Chicago Motor Club v. Robinson

Case Date: 11/03/2000
Court: 1st District Appellate
Docket No: 1-98-0628, 4147 cons. Rel

                                                                                           FIFTH DIVISION
                                                                                           FILED: 11/03/00

Nos. 1-98-0628) Consolidated
         1-98-4147)

CHICAGO MOTOR CLUB a/s/o
KATHRYN IVIN and
KATHRYN GLASS,

          Plaintiff / Citation Petitioner

          v.

BETTY ROBINSON,

          Defendant-Appellant,

(SAFEWAY INSURANCE COMPANY,

          Citation Respondent-Appellee).
___________________________________________

BETTY ROBINSON,

          Plaintiff-Appellant,

          v.

SAFEWAY INSURANCE COMPANY,

          Defendant-Appellee.

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Appeal from the
Circuit Court of
Cook County.




93 M1 23438




Honorable
Glynn Elliott,
Judge Presiding.


Appeal from the
Circuit Court of
Cook County.

97 L 11244

Honorable
Loretta C. Douglas,
Judge Presiding.


MODIFIED ON DENIAL OF REHEARING

PRESIDING JUSTICE ZWICK delivered the opinion of the court:

This consolidated appeal arises from a traffic accident which occurred onNovember 14, 1991. In the liability action, which is not the subject of the current appeal,plaintiff Chicago Motor Club, on behalf of two of its insureds, brought suit against BettyRobinson. Safeway Insurance Company (Safeway), which had issued a policy ofinsurance to Robinson, initially refused to defend her.

Robinson filed a pro se appearance and answer January 3, 1994. Robinsonsubsequently retained attorney Steven Grady of the Chicago Volunteer Legal ServicesFoundation who filed an appearance, amended answer and affirmative defenses. Gradyalso filed, on April 18, 1994, a declaratory judgment action for Robinson againstSafeway and an insurance agency, Thomas & Associates Insurance, Co. (Thomas &Associates). Although Robinson's policy was dated November 19, 1991, five days afterthe accident, Robinson claimed that she had procured her policy through Thomas &Associates on November 12, 1991, and that she was covered by Safeway under a binderissued by Thomas & Associates.

Safeway subsequently retained attorney I. R. Strizak to defend Robinson in theChicago Motor Club case. By letter of May 9, 1994, Strizak informed Robinson that "it ismy understanding that Safeway Insurance Company, in fact, is extending you coverageand they will pay my fees as an attorney." Strizak entered his appearance on April 26,1994 and acted as attorney for Robinson for the remainder of the liability action.

Grady subsequently filed a motion to withdraw and have Strizak substituted asattorney for Robinson. He also filed a petition to withdraw from the declaratory judgmentsuit citing his "complete lack of communication" with Robinson which resulted in hisinability to effectively represent her. Robinson thereafter represented herself in thedeclaratory judgment action, which was ultimately dismissed for want of prosecution onMarch 13, 1995.

Strizak pursued discovery on Robinson's behalf in the liability action. However,on November 22, 1994, he failed to appear at a trial call, and the court found Robinson indefault, setting the matter for prove-up on January 9, 1995. No motion to set aside thedefault was filed prior to the prove-up. On January 9, 1995, Strizak appeared, but thecourt entered a default judgment against Robinson in the amount of $25,000.

On January 25, 1995, Strizak filed a section 2-1401 motion on Robinson's behalfto vacate the default judgment entered January 9, 1995. The motion was noticed forFebruary 13, 1995. However, on February 14, 1995, all pending motions were stricken.On February 15, 1995, Strizak filed an identical motion to vacate the default. Hearing onthat motion was set on February 27, 1995, and continued until April 3, 1995. Strizak didnot appear on April 3, 1995, but Robinson appeared personally. The docket entry statesthat "[d]efendant will attempt to seek additional counsel," and the motion to vacate wascontinued to April 24, 1995. By letter dated April 4, 1995, Strizak advised Robinson thathe expected to be able to set aside the judgment entered on January 9, 1995. He alsoinformed her that he would not withdraw as her attorney.

