Court Opinion

ID: 3146328
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:15:06.640562+00
Date Added: 2024-06-11T12:14:59.580102
License: Public Domain

THIRD DIVISION
                                                          FILED: March 31, 2006

No.    1-05-3122

GREAT WEST CASUALTY COMPANY,                       )      APPEAL FROM THE
                                                   )      CIRCUIT COURT OF
            Plaintiff-Appellant,                   )      COOK COUNTY
                                                   )
                         v.                        )      NOS. 05 CH 3731
                                                   )            98 L 13503
NANCY JEAN COTE, JOHN JOHANNESSON,                 )
WALCO TRANSPORT, INC., and WALCZYNSKI              )
ENTERPRISES, INC.,                                 )      HONORABLE
                                                   )      ALEXANDER P. WHITE,
            Defendants-Appellees.                  )      JUDGE PRESIDING.

       PRESIDING JUSTICE HOFFMAN delivered the opinion of the court:

       The plaintiff, Great West Casualty Company (Great West),

appeals   from     an   order   of   the   circuit      court    dismissing    its

declaratory judgment action as untimely and an earlier order

entered in a consolidated case, finding that it failed to tender

the full amount of monetary coverage remaining under its policy of

insurance in partial satisfaction of a judgment entered against its

insureds.    For the reasons which follow, we reverse the circuit

court=s order dismissing the declaratory judgment action and remand

this   matter    with   directions     and   for       further   proceedings    in

conformity with the opinions expressed herein.

       The facts necessary to an understanding of our disposition of

this appeal are not in dispute. Nancy Jean Cote filed an action in

the Circuit Court of Cook County seeking damages by reason of
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injuries she sustained on November 22, 1996, when the vehicle she

was driving collided with a semi-tractor and trailer driven by John

Johannesson.        Named    as    defendant's       in    Cote's     complaint      were

Johannesson and his employer, Walco Transport, Inc.(Walco).                           The

case   was   docketed    in       the    circuit     court     as   No.    98   L    13503

(hereinafter referred to as the "underlying case").                        Following a

trial, the jury returned a verdict in Cote's favor and against both

Johannesson    and     Walco,      fixing       Cote's    recoverable      damages     at

$2,052,750. Thereafter, the trial court entered judgment on the

verdict.      The     judgment      was    subsequently        amended     to   include

Walczynski     Enterprises,         Inc.    in     response     to    Cote's        motion

suggesting     that    Walco       had     changed       its   name   to    Walczynski

Enterprises, Inc. (Walczynski).

        Johannesson and Walco filed post-trial motions which the

trial court denied.         In addition, the trial court imposed monitary

sanctions against their attorneys for meritless pleading.

       Johannesson and Walco filed a notice of appeal, and Cote filed

a timely notice of cross-appeal.                On review, we reversed the order

assessing sanctions against the attorneys representing Johannesson

and Walco and affirmed the circuit court's judgment and orders in

all other respects.         Cote v. Walco Transport, Inc., No. 1-02-3857

(2004) (unpublished order under Supreme Court Rule 23).

       At all times relevant, Walco was insured under a policy of

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commercial lines insurance issued by Great West which provides

$1,000,000 in liability coverage (hereinafter referred to as the

"Policy").     In its brief, Great West acknowledges that Johannesson

and Walczynski are additional insureds under the Policy.

        On October 14, 2004, Great West tendered two checks payable to

Cote and her attorney.           The first check was in the sum of $995,000,

representing what Great West claimed was the remaining limit of

liability coverage under the Policy.            The second check was in the

sum of $402,901.56, representing accrued interest on the entire

judgment in favor of Cote in the underlying case through the date

of tender.     Cote refused the tendered sums, contending that Great

West had failed to tender the Policy=s full $1,000,000 limit of

liability coverage.

