author: JUSTICE GEIGER

text:
    ILLINOIS STATE TOLL HIGHWAY AUTHORITY, Plaintiff-Appellant, v. AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, as Trustee, et al., Defendants-Appellees.—ILLINOIS STATE TOLL HIGHWAY AUTHORITY, Plaintiff-Appellant, v. BANK OF RAVENSWOOD, as Trustee, et al., Defendants-Appellees.
    Second District
    No. 2—92—0020
    Opinion filed October 23, 1992.
    Rehearing denied November 25, 1992.

      Roland W. Burris, Attorney General, of Springfield (Paul J. Olszewski and Frank M. Howard, Special Assistant Attorneys General, of Oak Brook, and Thomas F. Geselbracht, Special Assistant Attorney General, of Chicago, of counsel), for appellant.
    Peregrine, Stime, Newman, Ritzman & Bruckner, Ltd., of Wheaton (Roger A. Ritzman, of counsel), for appellees.
   JUSTICE GEIGER

delivered the opinion of the court:

The plaintiff, the Illinois State Toll Highway Authority (the Authority), appeals from a consolidated eminent domain proceeding wherein a jury awarded the defendant trustees, American National Bank and Trust Company of Chicago and the Bank of Ravenswood, $603,571 for the taking of their property and $176,673 in damages. On appeal, the Authority argues that (1) the court erred in excluding evidence of the purchase price paid by the defendants; (2) the court erred in excluding evidence of special benefits which accrued to the remainder of the property; (3) the defendants waived any claim for interest at a rate greater than provided by statute; and (4) the verdict was against the manifest weight of the evidence.

The defendants are the trustees for the property at issue, a 3.35-acre tract located within a subdivided block (Block 38) in an unincorporated section of Du Page County. The property consists of 21 lots and was assembled by the defendants in four separate transactions. The property is situated west of and adjoining the main line of the North-South Toll Road where it intersects with Roosevelt Road. The property is vacant, and it is not serviced with sewer or water. The trusts, administered by the defendants, contain 21 of the 22 lots in Block 38; each lot is about a quarter acre in size.

On April 22, 1987, the Authority filed a complaint for condemnation of a three-lot portion of the defendants’ property. The Authority exercised its right of eminent domain over this property for the specific purpose of constructing compensatory wetlands; those wetlands were required by the United States Army Corps of Engineers because the construction of the North-South Toll Road eliminated some preexisting wetlands. On September 23, 1987, the trial court held a “quick-take” hearing and preliminarily determined that just compensation for the taking of the subject property was $51,300. The preliminary award was deposited with the Du Page County treasurer and was withdrawn by the defendants. On October 8, 1987, the court entered an order which vested title to the property in the Authority.

Needing additional land for the construction of compensatory wetlands, the Authority filed, on December 23, 1987, a complaint for condemnation of nine of the defendants’ remaining lots. That complaint was considered together with a complaint addressing a single additional lot. Again, pursuant to a “quick-take” hearing, an award was deposited with the treasurer of $125,000, and the court entered an order vesting title to the property in the Authority.

On April 21, 1988, the trial court entered an order consolidating these takings of 13 of the defendants’ 21 lots. A four-day jury trial concerning the takings commenced on April 8, 1991. The court first considered the parties’ motions in limine. Among these were the defendants’ motion to bar all evidence regarding the purchase price they paid for the subject property. Also, the defendants moved the court to bar all evidence concerning special benefits which might inure to the defendants as a result of the taking. The court granted these motions.

On April 11, 1991, at the conclusion of the trial, the jury returned a verdict that just compensation for the taking of the subject property was $603,571 and that damage to the remainder of the property was $176,673, a total of $780,244 exclusive of interest.

On May 21, 1991, the Authority filed a motion for summary judgment concerning the interest rate on the final compensation award. The court denied the Authority’s motion and continued the matter for later determination.

On September 6, 1991, the court entered judgment on the jury verdict. It also established interest rates on the portion of just compensation exceeding the amounts awarded in the respective “quick-take” proceedings. It awarded 8.7% on $59,908.59, beginning September 23, 1987, on the first taking. It also awarded 9.0% on the sum of $367,362.41, beginning February 10, 1988, on the second taking. The court further awarded 6% interest on damages to the remainder, calculated from December 1, 1987.

On October 4, 1991, the Authority filed a post-trial motion for a new trial. It argued that it was denied a fair trial because the court barred evidence on both the defendants’ purchase price of the subject property and the special benefits which inured to the defendants as a result of the taking. The Authority also argued that the interest rates established by the court were inconsistent with the mandate of the Code of Civil Procedure (Ill. Rev. Stat. 1991, ch. 110, par. 7 — 108(1)). On December 9, 1991, the trial court entered an order denying the Authority’s post-trial motion. The Authority timely appealed that decision.

On appeal, the Authority first argues that the court erred in barring evidence of the defendants’ purchase price of the subject property.. The Authority notes that the defendants purchased the property two years before the 1987 taking and paid about $1 per square foot. The Authority asserts that the court abused its discretion in barring this evidence. In reaching its finding concerning the admissibility of the purchase price, the court relied, in part, on the opinion of two appraisers who agreed that the purchase price was not a reliable factor in this case.

Generally, the price paid by the owner is a factor to be considered in setting the value of land taken as long as (1) the sale is recent; (2) the defendant purchased the property in a voluntary transaction; and (3) no changes in market conditions or marked fluctuations in the values of property have occurred since the sale. (Illinois State Toll Highway Authority v. Grand Mandarin Restaurant, Inc. (1989), 189 Ill. App. 3d 355, 362.) However, the trial court has discretion as to the admissibility of evidence relating to the purchase price of the property. (Department of Transportation v. Prombo (1978), 63 Ill. App. 3d 407, 413.) A substantial increase in recent property valuation alone may be sufficient to exclude evidence of the prior purchase price, particularly where the appraisal witnesses testify to a rapid increase in value. Prombo, 63 Ill. App. 3d at 413.

In arguing against admission of this evidence, the defendants do not challenge, under this analysis, that their purchase of the property in question was recent. The defendants do, however, allege that the value of the property after its assemblage into one large parcel far exceeds the value of the individual lots. They based their claim on the “assemblage,” the greater utility and economic use of larger land parcels. They also allege that their purchase was not entirely voluntary and that there is a difference in the real estate market at the time of the prior sale and the real estate market upon the taking by the Authority.

In this case, all four appraisers who testified agreed that the property’s purchase price did not reflect its fair-market value as of the date of the taking. The Authority’s own appraisers testified that the purchase price of the small individual lots did not reflect the value of the assembled 3.35-acre parcel. Thomas Collins, an appraiser for the Authority, stated that it would be erroneous to rely on the sales price of the subject property, given the dramatic increase in values, where many small properties are assembled together. Fred Tadrowski, also an appraiser for the Authority, stated that he did not rely on the prices paid for the subject property because he “appraised [the property] as a whole,” not as smaller parcels, because one “couldn’t do much with them by themselves.” He continued by stating, in part, that he did not use the purchase price at arriving at his value because “they were such a small part when I was appraising this larger parcel.” The two appraisers for the defendants agreed on this point.

We find no abuse of discretion to exclude the evidence of the 1985 purchase price. Here, the defendants’ various purchases brought together small parcels of land. That process had the unique consequence, according to the appraisers, of greatly affecting the market price. (See Prombo, 63 Ill. App. 3d at 412-13; Grand Mandarin Restaurant, 189 Ill. App. 3d at 362.) As we find a sufficient basis to affirm the court on this issue, we do not reach the defendants’ other bases for the exclusion of the original purchase price.

The Authority next argues that the trial court erred in excluding evidence of the special benefits that inured to the remainder of the defendants’ property because of the construction of the North-South Toll Road. Under the Code of Civil Procedure, “[i]n assessing damages or compensation for any taking or property ***, due consideration shall be given to any special benefit that will result to the property owner from any public improvement to be erected on such property.” (Ill. Rev. Stat. 1991, ch. 110, par. 7— 120.) The Authority asserts that the court’s refusal to allow evidence of special benefits directly conflicts with the Code of Civil Procedure and a recent decision by this court, Illinois State Toll Highway Authority v. Heritage Standard Bank & Trust Co. (1990), 196 Ill. App. 3d 5.

In Heritage, a portion of property was acquired for the main traffic lanes of the tollway. (Heritage, 196 Ill. App. 3d at 9.) In the Heritage eminent domain proceeding, special benefits accruing to the property owner from the North-South Toll Road project were allowed to offset damages to the defendant’s remainder. (Heritage, 196 Ill. App. 3d at 14.) The Heritage court specifically allowed evidence of special benefits accruing from interchange ramps, located approximately four blocks away from the taking, to offset damages to the remainder. It did so even though the ramps were not constructed on land taken from the defendant, reasoning that the Tollway was constructed on the defendant’s land and that the construction of the interchange ramps were part of the overall public improvement known as the North-South Toll Road project. 196 Ill. App. 3d at 14.

The defendants assert that the case at bar is distinguishable from Heritage and that Heritage should not be read so broadly as to cover the instant facts. For this position, the defendants rely on Illinois State Toll Highway Authority v. Itasca Bank & Trust Co. (1991), 216 Ill. App. 3d 926.

In Itasca Bank, the Authority acquired certain property near the intersection of Army Trail Road and the tollway. (216 Ill. App. 3d at 928.) The property acquired by the Authority was not used for the construction of the tollway itself. (216 Ill. App. 3d at 928.) The lower court in Itasca Bank denied the defendant’s motion in limine to bar testimony of special benefits to the remaining land owned by the defendant. (216 Ill. App. 3d at 930.) The trial court reasoned that the “off-alignment” improvements, now adjacent to the defendant’s remainder, were part of the tollway and necessary for its construction. (216 Ill. App. 3d at 930.) However, the appellate court held that unlike the facts in Heritage, “no part of the tollway is on the subject property,” and “[n]one of the property taken was used for the actual toll way.” (216 Ill. App. 3d at 931.) The court, therefore, held that the trial court erred as a matter of law in admitting evidence of special benefits from the tollway. 216 Ill. App. 3d at 932.