On April 24, 1995, Robinson again appeared in court for the hearing on themotion to vacate the default, but Strizak again failed to appear. The judge issued a rule toshow cause against Strizak and reset the motion to May 15, 1995. On May 15, 1995,Strizak appeared with Robinson and the 2-1401 motion was set for June 12, 1995. Thathearing date was continued on motion of Strizak until June 22, 1995, and then until July7, 1995. On July 7, 1995, the motion was stricken. No appearances are shown in therecord on appeal for Robinson or Strizak on that court date.

In December of 1996, Chicago Motor Club sought to enforce its $25,000judgment by a citation to discover assets filed against Safeway as the purported insurer ofRobinson. Robinson was notified by letter. Contested hearings were held with Robinsonintervening and appearing pro se. Robinson answered ready for trial on the citation onMarch 13, 1997. Safeway then presented evidence that the policy of insurance had beenissued to Robinson on November 19, 1991, and that Robinson's accident had occurred onNovember 14, 1991. Safeway did not inform the court that it retained attorney Strizak torepresent Robinson in the liability action or that Strizak had represented to Robinson thatSafeway was extending coverage to her. Chicago Motor Club did not present anyevidence but stated that it would rely upon the case presented by Robinson. Robinsonthen sought a continuance to obtain an attorney, which the court granted, giving her untilApril 24, 1997. The court marked this continuance "final".

Attorney Brenda Marcus appeared on behalf of Robinson on April 24, 1997. Thetrial judge was not available, however, and the trial on the citation claim was continueduntil May 1, 1997, by agreement of the parties.

The parties disagree as to what transpired at the next court date, on May 1, 1997.The certified bystanders report which was drafted by counsel for Safeway indicates thatChicago Motor Club elected to adopt Robinson's evidence, and attorney Marcus calledRobinson as a witness. After numerous objections to her questions were sustained,Marcus stated that she had inadequate time to prepare. The bystanders report then statesthat Marcus informed the court that she "would not proceed further with the trial." Thecourt subsequently entered judgment in favor of Safeway.

Robinson challenges the Bystander's Report and asserts that Marcus objected tothe trial proceedings on May 1, 1997, informing the court that she had inadequate time toprepare her client's case. Robinson's Objections and Proposed Additions to theBystanders Report, which is included in the record and was filed with the court onDecember 23, 1997, states she informed the court on May 1, 1997, that she could notfamiliarize herself with the case in the short period of time provided, and that discoverywas needed to prepare a defense, particularly with regard to issues of agency, estoppeland waiver. Robinson also asserted in her objections to the Bystander's Report that sheasked the court to have these issues briefed and that she be given additional time tolocate a court file which was not available to her. Counsel for Safeway then argued thatRobinson had not filed any affirmative defenses in the case and urged the court to rule onthe testimony presented. According to Robinson, the court then entered judgment againsther and in favor of Safeway.

On May 12, 1997, Robinson filed "Affirmative Defenses" to the citation, allegingwaiver and estoppel by Safeway. Robinson subsequently filed her post-trial motion onMay 30, 1997, and her amended post-trial motion on December 29, 1997. These weredenied January 22, 1998. In denying Robinson's proposed amendments to the Bystander'sReport on that same day, the court stated simply that Robinson's proposed additions didnot "add to the facts already certified concerning the trial of the Citation" and that "theobjections and proposed additions did not change the facts supporting the ruling."Robinson subsequently filed a timely notice of appeal (No. 1-98-0628).

In a separate action in the circuit court, filed on September 27, 1997, Robinsonbrought claims against Safeway sounding in contract and tort relating to Safeway'salleged undertaking of the defense of the liability action, and its conduct at the citationproceedings. Safeway denied that Thomas & Associates was its agent and asserted theaffirmative defense that, in any event, it would not have issued the insurance policy toRobinson had it been given timely information about the accident. Safeway also assertedthat it had defended Robinson in the liability action under a reservation of rights.

