Court Opinion

ID: 6497998
Source: CourtListenerOpinion
Date Created: 2022-07-05 21:03:02.277084+00
Date Added: 2024-06-11T08:51:36.408007
License: Public Domain

2022 IL App (2d) 210680-U
                                         No. 2-21-0680
                                     Order filed July 5, 2022

      NOTICE: This order was filed under Supreme Court Rule 23(b) and is not precedent
      except in the limited circumstances allowed under Rule 23(e)(l).
______________________________________________________________________________

                                             IN THE

                              APPELLATE COURT OF ILLINOIS

                              SECOND DISTRICT
______________________________________________________________________________

BEARCAT LEASING CORPORATION,           ) Appeal from the Circuit Court
                                       ) of Kane County.
      Plaintiff-Appellant,             )
                                       )
v.                                     ) No. 21-AR-232
                                       )
MIDWEST VEHICLE LOGISTICS, INC.,       ) Honorable
                                       ) John G. Dalton,
      Defendant-Appellee.              ) Judge, Presiding.
______________________________________________________________________________

       JUSTICE JORGENSEN delivered the judgment of the court.
       Justices Schostok and Brennan concurred in the judgment.

                                             ORDER

¶1     Held: The trial court erred in dismissing plaintiff’s complaint against defendant for
             property damage. First, the claims were not barred by a release signed by
             representatives of plaintiff’s insurer but not by plaintiff. Second, plaintiff’s failure
             to attach to its complaint certain evidentiary support for its allegations did not
             require dismissal.

¶2     Plaintiff, Bearcat Leasing Corp., appeals from the trial court’s dismissal, with prejudice, of

its complaint against defendant, Midwest Vehicle Logistics, Inc. For the reasons that follow, we

reverse and remand.

¶3                                     I. BACKGROUND

¶4                                      A. The Complaint
2022 IL App (2d) 210680-U

¶5     On March 24, 2021, plaintiff filed a two-count complaint against defendant. Count I,

entitled “Breach of Bailment,” alleged that, in October 2018, plaintiff and defendant “formed an

agreement that provided for [defendant] to deliver a [vehicle] from [plaintiff] to one of [plaintiff’s]

lessees.” Plaintiff transferred the vehicle, “valued at $42,500,” to defendant’s exclusive possession

in good condition, and defendant accepted the vehicle. On October 24, 2018, the vehicle was

“irreparably damaged” while in defendant’s possession. Consequently, plaintiff had to sell the

damaged vehicle for only $24,985. It claimed a “loss in value” of $17,515. Plaintiff also incurred

$5510 in storage fees. Count I sought total damages of $23,025, plus costs.

¶6     Count II, entitled “Negligence,” alleged that, on October 24, 2018, defendant’s agent was

driving the vehicle and had a duty to exercise reasonable care. Notwithstanding its duty,

defendant’s agent failed to maintain proper lookout and control. As a direct and proximate result,

plaintiff suffered damages in the “loss in value” of the vehicle and the cost of storing the damaged

vehicle before sale. Count II sought total damages of $23,025, plus costs.

¶7                               B. Defendant’s Motion to Dismiss

¶8     On September 1, 2021, defendant filed a motion entitled “Section 2-615 Motion to

Dismiss.” It raised two bases for dismissal: (1) plaintiff had released the claims against defendant,

and (2) plaintiff failed to attach a “necessary and integral part of the pleading and allegations

against [d]efendant,” namely a certain lease agreement.

¶9                                      1. Release of Claims

¶ 10   Defendant first argued that the trial court should dismiss the complaint because plaintiff

had released its claims against defendant. According to defendant, “[u]pon information and belief,”

on October 24, 2018, plaintiff was insured by “Zurich North America/Empire Fire and Marine Ins.

