Court Opinion

ID: 5139698
Source: CourtListenerOpinion
Date Created: 2021-12-22 17:03:44.083192+00
Date Added: 2024-06-11T08:24:19.314274
License: Public Domain

2021 IL App (1st) 210600
                                                   No. 1-21-0600
                                                                        Third Division
                                                                    December 22, 2021
      ______________________________________________________________________________

                                          IN THE
                              APPELLATE COURT OF ILLINOIS
                                      FIRST DISTRICT
      ______________________________________________________________________________

                                                     )
      COUNTRY MUTUAL INSURANCE COMPANY,              )
                                                     )
             Plaintiff-Appellee,                     )   Appeal from the Circuit Court
                                                     )   of Cook County.
      v.                                             )
                                                     )   No. 20 CH 03915
      UNDER CONSTRUCTION AND REMODELING,             )
      INC., and KAZIMIERZ SZYMANSKI,                 )   The Honorable
                                                     )   David B. Atkins,
             Defendants                              )   Judge Presiding.
                                                     )
      (Kazimierz Szymanski,                          )
             Defendant-Appellant).                   )
                                                     )
      ______________________________________________________________________________

                   PRESIDING JUSTICE GORDON delivered the judgment of the court, with opinion.
                   Justices McBride and Burke concurred in the judgment and opinion.

                                                    OPINION

¶1           Defendant Kazimierz Szymanski 1 was allegedly injured while working for his employer,

         defendant Under Construction and Remodeling, Inc. (Under Construction), and filed a

         workers’ compensation claim. Plaintiff Country Mutual Insurance Company, which had issued

             1
              We note that Szymanski refers to himself as a third-party defendant in his brief on appeal.
     However, Szymanski was not a third-party defendant but was named as a defendant in plaintiff’s
     declaratory judgment complaint, as injured claimants have been held to be necessary parties to such a suit.
     See M.F.A. Mutual Insurance Co. v. Cheek, 66 Ill. 2d 492, 495 (1977); Williams v. Madison County
     Mutual Automobile Insurance Co., 40 Ill. 2d 404, 407 (1968).
     No. 1-21-0600

        a workers’ compensation insurance policy to Under Construction, sought to investigate

        Szymanski’s claim and contacted Under Construction for information. When Under

        Construction failed to respond after repeated attempts to reach it, plaintiff filed a complaint for

        declaratory judgment in the circuit court of Cook County, alleging that plaintiff owed no duty

        to defend or indemnify Under Construction because Under Construction had breached the

        insurance policy’s cooperation clause. Under Construction did not file an appearance in the

        lawsuit, and the court entered a default judgment against it. Plaintiff then moved for summary

        judgment, which was granted on the basis of Under Construction’s breach of the cooperation

        clause. Szymanski appeals and, for the reasons set forth below, we reverse and remand.

¶2                                          BACKGROUND

¶3         The facts underlying the instant appeal are taken from plaintiff’s complaint and the exhibits

        attached thereto, as well as plaintiff’s motion for summary judgment. Since the issue on appeal

        turns on the adequacy of plaintiff’s attempts to contact Under Construction, we relate the facts

        concerning that issue in some detail.

¶4         On June 28, 2016, Under Construction submitted an application for a workers’

        compensation insurance policy with plaintiff, using an insurance agent named Kathy Spiewak.

        According to the application, Under Construction had been in business since 2010 and was in

        the business of “siding installation—all types—residential dwelling.” The application also

        provided that Under Construction had three full-time employees and listed a mailing address

        on Clark Lane in Des Plaines. The owner of the business was listed as Jan Kaznecki, and the

        application included Kaznecki’s phone number and e-mail address.

¶5         The insurance policy at issue on appeal was a renewal policy with a policy period from

        May 17, 2019, through May 17, 2020; as with the application, the renewal policy was issued

                                                      2
     No. 1-21-0600

        using Spiewak as the insurance agent. The policy listed an address on Lincoln Avenue in

        Chicago as the business address, and Kaznecki was listed as the owner. Part four of the policy

        discussed “Your Duties if Injury Occurs” and provided, in full:

                     “Tell us at once if injury occurs that may be covered by this policy. Your other

               duties are listed here.

                     1. Provide for immediate medical and other services required by the workers

               compensation law.

                     2. Give us or our agent the names and addresses of the injured persons and of

               witnesses, and other information we may need.

                     3. Promptly give us all notices, demands and legal papers related to the injury,

               claim, proceeding or suit.

                     4. Cooperate with us and assist us, as we may request, in the investigation,

               settlement or defense of any claim, proceeding or suit.

                     5. Do nothing after an injury occurs that would interfere with our right to recover

               from others.

                     6. Do not voluntarily make payments, assume obligations or incur expenses, except

               at your own cost.”

        The insurance policy did not contain a schedule or list of employees, other than listing

        Kaznecki as an “Excluded Owner, LLC member or Executive Officer” in an endorsement.

¶6         On November 20, 2019, Szymanski filed an application for adjustment of claim with the

        Illinois Workers’ Compensation Commission. Szymanski alleged that he injured his left

        shoulder on July 2, 2019, while working for Under Construction, and had orally notified his

                                                      3
     No. 1-21-0600

         employer of the accident. Szymanski listed the Lincoln Avenue address as Under

         Construction’s address.

¶7           Plaintiff commissioned an “audit” of Under Construction, covering the period of June 1,

         2018, through June 1, 2019, which it received on December 7, 2019; plaintiff refers to this

         audit as a “Premium Audit” in its brief on appeal, and does not claim that this audit had any

         connection with Szymanski’s claim. The audit listed an address on Lincoln Avenue in Chicago

         as the business address, and continued to list Kaznecki as the owner. The contact details for

         the business provided “John Kaznecki” 2 as the contact, at the same phone number as provided

         in the initial application, but with a different e-mail address. Payroll lists on the audit named a

         total of four individuals: Jan Kaznecki and three individuals identified as installers; Szymanski

         is not included on these payroll lists.

