Farmers Automobile Insurance Association v. Neumann ( 2015 )

Illinois Official Reports
Appellate Court
Farmers Automobile Insurance Ass’n v. Neumann,
2015 IL App (3d) 140026
Appellate Court FARMERS AUTOMOBILE INSURANCE ASSOCIATION,
Caption Plaintiff-Appellee, v. JOHN E. NEUMANN, Defendant-Appellant
(Christopher Bitner, Defendant).
District & No. Third District
Docket No. 3-14-0026
Filed February 5, 2015
Rehearing denied March 24, 2015
Held In an action arising from an automobile accident in which defendant’s
(Note: This syllabus car struck a police officer who was directing traffic and two suits were
constitutes no part of the filed against the driver, the first by the policeman alleging intentional
opinion of the court but assault and intentional battery, and the second by the driver’s insurer
has been prepared by the seeking a declaratory judgment that it had no duty to defend the driver
Reporter of Decisions in the policeman’s action because the policy did not cover claims for
for the convenience of intentional conduct, then the city’s workers’ compensation insurer
the reader.) sued the driver to recover the workers’ compensation benefits it would
have to pay the officer, the driver moved to consolidate the actions
filed by the officer and the city’s workers’ compensation insurer, the
driver’s insurer acknowledged its obligation to defend the driver under
a reservation of rights, and when the trial court denied the driver’s
cross-motion for summary judgment that his insurer had to defend
both the actions to recover the workers’ compensation benefits and the
officer’s action against the driver and granted the insurer’s motion for
summary judgment, the driver appealed and the appellate court
reversed the entry of summary judgment for the driver’s insurer and
remanded the cause with an order that the trial court enter summary
judgment for the driver based on the finding that his insurer had a duty
to defend the officer’s action.
Decision Under Appeal from the Circuit Court of Tazewell County, No. 12-MR-137;
Review the Hon. Paul Gilfillan, Judge, presiding.
Judgment Reversed and remanded.
Counsel on John P. Fleming (argued) and Joshua M. Smith, both of Fleming &
Appeal Umland, of Peoria, for appellant.
Robert Marc Chemers and Philip G. Brandt (argued), both of Pretzel
& Stouffer Chtrd., of Chicago, for appellee.
Panel JUSTICE O’BRIEN delivered the judgment of the court, with
opinion.
Justices Carter and Lytton concurred in the judgment and opinion.
OPINION
¶1 Defendant insured, John E. Neumann, appealed from a circuit court order granting the
motion of the plaintiff insurer, Farmers Automobile Insurance Association (Farmers), for
summary judgment and denying Neumann’s cross-motion for summary judgment, and
finding that Farmers owed no duty to defend Neumann in one of two civil lawsuits that had
been filed against Neumann. We reverse the grant of summary judgment in favor of Farmers
and grant Neumann’s motion for summary judgment.
¶2 FACTS
¶3 The defendant in this declaratory judgment action, John E. Neumann, was involved in a
traffic incident on August 27, 2011, with the other defendant in this action, Christopher
Bitner, wherein Neumann allegedly hit Bitner with his automobile while Bitner was directing
traffic as a City of Pekin police officer. As a result of the accident, two civil lawsuits were
filed naming Neumann as a defendant. The first was a complaint filed by Bitner (No.
12-L-101) (Bitner complaint), alleging intentional assault and intentional battery by
Neumann. Neumann tendered the Bitner complaint to his insurer, the plaintiff in this action,
Farmers. Farmers rejected the defense of the Bitner complaint on the basis that the
automobile liability policy issued to Neumann did not cover any claims for intentional
conduct.
¶4 After rejecting the defense of the Bitner action, Farmers filed the instant action for a
declaratory judgment that it owed no duty to defend Neumann against the Bitner complaint.
Neumann answered the declaratory judgment complaint, asserting affirmative defenses and
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attaching his affidavit. Neumann’s affidavit asserted that he did not intend to strike nor
intend to cause bodily harm to Bitner. Farmers moved to strike both the affidavit and the
affirmative defenses, arguing that the affirmative defenses were not proper affirmative
defenses and the affidavit was an improper attempt to assert “true but unpleaded facts.” The
circuit court granted both motions. Farmers filed a motion for summary judgment, arguing
that it did not owe Neumann a defense to the Bitner complaint.