On March 3, 1998, Safeway filed a combined 2-615/2-619 motion to dismissRobinson's complaint. 735 ILCS 5/2-619.1 (West 1998). Safeway argued: (1)Robinson's claims should be dismissed under section 2-619(a)(3) because another actionbetween the same parties and addressing the same claims was pending; (2) the citationproceeding in which the court found that Safeway had not insured Robinson wasdeterminative of the case (section 2-619(a)(4)(collateral estoppel)); (3) that the supremecourt case of Cramer v. Insurance Exchange Agency, 174 Ill. 2d 513, 675 N.E.2d 897(1996) restricted claims by insureds against their insurers to the provisions of section 155of the Illinois Insurance Code (215 ILCS 5/155 (West 1998)); and (4) Robinson'scomplaint did not state a cause of action for "bad faith."

The court granted Safeway's combined 2-615/2-619 motion, dismissingRobinson's claims with prejudice. Robinson subsequently appealed (No. 1-98-4147).

On April 6, 2000, Safeway filed a motion in this court to dismiss the appeal in No.1-98-0628. In the motion, which was supported by affidavit, Safeway stated that it hadsettled the citation claim with Chicago Motor Club. Safeway asserted that the appeal inNo. 1-98-0628 was rendered moot by the settlement. Robinson was not a party to thesettlement between Chicago Motor Club and Safeway and filed a motion opposingdismissal of the case. She argued, in part, that a confession of error by Safeway on thecoverage issue was a required condition for the citation proceedings to be consideredmoot (see Beacon Home Equipment Co. v. Paulsen, 343 Ill. App. 468, 99 N.E.2d 586(1951)), and that it would be fundamentally unfair to dismiss the appeal because of thepotential res judicata and collateral estoppel effects on her tort and contract claims. OnApril 21, 2000, we denied Safeway's motion and consolidated appeal No. 1-98-4147with appeal No. 1-98-0628.

We first address the citation proceeding (No. 1-98-0628) and Robinson'scontention that the court improperly denied attorney Marcus's request for a continuanceat trial, as well as Robinson's subsequent post-trial motion requesting a new trial.Robinson argues that once she established that she had been prejudiced by Marcus'sinadequate time to prepare, the trial court should have allowed the case to be retried.

Section 2-1007 of the Code of Civil Procedure governs requests for continuances.735 ILCS 5/2-1007 (West 1996). It provides that continuances may be granted for goodcause shown, at the discretion of the court and on just terms. 735 ILCS 5/2-1007 (West1996). There is no absolute right to a continuance. Village of Maywood v. Barrett, 211Ill. App. 3d 775, 570 N.E.2d 645 (1991). The trial judge's decision to deny acontinuance will not be reversed absent an abuse of discretion. In re Marriage of Ward,282 Ill. App. 3d 423, 668 N.E.2d 149 (1996). The denial of a request for continuancewill not be grounds for reversal unless the complaining party has been prejudiced by thedenial. Shumak v. Shumak, 30 Ill. App. 3d 188, 332 N.E.2d 177 (1975).

With regard to the granting of a new trial, it is well settled that it is within the trialcourt's discretion to grant a motion for a new trial, and the court's decision will not bedisturbed absent a clear abuse of that discretion. Ervin v. Sears, Roebuck & Co., 65 Ill.2d 140, 357 N.E.2d 500 (1976).

"The purpose of vesting the trial judge with power to grant anew trial is to permit him, before losing jurisdiction of thecase, to correct errors that he or the jury might have madeduring the course of the trial. Courts of review haverepeatedly stated that they will not disturb the decision of atrial court on a motion for new trial unless a clear abuse ofdiscretion is affirmatively shown. The reason for this rule isthat the trial court has had the opportunity to consider theconduct of the trial as a whole, and therefore is in a superiorposition to consider the effects of errors which occurred, thefairness of the trial to all parties, and whether substantialjustice was accomplished. [Citation.]" Magnani v. Trogi, 70Ill. App. 2d 216, 220, 218 N.E.2d 21(1966).

