No. 3-06-0681

_________________________________________________________________ Filed April 10, 2008 IN THE APPELLATE COURT OF ILLINOIS THIRD DISTRICT A.D., 2008 SAFECO INSURANCE COMPANY ) Appeal from the Circuit Court as subrogee of IOLA BEDNAR, ) of the Ninth Judicial Circuit ) Warren County, Illinois, and Plaintiff-Appellant, ) from the Circuit Court of Cook ) County, Illinois, First ) Municipal District v. ) ) No. 05-L-25 (Warren County) ) 05-MI-16476 (Cook County) ) SUSAN M. JELEN, AVIS RENT A ) Honorable CAR SYSTEM, INC., STEVEN E. ) Gregory McClintock GREGORY, JEFF GREGORY, and ) Judge Presiding, Warren County STANLEY GREGORY, ) ) Honorable ) Cassandra Lewis Defendants-Appellees. ) Judge Presiding, Cook County

_________________________________________________________________ JUSTICE LYTTON delivered the Opinion of the Court:

_________________________________________________________________ Plaintiff, Safeco Insurance Company, brought an action against defendants, Sus an Jel en, Avis Rent A Car System, Inc., Steven Gregory, Jeff Gregory and Stanley Gregory, for subrogation to

recover medical expenses it paid on behalf of its insured, Iola Bednar, after Bednar was injured in an automobile accident. The complaint was initially filed in Cook County and then transferred to Warren County. Defendants filed motions to dismiss pursuant to sections 2-615 and 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 20 04); 735 ILCS 5/2-619 (West 2004)). The trial court granted the motions. Safeco appeals, arguing that the2

trial court erred in (1) granting the 2-615 motions to dismiss, (2) gr anting the 2-619 motions to dismiss, and (3) transferring t h e case to Warren County. We affirm in part and reverse in part. On May 12, 2004, Iola Bednar, a Minnesota reside nt, was injuredin an automobile accident in Warren County, Illinois. Bednar was a pa ssen ger in a minivan that collided with a truck driven by Steven Gregory and owned by Jeff and Stanley Gregory. The Gregorys are all residents of Illinois. The minivan was driven by Susan Jelen, a Minnesota resident, and owned by Avis Rent A Car System, Inc., a company licensed to do business in Illinois. Bednar was insur ed b y Safeco Insurance Company, a company licensedto do business in Illinois and Minnesota. As a result of the accident, Safeco paid $20,000 for Bednar’s me dica l expenses. Safeco brought suit, as subrogee of Bednar, against Jelen, Avis and all three Gregorys to recover the $20,000 it paid on Bednar’s behalf. In the complaint, Safeco alleged that Jelen was negligent in driving the minivan (Count I), that Avis was legally responsible for Jelen’s negligence based on an agency theory (Count II), that Steven Gregory was negligent in driving the truck (Count III), and that Jeff and Stanley Gregory were legally responsible for Steven’s negligence based on a theory of agency (Counts IV and V). Safeco initially filed its complaint in Cook County. The Gregorys filed a motion to transfer venue and then requested the court to treat the motion as a motion to transfer on the grounds of forum non conveniens . The trial court granted the motion on that basis.3

After the case was transferred to Warren Co unty , defendants filednumerous motions to dismiss. Jelen and Avis moved to dismiss Counts I and II of the complaint pursuant to section 2-615 of the Code (735 ILCS 5/2-615 (West 2004)), alleging that Minnesota’s nofault law shouldbe applied to bar Safeco’s subrogation claims. The Gregorys adopted and joined that motion. Jeff and Stanley G reg ory also filed motions to dismiss Counts IV and V of the complaint pursuant to section 2-619 of the Code (735 ILCS 5/2-619 (West 2004)), alleging that Steven was not acting as their agent or employee at the time of the accident. The motions were supported by affidavits from all three Gregorys, stating that Steven was using the vehicle for his own personal use when the accident occurred. The trial court granted defendants’ 2-615 motions to dismiss, finding that Safeco’s subrogation claim was a con trac t claim gover ned by Minnesota law, which precluded Safeco from seeking subrogation. The trial court also granted Jeff and Stanley Gregory’s 2-619 motion to dismiss, finding that there was no agency liability.