Co.” (Zurich) and “filed a subrogation claim with *** Zurich for the damages alleged in its

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2022 IL App (2d) 210680-U

[c]omplaint *** as Claim No. 1510139660.” “Upon information and belief, [p]laintiff received a

total sum of $12,933.21 from its insurer, Zurich, pursuant to said claim for said damages.” On July

30, 2020,

        “[d]efendant’s primary insurer, Lloyd’s of London, and its duly authorized agent adjuster,

        Custard Insurance Adjusters, *** settled the subrogation claim with *** [p]laintiff’s

        insurer Zurich, and Zurich, by and through its claim representatives, Christina Uselding

        and/or Kelly Nusser, executed a General Release of All Claims, a true and correct copy of

        which, together with related correspondence, is attached as Group Exhibit ‘A’.”

Defendant argued that “[p]laintiff’s insurer, Zurich, as a result of its subrogation payments to

[p]laintiff, stands in the same position as [p]laintiff, and since [p]laintiff’s insurer, Zurich, released

all claims against [d]efendant, Zurich released the debt owed by [d]efendant, and [p]laintiff’s

complaint must be dismissed.”

¶ 11    In support of this argument, defendant attached to the motion, “Group Exhibit ‘A’ ”, which

consisted of (1) a document entitled “General Release of All Claims” (the Release), (2) an e-mail,

dated June 19, 2019, from Zurich to plaintiff, and (3) a letter, dated June 20, 2019, from Zurich to

defendant’s insurer.

¶ 12    The Release provided as follows:

                “KNOW ALL MEN BY THESE PRESENTS: That the Undersigned, being of

        lawful age, for sole consideration of Eight Thousand, Four Hundred, Thirty-Three Dollars

        and 21/100 Cents ($8,433.21) to be paid to Zurich North America / Empire Fire and Marine

        Ins. Co. (Claim number: 1510139660), do/does hereby and for my/our/its heirs, executors,

        administrators, successors and assigns release, acquit, and forever discharge Midwest

        Vehicle Logistics, Inc., Certain Underwriters at Lloyd’s London, Thompson Heath &

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       Bond, Ltd., Custard Insurance Adjusters and his/her/their/its agents, servants, successors,

       heirs, executors, administrators, and all other persons, firms, corporations, associations, or

       partnerships of and from any and all claims, actions, causes of action, demands, rights,

       damages, costs, loss of service, expenses, and compensation whatsoever, which the

       Undersigned now has/have of which may hereafter accrue on account of or in any way

       growing out of any and all known and unknown, foreseen property damage and the

       consequences thereof resulting or to result from the accident, casualty, or event which

       occurred on or about 24th October 2018 (Date of Incident), at or near Knoxville, TN.”

It provided the following “[b]reakdown”:

       “Paid to Date:                 $12,933.21

       Deductible:                    $   500.00

       File Total:                    $13,433.21

       Less Insured Deductible:       $ 5,000.00

       Net Total Due:                 $ 8,433.21”

It also provided that defendant was “responsible for remitting the payment of $5,000.00 (Insured

deductible) to [Zurich].” It was signed by “Christina Uselding” and “Dakota Cox” and dated July

30, 2020.

¶ 13   The e-mail, dated June 19, 2019, from Zurich to plaintiff, indicated that it concerned

“Supplement Estimate/Payment - Claim 1510139660” and advised plaintiff that “[t]he supplement

[sic] repair estimate” had been processed and that Zurich would be “issuing payment in the amount

of $3,677.86 to be sent to your attention [and] this amount includes towing and a portion of the

storage.” It contained the following breakdown:

       “Estimate - $13,088.21

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       Towing - $195.00

       Storage - $150.00

       Deductible - $500.00

       Initial Payment - $9,255.35

       Supplement Due - $3677.86.”

It further provided: “This claim has been submitted to our subrogation department for collection

of your deductible.” (Emphasis omitted.)