In this case, there is no transcript of the trial in the citation proceeding and thecertified bystander's report does not suggest that Marcus made a formal or timely motionfor a continuance. Of course, Marcus insists she made such a motion. Even assuming,however, that Marcus failed to make a timely motion for a continuance, the recorddemonstrates quite clearly that it was only at trial that Marcus discovered she was notprepared to finish the proceedings begun by her formerly pro se client. At this point inthe trial, through no particular fault of her own, Marcus was put in the untenable positionof concluding a trial begun by her client in what had become a relatively complicatedinsurance dispute, on very short notice. Marcus was handicapped by a lack of discovery,and the record shows she was required to put on her case without access to either theprior testimony of witnesses or a missing court file which was needed to ascertain thenature of the pleadings filed in the underlying liability action. The information in this filewas critical to Robinson's claim in that one of Robinson's central contentions was thatSafeway had either waived its defenses to coverage or was estopped from raising themdue to its conduct in the liability action. It is our conclusion that, to allow Marcus toappear as Robinson's attorney, but then to deny her a reasonable opportunity to preparefor trial, had the effect of seriously prejudicing Robinson's case.

Our holding that the trial court should have set aside the judgment and allowedMarcus more time to prepare her client's case is in no way a criticism of the court's priororders. The record certainly suggests good reason for the court to have entered a defaultjudgment against Robinson in the underlying liability case, as well as to deny Robinson'ssubsequent section 2-1401 motion. Indeed, attorney Strizak's pattern of not appearing onscheduled dates compelled such action by the trial court. The same is simply not true,however, with regard to the citation proceeding in which Robinson was not representedby Strizak. The record shows Marcus was diligently attempting to prepare to representher client in a difficult case, but that the proceedings and court records were such thatMarcus could not do so in the short time provided to her. While it is certainly true thatRobinson, who initially appeared pro se, should not have answered ready for trial if shewas not, in fact, ready, it is our determination that once the court allowed her the optionof securing counsel, it was inherently unfair to require that counsel to proceed withoutallowing adequate time to ready the case. The fact that Robinson had a colorable theorysupporting coverage, but that Marcus was not able to articulate this theory or create arecord supporting her claim until after the trial, demonstrates Robinson has sufferedprejudice. Accordingly, we find an abuse of discretion in the court's failure to allowRobinson's post-trial motion. We remand the matter to allow the citation claim to beretried.

We turn to the appeal in No. 1-98-4147 in which Robinson has alleged variouscontract and tort claims against Safeway.

Section 2-619.1 of the Code of Civil Procedure allows for a party to combine inone motion a section 2-615 motion to dismiss for substantially insufficient pleadingswith a section 2-619 motion for involuntary dismissal based upon defects or defenses.735 ILCS 5/2-619.1 (West 1998). When ruling on a motion to dismiss under eithersection 2-615 or section 2-619 of the Code, the trial court must interpret all pleadings andsupporting documents in the light most favorable to the nonmoving party; the courtshould grant the motion only if plaintiff can prove no set of facts that would support acause of action. Toombs v. City of Champaign, 245 Ill. App. 3d 580, 615 N.E.2d 50(1993). Because this process does not usually require the appellate court to weigh factsor determine credibility, we generally apply a de novo standard of review. Toombs, 245Ill. App. 3d at 583; Weatherman v. Gary-Wheaton Bank, 286 Ill. App. 3d 48, 63, 676N.E.2d 206, 216 (1996). However, in cases involving the decision to grant or deny amotion to dismiss on grounds of the existence of a pending action between the sameparties for the same cause, we have most often applied an abuse of discretion standard. Katherine M. v. Ryder, 254 Ill. App. 3d 479, 487, 627 N.E.2d 42 (1993); Kellerman v.MCI Telecommunications Corp., 112 Ill. 2d 428, 447-48, 493 N.E.2d 1045 (1986).

