text:
    Lawrence M. Janssen and Joyce V. Janssen, Plaintiffs-Appellees, v. Lloyd E. Worthington, Defendant, State Security Insurance Co., Citation Respondent-Appellant.
    Gen. No. 67-177.
    Second District.
    September 23, 1968.
    Diver, Diver, Ridge & Brydges, of Waukegan, for appellant.
    Lidschin & Pucin, of Waukegan, for appellees.
   MR. JUSTICE MORAN

delivered the opinion of the court.

In July, 1965, the defendant State Security Insurance Company, issued a policy of insurance to the defendant, Lloyd E. Worthington, who gave his address, at that time, as 3220 Gilboa Avenue, Zion, in Lake County. On August 14, 1965, the defendant Worthington’s automobile collided with plaintiffs’ auto, causing personal injury and property damage. On August 16, 1965, Mrs. Worthington called the insurance company to report the accident, giving their address as 3021 Galilee, Zion, and the written report, filed on August 24th, also showed that address.

Plaintiffs’ complaint was filed on September 14, 1965. On September 20th, Mrs. Worthington called the insurer and left her sister-in-law’s phone number.

In November, the plaintiffs filed written interrogatories and, shortly thereafter, the attorneys for the insurance company sent a letter to the defendant, addressed to 3220 Gilboa, requesting a conference. The letter was not returned. In December the attorneys for both sides set up a deposition to be taken in the following February. On February 3, 1966, the attorneys for the insurance company addressed a letter to the individual defendant at the Gilboa address, advising him of the deposition. That letter was not returned. When the attorneys for the insurance company were unable to contact the defendant, the deposition was continued to April 26th, and again they sent a letter to the defendant at 3220 Gilboa informing him of the new date. This letter was not returned.

On April 25th, defendant’s attorneys called plaintiffs’ attorney to say that the defendant would be unavailable for his scheduled appearance on the 26th and, on April 28th, subsequent to defendant’s failure to show and upon receipt by defendant’s attorneys of plaintiffs’ notice on a motion to debar, another letter was written to Worthington at 3220 Gilboa, stressing the necessity of his appearance on May 2 and stating that his failure to do so would prompt his attorneys to withdraw. This letter was returned to the sender.

On May 5, two letters were sent defendant, (one by certified mail), addressed to 3021 Galilee. Both were returned to defendant’s attorneys.

The motion to debar was continued to May 6th, at which time it was ordered that defendant pay $180 in attorneys’ fees and be debarred in the event of his failure to comply. Also on May 6th, a motion by defendant’s attorneys to withdraw was entered and continued to May 23 for the purpose of sending out a new notice of withdrawal to defendant. With this intent, certified letters were directed to defendant at each of his three known addresses; all were returned.

On May 13th, defendant’s attorneys requested that a State Security investigator be sent out to locate the assured. The investigator’s report of the 16th was negative and, subsequently, a leave to withdraw was granted on May 23,1966.

Two days later, defendant called and gave a new address and telephone number. A letter was directed to him at that address, which was again returned.

On June 8, 1966, Worthington called, stating he would be in the office on that “Thursday,” but failed to show. An investigator was directed to the last given address, 6029 S. Eberhardt, Chicago. On June 15, Mrs. Worthington called and made an appointment for her husband on the following day.

Defendant came to the office on June 22nd, was informed of the $180 judgment and was to return on the 24th, an appointment he failed to keep.

The motion to debar, filed by plaintiffs on May 26th, reads, in part, as follows:

“. . . Thereafter, at defendant’s request, a new discovery deposition was set for hearing on April 26, 1966, at 2:00 p. m. with the assurance that the defendant would be available on that date. Thereafter, on April 25,1966, plaintiffs’ attorneys received a call from the office of defendant’s attorneys inquiring whether or not plaintiffs would be available for the deposition and were advised that plaintiffs had been notified and would appear. Thereafter, on
April 26, 1966, the date set for the deposition aforesaid, defendant’s attorneys called plaintiffs’ attorneys to advise them that the defendant would not be present for the deposition.
“That the plaintiffs have been seriously inconvenienced and put to unnecessary additional expense by reason of the settings aforesaid and the cancellations thereof, without furnishing plaintiffs or their attorneys ample time to rearrange their schedules.

The motion and the resulting judgment would seem to arise from the failure of defendant’s attorneys to give ample notice on their inability to appear. Yet during the aforementioned meeting of June 22nd, testimony indicates that Worthington was informed by his attorneys that he, Worthington, would be expected to pay the $180 before they would seek to reenter the case.

Let it be noted that the record shows no indication that the insurance company attempted to contact Worthington by the use of the phone numbers left with the company, in an effort to learn the whereabouts of the individual defendant.

Between May 23, 1966, when defendant’s attorneys were granted leave to withdraw, and July 28, 1966, the trial date, (during which time the defendant appeared personally in the office of the attorney and while the company had the correct address), there was no effort on behalf of the company to reenter the case.

The trial was held in the absence of defendant and his attorneys and judgment was rendered for the plaintiff, Lawrence M. Janssen, in the sum of $1,450 and for the plaintiff, Joyce V. Janssen, in the sum of $3,500.

A citation to discover assets was then issued and the defendant insurance company interposed an affirmative defense, that the individual defendant had breached the policy of insurance by noncooperation. The trial court rejected this defense and rendered judgment against the insurance company.

The insurance company brings the case to this Court raising the single issue that, under the facts of the case, the individual defendant has breached the noncooperation clause and, therefore, the company is not liable.

The insurance company brief before us contains a statement of the facts, an argument and one citation, Calla-way v. Schied, 73 Ill App2d 116, 219 NE2d 718 (1966). That case may be easily distinguished from the case at bar, since in that case, attorneys for the insurance company addressed correspondence to the individual defendant at an address where she actually lived. In this case, the insurance company knew within two days of the accident that the defendant had moved. Despite the telephone call from defendant’s wife, the address shown on the written accident report and a subsequent phone call informing the company of a telephone number at which defendant might be reached, the insurance company sent their letters to a former address. Not until a motion to debar was filed did the insurance company start sending letters to any other address. The insurer knew the correct address on August 16, 1965, and yet, did not send any mail to that address until Hay of 1966. Notice to an address which is known to be wrong is no notice at all.

If notice was not sent defendant at his correct address, he can hardly be charged with noncooperation since he was not given the opportunity to cooperate. In quoting the trial court in the case of Penn v. Progressive General Ins. Co., 74 Ill App2d 32, 36, 219 NE2d 857 (1966), the court said “. . . there is no evidence that she ever received any notice at all from the company. She never got the chance not to cooperate.” The court further held that the defense of noncooperation is affirmative and the burden is on the defendant insurance company to establish, by a preponderance of evidence that the individual defendant failed to cooperate. See also Gregory for Use of Cusimano v. Highway Ins. Co., 24 Ill App2d 285, 297,164 NE2d 297 (1960).

In the case of Pennsylvania Threshermen & Farmers Mut. Cas. Ins. Co. v. Owens, 238 F2d 549 (1956), the Court said at page 550:

“The problem of noncooperation has a dual aspect: not only what the assured failed to do, but what the insurer on its part did to secure cooperation from an apathetic, inattentive, or vanished policyholder, must be considered. Liability insurance is intended not only to indemnify the assured, but also to protect members of the public who may be injured through negligence. Indeed, such insurance is made mandatory in many states. It would greatly weaken the practical usefulness of policies designed to afford public protection, if it were enough to show mere disappearance of the assured without full proof of proper efforts by the insurer to locate him.”

As stated in Jackson v. Bankers Indemnity Ins. Co., 277 Ill App 140, 156 (1934), “. . . What constitutes cooperation (or lack of it) on the part of the assured, within the meaning and effect of cooperation clauses, is usually a question of fact.” The trial court heard and saw the witnesses and examined all of the evidence and concluded that the insurance company did not prove the affirmative defense of noncooperation. On the basis of the record before us we cannot say that the trial court committed any error.

Judgment affirmed.

ABRAHAMSON, P. J. and DAVIS, J., concur.


source: Caselaw Access Project

author: MR. JUSTICE SEIDENFELD

license: Public Domain

text:
    Stanley Stawasz, Plaintiff-Appellee, Cross-Appellant, v. Aetna Insurance Company, a Corporation, and Publicker Chemical Corporation, a Corporation, Defendants-Appellants.
    Gen. No. 68-3.
    Second Judicial District.
    September 25, 1968.

      John W. Gilligan, and Peterson, Lowry, Rall, Barber & Ross, of Chicago, for appellants.
    Allen S. Greene, of Wheaton, for appellee.
   MR. JUSTICE SEIDENFELD

delivered the opinion of the court.

Defendants, Aetna Insurance Company and Publicker Chemical Corporation, separately appeal from summary judgments entered against them.