ANALYSIS I. 2-615 MOTIONS TO DISMISS

A. Safeco argues that the trial court erred in granting the 2-615 motions to dismiss Counts I through III of its complaint, asserting that Illinois law should be applied in th is ca se, and that under4

Illinois law, it can proceed on its subrogation claim. Defendants respondthat the trial court properly granted their motions to dismiss because Minnesota law should apply to preclude Safeco’s claim for subrogation. The pivotal issue in this case is whether Safeco’s subrogation claimis a tort claim or a contract claim. Resolution of this issue d ete rmines whether Illinois or Minnesota law applies. If Minnesota law applies, Safeco may not seek subrogation against any of the defendants because Minnesota law forbids it. See Minn. Stat. § 65B.53, subd. 3 (2006); Milbrandt v. American Legion Post of Mora , 372 N.W.2d 702, 705 (Minn. Sup. Ct. 1985). Under Illinois law, Safeco stands in the shoes of Bednar and can seek subrogation. See 735 ILCS 5/2-403 (West 2004). Our standard of review for this issue is de novo . Barbara’s Sales, Inc. v. Intel Corp ., 367 Ill. App. 3d 1013, 1017, 857 N.E.2d 717, 721 (2006). To resolve this issue, we look to the conflicts law in Illinois as the forum state. Esser v. McIntyre , 169 Ill. 2d 292, 297, 661 N.E.2d 1138, 1141 (1996). Illinois follows the R esta tement (Second) of Conflicts of Law in making choice-of-law decisions. See Barbara’s Sale s, Inc. , 367 Ill. App. 3d at 1018, 857 N.E.2d at 721-22. The Restatement employs different tests to determine which substantive law will apply based on the nature of the claim raised. If the claim raised is a tort, the most significant relationship test is used. Restatement (Second) of Con flict of Laws § 145 (1971); Esser , 169 Ill. 2d at 297-98, 661 N.E.2d at5

1141. Under the most significant relationship, the law of the state where place of the injury controls unless another state has

a more significant relationship to the occurrence. Esser , 169 Ill. 2dat 298, 661 N.E.2d at 1141. When applying the most significant relationship test, a court should consider: (1) w here t he injury occurred; (2) w here the conduct causing the injury occurred; (3) t he d omicile, residence, place of incorporation and place of business of the parties; and (4) where the relationship between the parties is centered. Esser , 169 Ill. 2d at 298, 661 N.E.2d at 1141. If the claim raised is a contract, the most significant contacts test is used. Restatement (Second) of Conflict of Laws § 188 (1971); Westchester Fire Ins. Co. v. Heileman Brewing Co., Inc. , 321 Ill. Ap p. 3d 622, 628, 747 N.E.2d 955, 961 (2001). In th e most significant contacts test, insurance contracts ar e governedby the location of the subject matter, the place of delivery of the contract, the domicile of the insured or the insurer, the place of the last act to give rise to a valid contract, the pl ace of performance, or other place bearing a rational relationship to the general contract. Westchester Fire Ins. Co. , 321 Ill. App. 3d at 628-29, 747 N.E.2d at 961. B. In a Florida case, Lincoln Nati onal Health and Casualty Insurance Co. v. Mitsubishi Motor Sales of America, Inc. , 666 So.2d 159 (Fla. App. Ct. 1995), Alan Skowronek, a Connecticut resident,

was injured when a rental car being driven by Kathleen Ch ew, a6

California resident, struck him in Florida. Lincoln National Health , 666 So. 2d at 160. Lincoln National Health, Skowronek's insurer, paid Skowronek for medical and other expenses related to the accident. Lincoln National Health , 666 So. 2d at 160. Lincoln National Health then filed an action for equita ble subrogation against Chew an d th e owner and lessors of the vehicle Chew was driving. Lincoln National Health , 666 So. 2d at 160. I n determining which state's law governed the subrog atio n claim, the Florida appellate court reversed the trial court's ruling and held that because the underlying action sounded in tort, the subrogation action was governed by the most significant relationship test. See Lincoln National Health , 666 So. 2d at 161- 62. The court rejected the defendants’ arg ume nt that Florida’s choice of law p rinciples pertaining to contracts should apply to the action because Lincoln’s righ t of s ubrogation arose form the contract of insurance. Lincoln National Health, 666 So.2d at 161. The court explained: This is not an action between the insurer and the insured concerning matters governed by the contract. The claim assertedb y Li ncoln in Florida is for equitable subrogation against third-party tortfeasors with whom it has no contract for medical benefits paid to Skowronek. Such an action is a creature of equity that does not dependon contract, but which follows as a legal consequence of the acts and relationship of the parties. In such an action, the insurer's rights are dependent on1 While the American Standard court used the most significant

