2) whether the trial court abused its discretion in denying Nancy’s motion to file instanter a second amendment to her answer to the petition for distribution of benefits. We affirm.

Respondent, Nancy L. Hopkins, is the surviving spouse of the decedent, Thomas Robert Hopkins. Nancy and the decedent were married on April 17, 1982. The day before their marriage, April 16, 1982, Nancy and the decedent entered into an antenuptial agreement which provided that each party would retain his or her separate property and would not have any rights to the estate or property of the other when the marriage was terminated by death or legal proceedings. The decedent died on November 11,1985.

At the time of his death, and for a number of years prior thereto, the decedent was employed by the Borg-Warner Acceptance Corporation, a subsidiary of the Borg-Warner Corporation. During his employment, the decedent participated in the Borg-Warner Corporation Investment Plan. In August 1977, the decedent executed a beneficiary designation form under the Plan, naming Margaret C. Hopkins, the decedent’s daughter from a previous marriage, as the beneficiary of the benefits due under the Plan. The decedent further provided that, if Margaret were a minor at the time of his death, the benefits were to be paid to petitioner, Terri-Beth Brown, decedent’s sister, as trustee for Margaret. Margaret is presently a minor.

Effective August 23, 1984, the Retirement Equity Act of 1984 (REA) (29 U.S.C. §1055 (1988); 26 U.S.C. §§401, 417 (1988)) amended various provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code. The applicable amended provisions provide that qualified plans must provide that the surviving spouse is to receive benefits under a plan following the death of the participant spouse unless the surviving spouse consents in writing to waive the benefits and such writing is witnessed by a plan representative or a notary public.

There is no dispute that the Borg-Warner Investment Plan is a qualified plan within the terms of the amendment. Consequently on September 3, 1985, Borg-Warner amended its Plan to incorporate the above changes. The Plan now provides that a participant’s spouse must consent in writing to any designation of a beneficiary unless the spouse is designated as the beneficiary.

Borg-Warner notified all married participants in the Plan, by letter dated February 15, 1985, that REA required the consent of a participant’s spouse if the participant had designated someone other than his or her spouse as his or her beneficiary under the Plan. If a non-spouse had been previously designated, the participant was informed to complete a new beneficiary designation form and to include the spouse’s signature. The letter requested the participant to return the new form no later than March 31, 1985. According to the letter, if the spouse’s consent for a nonspouse beneficiary was not on file with the Plan administrator at the time of the participant’s death, the participant’s account balance would be paid to his or her spouse notwithstanding the fact that another beneficiary had been designated. Although there is nothing in the records of Borg-Warner confirming that the decedent received the February 15 letter, a social acquaintance and co-worker of the decedent indicated that the decedent did, in fact, receive the letter.

Borg-Warner never received a new beneficiary designation form from the decedent, nor did Nancy ever sign a designation form consenting to the designation of a nonspouse beneficiary.

After the decedent’s death, Terri-Beth Brown was appointed as the executor of the decedent’s estate. Terri-Beth filed a petition in the probate court requesting that Borg-Warner be ordered to distribute the decedent’s benefits under the Plan to her as trustee for Margaret Hopkins, the decedent’s minor daughter.

Subsequent to the filing of Terri-Beth’s petition, Nancy filed an action in the United States District Court for the Northern District of Illinois seeking to recover the benefits under the investment Plan and stating that the Federal court had exclusive jurisdiction pursuant to 28 U.S.C. §1332 (1988) and also based upon section 1132(e)(1) of ERISA (29 U.S.C. §1001 et seq. (1988)) (Hopkins v. Brown (N.D. Ill. August 7, 1986), No. 86—C—2260). Terri-Beth filed a motion to dismiss the complaint on the basis that a parallel proceeding was pending in probate court in Du Page County and that the Federal court should, therefore, apply the abstention doctrine to permit the State court proceedings to be completed without interference. The Federal district court ruled that the abstention doctrine applied; however, rather than dismissing the proceedings, the Federal court stayed the proceedings pending resolution of the cause in the State court.

After the Federal district court made its ruling, Nancy filed a petition in the circuit court to set aside the antenuptial agreement. The circuit court dismissed the petition to invalidate the agreement, and Nancy appealed. This court affirmed the dismissal and the validity of the agreement. In re Estate of Hopkins (1988), 166 Ill. App. 3d 652.