Publicker operated a “tank farm,” an industrial operation in which inflammable substances such as naphtha, alcohol, and ketones were blended into various products and shipped out in steel drums. Stawasz was a foreman for Publicker. An employee of Publicker had given a drum, which had contained a chemical shipment to Publicker, to one Morgan. Stawasz was not present on the day this was done and had not authorized it. The drum given to Morgan exploded at his home causing injuries which later resulted in his death.

The conservator of Morgan’s estate, before his death, filed a suit against Publicker and Stawasz. Aetna, as the liability carrier for Publicker, entered a defense for both defendants, but as to defendant Stawasz, defended under a reservation of rights. However, this suit was voluntarily dismissed and, subsequently, a wrongful death was instituted joining Publicker and various employees, including Stawasz, as defendants. The charges of negligence against both Publicker and Stawasz were essentially the same. Both were charged with negligence in the storage, handling, possession, labelling and transfer of possession of the drum without warning of the dangerous contents. Aetna’s attorneys entered a defense for Publicker but not for Stawasz, and refused various tenders by the latter during the course of litigation. Stawasz defended by his personal attorney. The trial resulted in a damage judgment on a jury verdict against Publicker; with Stawasz being found not guilty.

Stawasz filed this suit to recover his expenses of defense from Aetna, later adding a second count against Publicker and asking the same relief. Stawasz also asked for relief against Publicker under section 41 of the Civil Practice Act charging unreasonable denial of allegations in the complaint. Publicker’s motion to strike the complaint was denied. Thereupon issues were joined on Stawasz’s motion for summary judgment, which the trial court granted as to both defendants and from which the defendants appeal. The court, however, denied the section 41 relief and plaintiff cross-appeals.

THE CASE AGAINST AETNA

Plaintiff’s theory against Aetna is that, although he is not a named insured, he is covered by the policy issued to his employer, Publicker, as a third-party beneficiary. Arguing from the premise that an employer is required to indemnify an employee for his cost of defense, plaintiff claims that the provisions of the employer’s policy providing that the insurer shall pay all sums which the insured shall be legally obligated to pay, warrants recovery of his expenses of defense.

The premise is false and unsupported by authority. Absent a contract between the employer and employee to that effect, an employer has no obligation under the circumstances present here either to defend or to indemnify an employee charged with a negligent act whether charged jointly with his employer or not. No such contract of indemnity or agreement to provide a defense is present in this case. An employer may be liable jointly with the employee to a third person for the negligent acts of his employee while acting within the scope of the employment. But the indemnity runs in the opposite direction from the course charted by the plaintiff : the employer becomes liable under the doctrine of respondeat superior or agency for the negligent acts of his employee. Brill v. Davajon, 51 Ill App2d 445, 201 NE2d 253 (1964); and the employer, in turn, may seek to be indemnified by his employee for his loss for the reason that an employee owes to his employer the duty of exercising reasonable care in the performance of his duties. Bituminous Cas. Corp. v. American Fidelity & Casualty Co., 22 Ill App2d 26, 31, 32, 159 NE2d 7 (1959); Purple Swan Safety Coach Lines v. Egyptian Transp. Co., 256 Ill App 442, 444 (1930); Embree v. DeKalb Forge Co., 49 Ill App2d 85, 91-92, 199 NE2d 250 (1964). Stawasz, here, defended to disclaim his personal negligence, and in so doing was acting in his own interest; and, in establishing his freedom from negligence, was doing no more than that required of him as an employee.

The only obligation of Aetna is to the insureds defined in its policy. In order for plaintiff to come within those policy definitions, the record must show that he is, though an unnamed insured, within the terms extending coverage to “any executive officer, director, or stockholder” of the named insured. The motion and affidavits characterize Stawasz only as a “foreman.” This allegation is insufficient to bring him within the policy, and it was error to grant summary judgment against Aetna on the pleadings with a material question of fact remaining unanswered. Brockie v. State Farm Mut. Automobile Ins. Co., 39 Ill App2d 159, 162-163, 187 NE2d 538 (1963).

We hold that the court erred in granting plaintiff’s motion for summary judgment against Aetna, and remand for further proceedings in accordance with this opinion.

THE CASE AGAINST PUBLICKER

Stawasz’s case against Publicker proceeds on the admittedly novel theory that since both the employer and the employee were charged with the same wrongful conduct, and the employer was found at fault while the employee was found free of fault, the employee is entitled to be indemnified for any expense he has been put to because of the “primary” fault of the employer.

The fatal flaw in this argument is that no possible act of Publicker placed Stawasz in a position of liability. Stawasz was not found guilty of negligence, which under any theory, could have allowed him to place that burden on one more at fault. Stawasz incurred no liability for any conduct of Publicker. The positions are reversed, in fact. If Stawasz had been found to be negligent, and Publicker then burdened with damages for its derivative liability based on the fault of its employee, Publicker could have secured indemnity from its employee. Bituminous Cas. Corp. v. American Fidelity & Casualty Co., supra; Purple Swan Safety Coach Lines v. Egyptian Transp. Co., supra; Embree v. DeKalb Forge Co., supra. It, of course, could not logically be said that Publicker would have to assume Stawasz’s cost of defense because the latter was an employee. Stawasz is liable for his own misconduct — to others or to Publicker. If he is wrongfully charged with negligence he must defend at his own expense unless he has contracted with someone else to assume such defense. No such contract is expressed or implied in the circumstances of this record.

We hold that the court erred in denying the motion to strike the complaint of Stawasz against Publicker and remand with directions to strike the complaint and dismiss this portion of the case with prejudice.

THE CROSS-APPEAL

We further hold that the trial court properly refused to order sanctions under section 41.

Lastly, under the circumstances of the record we deny the motion of the cross-appellant, taken with the case, to require appellants to correct the record on appeal at appellants’ expense.

Reversed and remanded with directions on the appeal of defendants; affirmed on the cross-appeal.

ABRAHAMSON, P. J. and MORAN, J.,concur.


author: MR. PRESIDING JUSTICE ABRAHAMSON

text:
    People of the State of Illinois, Plaintiff-Appellee, v. William F. Rickelman, Defendant-Appellant.
    Gen. No. 68-21.
    Second District.
    September 23, 1968.

      Gatenbey, Spuller, Law & Johnson, and Philip J. R. Equi, of Chicago, for appellant.
    William V. Hopf, State’s Attorney of DuPage County, of Wheaton, and Michael Fitzsimmons, Jr., Assistant State’s Attorney, for appellee.
   MR. PRESIDING JUSTICE ABRAHAMSON

delivered the opinion of the court.

The defendant, an attorney, was arrested and charged with speeding. At the time of his arrest he was returning from attendance in court at the courthouse in Wheaton, DuPage County, Illinois. A motion predicated on privilege from arrest was granted and the complaint dismissed.

Subsequently, a complaint was filed under a new case number charging the defendant with the same offense. The complaint and warrant were served upon him during the recess of a jury trial being held in Wheaton, Illinois, at which trial the defendant was the attorney representing one of the parties to a lawsuit. The complaint was returnable June 26,1967, at which time the defendant, by his attorney, entered a general appearance and executed a waiver of trial by jury, which read as follows:

“Now comes the above named defendant, in his own proper person, and here states that he has been fully advised of his right to Trial by Jury; that he waives same and elects to be tried by the Court.”

July 18 the defendant, by his attorney, filed a Motion to Quash the warrant on the grounds that the arrest was improper and illegal and was contrary to the provisions of the statute as follows:

Chapter 13, section 9 (Ill Rev Stats 1965) :
“All attorneys and counselors at law, judges, clerks and sheriffs, and all other officers of the several courts within this state, shall be liable to be arrested and held to bail, and shall be subject to the same legal process, and may in all respects be prosecuted and proceeded against in the same courts and in the same manner as other persons are, any law, usage or custom to the contrary notwithstanding: Provided, nevertheless, said judges, counselors or attorneys, clerks, sheriffs and other officers of said courts, shall be privileged from arrest while attending courts, and whilst going to and return from court.”
Chapter 38, section 107.7 (Ill Rev Stats 1965):
“(d) Judges, attorneys, clerks, sheriffs, and other court officers shall be privileged from arrest while attending court and while going to and returning from court.”

On August 25 the Motion to Quash was denied and the defendant was found guilty of a speeding charge and fined $10 plus costs. It is from this order that the appeal is taken.

The claim of privilege from arrest is waived by the failure of the defendant to insist upon it at the first opportunity. Wilson v. Nettleton, 12 Ill 61, 63 (1850).

The question to be determined by this court is whether or not privilege was urged at the first opportunity. In the light of the chronological events herein recited, we are of the opinion that the entry of a general appearance and waiver of trial by jury is inconsistent with the principle that privilege must be urged at the first opportunity.