The facts in the instant case are similar to those in Itasca Bank. Here, the actual public improvement, i.e., the North-South Tollway, is not located on any part of the defendants’ property. The only part of the tollway project located on the defendants’ property is compensatory wetlands. We decline to read Heritage as broadly as the Authority argues it should be read, and we find no compelling reason to reject the reasoning in Itasca Bank. Here there is no public improvement erected on the defendant’s property (see Ill. Rev. Stat. 1991, ch. 110, par. 7 — 120), and the relationship between the North-South tollway and the defendants’ remainder is too tenuous to consider the special benefits of the tollway to it. We therefore find that the court properly excluded the evidence of special benefits. Itasca Bank, 216 Ill. App. 3d at 932.

The Authority next argues that the defendants waived any request for interest at a rate greater than that mandated by the Code of Civil Procedure (the Code) (Ill. Rev. Stat. 1991, ch. 110, par. 7— 108(1)). Specifically, the Authority alleges that the defendants failed to make the necessary showing that the 6% rate of interest was constitutionally inadequate and that if they did satisfy this precondition, the determination of the proper interest rate should have been made by the jury, not by the court.

The Code provides that in eminent domain proceedings “[t]he plaintiff shall pay, in addition to the just compensation finally adjudged in the proceeding, interest at the rate of 6% per annum.” (Ill. Rev. Stat. 1991, ch. 110, par. 7 — 108.) Under extraordinary circumstances, it is possible to exceed the 6% interest rate mandated in the Code. Department of Transportation v. Rasmussen (1982), 108 Ill. App. 3d 615, 628-29.

In Rasmussen, the prevailing interest rates at the time of the taking were more than double the statutory rate; under those circumstances, the court found that 6% was not constitutionally adequate for the property owner. (Rasmussen, 108 Ill. App. 3d at 628-29.) In reaching this finding, the Rasmussen court noted that deciding whether a given rate of interest is sufficient for just compensation is a “judicial function” and the statutory rate of interest applies only if it is constitutionally adequate. (Rasmussen, 108 Ill. App. 3d at 628.) The court additionally stated that the court may therefore treat the statutory guidelines in the Code as a minimum rate of interest and leave the question of the proper rate of interest to the “trier of fact.” Rasmussen, 108 Ill. App. 3d at 629.

The defendants assert that it was not an error for the court to determine a higher rate of interest, after the jury was dismissed. They rely on Department of Transportation ex rel. People v. Gass (1988), 165 Ill. App. 3d 562, 568-69, for their argument that the interest rate is only a supplemental question of law for the trial court to determine. In Gass, the Appellate Court, Fifth District, addressed the issue of whether it is the role of the jury or the court to determine interest on an eminent domain award. (Gass, 165 Ill. App. 3d at 569.) Gass looked solely to the Rasmussen court for authority on this issue and it noted that Rasmussen stated both that the determination of the rate of interest is a “judicial function” and a function for the “trier of fact.” (Gass, 165 Ill. App. 3d at 569, citing Rasmussen, 108 Ill. App. 3d at 628-29.) With no explanation, the Gass court held that the rate of interest is a supplemental question of law for the trial court to determine. Gass, 165 Ill. App. 3d at 569.

We disagree with the Gass court’s analysis of Rasmussen. Read in context, the Rasmussen court stated that the determination of interest is a “judicial function” only to distinguish it from a legislative function. (See Rasmussen, 108 Ill. App. 3d at 628.) In this regard, Rasmussen merely explained that it was not the role of the legislature to determine what amount of interest was constitutionally adequate, whereas in the portion of the decision where the court decided if the jury verdict which set the interest rate at 12% was proper, the court clearly stated that “the proper rate of interest [is] a question for the trier of fact.” Rasmussen, 108 Ill. App. 3d at 629.

In this case, the defendants failed to timely request a higher rate of interest by the jury. We find the Rasmussen court’s analysis on setting a rate of interest to be controlling in this case. Similarly, we conclude that Gass, upon which the defendants solely rely, erroneously interpreted Rasmussen. We hold that the defendants are precluded from a rate of interest higher than the statutory 6% because they failed to raise the issue for a jury determination as required by Rasmussen. See Rasmussen, 108 Ill. App. 3d at 629.

Lastly, the Authority argues that based on the court’s alleged errors the verdict was against the manifest weight of the evidence. We determine, based on our above discussion and because the jury verdict falls within the range of values stated in the appraisal testimony, that the verdict was not against the manifest weight of the evidence.

For the foregoing reasons, we affirm the decision of the circuit court of Du Page County insofar as it excluded evidence of the purchase price and special benefits. We reverse on the issue of the interest rate applicable to the award and remand the cause with instructions to recalculate the award based on a 6% rate of interest.

Affirmed in part; reversed in part and remanded with instructions.

WOODWARD and DOYLE, JJ., concur.


source: Caselaw Access Project

author: JUSTICE WOODWARD

license: Public Domain

text:
    GREGORY W. MEYERS, Plaintiff-Appellee, v. RALPH R. HABLUTZEL, Defendant (Indiana Insurance Company, Claimant-Appellant).
    Second District
    No. 2—91—1474
    Opinion filed October 23, 1992.

      Thomas R. Weiler, of O’Reilly, Cunningham, Norton & Mancini, of Wheaton, for appellant.
    Paul G. Krentz, of Murphy, Hupp, Foote, Mielke & Kinnally, and John R. Wienold, of Law Offices of John R. Wienold, Ltd., both of Aurora, for appellee.
   JUSTICE WOODWARD

delivered the opinion of the court:

Indiana Insurance Company (Indiana) appeals from an order of the circuit court which adjudicated the rights of Indiana on its claim for payments made to its insured, plaintiff, Gregory Meyers. The court ordered plaintiff to pay $3,300.73 out of funds from a settlement, in full satisfaction of the claim. Essentially, Indiana’s issues on appeal may be treated as one issue: whether the equitable fund doctrine applies to Indiana’s subrogation rights to plaintiff’s award in the underlying cause.

On July 17, 1990, plaintiff filed a personal injury complaint against defendant, Ralph Hablutzel, based on an automobile accident which occurred on April 20, 1990. Defendant entered an appearance and filed an answer. In September 1990, Indiana reimbursed plaintiff for his medical expenses pursuant to the terms of the automobile insurance policy. The total reimbursement was $5,000. Simultaneously, Indiana sent letters to plaintiff, his counsel, defendant’s attorney and defendant’s insurer, pursuant to Tenney v. American Family Insurance Co. (1984), 128 Ill. App. 3d 121, informing them of Indiana’s intention to represent its own subrogation interests. Plaintiff and defendant settled the suit for $32,500, and Indiana was not involved in the settlement negotiations. Indiana was not a party to the suit and had not filed an appearance.

On November 21, 1991, plaintiff filed a petition to determine whether Indiana had a valid “lien” and, if so, what would be the proportionate share of the fees and expenses it should pay to plaintiff’s attorney. The petition stated that $1,666.66 should be deducted from Indiana’s claim for attorney fees for plaintiff’s counsel and $32.61 should be deducted for the expenses.

In its response, Indiana alleged that it should not have the amounts deducted because it did not agree to be represented by plaintiff’s counsel. In addition, Indiana noted that it had the right to file suit for subrogation because the statute of limitations had not yet expired. The court agreed with plaintiff and deducted the amounts for attorney fees and costs, according to the equitable fund doctrine. Indiana timely appealed.

Indiana contends that the equitable fund doctrine does not apply to the settlement in this cause because Indiana did not agree to be represented by plaintiff’s attorney. Plaintiff counters that all the elements of the equitable fund doctrine apply here and, therefore, the trial court did not err in deducting the amounts for attorney fees and costs.

“[T]he ‘fund doctrine,’ is based on the equitable concept that an attorney who performs services in creating a fund should in equity and good conscience be allowed compensation out of the whole fund from all those who seek to benefit from it.” (Baier v. State Farm Insurance Co. (1977), 66 Ill. 2d 119, 124.) This equitable doctrine is similar to the theory of quantum meruit in that the person seeking compensation has benefitted the other party and seeks payment for the value of his services. (Beaton & Associates, Ltd. v. Joslyn Manufacturing & Supply Co. (1987), 159 Ill. App. 3d 834, 848.) To be entitled to fees under this theory, the attorney must show “that (1) the fund with respect to which fees are sought was created as a result of legal services performed by the attorney; (2) the claimant or holder of the fund did not participate in its creation; and (3) the claimant or holder of the fund benefited or will benefit from it.” (Taylor v. State Universities Retirement System (1990), 203 Ill. App. 3d 513, 520.) However, as Indiana argues, the equitable fund doctrine should not be applied when the attorney knowingly renders services for an unwilling recipient. Beaton & Associates, 159 Ill. App. 3d at 848-49; Tenney, 128 Ill. App. 3d at 124-25.

From the facts we draw two conclusions: (1) the elements of the fund doctrine have been satisfied because plaintiff’s attorney procured the settlement without Indiana’s assistance, thereby conferring a benefit on Indiana; and (2) after suit was filed, Indiana informed plaintiff and his counsel that it would represent its subrogation rights.