¶8           As explained in further detail below, between January 3, 2020, and April 17, 2020, plaintiff

         attempted to contact Under Construction in connection with Szymanski’s claim on nine

         occasions, without success.

¶9           On April 20, 2020, plaintiff filed a complaint for declaratory judgment against defendants,

         seeking a finding that it owed no duty to defend or indemnify Under Construction in connection

         with Szymanski’s workers’ compensation claim. In count I of its complaint, plaintiff alleged

         that Szymanski was not an employee of Under Construction on the date of his alleged accident,

         so plaintiff’s insurance policy did not apply. In count II of its complaint, plaintiff alleged that

         Under Construction had failed to cooperate with plaintiff’s investigation, so plaintiff had no

             2
              It is not clear if this is a phonetic spelling of “Jan Kaznecki” or a different individual. However,
     no one by the name “John Kaznecki” appears on the audit’s list of employees.
                                                           4
       No. 1-21-0600

           obligation to defend or indemnify Under Construction in connection with Szymanski’s

           workers’ compensation claim.

¶ 10           Due to the COVID-19 pandemic, the sheriff’s office declined to serve defendants, and a

           special process server was appointed to serve them. Szymanski was personally served on

           August 3, 2020, and filed an appearance and answer on August 14, 2020. With respect to Under

           Construction, the address for Under Construction on the initial summons and on an alias

           summons was the Lincoln Avenue address. However, a second alias summons listed an address

           on Oxford Avenue in Chicago and provided the name of Chester Grochowski as Under

           Construction’s registered agent. 3 The affidavit of the special process server indicated that

           Under Construction was served at the Oxford Avenue address on September 24, 2020, and that

           a copy of the summons and complaint were personally served on Grochowski.

¶ 11           On November 6, 2020, plaintiff filed a motion for default judgment against Under

           Construction, which had failed to file an appearance or answer. On November 16, 2020, the

           trial court granted plaintiff’s motion, further finding that Under Construction would be bound

           by any decision by the court as to the issues raised in the complaint. 4

¶ 12           On January 5, 2021, plaintiff filed a motion for summary judgment. The sole argument

           raised in the motion for summary judgment was that Under Construction had breached the

           cooperation clause of the insurance policy and, therefore, plaintiff was not obligated to defend

               3
                  According to the corporate file detail report available on the Secretary of State’s website,
       Grochowski has been the registered agent of Under Construction since April 2015. See Maldonado v.
       Creative Woodworking Concepts, Inc., 296 Ill. App. 3d 935, 938 (1998) (“records from the Illinois
       Secretary of State’s Office *** are public records that this court may take judicial notice of”).
                4
                  The corporate file detail report available on the Secretary of State’s website indicates that Under
       Construction was involuntarily dissolved on November 10, 2020. Neither party claims that this
       dissolution has any effect on the issue of whether Under Construction had violated the cooperation clause
       as of the date of the filing of the complaint.
                                                             5
       No. 1-21-0600

           or indemnify it for any claims arising from Szymanski’s alleged injury. 5 Plaintiff claimed that

           it had exercised a reasonable degree of diligence in seeking Under Construction’s cooperation,

           making “numerous” phone calls and sending “repeated” letters in an effort to discuss

           Szymanski’s claim with Under Construction, beginning in January 2020. In June 2020,

           plaintiff’s “Special Investigation Unit” attempted to contact Under Construction through e-

           mails and phone calls, but was unsuccessful. In July 2020, a representative from the special

           investigation unit physically visited the address that was listed with the Secretary of State’s

           office in an attempt to make contact, but was able only to leave a business card and letter. 6

           Plaintiff claimed that Under Construction’s silence “constitute[d] a willful refusal to

           cooperate.” Plaintiff further claimed that it was “greatly prejudiced” in its ability to obtain all

           necessary facts to defend the claim. Accordingly, plaintiff claimed that the breach of the

           insurance policy’s cooperation clause meant that plaintiff had no duty to defend or indemnify

           Under Construction with respect to Szymanski’s claim as a matter of law.

¶ 13           Attached to the motion for summary judgment was the affidavit of Jennifer Shepherd, a

           claims representative with plaintiff, who was assigned to handle Szymanski’s claim. In her

           affidavit, Shepherd averred that, through its investigation, plaintiff had attempted to contact

           Under Construction in the following ways: (1) “January 3, 2020: Telephone call unanswered,

           voicemail full”; (2) “January 7, 2020: Telephone call unanswered, voicemail full”; (3)

           “January 8, 2020: Contact letter sent to insured. No response received”; (4) “January 20, 2020:

               5
                  Indeed, in its reply in support of the motion for summary judgment, plaintiff made clear that
       Szymanski’s employment status at the time of his accident was “immaterial[ ] to Plaintiff’s argument
       based on UNDER CONSTRUCTION’s non-cooperation. Non-cooperation alone is a sufficient basis to
       deny coverage for Szymanski’s claim, as it unambiguously breaches the terms of the Policy.”
                6
                  The motion does not specify which address was visited; the corporate file detail report available
       on the Secretary of State’s website lists both the Lincoln Avenue address and the Oxford Avenue address
       of the registered agent.
                                                            6
       No. 1-21-0600

          Telephone call unanswered, voicemail full; Contact letter sent to insured. No response

          received”; (5) “February 27, 2020: Telephone call unanswered, voicemail full”; (6) “March