We find that privilege was waived and that the order of the trial court was correct.

Judgment affirmed.

MORAN and SEIDENFELD, JJ., concur.


author: STOUDER, J.

text:
    Alice Lauff, Plaintiff-Appellant, v. David Lauff, Defendant-Appellee.
    Gen. No. 68-21.
    Third District.
    September 19, 1968.
    John L. Moore, of Oregon, for appellant.
    Besse & Besse, of Sterling, for appellee.
   STOUDER, J.

Plaintiff-Appellant, Alice Lauff, filed her petition in the Circuit Court of Whiteside County seeking issuance of a contempt citation against Defendant Appellee, David Lauff, to enforce a child custody order. Defendant filed a petition seeking to modify the custody order and asking that the custody of the children be awarded to him. The trial court denied plaintiff’s petition for citation, granted defendant’s petition and thereupon modified the custody provision of the divorce decree by awarding custody of the minor children to defendant. It is from this order that plaintiff appeals.

The parties were divorced by a decree entered in the Circuit Court of Whiteside County in June, 1964. By the terms of the decree the custody of the two minor daughters of the parties, aged seven and five was awarded to plaintiff. She exercised custody of said daughters until on or about November 11, 1965, during which period defendant visited the children and so far as the record reveals conducted himself as a proper father. On the 11th day of November, 1965, plaintiff left the children with their paternal grandparents. There is some conflict in the evidence concerning what transpired after the children were left with their grandparents. According to plaintiff she returned a few days later to get the children and the grandmother refused to return them. According to plaintiff she made other efforts to secure a return of the children between November 11, 1965, and November 30,1967, the date of the filing of the petition in this case.

The grandmother denied the plaintiff’s testimony and stated that the plaintiff had left the children with her on the November date explaining that she, the plaintiff, would be out of town. No extra clothes were left with the children and the grandmother testified that she expected the plaintiff to return for the children within the next day or two but that when she failed to do so within a week the defendant father came and got the children, who have since remained with him. The defendant father also denied that plaintiff had made any efforts to secure a return of the children and indicated further that the only time plaintiff had seen the children was inadvertently when she met the children on the street some eight months after the children came to live with their father. Defendant remarried in May, 1965, and plaintiff remarried in October, 1966.

Without detailing the evidence we believe there is ample evidence to support the following conclusions: First, although the evidence is conflicting, we believe it sufficient to support a determination that after plaintiff left the children with the grandparents in November, 1965, she made no effort to secure a return of custody until the filing of this petition. Secondly, due to physical, mental and emotional problems the plaintiff, at the time she left such children with their grandparents, was unable to properly care for them and these conditions have persisted during the period involved. Thirdly, the defendant’s custody of the children on and after November, 1965, was for the best interests of the children. Fourthly, at the time of the original decree of divorce and at the time of the hearing on this petition, each of the parties was a fit and proper custodian for the children and each had adequate physical facilities to provide for their care.

Plaintiff argues that the trial court abused its discretion in awarding the custody of the children to defendant and in failing to require defendant to return the children to her. The familiar authorities on the custody of children have been called to our attention. Nye v. Nye, 411 Ill 408, 105 NE2d 300 and Wade v. Wade, 345 Ill App 170, 102 NE2d 356. These authorities emphasize the importance of the maternal relationship to the proper care and development of children and also indicate that the primary concern of the court is the best interests of the children. It may be also said that the custody of minor children by the mother will be preferred unless there are compelling reasons which in the best interests of the children require other custodial arrangements.

It is also well settled that a decree which provides for the custody of minor children should not be modified unless there has been a change of circumstances affecting the best interests of the children. The principal reason for this rule is that the best interests of children are not served by a disturbance of the continuity of custodial arrangement. Although the plaintiff is not seeking a modification of the original custodial decree she is seeking to modify a custodial arrangement which had existed for a substantial period of time albeit without court approval. We believe that the same reasoning is applicable and that there is ample evidence in the record from which the trial court could properly conclude that the continuance of the custodial arrangements made by the parties better served the interests of the children than any disturbance therewith.

Plaintiff also argues that it was the duty of the defendant to seek and secure at some prior time the modification of the custodial decree and that because he failed to do so he should now be precluded from opposing the plaintiff’s petition. We do not believe that any different duty devolved upon defendant than upon plaintiff and in any event we fail to see how such circumstance has any bearing on the interests of the children.

For the foregoing reasons the decree of the Circuit Court of Whiteside County is affirmed.

Decree affirmed.

ALLOY, P. J. and CULBERTSON, J., concur.


text:
    In the Matter of the Application of the County Collector for Judgment of Sale Against Lands and Lots Returned Delinquent for Nonpayment of General Taxes for the Year 1964 and Prior Years. Petition of Clarence C. Short for Tax Deed.
    Gen. No. 68-31.
    Third District.
    September 19, 1968.
    Vonachen, Cation, Lawless, Trager & Slevin, of Peoria, for appellant.
    Crissey, Kost & Downs, of Lewistown, for appellee.
   STOUDER, J.

This case involves a Petition for a Tax Deed by Clarence Short, Appellant, a purchaser of a tax certificate to the premises involved which were sold for nonpayment of taxes. The Circuit Court entered an order denying the Petition for Issuance of a Tax Deed and directing the County Clerk to refund to Clarence Short the amount of money paid for the purchase of the tax certificate. It is from this order that this appeal is taken.

Charles Kling, Appellee, of Canton, Illinois, owned certain real estate in Canton, Illinois. The 1964 real estate taxes due in 1965 on these premises were not timely paid. The County Treasurer of Fulton County found them delinquent and ordered the premises sold for the nonpayment of taxes subject to the right of redemption. On October 11, 1965, appellant purchased the tax certificate to these premises. The original time of redemption for the owners and interested parties would, by law, have expired on the 11th day of October, 1967. On August 10,1967, appellant filed his petition for an order directing the issuance of a tax deed.

Likewise on August 10, 1967, appellant extended the period of redemption from October 11, 1967, to and including the 2nd day of January, 1968.

On the 5th day of January, 1968, three days subsequent to the expiration of the extended period of redemption, the amount, necessary to redeem the premises was paid to the County Clerk of Fulton County, Illinois.

On January, 8, 1968, a hearing date which was set on the 11th day of August, 1967, appellant presented his petition for the issuance of a tax deed. The court denied this petition and entered an order directing the County Clerk to refund to appellant the amount of money paid for the tax certificate.

The sole question presented on this appeal is whether the trial court erred in denying appellant’s petition for a tax deed. The applicable statute is section 734, chapter 120, Ill Rev Stats, enacted in 1963 which provides, “Real property sold under the provisions of this Act may be redeemed at any time before the expiration of two years from date of sale by payment . . . such real property may also be redeemed after the expiration of two years from date of sale, until expiration of the extended period of redemption by payment. . . .”

The principal issue presented by this case is one of statutory construction, the appellee arguing in support of the judgment below that on the authority of People v. Altman, 9 Ill2d 277,137 NE2d 357, redemption may be made at any time prior to the judicial determination that the purchaser of a tax certificate has complied with all requirements of law. The Altman case was decided in 1956, at which time section 266 (the predecessor of present section 734) chapter 120, Ill Rev Stats provided, “Real property sold under the provisions of this Act may be redeemed at any time before the expiration of two years from the date of sale by payment . . . such property may also be redeemed after the expiration of two years from the date of sale, at any time up to the date a Tax Deed is issued, by payment. . . .” In Altman, redemption was attempted after the court had ordered the County Clerk to issue the tax deed but before such deed had actually been issued by the County Clerk. The court held that the judicial determination of compliance was the significant event which terminated the right of redemption under the then existing statute. The decision appears to be based largely on the recognition of two considerations. First, under prior statutory provisions the county clerk determined the matter of statutory compliance prior to the issuance of a tax deed without the intervention or aid of a prior judicial determination and hence the issuance of a tax deed under such circumstances was a significant and certain event. Second, where the statutory compliance is judicially determined, the procedure which ensures depends upon the press of business in the clerk’s office and is a routine matter related to the alacrity or lack thereof of the clerk, thereby creating uncertainty without any particular significance.

Applying the usual rules of statutory construction it must be deemed that the legislature acted with due awareness both of the preexisting statutory provision and the interpretation thereof. If the legislature had intended to retain the rule in Altman it could and would have done so either by retaining the language of the statute as it then existed or by specifying the judicial determination of compliance with the statute as the event which terminated the right of redemption. This the legislature did not choose to do. We believe that the present legislation represents an awareness by the legislature that making the termination of the right of redemption dependent upon judicial compliance with the statute still represented some uncertainty. Such uncertainty could be and in our opinion was avoided by terminating the right of redemption on a date certain. Thus, any problems or questions which might arise in connection with a judicial hearing are avoided. Accordingly we hold that any redemption attempted after the period specified in the statute or as the same may have been extended has expired, is a nullity and of no legal effect. For the foregoing reasons the judgment of the Circuit Court of Fulton County is reversed and remanded with directions to proceed in accord with the views expressed herein.