According to Indiana, under Tenney, the trial court could not apply the equitable fund doctrine because plaintiff and his counsel knew that Indiana intended to pursue its subrogation rights against defendant. Plaintiff argues, however, that Tenney is distinguishable because there the plaintiff did not file suit until after his counsel had notice that the insurer did not wish to be represented by the attorney. Tenney, 128 Ill. App. 3d at 122.

In concluding that the equitable fund doctrine did not apply, Tenney distinguished Powell v. Inghram (1983), 117 Ill. App. 3d 895. (Tenney, 128 Ill. App. 3d at 123-24.) In Powell, 10 months after the plaintiff filed her personal injury complaint, she submitted a claim for medical expenses to her insurer. Shortly thereafter, the insurer sent a letter to the plaintiff’s attorney which stated that it was not employing the plaintiff’s attorney, but was notifying the attorney of the insurer’s subrogation rights. The plaintiff and the defendant settled the cause. The insurer filed a counterclaim of interpleader seeking to exercise its subrogation rights. The trial court awarded the insurer the full amount. On appeal, the court found that the equitable fund doctrine should have been applied because the settlement fund was created as a result of the services rendered by the plaintiff’s attorney; the insurer did not participate in the creation of the fund; and the insurer benefitted from the fund by the plaintiff’s reimbursement of the funds she received from the insurer. (Powell, 117 Ill. App. 3d at 898.) The court stated that, although the insurer promptly notified the attorney of its subrogation and lien and its intention not to employ the attorney, the insurer’s “refusal to employ plaintiff’s attorney while seeking to benefit from his services in obtaining a settlement fund from which it should be reimbursed strikes us as a situation most suitable for the application of the fund doctrine.” (117 Ill. App. 3d at 899-90.) We agree with plaintiff that the facts of this cause resemble those of Powell rather than those of Tenney. As in Powell, the plaintiff here already filed suit before the insurer paid the medical expenses and informed the attorney of its subrogation rights and its determination not to hire the attorney.

We reject Indiana’s assertion that Powell is distinguishable because its holding was limited to a situation where the subrogee’s rights were payable only from the damages recovered by the plaintiff. An insurer’s right to subrogation for medical payments is determined by the terms of the contract. (In re Estate of Scott (1991), 208 Ill. App. 3d 846, 848.) Indiana failed to include a copy of the contract in the common-law record and did not submit a copy of it to the trial court. Thus, we must assume that the contract limited Indiana’s subrogation as payable from the damages plaintiff recovered. (See Foutch v. O’Bryant (1984), 99 Ill. 2d 389, 392 (in the absence of a sufficient record, the reviewing court will resolve any doubts against the appellant).) However, even if we ignore the omission in the record, the remaining evidence does not support Indiana’s position. For example, Indiana’s letter to plaintiff stated in relevant part:

“A payment under this coverage permits *** Indiana *** to recover an amount equal to such payment from any funds paid to you from the person(s) or entity(ies) responsible for your injury or from that person’s(s’) or entity’s(ies’) insurance company. ***
We will inform the responsible person and/or his insurance company of our rights to recover from him or from his insurer. We will deal directly with said wrongdoer(s) and/or insurer(s) in recouping our payments.” (Emphasis added.)

Clearly, the import of this letter is that Indiana was entitled to recoupment only from amounts actually recovered, either by plaintiff or by Indiana, from defendant or his insurer. Thus, Powell is not distinguishable on that basis.

We also reject Indiana’s argument that “[tjhere is no precedent which requires that a ‘Tenney letter’ be sent before suit is filed” to preclude application of the equitable fund doctrine. Powell does support that proposition, notwithstanding that it was decided before Tenney, because the insurer did send a Tenney-type letter. (Powell, 117 Ill. App. 3d at 896, 899.) Indiana further asserts that if such a rule exists, the result “would be a race to the courthouse between the insurance carrier/subrogee and the plaintiff’s attorney.” We disagree. In the present cause, to protect its rights, Indiana could have joined as a plaintiff or filed an interpleader counterclaim and participated in the settlement negotiations. (See Smith v. Marzolf (1980), 81 Ill. App. 3d 59, 65.) Instead, Indiana did nothing until plaintiff filed the petition to adjudicate Indiana’s subrogation rights. By declining to participate or employ plaintiff’s attorney, Indiana reaped the benefits of the settlement procured by plaintiff’s attorney while expending nothing. Such a situation is “most suitable for the application of the fund doctrine.” Powell, 117 Ill. App. 3d at 899-90.

Next, Indiana claims that because the insurance contract did not require plaintiff to file suit, the equitable fund doctrine is inapplicable. As noted above, Indiana failed to include a copy of the insurance contract in the record. By failing to present an adequate record on appeal, Indiana must accept the consequence that we will construe the record to support the trial court’s decision. (Foutch, 99 Ill. 2d at 393-94.) Moreover, Indiana’s argument is meritless. In Powell, the court expressly rejected this argument and instead looked to whether there was a subrogation agreement. (Powell, 117 Ill. App. 3d at 899.) It is true that Indiana could have filed suit against defendant. However, when plaintiff settled in full with defendant, including the amount subject to subrogation, that settlement barred any further claim by plaintiff and/or Indiana for damages against defendant arising out of the incident at issue. (Schultz v. Gotlund (1989), 185 Ill. App. 3d 943, 950, rev’d on other grounds (1990), 138 Ill. 2d 171; Tarzian v. West Bend Mutual Fire Insurance Co. (1966), 74 Ill. App. 2d 314, 324-25. But cf. Home Insurance Co. v. Hertz Corp. (1978), 71 Ill. 2d 210, 215 (an unlimited release by a subrogor for consideration which does not include specifically an amount designated for the insurer’s subrogation interest does not bar a subsequent suit by the insurer against the tort-feasor).) This is because a subrogee can enforce only those rights which the subrogor could enforce. (Dix Mutual Insurance Co. v. LaFramboise (1992), 149 Ill. 2d 314, 319.) Thus, following the settlement and the trial court’s dismissal of the complaint with prejudice, Indiana’s recovery was limited to the recoupment of funds paid to plaintiff. Consequently, Indiana is incorrect in its assertion that, because the statute of limitations had not yet run, it could have filed suit against defendant.

Finally, Indiana argues that plaintiff could have deleted the claim for medical expenses after he received the “Tenney letter.” Indiana cites no authority which would allow us to find, on this basis, that the trial court abused its discretion in awarding attorney fees, which is a matter of the trial court’s discretion based on equitable principles. (See De Fontaine v. Passalino (1991), 222 Ill. App. 3d 1018, 1039.) Consequently, we will not disturb the trial court’s order on this ground.

According to the record, after Indiana informed plaintiff and his attorney of its determination to assert its own rights, Indiana did nothing for over a year until plaintiff filed the petition to adjudicate Indiana’s right to subrogation. Indiana did not hire an attorney and did not participate in the settlement negotiations. The settlement amount was well in excess of Indiana’s subrogation claim, and it specifically allocated $5,000 for plaintiff’s medical expenses. Plaintiff filed the petition less than two weeks before the scheduled trial date. That the statute of limitations period had not expired does not alter the fact that defendant’s liability was extinguished by the settlement and the dismissal of the complaint with prejudice. Plaintiff’s counsel procured the settlement from which Indiana must recoup its funds. Indiana’s argument, regarding the effect of the dismissal of plaintiff’s complaint without prejudice, is waived because Indiana did not raise this argument in the trial court. (In re Marriage of Rodriguez (1989), 131 Ill. 2d 273, 279.) Under these circumstances, we conclude that the trial court did not abuse its discretion in determining that equity would not allow Indiana to reap the benefit of plaintiffs counsel’s efforts without requiring it pay for those services.

The judgment of the circuit court is affirmed.

Affirmed.

UNVERZAGT and McLAREN, JJ., concur.


author: JUSTICE McCULLOUGH

text:
    EVERETT LANDRUS, Plaintiff-Appellant, v. EAGLE WINGS INDUSTRIES, INC., Defendant-Appellee.
    Fourth District
    No. 4—92—0368
    Opinion filed October 22, 1992.
    Rehearing denied December 14, 1992.

      John T. Papa, of Callis Law Firm, P.C., of Granite City, for appellant.
    Karen L. Kendall and Bradley S. McMillan, both of Heyl, Royster, Voelker & Allen, of Peoria, and James C. Kearns and Edward M. Wagner, both of Heyl, Royster, Voelker & Allen, of Urbana, for appellee.
   JUSTICE McCULLOUGH

delivered the opinion of the court:

This is a personal injury action premised on allegations of negligence. Plaintiff Everett Landrus appeals from a summary judgment entered in the circuit court of Champaign County in favor of defendant Eagle Wings Industries, Inc. The only issue raised on appeal is whether defendant owed plaintiff a duty which would support a cause of action for negligence.

The injury occurred on Sunday, April 9, 1989, at defendant’s manufacturing facility in Rantoul, Illinois. Plaintiff, who was not an employee of defendant, received an injury to his hand while riding on a forklift operated by Kenny Heimberger (Heimberger), an employee of defendant. At the time of the incident, the manufacturing facility was closed.

At the time of the incident, defendant’s plant was being prepared for operations. Cardinal Construction Company (Cardinal) was uncrating robots and equipment for installation. The emptied wooden crates were placed inside and outside the building.