        On November 11, 2004, Johannesson, Walco, and Walczynski

(hereinafter collectively referred to as the "defendants") filed a

motion in the underlying action seeking an order finding that the

judgment in favor of Cote had been partially satisfied to the

extent of $995,000 and that interest on the judgment had been paid

to   the    extent   of    $402,901.56.       Additionally,    the   defendants

requested an order providing that, if Cote refused to accept the

tender of the two checks from Great West, the sums be deposited

with the court.        On November 15, 2004, the trial court entered an

order      directing      that    the   defendants   deposit     the   sum   of

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$1,397,901.56, the total sum tendered by Great West, with the

Northern Trust Company as escrowee for the benefit of Coat and her

attorney.      The order also provided that the deposit would be

without prejudice to Cote=s right to contest the adequacy of the

tender or to maintain that interest continued to run on the full

amount of the judgment.

      On December 1, 2004, Cote filed a motion in the underlying

case requesting, inter alia, that the trial court find that the

defendants= insurance carrier, Great West, had not made a "perfect

tender so as to stop the post judgment interest from running on the

full amount" and that the defendants and Great West still owe Cote

interest on the full amount of the judgment.            On February 4, 2005,

the trial court entered an order finding that "there has been an

improper    tender   of   the   judgment    plus   accrued    interest"   and

directing Cote=s attorney to tender the amounts previously paid back

to the defendants= attorneys within 30 days.

      On February 25, 2005, Great West filed a declaratory judgment

action in the Circuit Court of Cook County which was docketed as

No. 05 CH 03731.      Named as defendants in that action were Cote,

Johannesson, Walco, and Walczynski.           Great West sought findings

that: the maximum limit of its liability for indemnification under

the   Policy   is    $1,000,000;   the     limit   of   its   liability   for

indemnification under the Policy was reduced by $2,000 paid to Cote

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for damage to her property and an additional $3,000 it paid to

State Farm Insurance Company as reimbursement for Cote=s medical

expenses; its October 14, 2004, tender to Cote of $995,000 plus

$402,901.56 in accrued interest fulfilled its obligations under the

Policy and that it was not obligated to pay any additional sums to

Cote.        In addition, Great West sought an order directing Cote to

execute a partial satisfaction of judgment reflecting the payment

of $995,000 plus $402,901.56 in accrued interest through and

including October 14, 2004.

        On    April   28,   2005,   the   circuit   court   entered   an   order

consolidating Great West=s declaratory judgment action and the

underlying case.            Thereafter, Cote filed a motion pursuant to

section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-

619 (West 2004)) seeking the dismissal of Great West=s declaratory

judgment action.        In that motion, Coat asserted, inter alia, that:

the declaratory judgment action is untimely because Great West

never raised any issues of coverage prior to the entry of the

judgment in the underlying case; no actual controversy exists

between Great West and Cote, as all matters relating to the

adequacy of the October 14, 2004, tender were resolved in the

underlying action with the trial court=s order of February 4, 2005;

and Great West=s request for a finding that the limit of its

liability for indemnification under the Policy was reduced by the

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$3,000 it paid to State Farm Insurance Company as reimbursement for

Cote=s medical expenses is untimely pursuant to the provisions of

section 2-1205.1 of the Code (735 ILCS 5/2-1205.1 (West 2004)).

        On August 22, 2005, the trial court entered a Memorandum

Decision and Judgment Order, dismissing Great West=s declaratory

judgment action, finding that the action was untimely and "an

attempt to reduce Cote=s recovery in violation of 735 ILCS 5/2-

1205.1."    In addition, the trial court found that interest on Cote=s

judgment     would     continue   to     accrue   "until   proper   tender   is

attained."       Thereafter, Great West initiated this appeal with the

filing of a notice of appeal from the circuit court=s orders of

August 22, 2005, and February 4, 2005.            In urging reversal of the

circuit court=s orders, Great West argues that: 1) the dismissal of

its declaratory judgment action as untimely was error, as no case

or controversy arose until Cote refused its October 14, 2004,

tender; 2) the trial court erred in finding that it made an

"improper tender" of its policy limits to Cote; and 3) the trial

court    erred    in   finding    that   its   declaratory   judgment   action

violated section 2-1205.1 of the Code.