Reversed and remanded with directions.

ALLOY, P. J. and SCHEINEMAN, J., concur.


author: MR. JUSTICE DAVIS

text:
    Ruth L. Ruby, Plaintiff-Appellant, v. Willard F. Wayman, d/b/a Wayman’s Ace Hardware, Defendant-Appellee.
    Gen. No. 68-32.
    Second Judicial District.
    September 25, 1968.

      Roger W. Hayes, of DeKalb, for appellant.
    Popejoy, Bowman, Unverzagt and Nelson, of Wheaton, for appellee.
   MR. JUSTICE DAVIS

delivered the opinion of the court.

The plaintiff, Ruth L. Ruby, brought suit against the defendant, Willard F. Wayman, d/b/a Wayman’s Ace Hardware, to recover for injuries she sustained while an invitee in his store. The trial court granted the defendant’s motion for summary judgment, and the plaintiff appealed.

The plaintiff entered the defendant’s store to pay her utility bill and to purchase some wire. While following the defendant to the rear of the store to get the wire, she fell over a laundry cart or basket, which the defendant had placed in the aisle, and was thereby injured. Both the plaintiff and the defendant agree that the question before this court is whether it was proper to determine under a motion for summary judgment that the plaintiff was guilty of contributory negligence as a matter of law. They also agree that the trial court entered summary judgment on the ground that the plaintiff was guilty of contributory negligence as a matter of law, and that the defendant’s negligence and its causal connection to the accident is not an issue in this appeal.

The trial court, in passing upon the motion for summary judgment, had before it the pleadings, the plaintiff’s deposition, the affidavit of the defendant’s attorney and the plaintiff’s counteraffidavit. The affidavit of the defendant’s attorney consisted primarily of excerpts of those portions of the plaintiff’s deposition which the defendant believed significant to support his motion.

The plaintiff testified in her deposition that she noticed the cart ahead of her in the aisle as she was proceeding to the back of the store. It was on the right-hand side of the aisle, which was about four feet wide. As she approached the laundry cart, she walked toward her left to go around it, but her right foot tripped over a protruding cart leg. She described the laundry cart as a folding unit with an aluminum frame and legs and which would crisscross when open. It was about thirty inches high and two feet square. She had not noticed any other carts in the aisle and did not know why this cart had been placed there. On previous occasions when in the store, she had not noticed, or was not aware, that any carts were in the aisle.

In her counteraffidavit, the plaintiff stated that she was intent upon following the defendant to the rear of the store at the time of the accident (he was walking slightly ahead of her in another aisle); and that she did not notice that the legs of the cart protruded as far as they did. In her deposition she described the details of the laundry cart with reference to what she saw as she was lying on the floor after the accident, and not from her observations of the cart as she approached it; and stated that all that she noticed prior to the accident was “some object” in the aisle, which she swerved to avoid.

The principles applicable to a motion for summary judgment under section 57 of the Civil Practice Act (Ill Rev Stats 1967, c 110, par 57) are well defined. Summary judgment is a procedure to be encouraged (Allen v. Meyer, 14 Ill2d 284, 292, 152 NE2d 576 (1958) ); however, it is a remedy to be awarded with some caution so as not to preempt the right to a trial by jury or the right to fully present the factual basis for a case where a material dispute may exist. Solone v. Reck, 32 Ill App2d 308, 310, 311, 177 NE2d 879 (1961); Tezak v. Cooper, 24 Ill App2d 356, 362, 363, 164 NE2d 493 (1960).

Section 57 provides that a summary judgment should be rendered if the pleadings, depositions and admissions on file, together with the affidavits, if any, “show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment or decree as a matter of law.”

Courts have construed this section to mean that in determining if there is a genuine issue, inferences may be drawn from the facts which are not in dispute, and if fair-minded persons could draw different inferences from these facts, then a triable issue exists. Peirce v. Conant, 47 Ill App2d 294, 300,198 NE2d 555 (1964).

In making the above determination on a motion for summary judgment, the court must construe the pleadings, depositions and affidavits most strictly against the moving party and most liberally in favor of the opponent. Solone v. Reck, supra, 311. A summary judgment should then be granted where the moving party’s right thereto is clear and free from doubt. Palier v. Dreis & Krump Mfg. Co., 47 Ill App2d 334, 338, 198 NE2d 521 (1964); Solone v. Reck, supra, 310.

Applying these principles, we believe that the trial court should not have granted a summary judgment in favor of the defendant. The only function of the court, when presented with a motion for summary judgment, is to determine if a genuine issue exists as to a material fact; if not, summary judgment is proper; if so, summary judgment is improper, as the court may not summarily determine a material fact issue.

The plaintiff undoubtedly is to be charged with the duty to look ahead and to see what clearly should have been within her range of vision. There were no warning signs on the cart which took up approximately one-half of the width of the aisle, and it is not apparent to us that the plaintiff necessarily failed to fulfill her obligation by not seeing the legs on the cart. She was following and watching the defendant who was walking to the rear of the store in an adjoining aisle. There is no indication of the manner in which the legs of the cart may have protruded into the aisle; of the extent of the light near the aisle; or of the visibility of the legs of the cart.

A party’s right to summary judgment should be free from doubt; and the record on which the summary judgment was granted in this case fails to meet this requirement.

The defendant, in support of the trial court’s ruling, has urged that under the rule announced in Pedrick v. Peoria & Eastern R. Co., 37 Ill2d 494, 229 NE2d 504 (1967), the trial court properly granted summary judgment. It is his contention that under the facts of this case, the plaintiff could never establish that she was free from contributory negligence.

However, the issue, in the summary judgment case at bar, is not whether the plaintiff could ever establish freedom from contributory negligence. The issue is whether there is a dispute as to material facts; and if the material facts are not in dispute, then the issue is whether reasonable minded persons might draw different inferences from such facts. In either event, a triable issue exists and a motion for summary judgment should not be granted.

In Pedrick, at page 510, the court stated:

“In our judgment verdicts ought to be directed and judgments n. o. v. entered only in those cases in which all of the evidence, when viewed in its aspect most favorable to the opponent, so overwhelmingly favors movant that no contrary verdict based on that evidence could ever stand.” (Emphasis ours.)

Pedrick contemplates the existence of a triable factual issue which has been heard by a jury. It provides the rule which shall govern in connection with the direction of a verdict. After the denial of a summary judgment herein, the trial of the cause, upon proper demand, could be before a jury. In such event, the court would not necessarily be precluded from directing a verdict for the defendant, if all the evidence, when viewed in its aspect most favorable to the plaintiff, so overwhelmingly favored the defendant that no contrary verdict based on that evidence could ever stand.

The plaintiff raised another issue on appeal which was not argued in her brief. Therefore, this point will not be considered and will be treated as waived. Supreme Court Rule 341(e) (7) (Ill Rev Stats 1967, c 110A, par 341(e)(7)).

For the reasons stated above, the summary judgment entered in favor of the defendant is reversed and the cause remanded to the trial court for further proceedings.

Reversed and remanded.

ABRAHAMSON, P. J. and SEIDENFELD, J., concur.


author: MR. JUSTICE ENGLISH McCORMICK, P. J.,

text:
    Apex Mutual Insurance Company, a Corporation, Plaintiff-Appellee, v. John Christner, et al., Defendants-Appellants.
    Gen. No. 50,851.
    First District, Fourth Division.
    September 18, 1968.

      McCORMICK, P. J., dissenting.

      Rosenblum, Lipnick & Joseph, and Bennett H. Shulman, of Chicago (Arthur Rosenblum and Erwin Rubin, of counsel), for appellants.
    Brooks and Simon, and Gilbert Gordon, of Chicago (Gilbert Gordon, of counsel), for appellee.
   MR. JUSTICE ENGLISH

delivered the opinion of the court.

This is a declaratory judgment proceeding brought by plaintiff against John Christner, the owner of an automobile insured against public liability by plaintiff. The car was in an accident while being driven by Helen Christner, John’s wife and a codefendant. Leo Marks and Louis Clepp, the persons allegedly injured in the accident, were also named as defendants. Plaintiff sought a declaration relieving it of the duty to defend or to pay any judgment against Helen Christner, on the ground that she had breached the cooperation clause of the insurance policy and that plaintiff had not waived this breach. The court found all material issues in favor of plaintiff and entered a decree granting the relief requested. Defendants moved for a “judgment notwithstanding the verdict” [sic] or, alternatively, for a new trial. These motions were denied. Defendants have appealed, raising the sole issue of whether plaintiff waived its right to assert Helen Christner’s noncooperation as a defense to its obligations to her under the policy.