Terri-Beth then filed a motion for summary judgment (Ill. Rev. Stat. 1989, ch. 110, par. 2—1005) on her earlier filed petition, seeking the court to order Borg-Warner to honor the designation of beneficiary form signed by the decedent and to distribute the funds in the Plan to Margaret Hopkins. Nancy filed a similar motion requesting that the court direct Borg-Warner to distribute to her all of the benefits due under the Plan.

At the conclusion of the hearing on the motions, Nancy presented a motion for leave to file a second amendment to her answer. The trial court denied Nancy’s motion for leave to amend and subsequently denied her motion for summary judgment. The trial court granted summary judgment in favor of Terri-Beth and ordered Borg-Warner to distribute decedent’s benefits under the Plan to Terri-Beth. Nancy appeals.

Initially, we note that a motion for summary judgment should be granted when the pleadings, depositions, admissions, and affidavits establish that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. (Ill. Rev. Stat. 1989, ch. 110, par. 2—1005(c); Zaferopulos v. City of Chicago (1990), 206 Ill. App. 3d 904, 908.) Here, the parties apparently agree that there is no material issue as to fact; however, each party claims that as a matter of law, she is the one who is entitled to judgment. The central issue in deciding the case is whether the ante-nuptial agreement signed by Nancy was sufficient to waive her right to receive the decedent’s benefits under the Plan.

This court has already determined that the antenuptial agreement entered into between Nancy and the decedent is valid and enforceable (Hopkins, 166 Ill. App. 3d at 658); thus, we need only to construe the effects of that agreement. Generally, the rules governing construction of other contracts are applicable to antenuptial agreements. (Hopkins, 166 Ill. App. 3d at 656.) In determining the scope of an antenuptial agreement, the agreement should be read in its entirety so that the real intentions of the parties are given effect. (In re Estate of Anderson (1990), 195 Ill. App. 3d 644, 649.) A right in the estate of a spouse can be relinquished without the use of precise words to that effect, providing that the contract contains sufficient language showing that it was the intention of the parties to release such a right in the antenuptial agreement. Anderson, 195 Ill. App. 3d at 650.

We agree with the trial court that, in reading the antenuptial agreement in the case at bar, it is clear that the parties intended Nancy to waive any rights she had to the decedent’s benefits under the Plan. Paragraph (4)(b) of the agreement states:

“Nancy agrees to disclaim, release, and relinquish to [the decedent], his heirs, legal representatives, assigns, legatees, and devisees all and singular, all and every right, claim, estate whether actual, inchoate, or contingent of every kind and character she might, would or could have by reason of marriage, or surviving spouse, heir at law, or otherwise.”

Attached to the agreement is a schedule of the decedent’s property, which includes an employee retirement plan that appears to be a reference to the Plan in question. Although the agreement does not specifically include the terms “benefits” or “beneficiary,” we find that the language in the agreement is sufficiently comprehensive to include any rights Nancy has under the Plan.

Nancy contends that the antenuptial agreement is ineffective in waiving her rights under the Plan because she did not obtain those rights until REA was enacted, which was over two years into their marriage. However, it is clear by the language of the agreement that the waiver was intended to include any future acquired rights. Specifically, the recital provision of the agreement provides, in part, that “[i]t is the intention of the parties that any property which they may hereafter acquire and/or inherit in their sole and separate capacities shall remain separate and free from claims of the other, the same as the separate property now owned by them.” Paragraph 3 provides that the term “property” used in the agreement “shall include all the property now owned or hereafter acquired.” Finally, paragraph 4 provides:

“All properties of any name or nature, real or personal or mixed, wherever they may be found belonging to [the decedent] before, or acquired after the marriage or to which he may become entitled by inheritance or otherwise shall be and remain forever his own real and personal estate as if the contemplated marriage had never occurred.”

We find from the prospective nature of the language that all future rights acquired by Nancy under the Plan were waived by the agreement.

Nancy contends that even if the antenuptial agreement waived her rights to the decedent’s benefits, the waiver was ineffective under REA and the Plan. As stated above, REA provides that a surviving spouse is to receive the benefits under a qualified plan following the death of the covered spouse unless such benefits are specifically waived by the surviving spouse. (29 U.S.C. §1055 (1988).) A waiver of benefits must be in writing, acknowledging the effect of the waiver, and witnessed by a plan representative or a notary public. 29 U.S.C. §1055(c)(2) (1988).