          12, 2020: Cooperation letter sent to insured. No response received”; (7) “April 2, 2020: Letter

          sent to insured requesting payroll records. No response received”; (8) “April 10, 2020:

          Telephone call unanswered, voicemail full”; (9) “April 17, 2020: Reservation of rights letter

          sent to insured. No response received”; (10) “June 29, 2020: Special Investigation Unit email

          to insured. No response received”; (11) “July 2, 2020: Special Investigation Unit telephone

          call unanswered. Voicemail full”; (12) “July 6, 2020: Special Investigation Unit telephone call

          unanswered. Voicemail full”; (13) “July 7, 2020: Special Investigation Unit in-person contact

          attempt at insured’s address. No answer at the door, business card and letter left at address. No

          response”; and (14) “July 9, 2020: Special Investigation Unit in-person contact attempt at

          insured’s address. No response.” Shepherd’s affidavit did not indicate the phone number that

          was called or the address that was visited, nor did it indicate the time of day that these calls or

          visits occurred. However, attached to her affidavit were several of the letters referenced in the

          affidavit, which we relate in detail. We note that only one of these letters—the reservation of

          rights letter—indicates that it was sent by certified mail, and Shepherd’s affidavit does not

          include details as to whether any of the letters were returned as undelivered or whether anyone

          signed for the certified letter.

¶ 14          A January 8, 2020, letter from Shepherd to Under Construction was sent to the Lincoln

          Avenue address and provided, in full:

                       “Dear—Under Construction and Remodeling:

                       COUNTRY Mutual Insurance Company, Bloomington, IL provides your Workers’

                  Compensation. We have recently been informed of your employee’s injury.

                                                        7
       No. 1-21-0600

                       Please contact me at the number listed below at your earliest convenience to discuss

                 this claim.”

¶ 15         A January 20, 2020, letter from Shepherd to Under Construction was sent to the Lincoln

          Avenue address and provided, in full:

                       “Dear—Under Construction and Remodeling:

                       Your above named employee has filed an Application for Adjustment of Claim with

                 the Illinois Workers’ Compensation Commission in regard to the alleged injuries

                 received on the date mentioned above.

                       The matter is receiving our attention and you need not appear at any hearing unless

                 you are contacted by one of our representatives or by someone from our attorney’s

                 office. If you have any questions regarding this matter, please do not hesitate to contact

                 me direct[ly].

                       If in the future you receive any additional correspondence regarding this matter,

                 please forward to the undersigned immediately.”

          On the same day, Shepherd also sent another letter to Under Construction at the Lincoln

          Avenue address, which was identical to the January 8 letter, except that the words “SECOND

          REQUEST” appeared at the top of the letter.

¶ 16         A March 12, 2020, letter from Shepherd to Under Construction was sent to the Lincoln

          Avenue address. After quoting part four of the insurance policy, which concerned Under

          Construction’s duties in the event of an injury, the letter provided:

                       “We have repeatedly called and written your office in an attempt to obtain the

                 necessary information required in order to provide the injured employee with benefits

                 that may be owed. You have ignored our requests.

                                                        8
       No. 1-21-0600

                       Your actions may have prejudiced the rights of COUNTRY Mutual under the

                 policy to settle and/or defend this claim. To the extent that you claim any rights under

                 Policy # AW9225221 in connection to this matter, in order to preserve any such

                 claimed right, you must cooperate with COUNTRY Mutual in all actions it undertakes

                 on your behalf now and in the future. Failure to cooperate is a breach of your insurance

                 contact, which could excuse COUNTRY Mutual from any obligation to continue

                 providing coverage applicable under the policy.

                       Under the Workers’ Compensation Act of the State of Illinois the employer is

                 responsible for all benefits owed the employee under the Act. Should COUNTRY

                 Mutual be excused by the court from any obligation under Policy # AW9225221, Under

                 Construction And Remodeling Inc may be held responsible for all benefits owed the

                 injured employee under the Act.

                       Your cooperation is required immediately in contacting me at the number listed

                 below so I may complete my investigation of the claim.

                       Continued cooperation will be required throughout the duration of this claim.”

                 (Emphases in original.)

¶ 17         An April 2, 2020, letter from Shepherd to Under Construction was sent to the Lincoln

          Avenue address and requested that Under Construction complete an enclosed payroll record

          on Szymanski. An April 17, 2020, reservation of rights letter from Shepherd to Under

          Construction was sent to the Lincoln Avenue address via both regular mail and certified mail

          and provided that plaintiff was defending Under Construction with respect to Szymanski’s

          claim but that its position was that it owed Under Construction no duty to defend or indemnify

          it because Under Construction made material misrepresentations in its application for

                                                      9
       No. 1-21-0600

          insurance and because Under Construction had failed to cooperate with plaintiff’s

          investigation. A copy of this reservation of rights letter was sent to Spiewak, the insurance

          agent who had issued the policy.

¶ 18         Finally, a June 29, 2020, e-mail from Tim Bates, identified as a representative from

          plaintiff’s special investigations unit to Kaznecki, the owner of Under Construction, was sent

          to the e-mail address listed in the insurance audit and provided, in full:

                       “Mr. Kaznecki,

                       We have been trying to contact you to discuss the facts & circumstances regarding

                 the claim noted above. It is important that we speak to you about the incident as it is

                 relevant to our investigation. Upon receipt of this correspondence, please contact me

                 to discuss. I look forward to hearing from you.”

          We note that this e-mail was sent only to the address included in the insurance audit and not to

          the address listed on the original insurance application.