¶ 14   The letter, dated June 20, 2019, was on Zurich letterhead. It was addressed to “Lloyds of

London/Custard Insurance” and signed by “Christina Uselding” as “Recovery Specialist” for

“Empire Fire and Marine Ins. Co.” It referenced “Claim Number: 1510139660”; “Insured: Bearcat

Leasing Corporation”; and “Date of Loss: 10-24-2018.” It stated: “Our investigation indicates that

liability rests with your insured. A supplement has been issued. To date, our original demand is

still outstanding with your company.” It further indicated:

       “Paid to Date: $12,933.21

       Deductible:     $   500.00

       File Total:     $13,433.21”

¶ 15                                 2. Failure to Attach Lease

¶ 16   Defendant based its second argument in support of its motion to dismiss on plaintiff’s

failure to attach a certain lease agreement. Defendant alleged that “[u]pon information and belief,”

plaintiff’s allegation that the vehicle was valued at $42,500 when defendant accepted possession

of it was “based solely upon a written ‘Open End Lease’ leasing agreement.” According to

defendant, the agreement was “a necessary and integral part of the pleading” and plaintiff’s failure

to attach it warranted dismissal of the complaint.

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2022 IL App (2d) 210680-U

¶ 17                                    C. Plaintiff’s Response

¶ 18    On September 29, 2021, plaintiff filed a response to the motion to dismiss. First, plaintiff

pointed out that, although defendant titled its motion as a motion to dismiss under section 2-615

of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2020)), section 2-619(a)(6) of the

Code (id. § 2-619(a)(6)) governs a motion seeking dismissal based on a release. First, plaintiff

argued that the Release did not warrant dismissal because (1) the Release was signed…by

Christina Uselding and Dakota Cox, individually, (2) the Release did not mention plaintiff,

(3) defendant did not present any evidence of a subrogation agreement between plaintiff and

Zurich, and (4) even if there were a subrogation agreement between plaintiff and Zurich, there is

no evidence that the agreement included plaintiff’s claimed damages. As for defendant’s second

basis for dismissal, plaintiff argued that the complaint made no reference to a lease and that, even

if the claimed damages stemmed from a lease, that document would simply be evidence in support

of the allegation and thus would not need to be attached to the complaint.

¶ 19                                    D. Defendant’s Reply

¶ 20    In reply, defendant argued that the Release and additional documents attached to its motion

to dismiss established that the released claim belonged to plaintiff. Defendant argued that “[f]or

[p]laintiff to rely on the absence of a statement that the ‘released claims belonged to [p]laintiff’ is

disingenuous as best.” Defendant acknowledged the “inartful wording of the release” but asserted

that the Release was prepared during the “unprecedented COVID pandemic,” which was a relevant

fact to consider, “especially since [p]laintiff does not deny any of the facts set forth in [d]efendant’s

[m]otion or attachments.” (Emphasis in original.) Defendant further argued that plaintiff’s

assertion that there was no subrogation agreement between plaintiff and Zurich ignored the

motion’s attached uncontradicted documents. Defendant also argued that plaintiff did not identify

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2022 IL App (2d) 210680-U

any interest that it retained outside of the claim filed with its insurer. As for its second basis for

dismissal, defendant argued that the court should, at a minimum, “strike said valuation from [the

c]omplaint and require an amended complaint.”

¶ 21                            E. Proceedings on Motion to Dismiss

¶ 22   On October 20, 2021, the parties appeared via Zoom on the motion. The trial court “BEING

FULLY ADVISED IN THE PREMISES,” granted defendant’s motion and dismissed the

complaint with prejudice. The record does not contain a transcript, or an acceptable substitute,

from the proceedings. See Ill. S. Ct. Rule 323(c) (eff. July 1, 2017).

¶ 23   This timely appeal followed.

¶ 24                                       II. ANALYSIS

¶ 25   Plaintiff contends that the Release does not provide a basis for the trial court’s dismissal of

the complaint. Plaintiff argues that, because the Release does not name plaintiff, the Release does

not bind plaintiff. Plaintiff further contends that, even if Zurich held via subrogation plaintiff’s

claims against defendant, defendant provided no evidence that Zurich had the right to subrogate

all of plaintiff’s claims against defendant.