Nancy contends that these statutory provisions control rather than State law. In support, Nancy cites to section 1144(a) of ERISA, which provides that Federal law shall supersede all State laws which “relate to” an ERISA plan. (29 U.S.C. §1144(a) (1982).) A law “relates to” an ERISA plan “if it has a connection with or references to such a plan.” (Shaw v. Delta Air Lines, Inc. (1983), 463 U.S. 85, 96-97, 77 L. Ed. 2d 490, 501, 103 S. Ct. 2890, 2900.) The designation of beneficiaries plainly relates to an ERISA plan, and thus, Federal law applies. McMillan v. Parrott (6th Cir. 1990), 913 F.2d 310, 311; Fox Valley & Vicinity Construction Workers Pension Fund v. Brown (7th Cir. 1990), 897 F.2d 275, 278.

Terri-Beth’s citation to In re Estate of Anderson (1990), 195 Ill. App. 3d 644, does not persuade us otherwise. We note that the preemption statute applicable in Anderson is much narrower in scope than the statute governing ERISA. The Anderson statute preempted State law which relates to group life insurance to the extent that the law is inconsistent with the contractual provisions. In comparison, the ERISA statute simply preempts State law that relates to any nonexempt employee benefit plan. Because ERISA is such a comprehensive statute, we find that it preempts State law (Arnold v. Babcock & Wilcox Co. (1987), 154 Ill. App. 3d 863, 870); thus, Anderson is not controlling.

Despite the fact that Federal law controls the resolution of this issue, we find that the antenuptial agreement was a sufficient waiver of Nancy’s rights to the benefits under the Plan. As our above discussion indicates, we find that the antenuptial agreement included a waiver by Nancy of any right in the Plan. This waiver is in writing and is notarized as required under REA. In addition, it has already been held that a surviving spouse can waive her interests in a plan under REA without following its specific waiver requirements. Fox Valley, 897 F.2d at 279.

In Fox Valley, the decedent had named his wife as beneficiary under an employee benefits plan. The couple was subsequently divorced and entered into a court-approved property settlement that included the following proviso: “ ‘The parties each waive any interest or claim in and to any retirement, pension, profit-sharing and/or annuity plans resulting from the employment of the other party.’” (Fox Valley, 897 F.2d at 277.) After the divorce, the couple continued to live together, and the decedent made no effort to change his designated beneficiary before his death a year later. The court held that while the wife was designated as the beneficiary, she was not entitled to the pension benefits because she waived her interest in the benefits in the property settlement. (Fox Valley, 897 F.2d at 281.) Although Federal statute specifies the procedure necessary to assign benefits, the court held that those procedures need not be followed when a nonparticipant is waiving an interest in pension benefits. Fox Valley, 897 F.2d at 279-80.

Similarly, Nancy waived her right to receive the pension benefits through the use of the antenuptial agreement. We find this to be an effective waiver despite the fact that the agreement does not specifically acknowledge the effect of the benefits waived as required by REA. (29 U.S.C. §1055(c)(2)(A) (1988).) We note that the agreement implies the effect of the waiver, which we find to be sufficient under Fox Valley.

Nancy’s reliance on McMillan v. Parrott (6th Cir. 1990), 913 F.2d 310, is unpersuasive. In McMillan, the decedent was a participant in two ERISA plans. He named his wife as cobeneficiary along with his son from a prior marriage. The couple was subsequently divorced and entered into a joint settlement, whereby each spouse relinquished “any and all” claims he or she might have against the other. However, the decedent failed to remove his wife’s name as beneficiary under the plans before his death. ERISA mandates that a plan administrator discharge his duties “ ‘in accordance with the documents and instruments governing the plan.’” (McMillan, 913 F.2d at 311, quoting 29 U.S.C. §1104(a)(1)(D) (1982).) The McMillan court held that the designation in the plans’ documents controlled, not the surviving ex-spouse’s intent and, thus, the waiver was ineffective. McMillan, 913 F.2d at 312.