¶ 19         In response to plaintiff’s motion for summary judgment, Szymanski claimed that he was

          covered under the insurance policy and that any lack of cooperation by Under Construction

          did not breach the insurance policy. With respect to the cooperation clause, Szymanski argued

          that plaintiff failed to establish how it was prejudiced by Under Construction’s alleged failure

          to cooperate, and further argued that plaintiff had not displayed a reasonable degree of due

          diligence in seeking Under Construction’s participation. Szymanski claimed that there could

          have been a number of reasons for Under Construction’s silence, and that its failure to respond

          to the letters and phone calls did not necessarily mean that it was willfully noncooperative.

¶ 20         On May 4, 2021, the trial court entered an order granting plaintiff’s motion for summary

          judgment. The court found that it was undisputed that Under Construction had not participated

                                                       10
       No. 1-21-0600

          at all in the claim or in the resulting litigation, “despite Plaintiff attempting no less than 15

          times over several months to contact it, including phone calls, letters, and even a special

          investigator sent to its registered address and that of its president individually.” The court found

          that there was no basis for requiring any further efforts, and that Szymanski’s “speculative

          arguments about what might have been done” were unpersuasive, especially given that

          Szymanski supplied no affidavit or other evidence in response to the motion for summary

          judgment. Accordingly, the court found that plaintiff had no duty to defend or indemnify Under

          Construction in connection with Szymanski’s alleged injury and entered judgment in plaintiff’s

          favor.

¶ 21          Szymanski filed a timely notice of appeal, and this appeal follows.

¶ 22                                             ANALYSIS

¶ 23          On appeal, the sole question we are asked to consider is whether the trial court erred in

          granting summary judgment in plaintiff’s favor due to Under Construction’s breach of the

          insurance policy’s cooperation clause. A trial court is permitted to grant summary judgment

          only “if 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 2018). The trial court must

          view these documents and exhibits in the light most favorable to the nonmoving party. Home

          Insurance Co. v. Cincinnati Insurance Co., 213 Ill. 2d 307, 315 (2004). We review a trial

          court’s decision to grant a motion for summary judgment de novo. Outboard Marine Corp. v.

          Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992). De novo consideration means we

          perform the same analysis that a trial judge would perform. XL Specialty Insurance Co. v.

          Performance Aircraft Leasing, Inc., 2019 IL App (1st) 181031, ¶ 62. “ ‘The construction of an

                                                        11
       No. 1-21-0600

          insurance policy and a determination of the rights and obligations thereunder are questions of

          law for the court which are appropriate subjects for disposition by way of summary

          judgment.’ ” Steadfast Insurance Co. v. Caremark Rx, Inc., 359 Ill. App. 3d 749, 755 (2005)

          (quoting Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384, 391

          (1993)).

¶ 24         “Summary judgment is a drastic measure and should only be granted if the movant’s right

          to judgment is clear and free from doubt.” Outboard Marine Corp., 154 Ill. 2d at 102. However,

          “[m]ere speculation, conjecture, or guess is insufficient to withstand summary judgment.”

          Sorce v. Naperville Jeep Eagle, Inc., 309 Ill. App. 3d 313, 328 (1999). The party moving for

          summary judgment bears the initial burden of proof. Nedzvekas v. Fung, 374 Ill. App. 3d 618,

          624 (2007). The movant may meet his burden of proof either by affirmatively showing that

          some element of the case must be resolved in his favor or by establishing “ ‘that there is an

          absence of evidence to support the nonmoving party’s case.’ ” Nedzvekas, 374 Ill. App. 3d at

          624 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)). “ ‘The purpose of summary

          judgment is not to try an issue of fact but *** to determine whether a triable issue of fact

          exists.’ ” Schrager v. North Community Bank, 328 Ill. App. 3d 696, 708 (2002) (quoting Luu

          v. Kim, 323 Ill. App. 3d 946, 952 (2001)). We may affirm on any basis appearing in the record,

          whether or not the trial court relied on that basis or its reasoning was correct. Ray Dancer, Inc.

          v. DMC Corp., 230 Ill. App. 3d 40, 50 (1992).

¶ 25         In the case at bar, the trial court found that plaintiff did not owe Under Construction any

          duties under the insurance policy. In Illinois, the duties to defend and to indemnify are not

          coextensive, with the obligation to defend being broader than the obligation to pay.

          International Minerals & Chemical Corp. v. Liberty Mutual Insurance Co., 168 Ill. App. 3d

                                                       12
       No. 1-21-0600

          361, 366 (1988). In determining whether an insurer has a duty to defend its insured, a court

          looks to the allegations in the underlying complaint and compares them to the relevant

          provisions of the insurance policy. Outboard Marine Corp., 154 Ill. 2d at 107-08. This

          principle has been referred to as the “ ‘eight corners rule.’ ” Country Mutual Insurance Co. v.

          Dahms, 2016 IL App (1st) 141392, ¶ 37; see also Farmers Automobile Insurance Ass’n v.

          Country Mutual Insurance Co., 309 Ill. App. 3d 694, 698 (2000). “If the facts alleged in the

          underlying complaint fall within, or potentially within, the policy’s coverage, the insurer’s duty

          to defend arises.” Outboard Marine Corp., 154 Ill. 2d at 108. However, if it is clear from the

          face of the complaint that the allegations fail to state facts that bring the case within, or

          potentially within, the policy’s coverage, an insurer may properly refuse to defend. State Farm

          Fire & Casualty Co. v. Hatherley, 250 Ill. App. 3d 333, 336 (1993) (citing United States

          Fidelity & Guaranty Co. v. Wilkin Insulation Co., 144 Ill. 2d 64, 73 (1991)).