We first address the contention made by Safeway in the trial court that Robinson'stort and contract action against Safeway required dismissal under section 2-619(a)(3) ofthe Code. This statute provides:

"2-619 Involuntary dismissal based upon certain defects ordefenses. (a) Defendant may, within the time for pleading,file a motion for dismissal of the action or for otherappropriate relief upon any of the following grounds. If thegrounds do not appear on the face of the pleading attackedthe motion shall be supported by affidavit:

* * *

(3) That there is another action pending between the sameparties for the same cause." 735 ILCS 5/2-619(a)(3).

It is the burden of every section 2-619(a)(3) movant to demonstrate through clearand convincing evidence that the two actions involve both the same parties and the samecause. Hapag-Lloyd (America), Inc. v. Home Insurance Co., No. 1-99-2445 (March 31,2000), slip op. at 4. Here, however, the two actions were not shown to be between thesame parties, nor did they involve the same cause. The liability action and subsequentcitation proceeding centrally involve a dispute between Chicago Motor Club andRobinson, principally concerning claims of liability and damages, whereas the tort andcontract action is a dispute between Robinson and Safeway over coverage. Moreover,although both proceedings ultimately concerned a single common issue (i.e., whetherSafeway is obligated to extend coverage to Robinson), they involved different underlyingfacts. In addition, at the time of the citation proceeding, it was unclear whether Robinsoncould have brought damage claims in those proceedings against Safeway beyondclaiming coverage to satisfy Chicago Motor Club's judgment. Although the appellatecourt has subsequently decided this question affirmatively, Robinson had no precedent tosupport such a claim prior to the court's decision in Buckner v. Causey, 311 Ill. App. 3d139, 724 N.E.2d 95 (1999), which considered the issue as a matter of first impression.We therefore find the trial court abused its discretion in dismissing Robinson's claimsagainst Safeway. A far more appropriate ruling, if the court were concerned about theprospect of duplicative litigation, would have been to stay the proceedings in thecoverage action until resolution of the citation action, as permitted by section 2-619. SeeKellerman, 112 Ill. 2d at 447-48.

We next address Safeway's contention on appeal that either res judicata and/orcollateral estoppel required that the cause be dismissed, pursuant to Code section 2-619(a)(4). This section provides that a cause can be involuntarily dismissed if the cause"is barred by a prior judgment." 735 ILCS 5/2-619(a)(4) (West 1998). Because we havereversed the judgment in the citation action, neither res judicata nor collateral estoppelare any longer valid grounds for dismissal. See Ericksen v. Rush-Presbyterian-St. Luke'sMedical Center, 289 Ill. App. 3d 159, 168-69, 682 N.E.2d 79 (1997)(in order to applythe collateral estoppel doctrine, there must have been a final judgment on the merits inthe previous case); River Park, Inc. v. City of Highland Park, 184 Ill. 2d 290, 703 N.E.2d883 (1998)(under the doctrine of res judicata, a final judgment on the merits rendered bya court of competent jurisdiction acts as a bar to a subsequent suit between the partiesinvolving the same cause of action).