McMillan is distinguishable from the case at bar in several respects. First, we note that the ex-wife in McMillan was named as a beneficiary in the plan, and it was she who was given the proceeds under the plan. In the case at bar, the decedent’s daughter was named as the beneficiary, not Nancy. Thus, if we are to determine the decedent’s intent by the designation on file at the time of his death, it is clear that Margaret should prevail. (McMillan, 913 F.2d at 312.) Further, we note that the waiver at issue in McMillan was much more general than the waiver in the case at bar, and the McMillan waiver made no mention of the plans. (McMillan, 913 F.2d at 312.) Here, we have already determined that the antenuptial agreement did refer to the Plan and, thus, McMillan is not controlling.

Despite Nancy’s contentions to the contrary, we find our interpretation of REA to be consistent with Congress’ intent in enacting the amendment. The Senate report indicated, under the heading entitled “Reasons for Change,” the following:

“The committee believes that present law results in inequitable treatment of participants in pension plans who die before reaching the normal retirement age under the employer’s plan. Under the rules of present law, the participant’s spouse may be entitled to no survivor benefits under the plan even though the participant had accrued significant vested benefits before death. Therefore, the committee believes that it is appropriate to provide automatic survivor benefits to the spouse’s [sic] of vested participants.
In addition, because the committee believes that a spouse should be involved in making choices with respect to retirement income on which the spouse may also rely, the bill requires spousal consent when a participant elects not to take a survivor benefit.” Sen. Rep. No. 98-575, reported in 1984 U.S. Code Cong. & Admin. News 2558.

Here, Nancy was not entitled to rely on the pension as retirement income because she waived her right to do so in the antenuptial agreement. She clearly made an informed choice in entering the agreement, and, as such, she should not now be allowed to renege on that agreement. We do not find our interpretation of the amendment to be inconsistent with Congress’ intent.

Nancy concedes in her memorandum that the REA does not specifically prohibit the use of a prospective waiver; however, she maintains that the prohibition is implied by the fact that the statute requires spousal consent. She argues that, because she was not a spouse when she signed the antenuptial agreement, the waiver contained therein does not satisfy the statute. We disagree. Nancy and the decedent entered into the antenuptial agreement in contemplation of marriage. The agreement was intended to settle in advance the rights of the respective spouses in the property of each other upon divorce or death. (Eule v. Eule (1974), 24 Ill. App. 3d 83, 86.) Thus, the agreement is designed to be entered into prior to marriage, when the parties have no rights in one another’s estates. We have already determined that the agreement in the case at bar included the waiver of pension benefits. The fact that Nancy was not a spouse when she made the waiver is irrelevant. Again, we rely on Fox Valley to find that the waiver was sufficient under REA.

In arguing that the antenuptial agreement lacks the requisite statutory consent, Nancy cites to a question and answer provided by the Treasury Department. Specifically, Question and Answer 28 of Treasury Regulations §1.401(a)—20 states:

“Q — 28: Does consent contained in an antenuptial agreement or similar contract entered into prior to marriage satisfy the consent requirements of section 401(a)(ll) and 417?
A — 28: No. An agreement entered into prior to marriage does not satisfy the applicable consent requirements, even if the agreement is executed within the applicable election period.”

First, we note that it is doubtful whether the Internal Revenue Code is even applicable to the issue presented. However, as Nancy apparently concedes, the question and answer above is an interpretative rule and, as such, is not binding. The precedential value of an interpretative rule has been explained as follows:

“ ‘Interpretative’ regulations are those which purport to do no more than interpret the statute being administered, to say what it means. They constitute the administrator’s construction of a statute. In such instances the administrative agency is merely anticipating what ultimately must be done by the courts; they are performing a judicial function rather than a legislative function, and interpretative regulations (in the absence of ratification by the legislature) have validity in judicial proceedings only to the extent that they correctly construe the statute and then, strictly speaking, it is the statute and not the regulation to which the individual must conform.” (1 Am. Jur. 2d Administrative Law §95, at 893 (1962).)

We find that the answer provided by the Treasury Department to question 28 is incorrect as applied to our case and, thus, decline to follow it.

Our above analysis regarding the effect of the antenuptial agreement on REA is equally applicable to the Plan’s amendment. The fact that Nancy did not consent, as required in the corporation’s February 15, 1985, letter, does not affect the validity of the waiver in the ante-nuptial agreement. The changes made to the Plan were a direct result of the enactment of REA and very similar language was used. Thus, an effective waiver under REA is similarly effective under the Plan.