There is no material dispute over the facts. At about 12:40 a. m., on August 2, 1962, Helen Christner, while driving alone in her husband’s automobile, collided with a squad car occupied by Police Officers Leo Marks and Louis Clepp. She was included as an insured by the terms of the liability policy carried by her husband with plaintiff. She informed plaintiff by telephone of the accident before 9:30 a. m. on that morning, at which time she appeared at plaintiff’s local office and was interviewed by its claims supervisor. On August 8, its field investigator obtained from her at her home a signed statement concerning the accident.

On November 21, 1962, the law firm of Rosenblum, Lipnick and Joseph filed a personal injury action on behalf of Clepp and Marks against Helen and John Christner. Plaintiff assigned the defense of that case to the law firm of Gillin and Owens. As attorneys for the Christners, Gillin and Owens filed an answer, and served and answered interrogatories.

On April 18, 1963, discovery depositions of Clepp and Helen Christner were taken at the office of Rosenblum, Lipnick and Joseph with a representative of Gillin and Owens present. Mrs. Christner’s testimony was in substantial agreement with the account of the accident contained in the statement which she had given to plaintiff’s investigator: she stopped her car on the street to permit the police car to back out of a driveway; after the police car had completed this maneuver and started to move forward along the street, she proceeded, following behind; after traveling forward for two or three car lengths, the police car stopped suddenly and without warning; as a result, she struck the police car in the rear.

On September 17, Mrs. Christner had a conversation with Officer Marks in the restaurant where she worked as a waitress. Thereafter, she telephoned Marks’ attorney, Rosenblum, and the next day went to his office where she executed a handwritten statement concerning the accident. Rosenblum’s office notified Gillin and Owens by telephone on the same day that Mrs. Christner had given them a statement. This statement asserted relevant facts not previously disclosed to plaintiff, declared that she had told untruths in her deposition, and admitted that she was fully and solely responsible for the accident.

Rosenblum did not furnish a copy of the statement to Gillin and Owens, but on October 3 they obtained a copy by court order. (We would assume from this that request for a copy had been denied by counsel.) Two weeks later they took a discovery deposition of Officer Marks. Part of this deposition dealt with Mrs. Christner’s connection with the police as a crossing guard, the circumstances of her meeting with Marks in the restaurant, and the events surrounding her giving the statement to Rosenblum.

On November 4, 1963, the policemen plaintiffs in the personal injury action filed a motion for summary judgment on the issue of liability. The court granted time for the filing of papers in opposition and set the motion for hearing on December 17.

On December 11, plaintiff, through other counsel, filed this declaratory action. Defendants were served with process on December 15. Until this time, plaintiff had not served a reservation of rights or notified its insureds in any manner that under the terms of the policy it no longer considered itself bound to defend Mrs. Christner. However, the gist of its complaint for declaratory relief was that when Mrs. Christner gave Rosenblum the statement admitting responsibility, she breached the condition of the policy requiring her to cooperate with plaintiff in the conduct of the defense and that because of this breach, plaintiff was neither obligated to defend that lawsuit on her behalf nor to pay any judgment which might be rendered against her. For the purpose of narrowing the issues on appeal, defendants have conceded in their brief that the conduct of Mrs. Christner did constitute a breach of the cooperation clause of the policy.

On December 17, 1963, Gillin and Owens filed a counteraffidavit in opposition to the motion for summary judgment in the personal injury action. This affidavit contained a description of the accident according to the testimony of Helen Christner in her discovery deposition, and denied knowledge of “the validity or circumstances under which the alleged statement (to Rosenblum) was given or taken.” It also informed the court of the pending declaratory action and requested that all proceedings in the personal injury action be stayed. The court, however, did not wait for determination of the declaratory judgment action, and entered summary judgment on the issue of liability in favor of Clepp and Marks and against both John and Helen Christner.

On January 17, 1964, Gillin and Owens filed a motion to vacate the summary judgment. This motion was denied on February 17.

The declaratory action was tried on March 18 and 19, 1965, and on May 17 the court entered the decree in plaintiff’s favor. On plaintiff’s motion, the court vacated its decree on May 28 and entered an amended decree nunc pro tunc as of May 17, declaring plaintiff free of any obligation to defend Helen Christner or pay any judgment which might be rendered against her in the personal injury case. The decree as first entered had not limited plaintiff’s relief to Mrs. Christner, but had referred generally to plaintiff’s release from the obligation to defend the lawsuit and to pay any judgment rendered therein. The court found “. . . the actions of the defendant Helen Christner were in violation of the conditions of the insurance policy and such violation was not waived or excused by any actions or omissions of the plaintiff

99

Meanwhile, on May 24, 1965, the plaintiffs in the personal injury suit made a motion to advance that cause for hearing on the remaining issue of damages. The motion was denied, the order including the recital: . .

the defendants through their attorney Gillin and Owens objecting to any advancement, the court having heard arguments of counsel . . . .” However, with regard to this motion to advance, it is stipulated in the case now before us that the attorney from Gillin and Owens testified (on defendants’ motion herein for “judgment notwithstanding the verdict”) that he had told Rosenblum (attorney for the injury action plaintiffs), before the motion was presented, that he did not know the status of the declaratory judgment suit at that time; that Rosenblum had prepared in advance the written order denying his own motion; that when the judge told Rosenblum that no written order was necessary, Rosenblum insisted he wanted the draft order anyway; and, further, that the attorney from Gillin and Owens made no statement of any kind before the court at the hearing on the motion to advance.

Difficulties arise when an injured party brings an action against an insured, and investigation by the insurer reveals a breach of condition or an essential fact tending to place the claim outside the coverage of the policy. The insurer’s interest in defending against the claim while restricting its obligation to the terms of the policy, presents the insurer with an urgent strategical problem: whether or not to defend the insured in court. See Shapiro v. DiGuilio, 95 Ill App2d 184, 237 NE2d 771.

It is well settled that assumption of the insured’s defense constitutes a waiver by the insurer of all questions of policy coverage. Bourne v. Seal, 53 Ill App2d 155, 203 NE2d 12; American Cas. Co. of Reading, Pa. v. Shely, 314 Ky 80, 234 SW2d 303 (1950); see De Hart v. Illinois Cas. Co., 116 F2d 685, 688. If, therefore, in spite of its doubts as to coverage, the insurer elects to take over the insured’s defense, it will afterwards be estopped from denying its own liability under the policy. The estoppel referred to here is “estoppel in pais”; it is ordinarily justified on the ground that the insurer has prejudiced the insured’s right to control his own defense. See the dissent in De Hart v. Illinois Cas. Co., 116 F2d 685, 688-689; and Rom v. Gephart, 30 Ill App2d 199, 173 NE2d 828.

With this in view, the insurer may wholly decline to assume the insured’s defense when coverage is in doubt. Having refused to enter the litigation, the insurer cannot subsequently be estopped from setting up in its own defense any matter not decided in the original action. Gould v. Country Mut. Cas. Co., 37 Ill App2d 265, 185 NE2d 603; Potter v. Great American Indemnity Co., 316 Mass 155, 55 NE2d 198; see Restatement of Judgments, § 107. Abstention presents a hazard, however, since the insurer will be “collaterally estopped” in the subsequent suit as to all issues which had been decided in the prior action. Sanitary Dist. of Chicago v. United States Fidelity & Guaranty Co., 392 Ill 602, 65 NE2d 364; Palmer v. Mitchell, 57 Ill App2d 160, 206 NE2d 776. Further, the danger of collateral estoppel is substantially increased if the insured and injured parties are inclined to conspire for the purpose of establishing such facts as they may select to place themselves under the policy’s coverage provisions. See Note in 4 Okla L Rev 125. Finally, the nonliability of the insured is potentially the most effective bar to any policy claims against the insurer. Where the possibility exists of making a successful defense on behalf of the insured, the insurer has much to gain from placing its first reliance upon this line of action, since by declining to defend, it would sacrifice all opportunity to contest the injured party’s claim.

Clearly, then, neither of these two alternatives is very satisfactory to an insurer. Sims v. Illinois Nat. Cas. Co. of Springfield, 43 Ill App2d 184, 199, 193 NE2d 123, cited with approval in Lincoln Cas. Co. v. Vic & Mario’s, Inc., 62 Ill App2d 262, 267, 210 NE2d 329, discusses the insurer’s options in such a predicament:

However, all authorities agree that quite often an insurer is faced with a dilemma as to whether to defend or to refuse to defend. In cases of doubt the answer is simple. (1) Seek a declaratory judgment as to its obligations and rights or (2) defend under a reservation of rights.