¶ 26   The purpose of a motion to dismiss under section 2-619 of the Code (735 ILCS 5/2-619

(West 2020)) “is to dispose of issues of law and easily proved issues of fact at the outset of

litigation.” Van Meter v. Darien Park District, 207 Ill. 2d 359, 367 (2003). 1 It admits the

complaint’s legal sufficiency but raises an affirmative defense or other matter that defeats the

       1
           As plaintiff contends, (and defendant does not dispute), although defendant’s motion to

dismiss was entitled “Section 2-615 Motion to Dismiss,” a motion for dismissal based on a release

is governed by Section 2-619(a)(6) of the Code (735 ILCS 5/2-619(a)(6) (West 2020)).

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2022 IL App (2d) 210680-U

plaintiff’s claims. Id. As is relevant here, a motion under section 2-619(a)(6) of the Code asserts

that “the claim set forth in the plaintiff’s pleading has been released.” 735 ILCS 5/2-619(a)(6)

(West 2020). “If [the] defendant’s motion to dismiss is based on a release, once [the] defendant

shows the existence of a facially valid release, the burden then shifts to the plaintiff to prove that

a material issue of fact exists which would invalidate the agreement.” Roberts v. Dow Chemical

Co., 244 Ill. App. 3d 253, 256 (1993). “If, after considering the pleadings and affidavits, the trial

judge finds that the [nonmoving party] has failed to carry the shifted burden of going forward, the

motion may be granted and the cause of action dismissed.” Kedzie & 103rd Currency Exchange,

Inc. v. Hodge, 156 Ill. 2d 112, 116 (1983).

¶ 27   When ruling on a motion to dismiss under section 2-619, a court must interpret all pleadings

and supporting documents in the light most favorable to the nonmoving party. In re Chicago Flood

Litigation, 176 Ill. 2d 179, 189 (1997). Evidentiary facts asserted in a defense affidavit or other

supporting evidence are deemed admitted unless the nonmoving party submits a counter affidavit

or other supporting documents to refute those facts. Kedzie & 103rd Currency Exchange, Inc., 156

Ill. 2d at 116. On appeal from a section 2-619 motion, the reviewing court “must consider whether

the existence of a genuine issue of material fact should have precluded the dismissal or, absent

such an issue of fact, whether dismissal is proper as a matter of law.” Id. at 116-17. We review

de novo the dismissal of a complaint under section 2-619. Epstein v. Chicago Board of Education,

178 Ill. 2d 370, 383 (1997).

¶ 28   Before reaching the parties’ arguments, we note that the record on appeal does not include

a transcript, or an acceptable substitute, from the proceedings on the motion to dismiss. See Ill. S.

Ct. Rule 323(c) (eff. July 1, 2017). Plaintiff, as appellant, bears the burden of presenting a

sufficiently complete record of the proceedings to support its claim of error. Foutch v. O’Bryant,

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2022 IL App (2d) 210680-U

99 Ill. 2d 389, 391 (1984); Short v. Pye, 2018 IL App (2d) 160405, ¶ 48. Although we resolve

against plaintiff doubts arising from the record’s incompleteness (see Foutch, 99 Ill. 2d at 392),

our review here is limited to the pleadings, motions, and supporting documents, which are part of

the record. See Bezanis v. Fox Waterway Agency, 2012 IL App (2d) 100948, ¶ 11. In addition, the

issues raised here present questions of law that we review de novo without showing deference to

the trial court’s reasoning. See id. Accordingly, the lack of a transcript, or acceptable substitute,

from the proceedings does not hinder our review.

¶ 29   We turn to the merits. Plaintiff argues that, because defendant did not establish that plaintiff

released the claims asserted in the complaint, the burden never shifted to plaintiff. We agree. “A

release is a contract wherein a party abandons a claim to the person against whom the claim exists.”