Next, Nancy contends that the decedent intended by his inaction to make her the beneficiary under the Plan. Nancy argues that the antenuptial agreement did not prohibit the decedent from naming her as his beneficiary, nor was she precluded from accepting any gift from the decedent of his property. Nancy cites to numerous assets, including benefits from Borg-Wamer, that the decedent gave to her. Nancy contends that the decedent’s inaction after receiving the letter from Borg-Warner, informing him of the need to redesignate a non-spouse beneficiary, “coupled with his knowledge of the consequences thereof indicate his intent to make Nancy his beneficiary under the Plan as he had previously made her the beneficiary of other benefits.” We disagree. In a majority of the “other benefits” cited, Nancy was made an equal beneficiary with the decedent’s daughter, Margaret. In addition, Margaret was named as the sole legatee in the decedent’s will. The antenuptial agreement specifically provided: “It is the parties’ intention *** to leave their respective properties in each case, solely to their children by the previous marriages.” Thus, the fact that Nancy was given a few assets by the decedent does not indicate to us that the decedent intended to name Nancy as the sole beneficiary under the Plan in question.

Further, any claim made by Nancy that the decedent made a gift to her of the benefits is without merit. A “gift” is defined as “a voluntary, gratuitous transfer of property by one to another where the donor manifests an intent to make such a gift and absolutely and irrevocably delivers the property to the donee.” (In re Marriage of Cook (1983), 117 Ill. App. 3d 844, 849.) Nancy has presented no persuasive evidence as to donative intent, nor has she presented any evidence indicating a delivery. The burden of proof rests upon the donee to prove all facts essential to a valid gift (Pocius v. Fleck (1958), 13 Ill. 2d 420, 427); Nancy has clearly failed to meet her burden. Consequently, we find that no gift was made, that the antenuptial agreement controls, and that Nancy waived her right to receive the Plan’s benefits.

Finally, Nancy contends that the trial court erred in denying her motion for leave to file instanter a second amendment to her answer. Nancy attempted to file the amendment at the conclusion of the hearing on the motions for summary judgment. In presenting the motion to the trial court, Nancy maintained that there was nothing new in the amendment, rather she argued that she wanted to file the amendment in order to conform her answer with the allegations contained in her memorandum in support of her motion for summary judgment. Terri-Beth objected, and the trial court denied the motion stating that, if the motion for summary judgment did not dispose of the case on the pleadings, Nancy could file anything she needed to amend. On appeal, Nancy contends that in so ruling, the trial court abused its discretion.

Section 2—1005(g) of the Code of Civil Procedure (Ill. Rev. Stat. 1989, ch. 110, par. 2—1005(g)) provides: “Before or after the entry of a summary judgment, the court shall permit pleadings to be amended upon just and reasonable terms.” Terms are considered to be “just and reasonable” if, by permitting the amendment, the ends of justice will be furthered. (Wingate v. Camelot Swim Club, Inc. (1990), 193 Ill. App. 3d 963, 967.) The relevant factors in determining whether the trial court properly exercised its discretion in denying the amendment proposed are: whether the proposed amendment would cure the defective pleading; whether other parties would sustain prejudice or surprise by virtue of the proposed amendment; the timeliness of the proposed amendment; and whether previous opportunities to amend the pleadings could be identified. Siebert v. Continental Oil Co. (1987), 161 Ill. App. 3d 891, 895.

Because the proposed amendment would not have cured Nancy’s defective answer, we find no abuse of the trial court’s discretion in denying her motion for leave to amend. In ruling on a motion for summary judgment, the trial court is to consider the pleadings, admissions, and affidavits, if any, to determine whether there is a genuine issue as to material fact and whether the moving party is entitled to judgment as a matter of law. (Zaferopulos v. City of Chicago (1990), 206 Ill. App. 3d 904, 908.) Here, Nancy concedes that the allegations in her amendment are not new, as they are contained in her memorandum in support of her motion for summary judgment. In ruling on the motions for summary judgment, the trial court was bound to consider Nancy’s memorandum, which included the allegations contained in her proposed amendment. Thus, the trial court was correct in finding that the proposed amendment would have been ineffective in curing any defects in Nancy’s answer.

Accordingly, for all the foregoing reasons, we affirm the judgment of the circuit court of Du Page County.

Affirmed.

