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Buckner v. Causey, No. 1-99-0312

1st District, 30 December 1999

FOURTH DIVISION

PRESIDING JUSTICE HOFFMAN delivered the opinion of the court:

Upon the trial of her personal injury action, the plaintiff, Gwendolyn Buckner, obtained a judgment in the sum of $15,660.95 against the defendant, Wayne Causey. The plaintiff then commenced a garnishment proceeding against Causey's insurer, Warrior Insurance Group, also known as Gallant Insurance Company, and formerly doing business as Allied American Insurance Company (hereinafter referred to as Gallant/Warrior). In response to the garnishment summons, Gallant/Warrior: 1) answered, claiming that it was not in possession of funds belonging to Causey; and 2) filed a supplemental response, admitting that Causey was its insured but alleging that his failure to cooperate in the defense of the plaintiff's action was a breach of its liability insurance policy which relieved Gallant/Warrior of any obligation to satisfy the judgment against Causey.

The issue of Gallant/Warrior's liability under its policy was tried, resulting in the entry of a judgment against Gallant/Warrior in the sum of $16,771.91 in favor of Causey for the use and benefit of the plaintiff. The judgment, which was entered on May 7, 1998, included the principal balance of the plaintiff's judgment against Causey, plus accrued interest and costs. Gallant/Warrior filed a timely post-judgment motion entitled "Petition for Motion Notwithstanding the Verdict," requesting that the court vacate its judgment of May 7, 1998, and enter judgment in its favor.

While Gallant/Warrior's post-judgment motion was pending, Causey filed a petition pursuant to section 155 of the Illinois Insurance Code (215 ILCS 5/155 (West 1996)), seeking sanctions and an award of attorney fees and costs against Gallant/Warrior for its vexatious and unreasonable refusal to pay the judgment entered against him. On December 8, 1998, the trial court denied Gallant/Warrior's post-judgment motion and, on Causey's petition, entered an order requiring Gallant/Warrior to pay $6,727.50 for attorney fees incurred by Causey in the garnishment proceeding and the additional sum of $3,500.00 as a sanction.

Gallant/Warrior now appeals from the trial court's orders of May 7, 1998, and December 8, 1998, contending that the trial court: 1) "abused its discretion" in requiring it to indemnify Causey for the plaintiff's underlying judgment; and 2) erred in awarding Causey relief under section 155 of the Illinois Insurance Code.

Before addressing Gallant/Warrior's arguments in support of its assignments of error, we will dispose of the plaintiff's request that we exercise our discretion and strike Gallant/Warrior's brief for failure to comply with the applicable Supreme Court Rules. There is little question that the plaintiff's objections to Gallant/Warrior's brief, even as supplemented, are well taken. The Statement of Facts is argumentative in violation of Rule 341(e)(6) (177 Ill. 2d R. 341(e)(6)), and is in some places incoherent. Further, the brief lacks a concise statement of the standard of review applicable to each issue raised as required by Rule 341(e)(3) (177 Ill. 2d R. 341(e)(3)). As originally filed, the brief was missing a page and had an incomplete appendix. Although we permitted Gallant/Warrior to supply the missing page of its brief and provide us with a complete appendix, it made no effort to correct its Statement of Facts or set forth standards of review. However, in the interests of judicial economy and in an effort to dispose of this appeal without further expense to the parties, we decline to strike the brief. The brief sets forth Gallant/Warrior's assignments of error, both the plaintiff and Causey have been able to respond to the issues raised, and the facts necessary to an understanding of the issues are readily ascertainable from the relatively short record. We caution, however, that our decision not to strike Gallant/Warrior's brief should not be interpreted as a signal that we are willing, as a matter of course, to overlook violations of the Supreme Court Rules in briefs filed with this court. We are not. Simply put, we find no useful purpose would be served in this case by striking Gallant/Warrior's brief.

We will first address Gallant/Warrior's contention that the trial court erred in finding that it was required to indemnify Causey for the plaintiff's underlying judgment. In its brief, Gallant/Warrior claims that the trial court abused its discretion. However, discretion has nothing to do with the issue. When a garnishee's answer is contested, a trial of the issues presented is to be conducted as in all other civil cases (735 ILCS 5/ 12-711 (West 1996)). That is exactly what occurred below. Consequently, the question before us is not whether the trial court abused its discretion but whether its judgment is against the manifest weight of the evidence. First Baptist Church of Lombard v. Toll Highway Authority, 301 Ill. App. 3d 533, 542, 703 N.E.2d 978 (1998).