¶ 26         The basis for the trial court’s decision in the case at bar was its finding that Under

          Construction breached the insurance policy’s cooperation clause with respect to plaintiff’s

          investigation of Szymanski’s claim. The purpose of a cooperation clause in an insurance policy

          is to prevent collusion between the insured and the injured person, as well as to make the

          insurer’s investigation possible. M.F.A. Mutual Insurance Co. v. Cheek, 66 Ill. 2d 492, 496

          (1977). The insurer typically has little or no knowledge of the facts surrounding a claimed loss,

          while the insured has exclusive knowledge of such facts; accordingly, the insurer is dependent

          on its insured for fair and complete disclosure. Waste Management, Inc. v. International

          Surplus Lines Insurance Co., 144 Ill. 2d 178, 204 (1991); Founders Insurance Co. v. Shaikh,

          405 Ill. App. 3d 367, 374 (2010). “While an insured has no obligation to assist the insurer in

          any effort to defeat recovery of a proper claim, the cooperation clause does obligate the insured

                                                       13
       No. 1-21-0600

          to disclose all of the facts within his knowledge and otherwise to aid the insurer in its

          determination of coverage under the policy.” Waste Management, 144 Ill. 2d at 204; Shaikh,

          405 Ill. App. 3d at 374; Direct Auto Insurance Co. v. Reed, 2017 IL App (1st) 162263, ¶ 25.

¶ 27          Where the insurer has sought a declaration of no coverage based on the insured’s failure to

          cooperate, as in the case at bar, a prima facie case consists of two elements: (1) a breach of the

          cooperation clause by the insured and (2) resulting substantial prejudice to the insurer. Reed,

          2017 IL App (1st) 162263, ¶ 25. On appeal, Szymanski contends that plaintiff failed to

          establish either element and, therefore, the trial court erred in granting summary judgment in

          plaintiff’s favor.

¶ 28          The burden of establishing a breach of the cooperation clause rests on the insurer. Cheek,

          66 Ill. 2d at 496. In order to establish such a breach, “the insurer must show that it exercised a

          reasonable degree of diligence in seeking the insured’s participation and that the insured’s

          absence was due to a refusal to cooperate.” Shaikh, 405 Ill. App. 3d at 374 (citing Mazzuca v.

          Eatmon, 45 Ill. App. 3d 929, 932 (1977)). The insurer must act in good faith to secure the

          insured’s cooperation. American Access Casualty Co. v. Alassouli, 2015 IL App (1st) 141413,

          ¶ 25. “ ‘Good faith is evaluated not only in terms of what the insurer did to secure cooperation,

          but also in terms of what the insured failed to do.’ ” Alassouli, 2015 IL App (1st) 141413, ¶ 25

          (quoting Wallace v. Woolfolk, 312 Ill. App. 3d 1178, 1180 (2000)). Both the determination of

          whether the insurer exercised reasonable diligence and whether the insured’s refusal to

          cooperate was willful are made by examining the particular facts of the case and must be shown

          by a preponderance of the evidence. United Automobile Insurance Co. v. Buckley, 2011 IL

          App (1st) 103666, ¶ 27; Alassouli, 2015 IL App (1st) 141413, ¶ 25; Lappo v. Thompson, 87

          Ill. App. 3d 253, 254-55 (1980).

                                                       14
       No. 1-21-0600

¶ 29         In the case at bar, the trial court found that plaintiff had exercised due diligence in

          attempting to secure Under Construction’s cooperation, and that it found “no basis for

          requiring any further efforts.” However, we cannot say that the record establishes as a matter

          of law that plaintiff exercised reasonable diligence in seeking Under Construction’s

          participation, or that Under Construction willfully refused to participate in plaintiff’s

          investigation of Szymanski’s claim.

¶ 30         The trial court found that plaintiff had “attempt[ed] no less than 15 times over several

          months to contact [Under Construction], including phone calls, letters, and even a special

          investigator sent to its registered address and that of its president individually.” A closer

          examination of these efforts, however, reveals that most of them either did not reach Under

          Construction or did not make clear that Under Construction was required to respond. First,

          between January 3, 2020, and the filing of the declaratory judgment complaint in April 2020,

          Shepherd’s affidavit avers that plaintiff called Under Construction five times. We note that

          Shepherd’s affidavit does not indicate the phone number called or the person sought to be

          reached, only that plaintiff “attempted to contact representatives from Under Construction.”

          We also note that, while the dates of the calls establish that they were made during the typical

          Monday-to-Friday workweek, there is no information as to the times of the calls. As plaintiff

          acknowledges, Under Construction is a contractor, providing services such as siding

          installation and interior remodeling. It is not unusual for contractors to be available for phone

          calls only early in the morning or late in the day—in short, when they are not on the jobsite.

          There is no indication whether plaintiff took this into consideration or varied the times of the

          calls, making it impossible to gauge whether the calls were reasonably calculated to reach

          someone. Most importantly, according to the affidavit, each of those phone calls were

                                                       15
       No. 1-21-0600

          unanswered and the voicemail was full. As a result, no message would have been conveyed to

          Under Construction, as there was no one who spoke to plaintiff’s representative and no

          voicemail was left. Thus, there is no evidence that Under Construction would have been aware

          of these contact attempts.

¶ 31         Next, as to the letters, Shepherd’s affidavit and the letters attached thereto show that,

          between January 8, 2020, and the filing of the complaint, plaintiff sent Under Construction six

          letters. As an initial matter, we have no way of knowing whether these letters were received.