McLAREN and GEIGER, JJ., concur.


author: JUSTICE LINN

text:
    ATLANTA INTERNATIONAL INSURANCE COMPANY et al., Plaintiffs-Appellees, v. CHECKER TAXI COMPANY, INC., et al., Defendants-Appellants.
    First District (4th Division)
    Nos. 1—90—1004, 1—90—1005 cons.
    Opinion filed May 2, 1991.
    Rehearing denied June 19, 1991.
    Beermann, Swerdlove, Woloshin & Barezky, of Chicago (Alvin R. Becker and Joel M. Horwich, of counsel), for appellant Checker Taxi Company, Inc.

      Sonnenschein, Nath & Rosenthal, of Chicago (John I. Grossbart and Richard C. Chessen, of counsel), for appellant Guillermo Bonillo.
    Conklin & Roadhouse, of Chicago (John S. Roadhouse and Alexandra Jackson Rieser, of counsel), for appellees.
   JUSTICE LINN

delivered the opinion of the court:

Plaintiffs, Atlanta International Insurance Company and Royal Insurance Company, filed a declaratory judgment action seeking a determination that they had no duty to provide excess insurance coverage for losses arising out of an accident involving Checker Taxi and one of its drivers, an additional insured. Atlanta and Royal contended that they were discharged from contractual liability under their excess insurance policies because Checker failed to timely provide notice of a loss and subsequent wrongful death lawsuit, in contravention of the policies’ notice provisions. The trial court granted both insurers’ motions for summary judgment, ruling that Checker’s notice, given two years after the accident, was untimely as a matter of law. The court further held that the driver of the taxi, Guillermo Bonillo, was not entitled to coverage because Checker’s failure to give prompt notice also was binding on him as an additional insured.

Both Checker and Bonillo appeal from their adverse judgments. The issue common to both parties’ appeal is whether the trial court erred in finding the timing of notice unreasonable as a matter of law. Bonillo additionally contends that his particular circumstances differ from those of Checker and thus Checker’s failure to give prompt notice should not bar his own right to be considered separately for insurance coverage under the policies.

We reverse.

Background

On December 30, 1983, Bonillo was driving a leased Checker cab when it collided with the car driven by Elizabeth Hoxie. She died as a result of her injuries. In accordance with his lease obligations, Bonillo immediately gave notice of the accident to Checker and Checker’s primary insurer, American Country Insurance Company (ACIC). Although Bonillo was unaware of the fact, Checker also maintained excess insurance coverage issued by Atlanta and Royal.

On the same day as the accident occurred, ACIC sent an investigator to the scene to interview witnesses and speak with police and fire personnel. The investigator obtained a police report and took an initial set of photographs. In the days that followed, the insurance company through its investigators secured the Checker cab, took more photographs of the scene, and engaged a consulting company to conduct a scientific analysis or reconstruction of the accident. The resulting report confirmed part of Bonillo’s story, that the rear bumper of the cab he was driving had been struck shortly before the accident.

According to Bonillo, while he was driving south on Lake Shore Drive, within the speed limit, he noticed a white car coming up fast behind him, driving erratically and swinging in and out of lanes. In seconds the car had swerved directly behind Bonillo’s cab, and before Bonillo could react, the car swerved to the adjoining lane on the right in an attempt to avoid colliding with the cab. In so doing, the white car struck the rear bumper of the cab, causing it to go out of control. The roads were wet and slick, and the impact from the white car caused Bonillo to drive across the concrete median strip into oncoming northbound traffic. Bonillo’s cab and Elizabeth Hoxie’s automobile collided head-on. The white car made no attempt to stop.

Under Illinois law, Checker and other taxi companies are required to maintain a certain amount of liability coverage for injuries arising from cab drivers’ use of leased automobiles. Checker obtained primary coverage in the amount of $250,000 and also purchased several layers of excess coverage. ACIC, the primary insurer, was obligated to pay up to $250,000 in primary coverage and an additional $150,000 as the first layer of excess.

Checker purchased a second layer of excess coverage from Atlanta. This coverage would take effect after the $400,000 total coverage provided by ACIC was exhausted. Maximum payment under Atlanta’s policy was $850,000. Royal provided the third layer of excess coverage, which would take effect after the $1.25 million in combined coverage provided by ACIC and Atlanta. The maximum pay out under the Royal policy was'$9 million.