Unger v. Nunda Township Rural Protection District, 135 Ill. App. 3d 758, 763 (1985). As a

contract, contract-interpretation rules govern a release. Gillilan v. Trustees for Central States,

Southeast & Southwest Areas Pension Fund, 183 Ill. App. 3d 306, 312 (1989). “This means that

‘[w]here a written agreement is clear and explicit, a court must enforce the agreement as written.

Both the meaning of the instrument and the intention of the parties must be gathered from the face

of the document without the assistance of parol evidence or any other extrinsic aids.’ ” Thornwood,

Inc. v. Jenner & Block, 344 Ill. App. 3d 15, 21, (2003) (quoting Rakowski v. Lucente, 104 Ill. 2d

317, 323 (1984)). “Releases are strictly construed against the benefitting party and must spell out

the parties’ intention with particularity.” State ex rel. Leibowitz v. Family Vision Care, LLC, 2019

IL App (1st) 180697, ¶ 48.

¶ 30   As plaintiff notes, generally, a person who is not a party to a release will not be bound by

its terms. See Unger, 135 Ill. App. 3d at 764. In Unger, the plaintiff brought an action against

adjacent property owners and others to recover damages for the destruction by fire of trees on the

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property that the plaintiff purchased under an installment contract. Id. at 760-61. When the fire

occurred, the plaintiff had not acquired title to the property from the seller under the installment

contract. Id. at 761. The seller signed a release for the fire damage in favor of one of the defendants.

Id. The trial court, concluding that the seller, rather than the plaintiff, suffered the loss, granted

summary judgment based on the seller’s release. Id. at 761-62. We reversed on appeal. Id. at 764.

First, we held that the plaintiff, not the seller, suffered the loss. Id. at 763. We then considered

whether the release executed by the seller barred the plaintiff’s action. Id. at 763-64. Noting that,

“where no ambiguity is presented, the meaning of the agreement and the intention of the parties

must be ascertained from the words employed therein,” (id.) we stated:

                “Initially, we note that [the defendant] has offered no theory for the proposition that

        [the seller] had authority to enter in a release contract on [the] plaintiff’s behalf. Even if

        [the seller] had had such authority, however, he did not exercise it. The release is

        unambiguous and by its terms binds only [the seller], his wife, and ‘their heirs, executors

        and adminstrators.’ [The p]laintiff does not fall into one of those categories and is not,

        therefore, bound by the release.” Id. at 764.

¶ 31    Here, the unambiguous language of the Release established that “the Undersigned,” in

consideration of $8,433.21 “to be paid to [Zurich],” “release[d]” defendant

        “from any and all claims, actions, causes of action, demands, rights, damages, costs, loss

        of service, expenses, and compensation whatsoever, which the Undersigned now has/have

        of which may hereafter accrue on account of or in any way growing out of any and all

        known and unknown, foreseen property damage and the consequences thereof resulting or

        to result from the accident, casualty, or event which occurred on or about 24th October

        2018 (Date of Incident), at or near Knoxville, TN.” (Emphasis added.)

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2022 IL App (2d) 210680-U

The Release is signed by “Christina Uselding” and “Dakota Cox.” Based on the letter and e-mail

attached to the motion, it appears that Uselding signed the Release on behalf of Zurich in her

capacity as “Recovery Specialist.” 2 To be sure, the letter and e-mail also suggest that Zurich was

plaintiff’s insurer at the time of the occurrence alleged in the complaint, that plaintiff filed a claim

with Zurich concerning that occurrence, and that Zurich paid plaintiff $12,933.21 for that claim.

The letter and e-mail further suggest that defendant was liable for plaintiff’s loss and that Zurich

pursued its subrogation rights with defendant’s insurer, which resulted in the execution of the

Release. Nevertheless, the Release on its face unambiguously binds only Zurich; plaintiff is not

named. In its response brief, defendant does not directly acknowledge that the Release does not

name plaintiff. Instead, without questioning the holding in Unger, defendant argues that it is

“factually different.” That might be. However, our holding in Unger—that the unambiguous terms

of the release bound only the signing individual, his wife, and their heirs, executors, and

administrators—is applicable here. Construing the unambiguous terms of the Release strictly

against defendant, we cannot say that defendant has met its burden of establishing a facially valid

release that bars plaintiff’s claims.