contacts test, it held that Wisconsin's subrogation law, allowing the insurer to recover from defendants, applied because the insurance policy was negotiated, entered into, issued and delivered in Wisconsin. 124 Wis. 2d at 267, 369 N.W.2d at 173. 7 t he in sured's rights in tort against the third-party tortfeaso r. The insurer, as subrogee, stands in the shoes of its insured with respect to the insured's tort claim against the tortfeasor. Lincoln National Health , 666 So. 2d at 161 (citations omitted). The court concluded that Florida law applie d t o the subrogation claimbecause Florida was the state where the accident occurred and

no other state had a more significant relationship t o t he

occurrence or parties. Lincoln National Health , 666 So. 2d at 162. Defendants cite a Wisconsin case, where the court came to a different conclusion. See American Standard Insurance Co. of Wisconsin v. Cleveland , 124 Wis. 2d 258, 369 N.W.2d 168 (Wis. App. Ct. 1985). In that case, the Wisconsin appellate court, without analysis, con cluded that "[the insurer's] subrogation right is a purely contractual right derived from the insuran ce pol icy." American Standard , 124 Wis. 2d at 267, 369 N.W.2d at 173. The court then concluded that the subrogee's contractual right limited the subrogee's ability to act against the third-party tortfeasors. 1 Defendants also ask us to consider a case recently decided by the Illinois Appellate Co urt for the First District, Progressive Insuran ce Co. v. Williams , ___ Ill. App. 3d ___, ___ N.E.2d ___ (2008). In that case, Progressive was the insurer of a Minnesota8

resident injured in a t raffic accident in Illinois. Progressive paidits insured for his injuries and then filed a subrogation claimagainst the other driver involv ed in the accident. The appellate court upheld th e tria l court’s dismissal of the claim, finding that Progressive was not a bona fide subrogee, and thus had

no standing to bring the action. Progressive Insurance Co. , ___ Ill. App. 3d ___, ___ N.E.2d ___ (2008). In reaching its decision , the first district did not analyze whether the underlying actio n

was based in contract or tort but simply assumed that Progressive’s claim was contractual. We reject the holdin gs in Ameri can Standardand Progressive

a nd a ccept the Florida court's reasoning in Lincoln National Health . This is not a dispute between an insured and its insurer regarding interpretation of an insurance contract; rather, it is a claimby an insurer against third par ties for tortious conduct. See Lincoln National Health , 666 So. 2d at 161. As a subrogee, Safeco stands in the shoes of Bednar, its insured, for purposes of enforcing Bednar's rights against third parties. See Whitledge v. Klein , 348 Ill. App. 3d 10 59, 1064, 810 N.E.2d 303, 307 (2004); Signode Corp. v. Normandale Properties , 177 Ill. App. 3d 526, 528, 532 N.E.2d 482, 484 (1988 ); Continental Casualty Co. V. Polk Brothers, Inc. , 120 Ill. App. 3d 395, 397, 457 N.E.2d 1271, 1273 (1983); London & Lancashire Indemnification Co. of America v. Tindall , 377 Ill. 308, 313, 36 N.E.2d 334, 337 (1941). There is no question that Bednar's claim against defendants would be based in tort. See Yacko v. Curtis , 339 Ill. App. 3d 299, 299, 789 N.E.2d2 The court in Progressive found Nodak inapplicable because

the Minnesota Supreme Court did not address the issue of standing in Nodak . We disagree. By holding that the insurer could pursue its subrogation claim under North Dakota law, the Minnesota Supreme Court in Nodak implicitly found that the insurer had standing to sue as its insured’s subrogee. If it had not, the action could not have gone forward. 9 1274, 1274 (2003) ("tort suit" arose out of automobile accident); Wiker v. Pieprzyca-Berkes , 314 Ill. App.3d 421, 423, 732 N.E.2d 92, 94 (2000) (suit brought by plaintiff seeking compensation for injuries suffered as a result of automobile collision was a "tort action"). Thus, Safeco's claim should also be considered a tort claim. See Lincoln National Health , 666 So. 2d at 161. Nevertheless, defendants contend that Minnesota law should apply because Minnesota, by adopting its no-fault law, has shown an interest in controlling how its residents are compensated from an accident. We disagree. According to the Minne sota legislature, the main purpose of Minnesota's no-fault system is "to relieve the

severe economic d istress of uncompensated victims of automobile accidents within this state ." Minn. Sta t. § 65.42(1) (2006) (emphasis added). This purpose is not furthered when an accident