"A judgment is against the manifest weight of the evidence only when an opposite conclusion is apparent or when findings appear to be unreasonable, arbitrary, or not based on evidence." Bazydlo v. Volant, 164 Ill. 2d 207, 215, 647 N.E.2d 273 (1995). For the reasons which follow, we are unable to say that the judgment entered in this case on May 7, 1998, against Gallant/Warrior and in favor of Causey for the use and benefit of the plaintiff is against the manifest weight of the evidence.

Gallant/Warrior does not dispute that Causey was its insured at the time he was involved in the motor vehicle accident which gave rise to the underlying litigation and the judgment entered against him. Further, there is no dispute as to the provisions of Gallant/Warrior's policy relating to the insured's obligation to cooperate in the defense of any action subject to coverage. Causey was required to cooperate and, at Gallant/Warrior's request, attend hearings and trials. The parties also stipulated that Causey did not appear or testify at the trial of the plaintiff's claim.

On February 26, 1998, the trial court heard the testimony of Causey; Grant Blumenthal, the attorney who represented Causey at the trial of the plaintiff's action; Edward Lowery, Blumenthal's supervisor; and Jeff Christofinelli, a claims adjuster employed by Gallant/Warrior. When the hearing concluded, the trial court took the matter under advisement. On May 7, 1998, the trial court issued its written order, finding that Gallant/Warrior failed to establish a defense of non-cooperation. Our examination of the record reveals more than sufficient evidence to support such a finding.

Although the trial date for the plaintiff's action, October 20, 1997, was set by an order dated August 7, 1997, Causey was first notified of the trial date when he received a phone call from Blumenthal on either October 17 or 18, 1997. Blumenthal was first assigned to the case on October 17, 1997. According to Blumenthal, he spoke to Causey by phone again on October 19, 1997, and advised him to be on standby for trial the following day, Monday, October 20. Blumenthal testified that he called Causey on October 20, 1997, and told him to be in court on October 21. Prior to October 17, 1997, Causey was not notified either in writing or by phone that the trial of the plaintiff's action had been set for October 20, 1997.

Causey testified that he informed Blumenthal that he did not have sufficient funds to get to court. According to Causey, he told Blumenthal, when Blumenthal first called, that he only had $3.00, and when Blumenthal call for the second time, Causey told him that he had no funds. Blumenthal, however, denied that Causey told him that he had insufficient funds to come to court. Blumenthal testified that, each time he spoke to Causey, Causey said that he would appear.

The trial court found that Causey told Blumenthal that he had no money to come to court. As the trier of fact, the trial judge was in a superior position to judge the credibility of the witnesses and determine the weight to be given to their testimony. Bazydlo, 164 Ill.2d at 214-15. When, as in this case, contradictory testimony which could support conflicting conclusions is given at a bench trial, we will not disturb the trial court's factual findings based on that testimony unless a contrary finding is clearly apparent. DeLong v. Cabinet Wholesalers, Inc., 196 Ill. App. 3d 974, 979, 554 N.E.2d 574 (1990).

In Anderson v. Lawlor, 27 Ill. App. 3d 150, 153, 326 N.E.2d 529 (1975), we held that:

"In asserting the affirmative defense of noncooperation, the burden is on the insurer to prove that it acted in good faith to secure the attendance of the insured and that the insured's failure to appear was due to his refusal to cooperate. [Citation.] An insurer is not liable for a judgment rendered against its insured if the insured willfully failed to cooperate by refusing to appear at trial after receiving adequate notice. [Citations.] However, the insurer is liable if it was not sufficiently diligent in attempting to secure the insured's appearance [citations] or if the insured's failure to attend was not due to a refusal to cooperate. [Citation.]"

There is no disagreement among the parties as to the fact that Causey was not notified that the plaintiff's underlying action was set for trial until three days prior to its commencement. This can hardly be termed "adequate" notice or "diligence" on the part of Gallant/Warrior. Additionally, the trial court found that Causey's failure to appear at trial was due to a lack of funds necessary to travel to the Daley Center. This finding is supported by Causey's testimony, and we will not disturb it as no contrary finding is clearly evident. Failure to attend a trial due to a lack of funds necessary to travel to court cannot be deemed a "refusal to cooperate."

Based on the record before us, we are unable to conclude that the trial court's finding that Gallant/Warrior failed to establish Causey's noncooperation in the defense of the plaintiff's action is against the manifest weight of the evidence. However, since Gallant/Warrior also claims that the trial court relied on information it received outside of the record to support its finding, our analysis must continue.