The reservation of rights is a means by which, prior to determination of the liability of the insured, the insurer seeks to suspend the operation of the estoppel doctrines through a nonwaiver agreement. When coverage is in doubt, the insurer will offer to defend the insured under such an agreement, reserving to the insurer all of its policy defenses in case the insured is found liable. Courts have generally held such agreements valid. E. g., Gallaway v. Schied, 73 Ill App2d 116, 219 NE2d 718; 81 ALE 1383; Blashfield, Automobile Law and Practice, § 342.23.

Estoppel in pais operates as a result of the insurer’s monopolization of the insured’s defense, since the insured, in reliance thereon, refrains from seeking other counsel. But no such reliance can be claimed where the insurer has defended under a reservation of rights, since the insured could have rejected the insurer’s offer of counsel if he had chosen to do so. Hawkeye Cas. Co. v. Stoker, 154 Neb 466, 48 NW2d 623. Also see Schneider v. Autoist Mut. Ins. Co., 346 Ill 137, 178 NE 466. Whether, in reserving rights, the insurer also avoids the strictures of collateral estoppel is, however, unsettled. See the discussion in Shelby Mut. Cas. Co. v. Richmond, 185 F2d 803, 805. It may be that since collateral estoppel arises from privity and since the nonwaiver agreement does not alter the fact of privity, it would not suspend the operation of collateral estoppel, thus substantially diminishing the value of a reservation of rights in many cases. See McNeely, Illegality as a Factor in Liability Insurance, 41 Col L Rev 26.

The second solution to the insurer’s dilemma (as referred to in Sims, supra) is through declaratory judgment. The purpose of this procedure is to resolve the issue of policy coverage with finality either prior to the commencement of suit by the injured party or while such suit is pending.

The right of the insurer to obtain a judicial declaration on the issue of policy coverage prior to adjudication of the personal injury claim has been favored by the weight of Illinois authority. E. g., Lentin v. Continental Assur. Co., 412 Ill 158, 105 NE2d 735; Walton Playboy Clubs, Inc. v. City of Chicago, 37 Ill App2d 425, 185 NE2d 719; Country Mut. Ins. Co. v. Bergman, 38 Ill App2d 268, 185 NE2d 513; Farmers Elevator Mut. Ins. Co. v. Burch, 38 Ill App2d 249, 187 NE2d 12; Farmers Automobile Ins. Ass’n v. Hamblin, 42 Ill App2d 482, 192 NE2d 450; Employers Liability Assur. Corp. v. Country Mut. Ins. Co., 50 Ill App2d 341, 343, 200 NE2d 98; 142 ALR 8, 12; also Sims and Lincoln Cas. Co., supra. Contra, State Farm Mut. Automobile Ins. Co. v. Morris, 29 Ill App2d 451, 173 NE2d 590; Valente v. Maida, 24 Ill App2d 144,164 NE2d 538.

We cannot blind ourselves to the perils of the insurer’s position. Where the injury action complaint states different causes of action or theories of recovery, only some of which are covered by the policy, the insurer is bound to defend all those which are within the policy. Canadian Radium and Uranium Corp. v. Indemnity Ins. Co. of North America, 342 Ill App 456, 97 NE2d 132. The penalty for failure to fulfill this duty is that any judgment entered is conclusive against it, absent fraud. Gould v. Country Mut. Casualty Co., 37 Ill App2d 265, 185 NE2d 603. In the instant case, plaintiff had a duty to defend John Christner and to indemnify him against any judgment he might suffer up to the policy limits as a result of the personal injury litigation. Plaintiff owed the same duty to Helen Christner until the time when she excused it from this obligation by virtue of her conceded breach of the policy conditions. The sole issue on review thus becomes whether plaintiff is estopped from asserting this excuse by virtue of its later conduct with respect to the personal injury litigation.

An insurer will not be estopped from asserting a breach of the cooperation clause by its insured if it repudiates liability within a reasonable time after becoming aware of the insured’s failure to cooperate. Krutsinger v. Illinois Cas. Co., 10 Ill2d 518, 526, 139 NE2d 767; 70 ALR2d 1199. See also Allstate Ins. Co. v. Keller, 17 Ill App2d 44, 50,149 NE2d 482, to the same effect.

In order for plaintiff to have preserved its defense under the policy, we must find, therefore, that notice of its disclaimer was given to Mrs. Christner and that such notice was timely. As mentioned above, the notification communicated to her consisted of her being served with process in the declaratory action filed by plaintiff. We believe that this constituted sufficient notice as it fairly informed her of plaintiff’s position. 38 ALR2d 1167.

The filing of the declaratory action by plaintiff was a clear manifestation that it was claiming to have been relieved of any duties owed to Mrs. Christner by virtue of the insurance policy, due to her now-admitted failure to cooperate with the defense. From the standpoint of notice, there does not appear to be any material difference between this method of procedure and the method of serving notice of the same intention through a reservation of rights.

. . . The immediate question which the surety must decide is whether it is obligated to defend the suit against the insured in the state court. Obviously its decision cannot await the determination of that suit, nor need the determination of its duty in this respect interfere with the trial of the state suit .... In similar situations it has been held in a number of recent cases that the insurer is entitled to be advised by the court whether or not it is obligated to defend and indemnify the insured against claims upon which suits are threatened or have already been brought. (Aetna Casualty & Surety Co. v. Yeatts, 99 F2d 665, 669; cited with approval in Nationwide Mutual Insurance Co. v. Simms, 231 F Supp 787, 789, which was a case involving a cooperation clause of an insurance policy.)

In the light of these generalizations, the case of Farmers Automobile Ins. Ass’n v. Janusick, 30 Ill App2d 352, 174 NE2d 75, is of interest. After an extensive review of the authorities with respect to the use of declaratory actions in this type of case, the court stated at page 359:

To summarize, the foregoing authorities indicate that declaratory judgment statutes should be liberally construed; that the construction of an insurance policy is the proper subject of a declaratory judgment action; and that the insurance company may ask to have its policy construed prior to the time that a suit against the insured has been prosecuted to judgment. Declaratory judgment statutes should be used to promote and facilitate rather than delay and impede the meting out of justice.

In Janusick, “the attorneys for the insurance carrier advised [the court] that they felt that they had a right to defend Janusick without waiving any policy defenses which they might have.” In reply to this contention, the court stated:

It is the holding of this Court that the question of coverage raised by the declaratory judgment action is not moot. Further, in view of this Court’s ruling that the declaratory judgment action may not be used to further delay the trial of the damage suits, it is the holding of this Court that the attorneys for the insurance carrier have the right to defend such suits without waiving the question of coverage and, that that question may be resolved either in the pending declaratory judgment action or in any subsequent garnishment or direct action instituted against the insurance carrier. (P 360.) (Emphasis added.)

In Janusick, a nonwaiver agreement was executed and, also, the insureds were represented by both personal and insurance company attorneys in the damage suits. However, the court in Knapp v. Hankins, 106 F Supp 43, 46, stated:

Plaintiffs argue that the Company has not attempted to obtain a nonwaiver agreement and make a defense under a reservation of rights. The court cannot see why the Company should be required to expend the money for a defense if the policy is void and in any event it has not been shown that such an agreement could be obtained from defendant. This argument is beside the point. The Company should not be forced to choose between not defending and waiving its rights by employing its own counsel before it has an adjudication of the validity of the contract of insurance. See Builders & Manufacturers Mut. Cas. Co. v. Paquette, supra, 21 F Supp at page 865.

At page 47 the Knapp court considered the argument that the company could sit idly by and let the defendant employ counsel of his own choosing to defend the damage suit, and dismissed it as unfair because the company would be bound by any judgment entered. Further, the insured has no duty to defend but only to cooperate in the defense of the action for damages. Therefore, unless the insurance company were to defend, there might be no defense at all.

In order to effectuate a result consonant with plaintiff’s right to defend (as pronounced in Janusick), and fairly to protect it from the strictures of estoppel in pais, we hold that personal service in the declaratory action brought by it preserved those defenses enumerated in the complaint for declaratory relief even though the insurer, without objection by the insured, continued meanwhile to represent its insured in the injury action. Cf. Krutsinger v. Illinois Cas. Co., supra, at 526.

A complaint for declaratory relief is an unequivocal assertion of nonliability by the insurer. Personal service affords the insured a formal and proper notice. To require. The declaratory judgment route impresses us as redundancy which the law does not and should not require. The declaratory judgment route impresses us as being eminently sound, as the insurer may preserve its defenses without losing its right under the contract to represent its insured if the defense is found invalid, and the insured is not forced to employ private counsel unless he opts so to do.