¶5 Thereafter, a second civil action involving the same incident on August 27, 2011, was
filed against Neumann, this one by CCMSI Insurance Company, as subrogee of the City of
Pekin (No. 13-L-89) (CCMSI complaint). That action alleged that Neumann was negligent
and sought to recover the amounts of worker’s compensation that CCMSI would have to pay
to Bitner as a result of the accident. Neumann filed a motion to consolidate the Bitner and
CCMSI actions, which was granted. The consolidation order states that all filings shall
reference and be filed in the first case number (the Bitner action). Farmers acknowledged,
under a reservation of rights, its duty to defend Neumann against the CCMSI complaint.
¶6 Then, in this case, Neumann filed a cross-motion for summary judgment, asserting that,
because the actions were consolidated, Farmers should defend both actions. The circuit court
granted Farmers’ motion for summary judgment and denied Neumann’s motion, and
Neumann appealed.
¶7 ANALYSIS
¶8 This matter is before us on the grant of summary judgment in favor of Farmers. Summary
judgment is appropriate only where “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 as a matter of law.” 735 ILCS 5/2-1005(c)
(West 2010). We review de novo a ruling on a motion for summary judgment. Standard
Mutual Insurance Co. v. Lay, 2013 IL 114617, ¶ 15.
¶9 An insurer’s duty to defend its insured is broader than its duty to indemnify. Pekin
Insurance Co. v. Wilson, 237 Ill. 2d 446, 456 (2010). In determining whether an insurer has a
duty to defend its insured, a court must look to the allegations in the underlying complaint
and the relevant portions of the insurance policy. Outboard Marine Corp. v. Liberty Mutual
Insurance Co., 154 Ill. 2d 90, 107-08 (1992). The court must focus on the allegations of the
complaint, liberally construed in favor of the insured. United States Fidelity & Guaranty Co.
v. Wilkin Insulation Co., 144 Ill. 2d 64, 73 (1991). If the allegations of the underlying
complaint fall within, or potentially within, the policy coverage, then the insurer has a duty to
defend. Outboard Marine Corp., 154 Ill. 2d at 125.
¶ 10 Neumann contends that the consolidation of the two lawsuits was equivalent to a single
lawsuit with several causes of action, and since Farmers already acknowledged its duty to
defend on one claim, it had to defend both claims. Section 2-1006 of the Illinois Code of
Civil Procedure (the Code) permits a court to consolidate cases pending in the same court as
long as a substantial right is not prejudiced. 735 ILCS 5/2-1006 (West 2010). Three forms of
consolidation are recognized:
“(1) where several cases are pending involving substantially the same subject matter,
the court may stay the proceedings in all but one and then see whether the
disposition of the one case may settle the others, thereby avoiding multiple trials
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on the same issues; (2) where several cases involve an inquiry into the same event in
its general aspects, the cases may be tried together, but with separate docket entries,
verdicts and judgments, the consolidation being limited to a joint trial; and (3) where
several actions are pending that might have been brought as a single action, the
cases may be merged into one action, thereby losing their individual identities, and be
disposed of in one suit.” Dowe v. Birmingham Steel Corp., 2011 IL App (1st)
091997, ¶ 21.
¶ 11 Neumann argues that the present consolidation order falls into the third category, while
Farmers contends that it fell into the second category. The motion to consolidate alleged that
both complaints arose out of a single incident, claiming identical injuries to the same person,
and it would serve the interests of judicial economy to consolidate the lawsuits. The order
granting the consolidation stated that all filings would be filed in the first case number. To
determine whether a particular consolidation was for disposition, the test is whether the cases
might have been the subject of a single proceeding or could have been brought as one action.
Dowe, 2011 IL App (1st) 091997, ¶ 22. Although the complaints had different named
plaintiffs, they both arose from a single incident, involving injury to a single person.
Considering that the purpose of consolidation is to expedite the resolution of lawsuits,
conserve time, and avoid duplicating efforts and unnecessary expenses, we find that the
lawsuits were consolidated into one action. See Dowe, 2011 IL App (1st) 091997, ¶ 24. Since
Farmers had a duty to defend against the CCMSI action, it also had a duty to defend the
consolidated Bitner action. See United States Fidelity & Guaranty Co., 144 Ill. 2d at 73 (if a
lawsuit pleads several theories of recovery, even if only one theory falls within the insurance
policy’s coverages, the insurer owes a duty to defend the entire lawsuit).