Heimberger, his cousin Rob, and plaintiff went to the facility that day for the purpose of removing scrap lumber which had accumulated as a result of the crates being discarded after the equipment shipped to the facility had been removed. Heimberger testified at his deposition that he was a material handler. His duties included driving the forklift, and he received formal training as an operator of the forklift. Heimberger obtained permission from Jim Quaak, defendant’s vice-president of manufacturing, to remove the lumber and to use the forklift. He testified Cardinal would have had to haul the lumber away. Heimberger’s testimony as to who would have paid for the removal of the lumber in the event Cardinal removed it is less than clear. Heimberger did not testify to a knowledge of the contractual relationship between Cardinal and the defendant. On April 9, 1989, they drove a truck belonging to Rob Heimberger (Rob) onto the premises. They also used a trailer. Rob was not an employee of defendant. While placing the load of wood onto the trailer, plaintiff got on top of the wood in order to balance the load. After the load was set into the trailer, plaintiff stepped onto the forks to ride down. Heimberger had seen other persons ride on the forks of a forklift several times while he worked construction. He had seen this done before. As Heimberger lowered the lift, plaintiff’s hand got caught between the masts, causing the injury for which recovery was sought.

Heimberger had initially approached Quaak about the scrap lumber and asked if he could “get some wood and if he could get some help to get the wood.” Quaak said there was no problem and placed no restrictions on the permission. Heimberger did not have unrestricted access to the facility on April 9, only permission to get and use the forklift. The scrap wood that was being removed that morning was for the personal benefit of the persons removing it. This was not part of Heimberger’s job, and he was not paid. Plaintiff was going to get some of the wood.

The deposition testimony of Rob Heimberger and plaintiff was consistent with that of Kenny Heimberger. Plaintiff stated he was going to use the wood for firewood and pens for his game birds. When asked why they went on a Sunday, plaintiff responded, “Kenny called and said he had, they had stacked a lot of that wood outside and he wanted to get it out of there, and I was busy Saturday so I said how about Sunday and he said that would be okay.” The plaintiff’s testimony was that Heimberger had indicated the wood was being saved for them and there was quite a bit of scrap wood piled there.

The allegations of negligence contained in plaintiff’s complaint were as follows:

“Defendant, by and through its agent and employee, and at said time and place, was guilty of one or more of the following negligent acts or omissions:
a) Negligently and carelessly operated the forklift in such a way as to injure Plaintiff;
b) Negligently and carelessly failed to furnish a reasonably safe place for Plaintiff to work;
c) Negligently and carelessly failed to equip the forklift with clear, explicit and correct instructions and warnings concerning proper use of the forklift;
d) Negligently and carelessly invited and permitted the Plaintiff to ride the forklift when it knew, or in the exercise of reasonable care should have known, this would result in harm to the Plaintiff;
e) Negligently and carelessly trained and instructed its employees in the safe operation of the forklift ***.”

In University of Illinois v. Continental Casualty Co. (1992), 234 Ill. App. 3d 340, 343, this court reiterated the general principles regarding summary judgment as follows:

“While summary judgment facilitates the prompt disposition of lawsuits, it is a drastic remedy allowed only when the moving party’s right to it is clear and free from doubt. In determining the propriety of granting summary judgment, the trial court should construe pleadings, depositions, admissions, exhibits, and affidavits strictly against the movant and liberally in favor of the respondent. Although inferences may be drawn from undisputed facts, an issue should be decided by the trier of fact and summary judgment denied where reasonable persons could draw divergent inferences from the undisputed facts. (Pyne v. Witmer (1989), 129 Ill. 2d 351, 357-59, 543 N.E.2d 1304, 1307-08.) In reviewing the granting of summary judgment, the role of the reviewing court is to determine if the trial court correctly ruled that no genuine issue of material fact exists, and if none exists, whether judgment was correctly entered for the moving party as a matter of law. (O’Hara v. Holy Cross Hospital (1989), 185 Ill. App. 3d 694, 699, 542 N.E.2d 11, 14, aff’d (1990), 137 Ill. 2d 332, 561 N.E.2d 18.)
‘The entry of summary judgment is not a matter within the discretion of the trial court. In reviewing a trial court’s ruling on a motion for summary judgment, the appellate court should consider anew the facts and law related to the case and determine whether the trial court was correct.’ (Shull v. Harristown Township (1992), 223 Ill. App. 3d 819, 824, 585 N.E.2d 1164, 1167.)”

In the case at bar, the trial court found there was no genuine issue of material fact and that defendant owed no duty to plaintiff.

In Widlowski v. Durkee Foods (1990), 138 Ill. 2d 369, 373, 562 N.E.2d 967, 968, the Illinois Supreme Court stated as follows:

“A complaint for common law negligence must set forth the existence of a duty owed by the defendant to the plaintiff, a breach of that duty and an injury proximately resulting from that breach. (Mieher v. Brown (1973), 54 Ill. 2d 539, 541.) A duty requires a person to conform to a certain standard of conduct for the protection of another against an unreasonable risk of harm. (Fancil v. Q.S.E. Foods, Inc. (1975), 60 Ill. 2d 552, 554.) Whether a duty exists, i.e., whether the defendant and the plaintiff stood in such a relationship to one another where the defendant is obliged to conform to a certain standard of conduct for the benefit of the plaintiff, is an issue of law that must be resolved by the court. Ward v. K mart Corp. (1990), 136 Ill. 2d 132, 140.”

The determination of duty resolves itself if the plaintiff’s theory of liability is correct. The only theory of liability plaintiff presents on appeal is that defendant is vicariously liable for the negligent acts of Kenny Heimberger under the doctrine of respondeat superior.

“Under the doctrine of respondeat superior, an employer may be liable for the negligent, wilful, malicious or even criminal acts of its employees when such acts are committed in the course of employment and in furtherance of the business of the employer. However, the employer is not liable to an injured third party where the acts complained of thereby were committed solely for the benefit of the employee. Webb v. Jewel Cos. (1985), 137 Ill. App. 3d 1004, 1006, 485 N.E.2d 409.” (Starr v. Leininger (1990), 198 Ill. App. 3d 622, 623-24, 556 N.E.2d 266, 267-68.)

In Pyne v. Witmer (1989), 129 Ill. 2d 351, 359-60, 543 N.E.2d 1304, 1308-09, the Hlinois Supreme Court stated:

“Summary judgment is generally inappropriate when scope of employment is at issue. [Citations.] Only if no reasonable person could conclude from the evidence that an employee was acting within the course of employment should a court hold as a matter of law that the employee was not so acting. Boehmer v. Norton (1946), 328 Ill. App. 17, 21, 24.
For an employer to be vicariously liable for an employee’s torts under the doctrine of respondeat superior, the torts must have been committed within the scope of the employment. Darner v. Colby (1941), 375 Ill. 558, 560, 566-67; Gomien v. Wear-Ever Aluminum, Inc. (1971), 50 Ill. 2d 19, 21; [citations].
‘No precise definition has been accorded the term “scope of employment” ’ (Sunseri v. Puccia (1981), 97 Ill. App. 3d 488, 493), but broad criteria have been enunciated:
‘(1) Conduct of a servant is within the scope of employment if, but only if:
(a) it is of the kind he is employed to perform;
(b) it occurs substantially within the authorized time and space limits;
(c) it is actuated, at least in part, by a purpose to serve the master, ***
* * *
(2) Conduct of a servant is not within the scope of employment if it is different in kind from that authorized, far beyond the authorized time or space limits, or too little actuated by a purpose to serve the master.’ (Restatement (Second) of Agency §228 (1958).)
***
The burden is on the plaintiff to show the contemporaneous relationship between tortious act and scope of employment. (Darner v. Colby (1941), 375 Ill. 558, 560; Bolwin v. El Kay Manufacturing Co. (1975), 32 Ill. App. 3d 138, 140.) Proof thereof can be by circumstantial evidence. 57 C.J.S. Master & Servant §615(d)(2), at 406 (1948); see McDonnell v. City of Chicago (1981), 102 Ill. App. 3d 578, 584.”

Section 235 of the Restatement (Second) of Agency states:

“Conduct Not for Purpose of Serving Master An act of a servant is not within the scope of employment if it is done with no intention to perform it as a part of or incident to a service on account of which he is employed.” (Restatement (Second) of Agency §235, at 520 (1958).)

The comments that follow explain the application of this rule:

“a. The rule stated in this Section applies although the servant would be authorized to do the very act done if it were done for the purpose of serving the master, and although outwardly the act appears to be done on the master’s account. It is the state of the servant’s mind which is material. Its external manifestations are important only as evidence. Conduct is within the scope of employment only if the servant is actuated to some extent by an intent to serve his master. However, it is only from the manifestations of the servant and the circumstances that, ordinarily, his intent can be determined. If, therefore, the servant does the very act directed, or does the kind of act which he is authorized to perform within working hours and at an authorized place, there is an inference that he is acting within the scope of employment.
* * *
b. Mixed motives. The servant may be within the scope of employment, although his departure from instructions in the performance of his work is for his own purposes, if his act is done with the intent to serve his employer. In such case, the rule stated in Section 236 applies.” (Restatement (Second) of Agency §235, Comments a, b, at 520-21 (1958).)

Section 236 of the Restatement (Second) of Agency provides as follows:

“Conduct Actuated by Dual Purpose
Conduct may be within the scope of employment, although done in part to serve the purposes of the servant or of a third person.” (Restatement (Second) of Agency §236, at 523 (1958).)

Comment a following section 236 makes it clear that the person performing the acts may “serve two masters both of whom are interested in the performance of the same act.” Restatement (Second) of Agency §236, Comment a, at 523 (1958).

The facts indicate Heimberger was operating defendant’s forklift and that the operation of the forklift was ordinarily a function of his job. He was operating the forklift on defendant’s premises, although at a time when defendant’s facility is ordinarily not operating. Defendant’s vice-president of manufacturing had given Heimberger permission to operate the forklift at that time and for the purpose of removing the wood. The removal of the wood did benefit plaintiff and Heimberger, but it could be argued it also benefitted defendant in that defendant may have had to make the arrangements for the removal of the wood and to pay for its removal. Heimberger’s testimony with regard to the contractual obligation between defendant and Cardinal as to who would remove the wood and who would have to pay for it is less than clear. If the wood belonged to Cardinal, as Heimberger testified, then it would seem that the vice-president of manufacturing would have no authority whatsoever to authorize the removal of the wood which did not belong to defendant. In any event, the decisive factor to be considered in determining whether the doctrine of respondeat superior applies in this case is whether Heimberger’s activities were too little actuated by a purpose to serve defendant. Under these circumstances, the question of whether Heimberger was acting within the scope of his employment cannot yet be determined as a matter of law.