In the instant case, plaintiff was bound to defend John Christner regardless of his wife’s conduct. John’s defense necessarily hinged on the nonliability of Helen or failure of the injured plaintiffs to prove the agency relationship upon which they sought to hold him liable for her conduct. Therefore, whether or not the insurer was obligated to defend Helen, it was bound to continue to defend the suit on John’s behalf. Further, John’s interests in the personal injury action presented no conflict situation since they were thoroughly consistent with Helen’s interests and manifestly adverse to the interests of the allegedly injured officers.

Helen Christner was served in the declaratory action on December 15, 1963. A firm of attorneys retained by plaintiff had filed an answer on her behalf in the personal injury suit. At no time did she indicate a desire to have someone other than those attorneys (Gillin and Owens) act as her counsel in that action. All things considered, she was fairly informed of plaintiff’s position. With respect to estoppel in pais, the filing of the declaratory action (after service) had the same legal effect as a reservation of rights. Cf. 38 ALR2d 1167. The insurer’s intent to assert its disclaimer was manifested to the insured, whose consent may be inferred from her acquiescence. See Ancateau v. Commercial Cas. Ins. Co. of Chicago, 318 Ill App 553, 556, 48 NE2d 440.

However, defendants argue that plaintiff’s failure to disclaim liability promptly upon discovering a breach of the cooperation clause waived any rights which might otherwise have accrued as a result of the breach. While it is true that an insurer waives the right to assert a breach of policy condition by not acting with reasonable promptness, the instant plaintiff did assert its disclaimer in apt time.

On September 18, 1963, plaintiff was informed that a new statement had been given to Rosenblum by Mrs. Christner. Nothing in the record indicates that it learned the precise contents of this statement until October 3, when it resorted to a motion in court in order to procure a copy. Nor did it delay unreasonably in scheduling the deposition of Officer Marks for October 17. In view of the way in which the statement came into existence, we consider it to have been a necessary part of plaintiff’s investigation for it to have taken Marks’ deposition when, for the first time, plaintiff was able to learn of the essential pertinent facts and circumstances surrounding the statement. A waiver being the relinquishment of a known right, plaintiff could therefore not have waived the breach before October 17. Within less than two months thereafter, the declaratory action was filed and service obtained upon the defendants. Defendants contend, however, that two months was too long. Plaintiff counters that this was only a reasonable period of time, as it was necessary to research the law, digest the facts, make an evaluation, and decide on a course of action, with the approval of those in authority to make such a determination.

In Allstate Ins. Co. v. Keller, supra, at 51, the court pointedly referred to the fact that “plaintiff did not reserve its rights against defendant until almost one year and a half after the filing of the answer in the personal injury action although it had knowledge of the breach [of the cooperation clause] at that time.” (Emphasis added.) The court considered this too long a time and held that “[p]laintiff’s extended delay in informing defendant of its intention to deny liability clearly constituted a waiver of the breach.” Quoting from Krutsinger, supra, at 526, the court reasoned:

When an insurer wishes to assert its non-liability under the policy, it must notify the insured without delay. The reason is that “[t]he claim might be of such a character as that the amount of damages recovered in a lawsuit by the insured [sic; injured?] party would exceed the indemnity and subject the insured to considerable loss and damage, and therefore the insured should have a right to know with reasonable promptness the attitude of the indemnity company, so that he might be in a position to take such action as would not only protect the indemnity company, but save himself from loss and damages.” (Interstate Casualty Co. v. Wallins Creek Coal Co., 164 Ky 778, 781, 176 SW 217, 219.) (Emphasis added.)

Following the usual application of the “rule of reason” to nonspecific time requirements, it has thus been determined that in this situation a notification is “without delay” if it is communicated with “reasonable promptness.” It is also apparent that a delay is reasonable if it is not so long as to prevent the insured from taking such action as would save him from loss and damages. It is also implicit in ascertaining “reasonable promptness” that all the time between the learning of the breach and the notification to the insured cannot be considered as “delay,” because within that period some part of the time — reasonable in relation to the status of the pending litigation — must be allowed to the insurer to evaluate its position and to determine what route it will follow.

Applying this standard to the instant case, notification within two months was most certainly “without delay,” as we must be cognizant of the complexity of the insurer’s problem — both in applying the particular facts to the law with certainty and in deciding which of the possible courses to pursue. Further, the only proceeding which transpired in the two-month period here in question was the motion for summary judgment as to liability filed about midway in the period. True, action on such a motion is a critical stage in the proceedings and one which carries the possibility of substantial prejudice to the insured’s position. Yet, several factors must be here noted: (1) No action was taken on the motion until after service in the declaratory action; (2) objection to the granting of this motion would have been futile if Helen Christner’s final statement were accepted as true; (3) Helen Christner’s first story was urged upon the court by way of the counteraffidavit filed by Gillin and Owens; (4) Gillin and Owens requested the court not to act on the motion for summary judgment pending disposition of the declaratory action; and (5) Helen Christner made no attempt to obtain representation by attorneys other than Gillin and Owens. We conclude that Helen Christner was afforded the maximum protection practical under the circumstances. In view of her final statement (which she contends spoke the truth), Mrs. Christner’s only line of defense was on the question of damages, which issue remained unaffected by the summary judgment.

Lastly, defendants contend that plaintiff waived the defense of breach of policy condition by virtue of the conduct of Gillin and Owens in continuing to defend the personal injury action after learning of the breach. As we have held that plaintiff had not waived the breach as of December 15, 1963 (the date of service on defendants in the declaratory action), it is only necessary to consider the legal effect of subsequent events.

On May 17,1965, the trial court ordered the declaration sought by plaintiff. During the interim in the personal injury action, counteraffidavits in opposition to the motion for summary judgment on liability were filed, summary judgment was granted, and a motion was made to vacate the summary judgment.

Defendants direct the court’s attention to Allstate, where a further ground for finding waiver was held to be the conduct of the attorneys retained by the insurer in their representation of the insured (at page 53). In Allstate the attorneys took the insured’s deposition for the purpose of strengthening the insurer’s position in the anticipated declaratory action. Although aware of the then existing conflict of interest, they made no disclosure to the insured.

The Allstate court stated, at page 52:

It is the law of this State that an attorney is required to disclose to his client all facts and circumstances' within his knowledge, which, in his honest judgment, might be likely to affect the performance of his duty for that client. Catherwood v. Morris, 360 Ill 473, 481 (1935). A client may presume from an attorney’s failure to disclose matters material to his employment that the attorney has no interest which will interfere with his devotion to the cause confided in him, or betray his judgment. Hunter v. Troup, 315 Ill 293, 302 (1925)....

“It is unprofessional to represent conflicting interests, except by express consent of all concerned . . . .” Hawkeye Cas. Co. v. Stoker, supra, at 481. Citing American Employers Ins. Co. v. Goble Aircraft Specialties, Inc., 205 Misc 1066, 131 NYS2d 393, 401-402, the Allstate court continued, at pages 52-53:

“. . . His duty to the assured is paramount. The Canons of Professional Ethics make it pellucid that there are not two standards, one applying to counsel privately retained by a client, and the other to counsel paid by an insurance carrier. . . .”
“Where an insurer’s attorney has reason to believe that the discharge of his duties to his client, the insured, will conflict with his duties to his employer, the insurer, it becomes incumbent upon him to terminate his relationship with the client. (Citations.) It was the duty of plaintiff’s attorneys upon learning of the possible conflict of interests between plaintiff and defendant, to immediately notify defendant of this fact. Their failure to take such action can be attributed only to their desire to strengthen plaintiff’s position in preparation for the filing of the instant suit. It would be untenable under such circumstances to allow plaintiff to disclaim liability under the policy.” (Emphasis added.)

As applied to the facts in Allstate, these statements are irrefutable. However, in the instant case no conflict appears between the interests of plaintiff and those of Mrs. Christner with respect to the professional representation afforded her by Gillin and Owens. Nothing helpful to plaintiff in the declaratory action was divulged to the attorneys by Mrs. Christner, nor was any attempt made to procure any information from her which would have been either helpful to plaintiff or damaging to her. Importantly, there was no issue raised with respect to any possibility that the injury claims would reach or exceed the policy limits. Since plaintiff is admittedly bound to pay any judgment rendered against its insured, John Christner, growing out of this accident, its interests in the personal injury action in no way conflicted with those of Helen who was sued as John’s agent. The record does not indicate that Gillin and Owens were involved at all in the declaratory action. In any event, Helen had notice of plaintiff’s position by virtue of the declaratory action.

While the attorney retained by the insurer in a case such as this, represents the insured and not the insurer (Thrasher v. United States Liability Ins. Co., 19 NY2d 159, 278 NYS2d 793, 225 NE2d 503 (1967)), no breach of duty will be imputed to him merely because his fee is not being paid by his client. Professional responsibility should be presumed until some evidence to the contrary is adduced. See Lysick v. Walcom, — Cal —, 62 Cal Rptr 640, which is of interest though distinguishable on the facts.