Each successive layer of insurance tracks the coverage of the layer below, meaning that the language of ACIC’s primary policy governs the nature and extent of liability coverage. The ACIC policy definition of “insureds” includes persons in Bonillo’s position, and there is no dispute over his status as an additional insured under all of the policies.

The notice provision in Atlanta’s policy requires the insured to “immediately advise the Company of any accident or occurrence which appears likely to result in liability under this policy.”

Royal’s notice provision states in part:

“Whenever the Insured has information from which they may reasonably conclude that an occurrence covered hereunder involves injuries or damage which, in the event that the Insured shall be held liable, is likely to involve this policy, notice shall be sent to the Company as soon as practicable ***.”

Neither policy requires the insured to give notice of every accident or claim made, and the issue in the pending case centers on whether the notice Checker gave both insurers, two years after the accident, was fatally tardy.

Opinion

The trial court apparently interpreted the above notice provisions as requiring Checker to give notice either contemporaneously with the actual collision or no later than the filing of the wrongful death lawsuit. In so doing, the court found it unreasonable, as a matter of law, for Checker to wait two years after the date of the occurrence to give notice to its excess insurance carriers. Cf. McFarlane v. Merit Insurance Co. (1978), 58 Ill. App. 3d 616, 374 N.E.2d 951 (lengthy passage of time is not an absolute bar); Grasso v. Mid-Century Insurance Co. (1989), 181 Ill. App. 3d 286, 536 N.E.2d 977 (two-year delay not unreasonable under the circumstances of the case).

In view of the undisputed facts of record, we disagree with the trial court’s conclusion. After Bonillo reported the accident, investigators for ACIC conducted a thorough investigation and compiled a substantial amount of evidence. In addition to procuring witness statements, photographs, police reports and similar material, the investigators located a white Oldsmobile which had recently undergone major front-end body repair and which was suspected of being the hit- and-run automobile. In conjunction with Bonillo's report, the investigation indicated that Bonillo had not been at fault. This preliminary decision that Bonillo was not negligent and thus not legally liable to the decedent is relevant to the reasonableness of Checker’s decision not to immediately notify the excess carriers.

In contrast to primary insurance, excess coverage is contingent on the exhaustion of the underlying policy or policies of insurance. The primary insurer, not the excess carrier, normally investigates the facts of the occurrence and undertakes the defense of the personal injury lawsuit. (See Brownlee v. Western Chain Co. (1979), 74 Ill. App. 3d 804, 393 N.E.2d 515.) Accordingly, the excess insurer generally does not require notification of those occurrences that are unlikely to result in a claim for excess insurance coverage under its policy. (Brownlee, 74 Ill. App. 3d at 810, 393 N.E.2d at 519, quoting Greyhound Corp. v. Excess Insurance Co. of America (5th Cir. 1956), 233 F.2d 630, 634 (excess insurer does not undertake the defense of assured and the notice provision of excess policy contemplates “ ‘the exercise of some judgment on the part of the assured in evaluating the case’”).) The key question involved in the pending case, therefore, is this: At what point should Checker reasonably have known that its excess insurance coverage would be implicated?

The simple answer, according to Atlanta and Royal, is “right away.” According to them, it should have been obvious that the death of a 36-year-old woman, the mother of two small children, could result in an award of damages in excess of the $400,000 coverage provided by ACIC. The woman’s estate filed a wrongful death action three weeks after the occurrence, on January 20, 1984, seeking damages in excess of the jurisdictional minimum amount of $15,000. Checker did not notify its excess carriers of the Hoxie suit, however, until almost two years after the accident. The record indicates that notice was given following a pretrial conference in which the attorneys for the Hoxies presented a settlement demand of $1.5 million. Given the amount of the demand and the inability of the parties to negotiate a settlement, Checker notified both of its excess carriers of their potential coverage liability.

The Atlanta policy requires Checker to give immediate notice whenever an accident or occurrence “appears likely to result in liability” under Atlanta’s policy. We do not agree that the mere fact a young mother was killed or the mere filing of a wrongful death complaint equates with an appearance of likeliness that the insured will be held legally liable in damages. If Atlanta wanted immediate and “automatic” notice of all accidents (or, for example, those in which a death occurred), Atlanta easily could have inserted appropriate policy language to that effect. Such a provision would have eliminated any perceived ambiguity regarding the efficacy of notice in the pending case. Instead, the notice provision contemplates that the insured may exercise some discretion in evaluating the claim. (See Brownlee, 74 Ill. App. 3d 804, 393 N.E.2d 515.) Here, the results of the initial investigation indicated that Bonillo’s taxi may have been launched into Hoxie’s path by the hit-and-run vehicle, through no fault of Bonillo’s.