¶ 12 Even if the cases had not been consolidated, we would still find that the order granting
Farmers’ summary judgment motion was in error. A court is not required to put on blinders
and may look beyond the complaint at other evidence appropriate to a motion for summary
judgment. American Economy Insurance Co. v. Holabird & Root, 382 Ill. App. 3d 1017,
1032 (2008); see also Pekin Insurance Co. v. Wilson, 237 Ill. 2d 446, 459 (2010) (a circuit
court may, under certain circumstances, look beyond the underlying complaint in order to
determine an insurer’s duty to defend). The CCMSI complaint was filed by an outside party,
not a third-party plaintiff seeking coverage as a putative additional insured. See Holabird &
Root, 382 Ill. App. 3d at 1032 (a third-party complaint filed by a codefendant could be
considered in deciding an insurer’s duty to defend on a motion for summary judgment); but
see Pekin Insurance Co. v. United Contractors Midwest, Inc., 2013 IL App (3d) 120803, ¶ 32
(a third-party complaint was not considered because it was potentially self-serving, filed by a
putative additional insured after the declaratory judgment action was filed). Although the
CCMSI complaint was filed after the declaratory judgment action, it was not filed by
Neumann. There was no indication that the CCMSI complaint was self-serving or filed
merely to fill in information. Thus, it should have been considered by the circuit court in
determining Farmers’ duty to defend.
¶ 13 Even though we are reversing the grant of summary judgment in favor of Farmers, we
will consider Neumann’s argument that the circuit court erred in striking his affidavit and his
two affirmative defenses. We find that neither action was in error.
¶ 14 As stated above, typically, determinations of a duty to defend are limited to the
allegations of the complaint and the underlying insurance documents. And, other pleadings
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can be considered in certain situations. Under the same authority, in certain circumstances,
courts may also look to “true but unpleaded facts” of which the insurer has knowledge.
Holabird & Root, 382 Ill. App. 3d at 1026. However, in this case, Neumann did not allege
true but unpleaded facts, but rather he gave a conclusory statement regarding his intent,
seeking to broaden the scope of the Bitner pleadings and trigger Farmers’ duty to defend.
Illinois Supreme Court Rule 191 (eff. July 1, 2002) states that affidavits must be made on the
personal knowledge of the affiants to facts admissible in evidence and not consist of
conclusions. There was no abuse of discretion in striking Neumann’s self-serving affidavit.
See American Service Insurance Co. v. China Ocean Shipping Co. (Americas), Inc., 402 Ill.
App. 3d 513, 524 (2010) (the granting of a motion to strike an affidavit in support of a
summary judgment motion is within the discretion of the trial court).
¶ 15 Neumann pled two affirmative defenses in response to Farmers’ complaint. Essentially,
he denied that he was liable for the allegations in the Bitner complaint, claimed that there
was insufficient factual support to show “intentional” actions, alleged that Farmers had
conducted its own investigation, alleged that Farmers had his statement, alleged that no
discovery had been completed in the Bitner action, and alleged that Farmers had a duty to
defend that suit. Neumann argues that the affirmative defenses that he raised were proper,
while Farmers contends that they were not proper affirmative defenses. We review de novo
any order of the circuit court striking a pleading as being substantially insufficient. Richco
Plastic Co. v. IMS Co., 288 Ill. App. 3d 782, 785 (1997).
¶ 16 Section 2-613(d) of the Code provides that the facts constituting an affirmative defense,
which includes “any defense which by other affirmative matter seeks to avoid the legal effect
of or defeat the cause of action set forth in the complaint,” must be plainly set forth in the
answer or the reply. 735 ILCS 5/2-613(d) (West 2010). The test for determining the factual
sufficiency of an affirmative defense is the same as that applied in deciding a motion to
dismiss; the facts constituting the defense must be plainly set forth and the court will
disregard any conclusions of law or fact not supported by allegations of specific fact. Richco
Plastic Co., 288 Ill. App. 3d at 785. An affirmative defense does not negate the essential
elements of the plaintiff’s cause of action but rather admits the legal sufficiency of the cause
of action, asserting new matter by which the plaintiff’s apparent right of recovery is defeated.
Vroegh v. J&M Forklift, 165 Ill. 2d 523, 530 (1995). In this case, Neumann raised defenses,
not affirmative defenses, so the affirmative defenses were properly stricken.
¶ 17 CONCLUSION
¶ 18 For the foregoing reasons, we reverse the judgment of the circuit court of Tazewell
County granting summary judgment in favor of Farmers and remand and order that the
circuit court enter summary judgment in favor of Neumann, finding that Farmers owes a duty
to defend the Bitner action.
¶ 19 Reversed and remanded.
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