The evidence established that Blumenthal and Lowrey were not merely attorneys engaged by Gallant/Warrior to defend Causey, they were employees of Gallant/Warrior at the time that they undertook Causey's representation. It appears from the record that when the trial court became aware of this circumstance, it ordered that the matter be brought to the attention of the Attorney Registration and Disciplinary Commission (ARDC). It also appears that a copy of the transcript of the February 26, 1998, proceedings before the trial court, or a portion thereof, was sent to the ARDC at some point in time prior to the issuance of the trial court's written order on May 7, 1998. In its May 7 order, the trial court found that Blumenthal and Lowrey's representation of Causey while they were employees of Gallant/Warrior constituted a conflict of interest. Specifically, the court found that these attorneys violated various provisions of the Illinois Rules of Professional Conduct by, inter alia: failing to advise Causey of his rights and duties; rejecting an arbitration award in favor of the plaintiff without advising Causey that they were doing so; failing to disclose to Causey that they were acting to protect the interests of Gallant/Warrior; and failing to advise the judge presiding over the plaintiff's trial of their conflict of interest.

In its post-judgment motion, Gallant/Warrior alleged that, subsequent to the close of proofs, the ARDC had "exonerated" and "taken no disciplinary action" against Blumenthal or Lowrey. On the strength of this fact, Gallant/Warrior requested that the court vacate its judgment of May 7, 1998, and enter judgment in its favor. When Gallant/Warrior's post-judgment motion came on for hearing, the trial judge informed the parties that, prior to the issuance of his written order on May 7, 1998, he was contacted by a representative of the ARDC who informed him that the ARDC would not consider the matter until the court made its findings and that it was closing its file. On appeal, Gallant/Warrior contends that the trial court's determination that Blumenthal and Lowrey violated the Illinois Rules of Professional Conduct was somehow influenced by the information it received from the ARDC and, as a result, it argues that the judgment of May 7, 1998, should be reversed.

In a bench trial, a judge is presumed to have considered only competent evidence in making his finding. People v. Tye, 141 Ill. 2d 1, 26, 565 N.E.2d 931 (1990). This assumption will be overcome only if the record affirmatively demonstrates the contrary, such as the judge's consideration of matters outside of the record. Tye, 141 Ill. 2d at 26. A court's consideration of matters outside of the record is prejudicial error which can result in a reversal of its judgment. People v. Steidl, 177 Ill. 2d 239, 266, 685 N.E.2d 1335 (1997). However, we fail to find any evidence in the record before us which suggests that the trial court relied upon anything outside of the record in arriving at its judgment.

Our reading of the record reveals that the trial judge acknowledged that a representative of the ARDC called and informed him that the ARDC would not consider the matter at that time and that the ARDC's file was being closed. There is no suggestion that the trial judge and the ARDC representative discussed the specifics of Blumenthal or Lowrey's conduct or the merits of any charge that they violated the Illinois Rules of Professional Conduct. Nevertheless, Gallant/Warrior asserts that "the Trial Court acknowledged that it accepted a communication from the Attorney Registration and Disciplinary Commission of the Supreme Court and utilized the same in making its decision." (Emphasis added.) In the Statement of Facts contained in its brief, Gallant/Warrior states that "the Court acknowledged that he got this call at a time prior to rendering the decision and considered the same. (Volume 4, T.53)." (Emphasis added.) Although there is no question that the trial judge received the call from the ARDC prior to the issuance of his judgment order, there is nothing contained on the record page referenced by Gallant/Warrior or any other page of the record that even remotely suggests that the trial judge "utilized" or "considered" any information that he received from the ARDC in rendering his judgment.

Gallant/Warrior also seems to argue that the trial court's findings of a conflict of interest and violations of the Illinois Rules of Professional Conduct on the part of Blumenthal and Lowrey are not supported by the evidence in the record. Assuming for the sake of argument that the contention is correct, we would still affirm the trial court's order of May 7, 1998, and the denial of Gallant/Warrior's post-judgment motion.

An erroneous conclusion of law is not a ground for reversal of a judgment where the judgment itself is legally correct. Ehredt v. Forest Hospital, Inc., 142 Ill. App. 3d 1009, 1012, 492 N.E.2d 532 (1986). "In addition, an erroneous finding of a material fact is not ground for reversal where there are other findings not inconsistent therewith which are unaffected by the error and are sufficient to sustain the judgment." Ehredt, 142 Ill. App. 3d at 1012; see also Evanik v. Janus, 120 Ill. App. 3d 475, 486-87, 458 N.E.2d 962 (1983). In the instant case, the failure on the part of Gallant/Warrior to give Causey more than three days notice of a trial date which had been set 2