Atlanta and Royal nevertheless assert that Checker should have realized at the time of the accident that such an occurrence might result in a large award of damages, if the jury decided that Bonillo was at least comparatively negligent. We do not believe, however, that the excess carriers should absolve themselves from payment pursuant to their policies under the circumstances. This is particularly true given the fact that neither excess insurer has asserted prejudice resulting from the delay. See Illinois Valley Minerals Corp. v. Royal-Globe Insurance Co. (1979), 70 Ill. App. 3d 296, 302, 388 N.E.2d 253 (prejudice is one factor in the reasonableness determination); see also Brownlee, 74 Ill. App. 3d at 812, (excess insurance policy that referred to insured’s actual knowledge of claim as triggering event to give notice under excess policy did not impose a duty of inquiry on insured, despite the fact prejudice may have resulted to insurer); Insurance Co. v. Associated International Insurance Co. (9th Cir. 1990), 922 F.2d 516, 523 (noting that since excess insurance carriers have no right to control the personal injury lawsuit and thus less need for early notice, the likelihood of prejudice from late notice to excess carriers is more remote); but cf. Sisters of Divine Providence v. Interstate Fire & Casualty Co. (1983), 117 Ill. App. 3d 158, 453 N.E.2d 36 (reviewing primary insurance cases and concluding that excess insurance carrier is on same footing regarding late notice and thus may be relieved of liability without establishing that prejudice resulted from lateness).

Royal’s notice provision is worded differently from Atlanta’s, requiring notice “as soon as practicable” after the insured has information from which it reasonably may be concluded that Royal’s layer of excess coverage will be implicated if the insured is found liable in damages to the injured party. Royal’s coverage would not begin, however, until the $1.25 million point. The Hoxie settlement demand was $1.5 million. Again, we find that neither the occurrence of the accident nor the filing of the wrongful death action in this case triggered an absolute duty at that time to give notice of potential claim under the excess policy. The results of the pretrial conference, however, changed the picture and Checker realized that notice to its excess insurance carriers was necessary. By that time, the parties would have had the opportunity to complete discovery and research the liability and damages issues. Moreover, the parties might have considered other, practical matters such as the possibility that a jury would award a large verdict despite what the defense might view as a weak case of negligence.

In our opinion, the two-year “delay” in giving notice to the excess carriers was not unreasonable given the circumstances of this case. See McFarlane v. Merit Insurance Co. (1978), 58 Ill. App. 3d 616, 619, 374 N.E.2d 951, 953 (“The determination of what constitutes a reasonable period of time [to notify the insurer after an accident] depends on the facts and circumstances in a particular case”); Grasso v. Mid-Century Insurance Co. (1989), 181 Ill. App. 3d 286, 289, 536 N.E.2d 977, 979 (where facts are undisputed, question regarding reasonableness of notice is one of law).

We emphasize that, unlike the situation with primary insurance coverage, Checker’s duty to give notice to Atlanta and Royal did not ripen until such time as Checker believed it reasonably likely that a claim under the excess insurance policies would be made. Whether viewed subjectively or objectively, Checker’s belief may be open to question, particularly in hindsight. We do not believe it appropriate, however, to allow an excess carrier to escape liability after granting its insured discretion in deciding the point at which liability under the policy becomes “likely.” Excess insurance carriers are free to specify in their notice provisions any triggering events they deem desirable, such as notice of any occurrence that results in grave bodily injury or death, or the filing of certain types of claims or lawsuits.

Because we have concluded that Checker’s notice was timely under the policies we need not address Bonillo’s argument regarding his separate rights and duties as an additional insured under the policies. The facts upon which summary judgment was granted are not in dispute. We find that the trial court erred in holding that the notice furnished to Atlanta and Royal violated the terms of their respective policies. Therefore, we reverse the trial court’s grant of summary judgment to Atlanta and Royal and remand for entry of judgments in favor of Checker and Bonillo as to coverage.

Reversed and remanded.

JIGANTI, P.J., and JOHNSON, J., concur.