In support of the summary judgment, defendant also argues that, even if Heimberger was acting within the scope of his employment, defendant did not owe plaintiff a duty because it was not reasonably foreseeable that plaintiff would ride on the forks of the forklift. In light of the earlier discussion of foreseeability as a factor in determining the existence of a duty and the deposition testimony of Heimberger that, in his construction job, he had seen persons ride on forklifts in this manner, the lack of foreseeability argument is merit-less. If the trier of fact finds that Heimberger was acting within the scope of his employment, then the likelihood of plaintiff being injured in this fashion is sufficiently foreseeable for the law to require defendant to accept the responsibility for plaintiff’s injury.

For the foregoing reasons, the summary judgment of the circuit court of Champaign County is reversed, and the cause is remanded for further proceedings.

Reversed and remanded.

GREEN, P.J., and KNECHT, J., concur.


author: JUSTICE STEIGMANN JUSTICE LUND, dissenting:

text:
    CRUM AND FORSTER MANAGERS CORPORATION et al., Plaintiffs-Appellants, v. RESOLUTION TRUST CORPORATION, as receiver of Mid-State Savings and Loan Association, et al., Defendants-Appellees.
    Fourth District
    No. 4—92—0148
    Opinion filed October 29, 1992.

      LUND, J., dissenting.
    John F. Bramfeld, of Phebus, Tummelson, Bryan & Knox, of Urbana, for appellants.

      Richard T. West, of Meyer, Capel, Hirschfeld, Muncy, Jahn & Aldeen, P.C., of Champaign, for appellees Joseph W. Corley and Joann Corley.
    Charles L. Palmer and John B. Alsterda, both of Flynn, Palmer, Tague & Lietz, of Champaign, for appellee Donald L. Whitsitt.
    William A. Spence and Brian P. Norton, both of Freeborn & Peters, of Chicago, and Ann S. Duross, Colleen B. Bombardier, and Maria Beatrice Valdez, all of Federal Deposit Insurance Corporation, of Washington, D.C., for appellee Resolution Trust Corp.
   JUSTICE STEIGMANN

delivered the opinion of the court:

On October 11, 1989, plaintiffs Crum & Forster Managers Corporation (Crum & Forster), Illinois Insurance Exchange, Inc. (Exchange), and LWB Syndicate, Inc., filed an action for declaratory judgment, seeking a determination of their duty to defend and indemnify defendants Mid-State Savings and Loan Association, and Mid-State Appraising, Incorporated, d/b/a Mid-State Realty, Inc. (Mid-State), in an underlying action (Dependable Realty v. Mid-State Realty et al., Champaign County Case No. 86—L—864) (the Dependable action). Plaintiffs filed a motion and defendants filed a cross-motion for summary judgment. On January 6, 1992, and February 6, 1992, the trial court entered orders denying plaintiffs’ motion and allowing defendants’ motion. The court determined (1) the conduct alleged in the Dependable complaint brings the defendants within potential coverage of the policy issued by Crum & Forster; (2) because the policy affords coverage, the issues of laches, res judicata, waiver, and abandonment are moot; and (3) the issue of the duty to indemnify was premature because the court would be required to decide several issues in the Underlying-Dependable action in order to determine the issue of indemnity. The court subsequently issued a finding pursuant to Supreme Court Rule 304(a) (134 Ill. 2d R. 304(a)) that there was no just reason to delay enforcement or appeal.

Plaintiffs argue the following on appeal: (1) an insurance company has no duty to defend real estate brokers and agents in a business dispute between brokers under an errors and omissions professional liability policy; (2) this court has jurisdiction to review the question of whether plaintiffs have a duty to indemnify defendants; and (3) the defendants’ affirmative defenses of laches, res judicata, waiver, and abandonment do not bar plaintiffs from claiming they have no duty to defend.

We affirm.

The record in this case reveals that Crum & Forster issued a real estate agents and brokers professional liability insurance policy to defendants Mid-State, and Joseph and Joann Corley (the Corleys) on March 15, 1986. The policy was effective February 1, 1986, through February 1,1987, and provided coverage in part as follows:

“(1) Professional Liability and Claims Made Clause: To pay on behalf of the Insured all sums in excess of the deductible amount stated in the Declarations which the Insured shall become legally responsible to pay in damages as a result of CLAIMS FIRST MADE AGAINST THE INSURED DURING THE POLICY PERIOD:
(a) by reason of any act, error or omission in professional services rendered or that should have been rendered by the Insured or by any person for whose acts, errors or omissions the Insured is legally responsible, and arising out of the conduct of the Insured’s profession as a real estate agent or real estate broker including the following related activities for real estate: consultation, appraisal, property management, property management consultation or notary public;
(b) because of personal injury arising out of the professional activities of the Insured as a real estate agent or real estate broker, including the following related activities for real estate: consultation, appraisal, property management, property management consultation or notary public.”

On June 26, 1986, Dependable filed the underlying action against defendants Mid-State and the Corleys. On October 2, 1989, Dependable filed its second-amended complaint, adding Donald L. Whitsitt as a party defendant. In the second-amended complaint, Dependable alleged various counts, including the following: (1) interference with a prospective economic advantage; (2) common law tortious interference with a contractual relationship; (3) breach or inducing breach of a fiduciary duty by an officer or director; (4) unfair competition under the Illinois Consumer Fraud and Deceptive Business Practices Act (see Ill. Rev. Stat. 1991, ch. 1211/2, pars. 261 through 272); (5) common law unfair competition; (6) the common law tort of fraud; (7) theft of trade secrets; and (8) conspiracy to interfere with a contractual relationship.

The multicount complaint essentially alleged that Joseph Corley, who was employed by Dependable as its sales manager from December 1982 to December 1984, left Dependable and induced other Dependable sales agents to leave Dependable and accept employment with Mid-State. It further alleged that Corley took business from, and left various debts with, Dependable.

After the Dependable action was commenced, the defendants retained attorneys who in turn tendered the defense of the cause to Exchange. Exchange initially indicated the defense was being accepted without a reservation of rights. Approximately six months later, however, the insurer, Crum & Forster, indicated to defendants that it would “monitor” the defense but it was not waiving any rights or defenses under the policy. Mid-State and the Corleys then filed a declaratory judgment action, seeking a declaration that the reservation of rights letter was not timely sent and that Crum & Forster was thereby estopped from asserting any reservation of rights. The trial court allowed plaintiff Mid-State’s motion for summary judgment, but this court determined on review that because there was no prejudice resulting from Crum & Forster’s six-month delay in sending its reservation of rights letter, it was not estopped from asserting the policy coverage defenses. (Mid-State Savings & Loan Association v. Illinois Insurance Exchange, Inc. (1988), 175 Ill. App. 3d 265, 271-72, 529 N.E.2d 696, 699-700.) Crum & Forster subsequently filed the present declaratory judgment action.

In Illinois, the duty of an insurer to defend an action brought against its insured must be determined solely by comparing the allegations of the complaint against the insured with the terms of the policy. (Thornton v. Paul (1978), 74 Ill. 2d 132, 384 N.E.2d 335.) “If the complaint alleges facts within or potentially within policy coverage, the insurer is obliged to defend even if the allegations are groundless, false, or fraudulent.” Thornton, 74 Ill. 2d at 144, 384 N.E.2d at 339.

Moreover, “[t]he threshold that a complaint must meet to present a claim for potential coverage is low. The allegations of the complaint must be construed liberally, and any doubt as to coverage must be resolved in favor of the insured.” Bituminous Casualty Corp. v. Fulkerson (1991), 212 Ill. App. 3d 556, 564, 571 N.E.2d 256, 262.

Plaintiffs maintain that the allegations against the various defendants in the Dependable action do not bring that action within the potential coverage of the policy. Plaintiffs argue that the policy in question was an errors and omissions policy and is analogous to malpractice insurance policies dealing solely with services to others and to the public, not actions between business partners. Plaintiffs cite Couch on Insurance, which states:

“Errors and omissions policies form the equivalent to malpractice insurance for occupations other than those in the legal and medical fields. *** But coverage is generally extended to a particular class of risks and is not a substitute for liability coverage.” (11 Couch on Insurance 2d §44:396, at 573 (rev. 1982).)

Plaintiffs also cite Albert J. Schiff Associates, Inc. v. Flack (1980), 73 A.D.2d 329, 425 N.Y.S.2d 612, aff’d (1980), 51 N.Y.2d 692, 417 N.E.2d 84, 435 N.Y.S.2d 972, and Mendelsohn v. CNA Insurance Co. (1983), 115 Ill. App. 3d 964, 451 N.E.2d 919, in support of their position.

In Schiff, the court considered policy language similar to that in the instant policy. There, the insured, a life insurance agency, sought a declaration that defendants, its insurers, had a duty to defend in an action by a competitor alleging interference with contractual relations, breach of trust, misappropriation of property, unfair competition, and deceptive trade practices based upon an alleged disclosure of a secret sales plan. The court determined that the allegations did not suggest a negligent act, error, or omission in the performance of any professional services.