          Only one of them—the reservation of rights letter—was sent via certified mail in addition to

          being sent by regular mail, and Shepherd’s affidavit does not indicate whether any of the letters

          were returned as undeliverable or if anyone signed for the certified letter. Additionally, only

          one of those letters explicitly stated that Under Construction’s cooperation was required under

          the policy. See Alassouli, 2015 IL App (1st) 141413, ¶ 34 (considering fact that insurer never

          informed insured of the consequences of noncooperation in finding insurer’s efforts

          insufficient). The nearly-identical letters of January 8 and January 20 merely requested that

          Under Construction “contact me at the number listed below at your earliest convenience to

          discuss this claim,” without indicating that such cooperation was required or that there was any

          urgency behind the request. Additionally, a second letter on January 20 implied that Under

          Construction’s participation was not needed, providing that “[t]he matter is receiving our

          attention and you need not appear at any hearing unless you are contacted by one of our

          representatives or by someone from our attorney’s office.” The letter sent on March 12 is the

          only letter that explicitly states that Under Construction’s cooperation is required under the

          insurance policy and that a failure to cooperate constitutes a breach of the policy. Two

          additional letters sent after this date contain only a request for payroll records—making no

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       No. 1-21-0600

          mention of the cooperation clause—and the reservation of rights letter, in which plaintiff sets

          forth its position that Under Construction has breached the policy. Thus, there was only one

          letter sent to Under Construction that would have placed it on notice that it was required to

          cooperate with plaintiff’s investigation of Szymanski’s claim. We must also note that each

          letter was sent to the Lincoln Avenue address, despite the fact that plaintiff had received no

          responses to these letters. None of the letters was sent to Under Construction’s registered agent,

          who had an address on Oxford Avenue. Moreover, none of these letters were sent to the Des

          Plaines address contained in the original insurance application, which may have been

          Kaznecki’s home address.

¶ 32          Finally, as to the special investigator, we note that, according to Shepherd’s affidavit,

          plaintiff’s special investigation unit became involved only at the end of June, two months after

          the filing of the declaratory judgment complaint. While the special investigator’s actions were

          slightly more extensive and varied from the methods already tried—consisting of an e-mail,

          two telephone calls, and two in-person contact attempts—the efforts made after plaintiff had

          already filed a complaint seeking to relieve itself of liability do not mitigate against earlier

          shortcomings. See Alassouli, 2015 IL App (1st) 141413, ¶ 35 (finding insurer’s retention of a

          private investigator after filing the complaint and several years after the accident to be “too

          little, too late”).

¶ 33          Furthermore, the special investigator’s actions demonstrate only slightly greater efforts. As

          with the earlier telephone calls, there is no indication what phone number the special

          investigator called or who he was trying to reach, and there is no indication what time the

          telephone calls were made. Both calls were also unanswered and the voicemail was full,

          meaning that Under Construction may have had no way of knowing of the attempted contact.

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       No. 1-21-0600

          As to the e-mail, the e-mail was sent only to one of the two e-mail addresses affiliated with

          Under Construction—it was not sent to the e-mail address listed on the original insurance

          application. The e-mail itself also does not explain that Under Construction was required to

          cooperate or the consequences of noncooperation, only providing that “[i]t is important that

          we speak to you about the incident as it is relevant to our investigation.” Finally, Shepherd’s

          affidavit indicates that the special investigator made an “in-person contact attempt at insured’s

          address” on two occasions in July 2020. There is no indication which address was visited or

          what time the visit was made. There is also no detail as to the type of location the special

          investigator visited—for instance, whether it appeared that the business was operating from

          that address or whether it was some other type of building—which would have been useful in

          determining whether Under Construction was willfully refusing to cooperate. See, e.g., Shaikh,

          405 Ill. App. 3d at 370 (when a special investigator visited the insured’s purported residential

          address, she discovered, inter alia, a commercial property and a muffler shop). Shepherd also

          averred that the special investigator left a business card and letter during one of the visits, but

          no such letter appears in the record, so we have no way of knowing what was communicated

          in that letter.

¶ 34          Examining the evidence in the record, we cannot find that, as a matter of law, plaintiff

          established that it exercised a reasonable degree of diligence in seeking Under Construction’s

          participation and that the resulting silence was due to a refusal to cooperate. As noted, an

          insurer’s good faith in seeking the insured’s cooperation “ ‘is evaluated not only in terms of

          what the insurer did to secure cooperation, but also in terms of what the insured failed to do.’

          ” Alassouli, 2015 IL App (1st) 141413, ¶ 25 (quoting Wallace, 312 Ill. App. 3d at 1180). While

          this analysis is fact-specific, we nevertheless find it instructive to consider efforts that other

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       No. 1-21-0600

          courts have found to be either sufficient—or insufficient—to establish diligence in seeking an

          insured’s cooperation.

¶ 35         An example of a case in which the insurer’s efforts were found to be insufficient is

          Alassouli. In that case, the insured caused a vehicular accident by making a left turn in front of

          another vehicle, and the driver filed a claim against the insured’s insurance company.

          Alassouli, 2015 IL App (1st) 141413, ¶ 1. In investigating the claim, a claims representative

          for the insurer called the insured, who answered the call and identified himself. Alassouli, 2015

          IL App (1st) 141413, ¶ 5. However, when the claims representative informed the insured that

          the call would be recorded, the insured disconnected the call; the claims representative

          immediately called back, but the call went to voicemail, and the claims representative left a

          detailed message concerning the need for additional information. Alassouli, 2015 IL App (1st)

          141413, ¶ 5. The insurer called three more times, leaving messages, but the insured never

          responded. Alassouli, 2015 IL App (1st) 141413, ¶ 5. The insurer then conducted a skip trace,

          which revealed nothing about the insured’s whereabouts. Alassouli, 2015 IL App (1st) 141413,

          ¶ 5. In total, the insurer’s efforts spanned 13 days and included five phone calls and a skip

          trace. Alassouli, 2015 IL App (1st) 141413, ¶ 5. The insurer then filed a declaratory judgment

          complaint, seeking a finding that it owed no duty to defend or indemnify the insured based on

          his breach of the insurance policy’s cooperation clause. Alassouli, 2015 IL App (1st) 141413,

          ¶ 6. After the filing of the complaint, and approximately two years after the accident, the insurer

          retained a private investigator to locate the insured, who engaged in additional (unsuccessful)

          efforts to locate him, including visiting his known address, speaking to neighbors in his

          apartment building, conducting another skip trace, and visiting another address revealed

          through the skip trace. Alassouli, 2015 IL App (1st) 141413, ¶ 10.