        The circuit court=s Memorandum Decision and Judgment Order of

August 22, 2005, states that it was entered in response to Cote=s

motion to dismiss which was brought pursuant to section 2-619 of

the Code.    Section 2-619 affords a defendant a means of obtaining a

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summary disposition of an action based upon issues of law or easily

proven issues of fact.     Kedzie and 103rd Currency Exchange, Inc. v.

Hodge, 156 Ill. 2d 112, 115, 619 N.E.2d 732 (1993).    An appeal from

a dismissal pursuant to this section of the Code is a matter given

to a de novo review. Guzman v. C.R. Epperson Construction, Inc.,

196 Ill. 2d 391, 397, 752 N.E.2d 1069 (2001).        Our function on

review is to "determine 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."

Guzman, 196 Ill. 2d at 397.

     For its first assignment of error, Great West argues that the

circuit court erred in dismissing its declaratory judgment action

as untimely.   We agree.

     Cote argued, and the trial court agreed, that, when an

insurance carrier waits to bring a declaratory judgment action

until after the underlying case has been resolved, the declaratory

judgment action is untimely as a matter of law. See Employers

Insurance of Wausau v. Ehlco Liquidating Trust, 186 Ill. 2d 127,

157, 708 N.E.2d 1122 (1999) (Wausau).     Great West acknowledges the

holding in Wausau, but argues that it has no application to the

facts in this case.   According to Great West, the proposition of

law set forth in Wausau, and relied upon by the circuit court, is

applicable only in situations where an insurer denies coverage for

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the underlying case and neither defends its insured under a

reservation of rights or brings a declaratory judgment action prior

to or during the pendency of the underlying case to determine its

obligations.   Great West asserts that this case presents an

entirely different fact situation as it never denied coverage and

did, in fact, defend its insureds in Cote's underlying action.

Great West contends that no actual controversy arose between the

parties relating to the monetary limit of coverage remaining under

the Policy until after there was a finding of liability on the part

of its insureds in the underlying case and Cote refused its tender

of October 14, 2004.     Great West maintains that any declaratory

judgment action filed prior to that time would have been premature.

 See Batteast v. Argonaut Insurance Co., 118 Ill. App. 3d 4, 6, 454

N.E.2d 706 (1983).

     As Great West correctly notes, the holding in Wausau upon

which the circuit court relied in dismissing its declaratory

judgment action as untimely was promulgated in the context of a

case involving an insurer that had denied that the underlying case

fell within the coverage afforded under its policy of insurance and

neither defended its insured under a reservation of rights or

sought a declaratory judgment prior to or during the pendency of

the underlying action.   Wausau, 186 Ill. 2d at 150-57.   The Wausau

Court specifically stated that its holding was based on an estoppel

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theory and was applicable only to an insurer that had breached its

duty to defend. Wausau, 186 Ill. 2d at 151.     In this case, Great

West neither denied coverage or declined to defend its insureds.

To the contrary, Great West has always acknowledged that Cote's

action fell within the coverage afforded under the Policy, and it

discharged its contractual duty to defend its insureds.

     Simply put, the holding in Wausau upon which the circuit court

relied to dismiss Great West's declaratory judgment action as

untimely has no application to the facts of this case.     However,

our review is de novo, and we can affirm the trial court's

dismissal of the action on any ground warranted, regardless of

whether the reason given by the trial court was correct.        See

Beckman v. Freeman United Coal Mining Co., 123 Ill. 2d 281, 286,

527 N.E.2d 303 (1988).   Consequently, we will address directly the

question of whether Great West's declaratory judgment action was

untimely.

     Section 2-701(a) of the Code provides that the circuit "court

may, in cases of actual controversy, make binding declarations of

rights, having the force of final judgments."   735 ILCS 5/2-701(a)

(West 2004).   By the very terms of the statute, a declaratory

judgment action may not be maintained unless and until an actual

controversy exists between the parties.   As the court in Stokes v.

Pekin Insurance Co., 298 Ill. App. 3d 278, 280-81, 698 N.E.2d 252

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(1998), held: "[A]n 'actual controversy' exists where there is a

legitimate     dispute    admitting   of    an    immediate   and    definite

determination of the parties' rights, the resolution of which would

help terminate all or part of the dispute."