¶ 32    Defendant contends that plaintiff’s argument “ignores the well settled law of insurance

subrogation actions.” When an undisputed insurance contract is involved, “subrogation rights arise

where (1) a third party has caused a loss and is primarily liable to the insured for the loss, (2) the

insurer is secondarily liable to the insured due to an insurance policy, and (3) the insurer pays the

insured under that policy, thereby extinguishing the debt owed by the third party.” Trogub v.

        2
            There is no reference to Dakota Cox anywhere in the record other than in the Release itself

and in plaintiff’s response to defendant’s motion to dismiss.

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Robinson, 366 Ill. App. 3d 838, 842 (2006). However, as plaintiff notes, even assuming that a right

to subrogation exists, “[s]ubrogation of a claim does not by itself exclude the party who has the

claim from bringing a suit if the insured retains some interest.” Brooke Inns, Inc. v. S & R Hi-Fi &

TV, 249 Ill. App. 3d 1064, 1078 (1993). Importantly, plaintiff’s complaint seeks damages for “loss

in value” of the vehicle and “storage” fees. Defendant argues that “[t]he record clearly shows that

[plaintiff] received monies from its insurer for diminution of value, repair charges[ ] to the truck

and for storage and towing charges.” However, the letter and e-mail refer only to amounts paid for

estimated “repair” costs and “a portion of the storage.” Interpreting the pleadings and supporting

documents in the light most favorable to the plaintiff, we cannot say that defendant has met its

burden of establishing that plaintiff’s claims fall within the scope of the Release.

¶ 33   Thus, construing the unambiguous terms of Release strictly against defendant, we cannot

say as a matter of law that plaintiff—unnamed in the Release—released its claims against

defendant. At most, defendant’s motion and supporting documentation raised a genuine issue of

fact as to whether the Release bound plaintiff and whether the released claims included the claims

raised in the complaint. Accordingly, as defendant did not meet its burden of establishing that

plaintiff’s claims were barred by the Release, dismissal of the complaint with prejudice on this

basis was error.

¶ 34   Plaintiff next contends that defendant’s argument concerning plaintiff’s failure to attach a

certain lease agreement provides no basis for dismissal. We agree. Defendant alleged in its motion

that, “[u]pon information and belief,” plaintiff’s allegation that the vehicle was valued at $42,500

when defendant accepted possession of it was “based solely upon a written ‘Open End Lease’

leasing agreement.” Defendant asserted that the agreement was “a necessary and integral part of

the pleading” and that plaintiff’s failure to attach the agreement warranted dismissal of the

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complaint. However, as plaintiff asserts, the complaint does not refer to a written lease. In addition,

as plaintiff argues, the exclusion of documentary evidence from the complaint does not justify its

dismissal. See Farm Credit Bank of St. Louis v. Biethman, 262 Ill. App. 3d 614, 622 (1994) (“There

is no law that every relevant document which counsel seeks to introduce as an exhibit at trial must

be attached to his pleading, and indeed, such a requirement would be unworkable and

imprudent.”).

¶ 35   Finally, defendant requests that assess against plaintiff the costs that defendant incurred in

the trial court and on appeal and impose a sanction of reasonable attorney fees against plaintiff

under Illinois Supreme Court Rules 137(a) (eff. Jan. 1, 2018) (allowing sanctions for filing

frivolous pleading, motion, or other document) and 375(b) (eff. Feb. 1, 1994) (allowing sanctions

for frivolous appeals or appeals not taken in good faith or for improper purpose). We deny these

requests.

¶ 36                                     III. CONCLUSION

¶ 37   For the reasons stated, we reverse the judgment of the circuit court of Kane County,

dismissing plaintiff’s complaint with prejudice, and remand the cause.

¶ 38   Reversed and remanded.

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