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       No. 1-21-0600

¶ 36         On appeal, the Alassouli court found that the insurer had not exhibited reasonable diligence

          in seeking the insured’s cooperation, and that its efforts were “cursory.” Alassouli, 2015 IL

          App (1st) 141413, ¶ 36. The court found that, “as a matter of law, five attempted phone calls

          and a skip trace in the matter of less than two weeks and nothing more until a declaratory

          judgment petition is on the line does not suffice to claim an insurer used reasonable diligence

          to secure the insured’s cooperation.” Alassouli, 2015 IL App (1st) 141413, ¶ 30. The court

          noted that the insurer had made no attempt to visit the insured’s known address or sent letters,

          but summarily concluded that the insured was not cooperating after he did not return phone

          calls. Alassouli, 2015 IL App (1st) 141413, ¶ 30. The court also found that the insured’s failure

          to return phone calls served as constructive notice that a problem existed. Alassouli, 2015 IL

          App (1st) 141413, ¶ 33. The court found that the insured had made only minimal effort to

          contact the insured after he disconnected the first phone call, “and much more could and should

          have been undertaken to procure his cooperation,” such as mailing him letters, visiting his

          address, or pursuing alternative methods of talking to him. Alassouli, 2015 IL App (1st)

          141413, ¶ 33. While the court noted that it could not state with any certainty that those efforts

          would have been fruitful, “their absence demonstrates a cursory investigation.” Alassouli, 2015

          IL App (1st) 141413, ¶ 34. The court also pointed out that there was no evidence that the

          insurer had ever explained to the insured the consequences of noncooperation, meaning that

          his failure to cooperate could be explained by a lack of notice as to what was expected.

          Alassouli, 2015 IL App (1st) 141413, ¶ 34. Finally, the Alassouli court found that the insurer’s

          retention of a private investigator did not did not minimize its shortcomings, as it hired the

          private investigator after it had already filed its declaratory judgment complaint and long after

          the accident. Alassouli, 2015 IL App (1st) 141413, ¶ 35. While the court acknowledged the

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       No. 1-21-0600

          private investigator’s investigation was more active, the court found that it did nothing to

          absolve the insurer of its duty and was “too little, too late.” Alassouli, 2015 IL App (1st)

          141413, ¶ 35.

¶ 37         By contrast, Shaikh provides an example of a case in which the insurer’s efforts were found

          to be sufficient. In that case, the insured was involved in an automobile accident and was sued

          by the other driver. Shaikh, 405 Ill. App. 3d at 368-69. The insured called his insurance

          company and faxed over a copy of the complaint; during the telephone conversation, the

          insured provided his current address and phone number. Shaikh, 405 Ill. App. 3d at 369.

          However, later that year, an attorney hired by the insurer to provide the insured’s legal defense

          informed the insurer that correspondence sent to the insured had been returned as

          undeliverable. Shaikh, 405 Ill. App. 3d at 369. When the insurer’s representative called the

          insured’s telephone number, the representative learned that service was disconnected. Shaikh,

          405 Ill. App. 3d at 369.

¶ 38         The insurer then turned the matter over to its special investigation unit, which conducted a

          database search on LexisNexis that returned the insured’s two most recent addresses. Shaikh,

          405 Ill. App. 3d at 369. The investigator visited both addresses in person, neither of which

          were the insured’s actual residence, and spoke with the occupants about their knowledge of the

          insured. Shaikh, 405 Ill. App. 3d at 370. The insurer then retained a private investigator to

          locate the insured and hand deliver a letter to him; the private investigator found another

          address for the insured and personally visited it and spoke to its occupants about the insured,

          who did not reside there. Shaikh, 405 Ill. App. 3d at 370. The private investigator also located

          the insured’s son and called him to inquire about his father, but the son said he had not spoken

          to his father in years. Shaikh, 405 Ill. App. 3d at 370. The private investigator then went to the

                                                       21
       No. 1-21-0600

          address located on the insured’s application for insurance and verified that he was no longer

          residing there. Shaikh, 405 Ill. App. 3d at 370. The insurer then sent the insured letters at three

          different addresses; when one of the addresses showed a forwarding address of the son’s

          address, the insurer pursued that lead by sending a letter to the son’s address and having the

          private investigator personally visit the property and leave a copy of the letter at the door when

          there was no answer. Shaikh, 405 Ill. App. 3d at 370-71. The insurer contacted the son by

          telephone again, and was informed that the insured might be in prison, so conducted research

          to verify that the insured was not incarcerated. Shaikh, 405 Ill. App. 3d at 371. After the insured

          failed to appear at the mandatory arbitration hearing in the underlying automobile case, the

          insurer filed a declaratory judgment action against him. Shaikh, 405 Ill. App. 3d at 371.

¶ 39         On appeal, the Shaikh court found that the insurer had diligently attempted to secure the

          insured’s cooperation. Shaikh, 405 Ill. App. 3d at 378. The court found that the insurer “used

          sources that were likely to disclose [the insured’s] whereabouts, its search was sufficiently

          broad and successful at producing leads, and it pursued and exhausted every lead it generated.”