        The controversy in this case relates to the amount that Great

West is required to pay Cote under the terms of the Policy.             Great

West never denied that Cote's action fell within the coverage

afforded its insureds; rather, the parties' dispute relates only to

the amount owed.    Therefore, until Great West's insureds were found

liable to Cote, any declaration as to the amount of coverage

available under the Policy would have been purely advisory and

premature.     Stokes, 298 Ill. App. 3d at 283-84; Batteast, 118 Ill.

App. 3d at 6.     As the court in Batteast observed, if the issue of

the amount of coverage available under a policy of insurance were

ripe for resolution prior to a determination of the liability of

the carrier's insured in the underlying action, every plaintiff,

upon the filing of a personal injury action, could concomitantly

file a declaratory judgment action to determine the amount of

coverage available in the event that liability was subsequently

established.     Batteast, 118 Ill. App. 3d at 6.

        Our analysis leads us to conclude that, in cases such as this

where    an   insurance   carrier   has    not   denied   coverage   and   has

undertaken the defense of its insured, a declaratory judgment

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action to determine the amount of insurance coverage available

under the carrier's policy is not ripe for adjudication until the

liability of the insured has been determined in the underlying

action.   Great West filed its declaratory judgment action after the

liability of its insureds to Cote had been established and Cote had

rejected its tender in partial satisfaction of her judgment.                     The

dispute between Great West and Cote as to the adequacy of the

tender was certainly ripe for adjudication, and no argument has

been   made   that    it    is     barred    by   any    applicable    statute    of

limitations.      For      these    reasons,      we    find   that   Great   West's

declaratory judgment action was not untimely and the circuit court

erred in dismissing it on that basis.

       Next, Great West argues that the trial court erred in finding

that its declaratory judgment action violated section 2-1205.1 of

the Code.     In support of its dismissal of Great West's action, the

trial court found that Great West was not entitled to any reduction

in the sums owed to Cote by reason of the provisions of section 2-

1205.1, as no motion to reduce her judgment was made within 30 days

of its entry.        However, Great West disclaims any reliance upon

section 2-1205.1 in support of its contention that the tender of

October 14, 2004, was a complete tender of the then remaining

liability coverage under the Policy.                    In point of fact, Great

West's entire declaratory judgment action rests on the proposition

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that, under the terms of the Policy itself, the $1,000,000 limit of

the liability coverage had been reduced by the $5,000 it had

previously paid to "reimburse for [Cote's] *** property damage and

medical expenses."    The issue of whether Great West is obligated to

indemnify its insureds for post-judgment interest accruing on the

full amount of Cote's judgment after October 14, 2004, rests on a

construction of the Policy to ascertain whether Great West's tender

of October 14, 2004, constituted a complete tender of the remaining

balance of liability coverage available under the Policy, not on

whether Cote's judgment has been reduced by $5,000 pursuant to the

provisions   of   section   2-1205.1    of   the   Code.   As   Great   West

correctly asserts, its declaratory judgment action has nothing

whatever to do with an application of section 2-1205.1.                  We

conclude, therefore, that the trial court also erred in finding

that Great West's declaratory judgment action is an attempt to

reduce Cote's judgment contrary to section 2-1205.1 of the Code and

in dismissing the action on that basis.

     Based upon the foregoing analysis, we reverse the trial

court's judgment of August 22, 2005, dismissing Great West's

declaratory judgment action.

     Finally, Great West argues that the trial court erred when, in

its February 4, 2005, order, it found that Great West made an

"improper tender" of the Policy's remaining limit of liability

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coverage.    However, for the reasons which follow, we conclude that

it would be inappropriate to address the merits of the issue at

this time.

     In its order of February 4, 2005, the trial court found that

there had been "an improper tender of the judgment and accrued

interest."    The order was entered in Cote's underlying action in

response to her motion requesting a finding that the defendants and

their insurance carrier, Great West, had not made a "perfect tender

so as to stop the post judgment interest from running on the full

amount" of her judgment and that the defendants and Great West

still owe her additional interest on the full amount of that

judgment.    The trial court=s order of February 4, 2005, can hardly

be termed a final order as it did not fully and finally resolve the

dispute existing between the parties.   See People ex rel. Scott v.