Third, we address Safeway's argument that, as a matter of law, it was not obligatedto extend coverage to Robinson because the complaint filed by Chicago Motor Cluballeged an accident which occurred before the coverage date of her policy and that aninsurer is not obligated to cover losses known to the insured before the policy issuesunless the insurer knowingly undertakes to provide such coverage. See 735 ILCS 2-619(a)(9)(providing for involuntary dismissal upon a showing the "the claim asserted*** is barred by other affirmative matter avoiding the legal effect of or defeating theclaim"). It is undisputed that Robinson's policy of insurance is dated after her accident.Safeway ignores in its argument, however, Robinson's claim that Safeway had extendedtemporary coverage to her through a binder. The existence of a valid binder remains aquestion of fact which has yet to be resolved. In addition, Safeway ignores Robinson'sclaim of estoppel based upon attorney I. R. Strizak assumption of Robinson's defensewithout a reservation of rights and without Safeway's securing of a declaratoryjudgment.(1) Although Safeway has argued that it did defend Robinson under a reservationof rights, the correspondence between Strizak and Robinson included in the record doesnot support Safeway's claim. The existence of a reservation of rights by Safeway is, atbest, in dispute. It is not, therefore, a valid basis for dismissing the complaint without anevidentiary hearing. See Brazas v. Property Tax Appeal Board, 309 Ill. App. 3d 520, 722N.E.2d 1193 (1999).

Fourth, we find merit in Safeway's argument that Cramer v. Insurance ExchangeAgency requires dismissal of many of Robinson's claims, but do not agree that all ofRobinson's claims must be dismissed. The issue in Cramer was whether an insured's tortclaim against his insurer for its breach of the duty of good faith and fair dealing indenying coverage could constitute a cause of action. Cramer, 174 Ill. 2d at 515. Thesupreme court determined that it could not because the General Assembly intendedsection 155 of the Insurance Code to provide the only available extra-contractual remedyfor such a plaintiff. Cramer, 174 Ill. 2d at 527. The court emphasized that it would notendorse a common-law tort where the legislature had acted to provide an exclusive andlimited remedy and where that remedy had been regularly updated by the legislature.Cramer, 174 Ill. 2d at 527-28.

Part of the complaint brought by Robinson alleges breach of contract claims, andsection 155 of the Code allows the court to make certain other damage awards beyondcontract damages to Robinson if it is found that Safeway is guilty of vexatious andunreasonable conduct in how it handled Robinson's claims. We agree with Safeway,however, that Robinson's tort-based claims relating to Safeway's handling of Robinson'scoverage are superceded by section 155 and the court's holding in Cramer. Robinson'scomplaint does not allege claims based upon a "failure to settle" the liability action,which is the only recognized exception to the doctrine set out in Cramer. See Buckner,311 Ill. App. 3d at 148-49. Accordingly, on remand, Robinson is limited in her recoveryto contractual damages, and those extra-contractual damages consistent with theprovisions of section 155 of the Insurance Code.

In sum, we vacate the judgments entered by the circuit court and remand thematters for further proceedings. With regard to Safeway's attempt to settle the citationproceedings with Chicago Motor Club, nothing in our determination precludes Safewayand Chicago Motor Club from settling their differences on remand. We hold only thatsuch a settlement cannot have res judiciata or collateral estoppel effect against Robinsonabsent her full and fair participation in the citation proceedings, which the recordestablishes has not yet occurred.

With regard to Robinson's request that we find Safeway has either waived or isestopped from raising coverage issues in the remand in appeal No. 1-98-4147, we declineto reach these issues at this particular stage of the proceedings. These questions shouldfirst be addressed to the trial court, which has not yet had the opportunity to rule on them.

Lastly, although we have consolidated these cases for purposes of ourconsideration, the circuit court remains free to handle these independent actions as itdeems most fair and expeditious. The cases need not remain consolidated on remand. Weagain note, however, that the appellate court has recently determined that an insured maypursue section 155 relief within a citation (or "garnishment") proceeding originallybrought by a third party. Buckner, 311 Ill. App. 3d at 149-50. This being the case, thecourt may wish to consider whether consolidation is appropriate.

For the forgoing reasons, the judgments of the circuit court of Cook County arereversed and remanded as is consistent with this opinion.

CAMPBELL, J., and O'BRIEN, J., concur.

1. We recognize that Robinson had a declaratory judgment action pending at the timeStrizak was retained. It cannot be determined from the record, however, that Safeway hadnot waived its right to contest coverage while this claim was pending. Robinson's failureto pursue the declaratory judgment action is consistent with such a waiver.