In Mendelsohn, the plaintiff was a lawyer who apparently represented himself in a divorce action and sought a declaration that coverage was available to him under a “ ‘professional, office premises and personal injury liability’ ” policy, and that the insurer had a duty to defend him in an action brought against him by his former wife. (Mendelsohn, 115 Ill. App. 3d at 964, 451 N.E.2d at 920.) The policy language provided for indemnity “ ‘arising from the performance of professional services for others in the insured’s capacity as a lawyer because of an error, negligent omission or negligent act of the insured.’ ” (Emphasis omitted.) (Mendelsohn, 115 Ill. App. 3d at 966, 451 N.E.2d at 921.) The trial court dismissed Mendelsohn’s complaint for declaratory judgment. On review, the appellate court affirmed, concluding that, in representing himself in the underlying action, he was not practicing his profession; therefore, the complaint did not allege facts necessary to bring the case within policy coverage.

Plaintiffs contend that “professional services” of real estate agents and brokers, as provided in the acts, errors, and omissions policy, means only those services rendered in the course of professional activity to others, i.e., to the public and not to one’s business partners or competitors. Plaintiffs further argue that defendants in the underlying cause of action were not acting in their capacity as real estate brokers or agents representing clients, but solely in a business capacity.

To determine if there is potential coverage under the policy, the court must examine the complaint in the underlying Dependable action. In its complaint, Dependable alleges certain defendants “deprived [Dependable] of substantial amounts of future real estate listings and commissions on sales and deprived [Dependable] of a sizable share of the real estate market”; that defendants “used confidential information such as [Dependable’s] confidential sales methods and techniques and skills imparted to them by [Dependable] during extensive and confidential training sessions”; that certain defendants have caused Dependable “lost listings for the sale of real estate and has lost commissions on sales by said real estate agents which they might or would have earned for [Dependable] had [defendants] not heretofore terminated said relationship at the wrongful inducement of defendants”; that defendants induced sales persons away from Dependant into the employ of Mid-State Realty “for the purpose of acquiring real estate sales listings and the selling of real estate on behalf of Mid-State Realty in addition to acquiring as many of [Dependable’s] sales agents, customers and as much of its good will as possible”; and that certain defendants have “actively solicited real estate sales listings and customers on behalf of Mid-State Realty, Inc.[,] in territories where they previously solicited listings and customers on behalf of [Dependable] and, in that connection, are using confidential information such as sales methods and skills acquired during training conducted by [Dependable], confidential methods and techniques provided them by [Dependable].”

We conclude that the Dependable action alleges sufficient facts to satisfy the low threshold required to find potential coverage. As the trial court noted, “[i]t was the action of defendants as real estate agents and brokers in allegedly taking away Dependable’s real estate business which started the proceedings in the first place. Had defendants not engaged in the real estate profession^] there would have been no lawsuit.” In addition, Dependable alleged injuries due to defendants’ rendering professional real estate services using Dependable’s agents, brokers, sales techniques and territory to the detriment of Dependable. These alleged acts are the conduct which led to the Dependable complaint being filed.

We further reject the claim plaintiffs’ counsel made to this court during oral argument that courts of review somehow require such obfuscating and opaque language in insurance policies. Insurance companies cannot go wrong by saying clearly what they intend to cover in their policies and what they intend to exclude.

We also agree with the trial court that the question of whether plaintiffs have a duty to indemnify defendants is premature. The duty to indemnify arises only when an insured becomes legally obligated to pay damages in the underlying action. (Zurich Insurance Co. v. Raymark Industries, Inc. (1987), 118 Ill. 2d 23, 52, 514 N.E.2d 150, 163.) Accordingly, the supreme court has held that a determination of an insurer’s duty to indemnify its insured, brought prior to a determination of the insured’s liability in the underlying lawsuit, is premature. United States Fidelity & Guaranty Co. v. Wilkin Insulation Co. (1991), 144 Ill. 2d 64, 73, 578 N.E.2d 926, 930.

Finally, because we conclude plaintiffs have a duty to defend the defendants in the underlying action, we agree with the trial court that the issues of laches, res judicata, waiver and abandonment are moot.

Accordingly, for the reasons stated, we affirm the judgment of the circuit court and remand to that court for further proceedings.

Affirmed and remanded.

COOK, J., concurs.

JUSTICE LUND, dissenting:

Contracts of insurance are to be construed according to the sense and meaning of the terms which the parties have used and, if they are clear and unambiguous, their terms are to be taken and understood in their plain, ordinary, and popular sense. 43 Am. Jur. 2d Insurance §277, at 351 (1982); Kelly v. Brotherhood of R.R. Trainmen (1923), 308 Ill. 508, 140 N.E. 5.

The section of the policy in the present dispute provides:

“(a) [B]y reason of any act, error or omission in professional services rendered or that should have been rendered by the Insured or by any person for whose acts, errors or omissions the Insured is legally responsible, and arising out of the conduct of the Insured’s profession as a real estate agent or real estate broker including the following related activities for real estate: consultation, appraisal, property management, property management consultation or notary public.”

The word “rendered” has many meanings, including to “melt down (fat) by heating” (American Heritage Dictionary 1046 (2d C. ed. 1982); however, the only reasonable definition to give the use in the contested policy is “to pay or perform” (Black’s Law Dictionary 1460 (4th ed. 1968)). The coverage is for any act, error, or omission performed arising out of conduct of the real estate business; and, when read with the specific listed inclusion “consultation, appraisal, property management, property management consultation, or notary pub-lie,” leads to the conclusion the coverage relates to faulty performance of services to clients of the real estate firm.

The underlying claim against the insured is described in the second-amended complaint by allegations of: (1) tortious interference with a contractual relationship for prospective economic advantage; (2) breach or inducing breach of fiduciary duty by an officer or director; (3) unfair competition; (4) theft of trade secrets; (5) conspiracy to interfere with contractual relationship; and (6) fraud. The insured defendants, Joseph and Joann Corley, had been employees of Dependable Realty, but they had left to establish their own firm. The various counts of the underlying complaint filed against the insured were primarily based upon Joseph Corley’s previous employment by Dependable Realty as its sales manager.

I would find the insurance policy terms to be clear and unambiguous — and only apply to acts, errors, and omissions performed for customers or clients of the real estate business. By no stretch of the imagination can the disgruntled former employer be considered a customer or client.

There is a similarity with attorney error and omission policies. Those policies insure against mistakes or omissions in performing legal services. To extend the attorney policy coverage for a wrongdoing to a former law firm would be ludicrous. The circuit court and the majority failed to give a reasonable interpretation to the terms of the insurance policy.


author: PRESIDING JUSTICE GREEN

text:
    LEON R. MENTZER, d/b/a JRAMB and Associates, Plaintiff-Appellant, v. JAMES DUDLEY, Defendant-Appellee.
    Fourth District
    No. 4—92—0216
    Opinion filed October 30, 1992.

      James R. Glenn, of Glenn & Logue, of Mattoon, for appellant.
    Dale A. Cini, of Ryan, Cini, Bennett & Radloff, of Mattoon, for appellee.
   PRESIDING JUSTICE GREEN

delivered the opinion of the court:

This appeal is from a judgment against plaintiff Leon R. Mentzer, d/b/a JRAMB & Associates, in a small claims case brought in the circuit court of Coles County against defendant James Dudley. The complaint was filed on November 25, 1991. After an evidentiary hearing at bench, the court entered an order on February 5, 1992, finding plaintiff not entitled to recovery and finding defendant entitled to damages as a sanction pursuant to Supreme Court Rule 137 (134 Ill. 2d R. 137) for vexatious filing of the complaint. After a further hearing, the court entered an order on March 3, 1992, awarding defendant $5,004.49. Plaintiff has appealed, taking issue only with the imposition of the sanction. We affirm.

In pertinent part, Supreme Court Rule 137 states:

“The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good-faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. *** If a pleading, motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, may impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of reasonable expenses incurred because of the filing of the pleading, motion or other paper, including a reasonable attorney fee. All proceedings under this rule shall be within and part of the civil action in which the pleading, motion or other paper referred to has been filed ***.” (Emphasis added.) 134 Ill. 2d R. 137.

On appeal, plaintiff maintains (1) Supreme Court Rule 137 should not be strictly applied to pro se litigants in small claims cases; (2) his complaint here was well grounded in fact and warranted by existing law; and (3) the amount of the award imposed as a sanction was excessive. While we agree that Supreme Court Rule 137 sanctions should not be applied with the same force in a small claims case where, as here, the matter in controversy is less than $1,000, the sanctions were properly applied in this case. The complaint was not well grounded in fact or warranted by existing law, and plaintiff sought to harass defendant. Under the gross circumstances of this case, the award was not excessive.

Plaintiff’s complaint alleged that defendant was “indebted to the plaintiff in the sum of $782.82 plus for late fees, back rent, (damages, service fees and court costs),” and upon demand, had refused to pay the same. The testimony at the hearing on the merits is shown by a bystander’s bill approved by the court (134 Ill. 2d R. 323(c)) as being substantially correct. Plaintiff proceeded pro se at that time, and the record does not give a clear picture as to the dispute. However, the parties, through their briefs, agree upon certain facts as follows: (1) defendant was the basketball coach at Lake Land College of Mattoon; (2) plaintiff rented apartments; and (3) arrangements were made for plaintiff to rent an apartment to four prospective Lake Land players for the summer of 1991.

The bystander’s bill shows indisputably that (1) the prospective players did use the apartment for the extended period; (2) on June 1, 1991, defendant made out a check for $100 on his own account and left it with plaintiff’s secretary as a security deposit to hold the property for the prospective players; (3) defendant did not negotiate for the lease and never had any contact with plaintiff before a phone call from plaintiff on June 7, 1991; (4) defendant’s understanding was that the check would be returned when the students moved in, but plaintiff cashed the check; (5) defendant did help the prospective players in seeking to learn the basis for a claim by plaintiff that the prospective players had damaged the apartment; (6) the prospective players each signed lease forms for the premises; and (7) payments of $1,410 were made by Lake Land College from Pell Grant funds and booster club funds for the rent on the premises. Other evidence will be related in regard to the particular issues it involves.