Silverstein, 87 Ill. 2d 167, 171, 429 N.E.2d 483 (1981). It was not

until the entry of the August 22, 2005, judgment that the trial

court found that interest on Cote=s judgment would continue to

accrue until a proper tender is made.      However, the August 22,

2005, judgment was entered in response to a section 2-619 motion,

requesting only that Great West's declaratory judgment action be

dismissed as untimely, either because it was not filed until after

her underlying case had been disposed of or because Great West was

attempting to obtain a reduction in her judgment past the 30 days

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provided in section 2-1205.1 of the Code.             Had Cote desired a

judicial determination of the issue of whether interest continues

to accrue on her judgment in the underlying case, she could have

filed a counter-claim for a declaratory judgment and, thereafter,

moved for summary judgment on the issue, or she might have sought

such a finding in the context of a section 2-615 motion for

judgment    on   the   pleadings   (735   ILCS   5/2-615(e)    (West   2004))

addressed to Great West's complaint for declaratory judgment.            Cote

did neither.      Rather, in the reply memorandum that she filed in

support of her section 2-619 motion, Cote, for the first time,

requested affirmative relief in the form of a judicial declaration

that, "as a matter of law, there has not been a tender to stop

interest from continuing to run, either by the nature of the tender

and/or the policy language."        The procedure employed by Cote in

this regard was wholly inappropriate and the affirmative relief she

sought should not have been entertained, as a section 2-619 motion

is not a vehicle for obtaining affirmative relief in the form of a

summary determination in favor of a defendant on one of several

major issues raised in a plaintiff's complaint.               However, Great

West never objected to the request, the trial court ruled on the

issues, and Great West has not claimed that it was prejudiced by

the procedure.         Nevertheless, we must decline to address the

question of the propriety of the trial court's finding.

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     The question of whether Great West's tender of October 14,

2004, constituted a complete tender of the remaining balance of

liability   coverage   under   the    Policy    rests   entirely   upon   a

construction of the terms of the Policy.        The record reflects that

both Cote and Great West addressed the coverage afforded under the

provisions of the Policy, but the trial court declined to address

their arguments, and appears instead to have rested its conclusion

that Great West's tender was not "legally sufficient" based upon

its finding that Great West was attempting to receive a set-off

contrary to the provisions of section 2-1205.1 of the Code.          As we

have already concluded, however, an application of section 2-1205.1

has nothing whatever to do with Great West's claim that it made a

complete tender of the remaining balance of liability coverage

under the Policy.      Whether, the October 14, 2004, tender was

"legally sufficient" or "improper" is an issue which can be decided

only by construing the terms of the Policy, an inquiry which we are

not inclined to conduct for the first time on appeal.

     Additionally, the trial court's findings in its August 22,

2005, judgment provided the finality rendering its interlocutory

order of February 4, 2005, appealable.         Having reversed the August

22, 2005, judgment, the basis for the exercise of our jurisdiction

to review the February 4, 2005, order may well have evaporated.

     We believe that the prudent course of action, in light of our

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conclusion that the issue of the adequacy of Great West's tender of

October 14, 2004, must be decided based upon a construction of the

Policy and our misgivings as to whether we have jurisdiction to

address the propriety of the February 4, 2005, order on the merits,

is to remand the matter to the circuit court with directions to

vacate that portion of its February 4, 2005, order finding that

"there has been an improper tender of the judgment plus accrued

interest" and to resolve the issue based upon a construction of the

terms of the Policy.

     For the reasons stated, we reverse the trial court's judgment

of August 22, 2005, and remand this cause with directions to vacate

portions of the February 4, 2005, order and to conduct further

proceedings in conformity with the opinions expressed herein.

     Reversed and remanded with directions.

     KARNEZIS and ERICKSON, JJ., concur.

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