occurs outside of Minnesota. See Nodak Mutual Insurance Co. v. American Family Mutual Insurance Co. , 604 N.W. 2d 91, 96 (Minn. Sup. Ct. 2000) (North Dakota law applied to subrogation claim of a Minnesota insurance company covering a Minnesota resident who was injuredin auto accident in North Dakota). 2 Because this accident occurred in Illinois, Minnesota has no interest in regulating how Bednar and Safeco are compensated.10 C. S ince we have concluded that Safeco's claim shoul d b e considereda tort claim, we apply the most significant relationship test to determine whether Illinois or Minnesota law applies. See Esser v. McIntyre , 169 Ill. 2d 292, 297-98, 661 N.E.2d 1138, 1141 (1996). Here, the injury and the injury-causing conduct occurred in Illinois. Additionally, several of the defendants (the Gregorys andAvis Rent A C ar) are domiciled or do business in Illinois. Finally, the relationship between the parties arose in Illinois because the accident occurred in Illinois and but for the accident, Bednar would have no relationship with the Gregorys or Avis Rent A Car. T hus, Illinois appears to have the most significant relationship to this case. Because Illinois is the place of the injury, and no other state has a more significant interest in the occurrence or the parties, Illinois law applies. See Esser , 169 Ill. 2d at 298, 661 N.E.2dat 1141. The trial court erred in granting defendants' section 2-615 motions to dismiss Counts I through III. II. 2-619 MOTIONS TO DISMISS Safeco next argues that the trial court erred in granting the Gregorys’ section 2-619 motions to dismiss Counts IV and V of the complaint. Asection 2-619 motion to d ismiss provides a means of disposing of issues of law or easily proven issues of act at the outset of a case. In Marriage of Kohl , 334 Ill. App. 3d 867, 877, 778 N.E.2d 1169, 1177-78 (2002). Pursuant to section 2-619(a)(9)11

of the Code, a cause of action should be dismissed when "the claim assertedagainst defendant is barred by o ther affirmative matter avoiding the legal effect of or def eating the claim." 735 ILCS 5/2-619(a)(9) (West 2004). An "affirmative matter" is something in the nature of a defense which negates the cause of action completely. Van Meter v. Darien Park Dist. , 207 Ill. 2d at 359, 367, 799 N.E.2d at 273, 278 (2003). When ruling on a section 2-619 motion to dismiss, the court may consider pleadings, affidavits and deposition transcripts, Kohl , 334 Ill. App. 3d at 877, 778 N.E.2d at 1178. If a defendant presents an adequate affidavit supporting his defense, the burden t hen shif ts to the plaintiff. See Kedzie and 103 rd Currency Exchange, Inc. v. Hodge , 156 Ill. 2d 112, 116, 619 N.E.2d 732, 735 (1993). If the facts asserted in an affidavit are not refuted by counteraffidavit, the court will take those facts as true nothwithstanding any contrary unsupported allegations in the plaintiff’s pleadings. Kohl , 334 Ill. App. 3d at 877, 778 N.E.2d at 1178. We review a section 2-619 dismissal de novo . Van Meter , 207 Ill. 2d at 368, 799 N.E.2d at 278. Here, the pleadings and other documents tendered in this case establish that Jeff and Stanley Gregory owned the truck Steven Gregory was driving at the time of the collision. The proof of ownership created a rebuttable presumption that an agency relationship existed. See Bell v. Reid , 118 Ill. App. 3d 310, 313, 454 N.E.2d 1117, 1119 (1983). That presumption was rebutted by the affidavits tendered by the Gregorys. In the affidavits, each of12

the Gregorys attested that Steven was using the vehicle for his own personal use and was not acting as an employee or agent of Jeff or Stanley Gregory at the time of the accident. The affidavits presented by defendants shifted the burden to Safeco to support its claim of agency liability. See Kedzie , 156 Ill. 2d112, 116, 619 N.E.2d 732, 735. Safeco failed to tender any counteraffidavits to refute the f acts presented by the Gregorys. Thus, the facts contained in the Gregorys’ affidavits were properly deemedadmitted. The trial court did not err in granting defendants’ section 2-619 motions to dismiss. III. MOTION TO TRANSFER Fina lly, Safeco argues that the Cook County Circuit Court erredin granting the Gregorys’ motion to transfer this case to Warren Co unty. However, Safeco has not tendered any part of the record from the Cook County proceedings in this appeal. Thus, we must presume that the Cook County Circuit Court properly grante d the motion to transfer the case to Warren County. See In re Stephanie P. , 341 Ill. App. 3d 887, 892, 794 N.E.2d 397, 400 (2003) (appellant has the duty to present a sufficiently complete record of the trial court proceedings to support a claim of error; in the absence of such a record, a reviewing court will presume that a trial court’s order was in conformity with the law). CONCLUSION The judgment of the Circuit Court of Warren County is affirmed in part and reversed in part; the judgment of the Circuit Court of Cook County is affirmed.13