We are unaware of any decision of a court of review in regard to whether Supreme Court Rule 137 sanctions can be properly imposed in a small claims case. However, various supreme court rules do speak to situations where the procedure involved differs from that in other cases. Supreme Court Rule 282(a) (134 Ill. 2d R. 282(a)) sets forth a special way to commence a small claims proceeding. Supreme Court Rule 286 (134 Ill. 2d R. 286(a)) makes the filing of an answer unnecessary in such a proceeding unless ordered by the court. More significantly, Supreme Court Rule 287 (134 Ill. 2d R. 287(a)) prohibits depositions or other discovery devices in such matters. The express statements of the supreme court in regard to those differences between procedures in small claims and those in other civil proceedings indicate the supreme court does not intend to absolutely preclude application of Supreme Court Rule 137 and its sanctions from small claims cases.

Supreme Court Rule 286(b) does provide for informal procedures in cases where the amount claimed does not exceed $1,000. (134 Ill. 2d R. 286(b); see Bouhl v. Gross (1985), 133 Ill. App. 3d 6, 478 N.E.2d 620.) Accordingly, in such cases a litigant, particularly a pro se litigant, should be granted more leeway in misstatements or inaccuracies of pleading, proof, or legal interpretation than in other cases.

Plaintiff’s theory that his complaint was well grounded in fact and supported by existing law was based on the theory that defendant was liable as an undisclosed or partly undisclosed agent of the prospective players. Neither plaintiff nor his secretary testified to any negotiations carried on by defendant as to terms of the lease or as to price, and defendant denied that he did so. The mere fact that defendant wrote a check for security gives no inference that he was the person who originally negotiated the lease on behalf of the prospective players. Neither does defendant’s later aid to the players in seeking information as to damages to the leasehold. If defendant had engaged in these negotiations, plaintiff, his secretary or someone working for plaintiff should have known of this and been able to so testify.

The record gives no indication that anyone other than prospective basketball players would be the tenants in the apartment. Thus, anyone negotiating for the lease on behalf of those tenants would be an agent for a partially disclosed principal. (See Lake Shore Management Co. v. Blum (1968), 92 Ill. App. 2d 47, 51-52, 235 N.E.2d 366, 368.) Considering the manner in which plaintiff handled his case, any good-faith belief on his part that defendant was liable on such a sophisticated rule of law was extremely remote. Rather, the record indicates that plaintiff became frustrated upon his failure to collect from the tenants all of the rent due and all he deemed he was entitled to receive for damage to the premises, and proceeded maliciously.

On September 11, 1991, plaintiff sent a statement of account to defendant and two Lake Land College officials setting forth what plaintiff deemed to be the amount owed by the tenants. On October 24, 1991, plaintiff, using a false name and purporting to be his business manager, wrote to the same persons again stating the amount claimed due and threatening legal action. On October 24, 1991, plaintiff sent a letter to the same people reciting that nothing had been paid on the bill, and that the three tenants had not responded to previous letters. The letter indicated that the college was involved in a coming referendum vote and threatened to expose the college administration concerning the manner in which the bill had been handled. Plaintiff admitted at the first hearing that he lied in that letter that he had issued a check for certain repairs to the apartment. The document stated that the sender was not demanding that Lake Land staff pay the bill but asked for their assistance in collecting it. On November 14, 1991, a letter was written to the governing board of the college requesting payment and threatening to sue the tenants and defendant if payment was not made.

The foregoing correspondence supports the circuit court’s finding that plaintiff’s bringing of the suit against defendant was harassing. The threats of exposure of defendant and the college to ridicule also support the amount of the sanction award granted defendant. Further evidence of harassment of defendant by plaintiff was presented at the hearing to determine the amount of the sanction when defendant’s counsel testified that (1) plaintiff had taken information to the national governing body for junior college athletes charging defendant with a violation of its code of conduct by virtue of his issuance of the $100 check, and (2) this had generated considerable unfavorable publicity about defendant in area newspapers. This testimony was not disputed.

The $5,004.49 award was based primarily upon the claims for fees. One was for fees of defendant’s counsel, Dale A. Cini, for 47.1 hours of work at $85 per hour and one-half day of trial at $950, totaling $4,478.50. The other was an expert witness fee for William A. Sunderman, an attorney who testified as an expert as to the propriety of Cini’s fee request. His approved charge was $460.70. This covered 3.42 hours of earlier preparation and 2 hours for preparation and attendance on the day of hearing, all at $85 per hour.

No serious question of the propriety of the raté of the hourly fees charged or of the hours spent is made. Rather, plaintiff maintains that spending $4,478.50, in addition to a few small amounts for other items, to defend a $782.82 claim is ridiculous. Under most circumstances, we would agree. We recognize that, ordinarily, the amount of the subject matter of the suit is a very important factor, but the importance of the subject matter is also highly significant. (Jacobs v. James (1991), 215 Ill. App. 3d 499, 505, 574 N.E.2d 1292, 1296.) This was an unusual case. We can give a pro se small claims litigant some leeway in presenting a claim which appears unreasonable, but when such a claimant engages in the harassment involved here, he must suffer the consequences. Ordinarily, a person would be expected to hire a lawyer of lesser caliber than Cini and one whose time was less valuable to defend a matter of this nature. However, because of the collateral consequences of plaintiff’s conduct, defendant was justified in incurring the fee involved here.

The portion of the award which was for Sunderman’s preparation and testimony was very high for a small claims case. However, defendant was required to pay him a reasonable sum for his testimony and charging plaintiff for that is a proper function of a sanction award. Sunderman’s time was valuable, and time was involved in preparation and testifying. Defendant asked plaintiff to stipulate as to Cini’s fees but, because of the amount involved and the nature of the proceedings, plaintiff cannot be faulted for refusing to do so. Nevertheless, plaintiff’s vexatious conduct brought about the need for Sunderman’s testimony. The court did not breach its discretion in awarding ample sums to pay Sunderman at a normal rate for his time.

As we have indicated, we affirm.

Affirmed.

STEIGMANN and COOK, JJ., concur.


text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. JEFF McINTIRE, Defendant-Appellant.
    Fourth District
    No. 4—92—0104
    Opinion filed October 30, 1992.
    Richard D. Frazier and Michael D. Metnick, both of Metnick, Barewin & Wise, of Springfield, for appellant.
    Brett Irving, State’s Attorney, of Pittsfield (Norbert J. Goetten, Robert J. Biderman, and Dale M. Wood, all of State’s Attorneys Appellate Prosecutor’s Office, of counsel), for the People.
   PRESIDING JUSTICE GREEN

delivered the opinion of the court:

Section 11 — 501.1(c) of the Illinois Vehicle Code (Code) (Ill. Rev. Stat. 1991, ch. 951/2, par. 11 — 501.1(c)) permits the Secretary of State to summarily suspend an Illinois driver’s license upon failure of a motorist to submit to or complete a blood-alcohol test under certain conditions. Section 2 — 118.1 of the Code (Ill. Rev. Stat. 1991, ch. 951/2, par. 2 — 118.1) sets forth a court procedure, including a hearing, whereby one whose license has been so suspended may seek to have the suspension rescinded.

Central to our decision here is the portion of section 2 — 118.1(b) of the Code which states:

“The hearing may be conducted upon a review of the law enforcement officer’s own official reports; provided however, that the person may subpoena the officer. Failure of the officer to answer the subpoena shall be considered by the court to be the same as the failure of a complaining witness to appear in any criminal proceeding.” (Ill. Rev. Stat. 1991, ch. 951/2, par. 2 — 118.1(b).)

The “law enforcement [officer]” referred to above is the arresting officer as described in section 11 — 501.1 of the Code. The questions raised here are (1) whether the court must formally receive the officer’s report in evidence before considering it, and (2) whether the report may be considered when the officer is subpoenaed by the petitioner and testifies. We hold (1) the report is before the court for evidentiary purposes as soon as it is filed, and (2) the report may be considered even though the officer is subpoenaed and testifies.

On June 19, 1991, defendant Jeff Mclntire filed in the circuit court of Pike County a petition pursuant to section 2 — 118.1 of the Code seeking rescission of a statutory summary suspension of his license which had been imposed by the Secretary of State. The petition was brought in a case in which the defendant was charged with a traffic violation which gave rise to a request by an arresting officer that defendant submit to a test of the alcohol content of his blood. After a section 2 — 118.1 hearing, the court entered an order on July 30, 1991, denying the petition for rescission. Defendant appeals. We affirm.

Under section 2 — 118.1(b) of the Code, the scope of the rescission hearing is limited to a few questions of which the only one in issue here is “[w]hether the arresting officer had reasonable grounds to believe [defendant] was driving *** a motor vehicle upon a highway while under the influence of alcohol, other drug, or combination thereof” (Ill. Rev. Stat. 1991, ch. 951/2, par. 2— 118.1(b)(2)). The sufficiency of the evidence to show that defendant was properly offered and refused a blood-alcohol test is not disputed.

At the hearing, defendant’s first witness was the arresting officer, deputy sheriff Brenda Leonard, and she testified as follows: (1) on May 28, 1991, at 1 a.m. she was dispatched to assist a City of Pittsfield policeman at Schuster’s Air Field, a private airport; (2) upon arrival she was advised by the officer that defendant was in the driver’s seat of a vehicle located on the airport runway; (3) she asked the defendant whether he was injured and what he was doing on the runway; (4) defendant told her several stories, including a statement that earlier that day he had been involved in a motorcycle accident and he was just treated at the hospital for injuries he sustained in the accident; (5) she contacted the hospital for verification and learned defendant was recently treated for ankle pain and scratches to his face and knees; (6) the hospital indicated he was not treated for a head injury, and he had only been advised to take Tylenol for the ankle pain; and (7) defendant later stated he was in a fight, not a motorcycle accident.