Considering the period concluding with entry of the declaratory decree (May 17, 1965), we find that there had been no waiver by plaintiff. Defendants, however, lay great stress on two more events in this complex chronology which they say indicate waiver by plaintiff and therefore must be analyzed in disposing of this appeal. On May 28, 1965, an order modifying the May 17 declaration was entered nunc pro tunc as of May 17. In substance this modification provided that only Helen and not John Christner had breached the cooperation clause, and that therefore plaintiff was relieved of its obligations only as to Helen. This was simply a correction to express the court’s decision more accurately, and is of no consequence here.

Meanwhile, on May 24, a motion to advance the personal injury action was denied by the assignment judge. The presence of an attorney from Gillin and Owens in court on behalf of the Christners at the time of this motion is relied upon by defendants as a waiver on the part of plaintiff. Referring again to what apparently occurred in that court, we note that: no statement of any kind was made by the Gillin and Owens attorney at the hearing on this motion; on the other hand, he did tell Rosenblum that he knew nothing of the status of the declaratory action at the time this motion was being presented; Rosenblum drafted the order denying his own motion in advance of the hearing, and persisted in obtaining entry of the written order despite the trial judge’s statement that a written order was not necessary.

We find in this episode nothing of any substance to support defendants’ contention of a waiver by plaintiff. The attorney from Gillin and Owens appeared on the motion in response to notice by Rosenblum, and completely unaware that the declaratory decree a week earlier had relieved the insurer of its responsibility to furnish such representation. As the trial judge told Rosenblum, he knew or should have known that his motion would be denied, and Rosenblum’s presentation of the pre-prepared draft order indicates the truth of this statement. No other inference is reasonable but that the entire incident was merely an attempt to establish waiver. It, of course, resulted in no prejudice whatsoever to the rights of Helen Christner.

The decree of the Circuit Court is affirmed.

Affirmed.

DRUCKER, J., concurs.

McCORMICK, P. J.,

dissenting:

I must respectfully dissent to the holding of the majority opinion. The only question involved in the case is whether or not the plaintiff, Apex Mutual Insurance Company, notified the defendant Christners in ample time of its reservation of rights under the policy. There is no question, where the coverage is in doubt because of a breach of condition or an essential fact tending to place the claim outside the coverage of the policy, that if the insurance company defends it must notify the insured of its intention to stand on its rights.

In the majority opinion it is pointed out that the assumption of the insured’s defense constitutes a waiver by the insurer of all questions of policy coverage. The opinion states: “If, therefore, in spite of its doubts as to coverage, the insurer elects to take over the insured’s defense, it will afterwards be estopped from denying its own liability under the policy.” If the coverage is in doubt in the opinion of the insurance company, it may refuse to enter the case at all. The court points out in the opinion that if the insurance company refuses to enter the litigation the insurer cannot subsequently be estopped from setting up in its own defense any matter not decided in the original action. However, such abstention presents a hazard since the insurer will be “collaterally estopped” in the subsequent suit as to issues decided in the prior action. The majority opinion states:

“The reservation of rights is a means by which, prior to determination of the liability of the insured, the insurer seeks to suspend the operation of the estoppel doctrines through a non-waiver agreement. When coverage is in doubt, the insurer will offer to defend the insured under such an agreement, reserving to the insurer all of its policy defenses in case the insured is found liable.” [Emphasis supplied.]

In Gallaway v. Schied, 73 Ill App2d 116, 219 NE2d 718, the court said at page 126:

“It has long been settled that an insurer will not be estopped from setting up the defense of noncooperation by participating in the defense of the action against the insured, if, at the same time, it gives notice to the insured that it does not waive the benefit of such defense. [Citing cases.] ”

In Illinois it is not necessary that a formal agreement be entered into, and the giving of notice to the insured is sufficient. Where the insured desires to have an adjudication of its liabilities under the policy he can, of course, proceed by way of a declaratory judgment action. However, it would seem that if he starts the declaratory judgment action after the suit is pending and the attorneys hired by the insurance company have entered their appearance for the insured, the better practice would be to file notice reserving rights.

The majority opinion states: “The right of the insured to obtain a judicial declaration on the issue of policy coverage prior to adjudication of the personal injury claim has been favored by the weight of Illinois authority. [Citing numerous cases.] ” That statement is entirely in accord with this dissent.

The opinion states: “An insurer will not be estopped from asserting a breach of the cooperation clause by its insured if it repudiates liability within a reasonable time

after becoming aware of the insured’s failure to cooperate. Krutsinger v. Illinois Cas. Co., 10 Ill2d 518, 526, 139 NE2d 767; . . . Allstate Ins. Co. v. Keller, 17 Ill App2d 44, 50, 149 NE2d 482, ...” In Krutsinger the court said at page 526:

“When an insurer wishes to assert its nonliabilityunder the policy, it must notify the insured without delay. The reason is that ‘[t]he claim might be of such a character as that the amount of damages recovered in a lawsuit by the injured party would exceed the indemnity and subject the insured to considerable loss and damage, and therefore the insured should have a right to know with reasonable promptness the attitude of the indemnity company, so that he might be in a position to take such action as would not only protect the indemnity company, but save himself from loss and damages.’ ”

The court found that the defendant insurance company knew from the very inception — about the last of June 1953 — that it was not accepting responsibility for the defense of the action. It did nothing until March 1954, when it filed, in another county, an action for a declaratory judgment of nonliability. The court said at page 527:

“By its failure to repudiate the answer of July 3, 1953, or to seek leave to amend it if it was unsatisfactory, and by its failure to do anything further until many months later, we think that defendant effectively waived any rights it might have had to claim a breach of the policy conditions it relies on.”

Allstate Ins. Co. v. Keller, 17 Ill App2d 44, 149 NE2d 482, was an appeal for declaratory judgment entered in favor of the insurance company, exempting it from any obligation to pay any judgment against the holder of an automobile liability insurance policy, in an action for personal injuries. The court said at page 50:

“We must now consider whether plaintiff waived the breach by defendant of the co-operation clause. The law is generally well settled that the failure of an insurer promptly to elect to disclaim liability, upon discovering facts indicating a breach of the co-operation clause by the insured, constitutes a waiver by the insurer of any rights which might otherwise accrue to it as a result of the breach.”

In its opinion in Allstate the court quoted from Krutsinger.

In the Allstate case a year and a half elapsed from the time the insurance company had acquired knowledge of the breach on the part of its insured before it took any action. In the instant case, the personal injury action against the insured was filed on November 21, 1962. The insurance company assigned the defense of that case to Gillin and Owens, who filed an answer, and served and answered interrogatories. On September 17, 1963, Helen Christner informed the attorney for the plaintiff that she had made false statements and had told untruths in her deposition. On the same day counsel for the plaintiff informed Gillin and Owens that Helen Christner had given the statement. There is no indication in the record that Gillin and Owens asked for a copy, but on October 3 they obtained a copy by court order. It would seem that if they had asked counsel for the statement it would have been given to them.

Two weeks later Gillin and Owens took a discovery deposition of Officer Marks, part of which (as stated in the majority opinion) dealt with Helen Christner’s connection with the police as a crossing guard, the circumstances of her meeting with Marks in the restaurant, and the events surrounding her giving the statement to Rosenblum. It is difficult to conclude that in taking this deposition Gillin and Owens were representing the Christners and not representing the insurance company.

On December 11, 1963, the insurance company filed an action for declaratory judgment, and the defendants were served on December 15, 1963. Treating the filing of the action as a formal disclaimer, it was nevertheless too late, and it would appear that in this case, as in Allstate, it was the duty of plaintiff’s attorneys, on learning of the possible conflict of interests between plaintiff and defendants, to immediately notify defendants of this fact.

The judgment of the Circuit Court should be reversed.

       This was not the same firm of attorneys who later filed the declaratory judgment action on behalf of plaintiff.

       Without evidence and despite issues of fact as to the negligence of Helen and as to the prerequisite agency relationship between Helen and John. Nor did the court find that there was “no genuine issue as to any material fact” (Civil Practice Act, § 57), but, rather, found:
      The issues in this suit at law are in favor of the Plaintiffs and against the Defendants on the issue of liability.
      This order, however, is not a final judgment (Martino v. Barra, 37 Ill2d 588, 229 NE2d 545) and is subject to correction or vacation at any time prior to ultimate disposition of the case.

       See Simms v. Andrews, 118 F2d 803, 806 (10th Cir); Prudence Mut. Cas. Co. v. Sturms, 37 Ill App2d 304, 308, 185 NE2d 366.

       It should be borne in mind that, under the decree as corrected four days later, Gillin and Owens were still obligated to appear on behalf of John Christner. Furthermore, the court in the injury case had not given Gillin and Owens permission to withdraw and presumably would not have done so without the substitution of another attorney for Mrs. Christner.