Affirmed in part and reversed in part. HOLDRIDGE, J., concurring. CARTER, J., concurring in part and dissenting in part: Iagree with the majority’sconclusion that the section 2-619 motions to dismiss ( 735 ILCS 5/2-619 (West

2006)) and the motion to transfer the case to Warren County were properly

granted. Idissent, however, because I disagree with the majority ’s ruling that the section 2-615 moti ons to dismiss (735 ILCS 5/2-615 (West 2006)) should have be en denied. Following American Standard Ins. C o. o f Wisconsin v. Cleveland , 124 Wis. 2d 258, 267, 369 N.W.2d168, 173 (Wis. Ct. App. 1985) , I would find that the claim raised is one of c ontract and that the most sign

ificant c ontacts te st must be us ed to dete rmine whe

ther the substanti

ve law o f Minnesota

(fo rbi ds subrogation in thi s context) or Illinois (all ows subro gation i n this cont

ext) should ap pl y. See Restatement (Second) of Conflict of Laws § 188 (1971); Westchester Fire Ins. Co. v. G. Heileman Brewing C o., Inc. , 321 Ill. App. 3d 622, 628, 747 N.E.2d 955, 961 (2001). I n the American Standard case, two Wisconsin residents, Ilerd Cleveland a nd Tho mas Mc Gree, were involved in a traffic accident in Minnesota. American Standard Ins. Co. of Wisconsin , 124 Wis. 2d at 260, 369 N.W.2d at 170. They wer e traveling in separate automobiles and Cleveland was 100% negligent in causing the acc ide nt. America n Standar d Ins . Co. of Wisc onsin , 124 Wis. 2d at 260, 369 N.W.2d at 1 70. Both were insu red by Wisconsin

insurers under po licies iss ued in Wisconsin. American Standard Ins. Co. of Wisconsin , 124 Wis. 2dat 260, 369 N.W.2d at 170. On appeal, one of the issue s that the Wi s consi n Appellate Court had to decide was whether to apply Wisconsin’s subrogation

law, which

would allow American Standard to recover subrogation, or Minnesota’s nofault law, whic

h prohib ited co ntractual subrogation by insurers. American Standard Ins. Co. of Wisconsin , 124 Wis. 2d at 266-67, 369 N.W.2d a t 173. The a

ppellate court ap plied the most14

s ignificant

contacts test and

determined that Wisc onsin’s su broga tion law c ontrolled

Americ an Standard’s right to recover subrogation. American Standard Ins. Co. of Wisconsin , 124 Wis. 2d at 267, 369 N.W.2d at 173. In so doing, the appellate c ourt noted tha t, “American Standard’s subrog ati onright (was) a purely contractual right derived from the insuranc e policy.” Americ an Standard Ins. Co. of Wisconsin , 124 Wis. 2d at 267, 369 N.W.2d at 173. Iwould re ach the s ameconclusi on in the pres ent case . Althoug h an unde rly ing tort gave r ise to the injuries for which Safeco made pay ment, the clai m rai sed in this suit is one of subrogation. The tort claim has been raised in a separate suit filed in Warre nCounty by

Iola Bednar

against Susan Jelenand Steven

Gregory . As with the insurer in American Standard , Safeco’s right to subrogation is purely a contra

ctual right

derived from the r

elationsh ip between the insurance company and the insured. See American Standard I ns. Co. of Wis consin , 124 Wis. 2d at 267, 369 N.W.2d at 173. Safeco’s claim, the

refore , is a cont

ract cla im and must be analyzed under the most significant contacts test. See Resta

tement (Se cond) of

Conflict o f La

ws § 188 (1971 ); Westchester Fire Ins. Co. , 321 Ill. App. 3d at 628, 747 N.E.2d at 961. Minnesota, as thestate where the contract was enter ed into, has the most significant contacts with this case. Minnesota law should be applied and Safeco should not be all owed to pr

oceed on a claim f

or subrogation against the 2 -615 def endants. I wou

ld find, therefore, that the Circuit Court properly granted the section 2-615 motions to dismiss. For the reasons stated, I concur in part and respectfully dissent in part.