Deputy Leonard described defendant as “confused,” noting petitioner “would tell us one story, and we would ask him about it and he would tell us another story.” The State declined to cross-examine Deputy Leonard.

Next, defendant testified as follows: (1) he was 5 feet 8 inches and 185 pounds, and on the afternoon prior to his arrest he went boating with some friends; (2) he arrived at the lake at approximately 3 p.m.; (3) he drank three beers until 7 p.m., and had nothing else to drink after that time; (4) after 7 p.m. he ate hamburgers for dinner; (5) there was a “good possibility” that while he was on the lake he spilled beer on himself; (6) he left the lake at 9:30 p.m. and went to a friend’s house; (7) he drove home on his motorcycle at 10:30 p.m.; (8) he lost control of his motorcycle when turning on to his gravel driveway; (9) he was not intoxicated when driving his motorcycle; (10) as a result of the accident he scraped the left side of his body and injured his head; (11) the head injury was not visible, but was tender to touch for one week; (12) following the accident he went into his house and cleaned his scratches; (13) he felt dizzy and took aspirin for the pain in his ankle; and (14) he went to bed and after that he did not remember much of what happened.

Defendant was unable to testify about what happened while he was being treated in the hospital. The next thing he allegedly remembered was seeing a grassy wooded area, and Officer Leonard arriving on the scene. Defendant claimed to have sporadic memory loss for the following three or four days. A hospital document on instructions for a head injury was given to defendant when he was released from the hospital, indicating that there was no evidence he received a serious head injury, but that he should be observed. On cross-examination, defendant denied using obscene language at the time of his arrest. Defendant stated that at the time of his arrest he was wearing the same shorts but a different shirt than he had on while drinking beer earlier that day.

Defendant’s friend, Barry Hammond, testified and corroborated defendant’s testimony regarding the boating trip. Hammond claimed defendant did not drink any alcohol after 7 p.m. the evening before his arrest, and he was not intoxicated. Hammond stated that when defendant left to drive home that evening, defendant’s breath and clothes smelled like alcohol. On cross-examination, Hammond admitted he did not know if defendant stopped to have anything to drink on his way home. He also admitted he distinctly smelled the odor of alcohol on defendant when defendant started on his way home.

Defendant also called as a witness the nurse who treated him at the hospital the night of his arrest. The nurse stated she could not remember anything unusual about defendant’s behavior that evening. On cross-examination the nurse testified that defendant’s blood was not tested for alcohol content. Defendant’s mother testified that on the evening of the arrest she observed defendant at 11 p.m. Defendant’s mother described defendant’s behavior as “stunned.” Defendant had scrapes, a swollen ankle, and complained of a headache. She later observed him in bed thrashing from side to side, and consequently she brought him to the hospital. The doctor told her the defendant’s ankle was not broken and he had “a possible head injury.” She stated defendant was not very “coherent” and was not making sense. They left the hospital at 12:30 a.m. and drove to purchase Tylenol. When she went into the store she left defendant in her vehicle with the keys in the ignition. When she came out of the store the vehicle was gone. She did not believe defendant was intoxicated, and she did not smell the odor of alcohol on him.

The State’s only witness was the assistant chief of the City of Pittsfield police, Dennis Jennings, who testified as follows: (1) in the early morning of May 28, 1991, he received a call that a vehicle was being driven on Schuster’s airport runway; (2) the vehicle was driven through a gate in order to get onto the runway; (3) he radioed for help; and (4) when he approached the vehicle on the runway, defendant was sitting in the driver’s seat.

The supreme court has held that in a rescission hearing, the petitioner has the initial burden of establishing a prima facie case by producing credible evidence of lack of grounds for rescission and, if this is done, the burden then shifts to the State. (People v. Orth (1988), 124 Ill. 2d 326, 338, 530 N.E.2d 210, 215-16.) Here, the testimony of Dennis Jennings, the State’s only witness, added little to the testimony of the defendant’s witnesses in regard to whether the arresting officer had probable cause to require defendant to submit to tests. Much of defendant’s testimony focussed upon whether he was, in fact, intoxicated rather than upon the question of whether the arresting officer had probable cause to believe he was intoxicated. However, defendant points out that no witness testified that he exhibited any of the classic signs of intoxication, i.e., odor of alcohol, glassy red eyes, or an unsteady gait.

We need not perform the mental gymnastics required by the shifting burden of proof pronounced in Orth in order to reach a decision, because of the existence of an arresting officer’s report referred to in section 2 — 118.1(b) of the Code. Here, that report was filed with the court by the arresting officer on May 28, 1991. It was verified by Brenda Leonard, the arresting officer. The report stated, in part, that the “[s]ubject had very strong odor of an alcoholic beverage, difficulty in standing and keeping balance, speech was slow and slurred.” If this document was properly before the court as evidence, the determination that the arresting officer had probable cause to require the testing was fully supported. The proceeding was a civil action. (People v. Gerke (1988), 123 Ill. 2d 85, 525 N.E.2d 68.) With the aid of the report, the court’s ruling was clearly not against the manifest weight of the evidence before it.

The trial judge indicated he was uncertain as to whether he could consider the report as the arresting officer was subpoenaed and appeared, but he did not say he did not consider the report. Accordingly, we must decide whether the report was properly before the court for consideration.

Defendant maintains that the report would have to have been offered into evidence in order for it to be considered and that was not done. We disagree that such offer was required. Section 11 — 501.1(d) of the Code (Ill. Rev. Stat. 1991, ch. 951/2, par. 11— 501.1(d)) requires the arresting officer to file a report with the court when a person required to submit to a required test refuses to do so. Section 2 — 118.1(b) of the Code states that a “hearing may be conducted upon a review” of that report. (Ill. Rev. Stat. 1991, ch. 951/2, par. 2 — 118.1(b).) The language does not indicate any offer of the report is required. Rather, the report is stated to be the heart of the proceeding. Analogy is appropriate to the provisions of section 5 — 4—1(a)(2) of the Unified Code of Corrections (Corrections Code), which permits a court at sentencing to “consider any presentence reports” (Ill. Rev. Stat. 1991, ch. 38, par. 1005 — 4—1(a)(2)). No case has indicated that such a report may be considered only after a foundation for the report has been established. Both under section 5 — 4—1(a)(2) (Corrections Code) and here, the reports are before the court upon filing.

No court of review has passed directly upon the question of whether the report of the arresting officer may be considered in a rescission hearing where, as here, the arresting officer was subpoenaed by the party seeking a rescission and appeared and testified. Section 2 — 118.1(b) of the Code makes no express limitation upon the use of the report. It merely states that the “hearing may be conducted upon a review of the *** [report],” but that the party seeking rescission can subpoena the officer. (Ill. Rev. Stat. 1991, ch. 951/2, par. 2 — 118.1.) This would seem to indicate that the party seeking rescission should have an opportunity to have the officer present and to seek to refute the report. Here, the defendant subpoenaed the officer and called her as his witness. However, he did not directly question her as to the accuracy of the statements she made in the report.

The theory that the bringing of the arresting officer before the court by subpoena negates any use of the report apparently begins with dictum in People v. Johnson (1989), 186 Ill. App. 3d 951, 542 N.E.2d 1226. There, in violation of a local court rule, the arresting officer failed to appear at a rescission hearing and for that reason the circuit court allowed rescission. The appellate court reversed, holding that a local rule could not supersede a statutory provision. However, the court did indicate that “[s]ection 2 — 118.1(b) makes clear that the State is permitted to use the arresting officer’s *** report to support the summary suspension *** provided that the arresting officer is not under subpoena to appear.” (Emphasis added.) Johnson, 186 Ill. App. 3d at 954, 542 N.E.2d at 1228.

Shortly after Johnson, in People v. Clayton (1990), 201 Ill. App. 3d 163, 559 N.E.2d 300, we reversed a rescission order entered by the circuit court on the sole ground that the arresting officer had failed to appear although he had not been subpoenaed. In holding that the mere failure of appearance of the officer was not sufficient, of itself, to justify rescission, we did say we approved the previously quoted statement in Johnson. (Clayton, 201 Ill. App. 3d at 165, 559 N.E.2d at 302.) While we still agree that Clayton was properly decided, further reflection causes us to disagree with the portion of the statement indicating that use of the arresting officer’s report is conditioned upon lack of subpoenaing the arresting officer.

Certainly, the report of the officer should receive little consideration if the arresting officer refutes it. However, section 2— 118.1(b) of the Code simply does not state that the review of the report is negated by the subpoenaing of the officer. If the subpoenaing of the officer is the trigger to negate the report, the appearance of the officer voluntarily or by State subpoena would still permit use of the report. This makes no sense. The use of a presentence report at a sentencing in a criminal case is not negated by the subpoenaing of the drafter of the report, but the defense must be given an opportunity to refute the report. (People v. Gilliand (1971), 131 Ill. App. 2d 635, 637, 267 N.E.2d 140, 142.) The recitation of the right of the person seeking rescission to subpoena the arresting officer in section 2 — 118.1(b) of the Code is clearly set forth to also indicate the right of such person to have the means to refute the officer’s report. If the legislature had intended that the subpoenaing of the officer negated the report, the legislature would surely have so stated.

With the supplement of the officer’s report to the testimony of the unusual behavior of defendant at the airstrip and the arresting officer’s information indicating defendant had given inaccurate information as to his infirmity, the evidence clearly supported the order denying rescission. We affirm that order.

Affirmed.

STEIGMANN and KNECHT, JJ., concur.