          Shaikh, 405 Ill. App. 3d at 378. The court noted that, within days of being alerted to a potential

          problem with the insured’s cooperation, the insurer was searching databases and visiting his

          last-reported addresses, and maintained an active search, including retaining an outside

          investigation firm. Shaikh, 405 Ill. App. 3d at 378. The insurer continued pursuing leads until

          the investigation “went cold” and none of the efforts generated any further leads. Shaikh, 405

          Ill. App. 3d at 378.

¶ 40         In the case at bar, we find the efforts undertaken by plaintiff to be much more similar to

          those in Alassouli than in Shaikh. While plaintiff made basic efforts to reach Under

          Construction, it did not take any action when it received no response as a result of those efforts.

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No. 1-21-0600

   As noted, courts have found that a lack of response to communication attempts can serve as

   constructive notice that a problem existed. See, e.g., Johnson v. Wade, 47 Ill. App. 3d 610, 615

   (1977); Lappo, 87 Ill. App. 3d at 255. Here, when plaintiff repeatedly discovered a full

   voicemail box upon calling Under Construction, it could have shifted its strategy—for

   instance, reaching out via e-mail, as its special investigator later did. Similarly, when it

   received no response to its letters, plaintiff could have investigated whether that address was a

   valid one or if there was another address to be used. Indeed, the special process server retained

   by plaintiff to serve Under Construction discovered another address that would have been

   simple for plaintiff to uncover upon even a cursory search—the address of Under

   Construction’s registered agent, located on Oxford Avenue. There is no indication that plaintiff

   ever directed any communication to the registered agent or to this address, despite the fact that

   Grochowski had served as the registered agent since 2015. Plaintiff could also have attempted

   to contact Under Construction at the address in Des Plaines listed in the application for

   insurance, as the investigator in Shaikh did. The lack of response should have been even more

   unusual to plaintiff given the fact that there is no indication that Under Construction had ever

   been unreachable previously. Under Construction had been insured by plaintiff since 2016,

   with the policy renewing several times, meaning that plaintiff would have had contact with the

   insurance agent at least annually. Additionally, the insurance audit conducted by plaintiff

   included Under Construction’s payroll records, including employee names and wages.

   Presumably, this information would have come from the business itself, meaning that Under

   Construction would have been cooperating with plaintiff’s requests for information as late as

   the end of 2019. Thus, its silence when plaintiff contacted it in early 2020 should have

   suggested that further investigation was necessary.

                                                23
       No. 1-21-0600

¶ 41         Moreover, there are several other parties who plaintiff could have contacted to reach Under

          Construction. It could have begun by contacting Spiewak, the insurance agent who handled

          Under Construction’s insurance policy, to discover if she had any contact with Under

          Construction or any ideas of how to reach a representative from the company. Further, plaintiff

          did not contact Spiewak to learn if she could assist in obtaining Under Construction’s

          cooperation, and did not send her a copy of the April 4, 2020, cooperation letter. It could also

          have contacted Szymanski, the injured employee—he certainly would have had an interest in

          ensuring Under Construction’s cooperation. Plaintiff could have asked Szymanski if he had

          any different contact information or way to reach his employer. Similarly, plaintiff could have

          contacted any of the workers listed on the audit that it had completed shortly before plaintiff’s

          claim to discover if any of them had any relevant information. Instead, plaintiff did nothing to

          discover alternative methods of contacting Under Construction. As in Alassouli, while we

          cannot say that these efforts would have been successful, “their absence demonstrates a cursory

          investigation” (Alassouli, 2015 IL App (1st) 141413, ¶ 34).

¶ 42         We also must note that, unlike in Shaikh, it was not until after the filing of the declaratory

          judgment lawsuit that plaintiff retained the services of its special investigation unit, suggesting

          a lack of seriousness to the search. Before that point, plaintiff relied solely on making fruitless

          phone calls and sending letters to the same unsuccessful address. There is no indication that

          plaintiff even did a search of the Secretary of State’s website, which is the most basic of

          searches to undertake in discovering how to reach a corporation.

¶ 43         Instead, it appears that plaintiff made several rote attempts to reach Under Construction

          and, when those failed, filed suit seeking a declaration that the cooperation clause had been

          violated. We cannot say that these efforts were sufficient to demonstrate plaintiff’s diligence

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       No. 1-21-0600

          or that Under Construction willfully refused to cooperate with plaintiff, and we certainly

          cannot find this to be the case as a matter of law, as required for a grant of summary judgment.

          We must also note that all of this occurred at the beginning of the COVID-19 pandemic, and

          continued during the pandemic. We do not know if the company was even in business during

          that period of time. In fact, we know that as of the end of 2020, the corporation was

          involuntarily dissolved. That highlights why it would have been so important for plaintiff to

          contact Kaznecki at the address contained in the initial insurance application, which may have

          been his home address. Accordingly, we must reverse the trial court’s grant of summary

          judgment in plaintiff’s favor, and have no need to consider whether plaintiff established the

          second element—that the lack of cooperation substantially prejudiced plaintiff’s ability to

          investigate Szymanski’s claim.

¶ 44                                          CONCLUSION

¶ 45         For the reasons set forth above, the trial court erred in granting summary judgment in

          plaintiff’s favor because plaintiff did not demonstrate as a matter of law that it made reasonable

          efforts to secure Under Construction’s cooperation and that Under Construction willfully

          refused to cooperate in plaintiff’s investigation of Szymanski’s claim.

¶ 46         Reversed and remanded.

                                                       25
No. 1-21-0600

                                  No. 1-21-0600

Cite as:                 Country Mutual Insurance Co. v. Under Construction &
                         Remodeling, Inc., 2021 IL App (1st) 210600

Decision Under Review:   Appeal from the Circuit Court of Cook County, No. 20-CH-
                         03915; the Hon. David B. Atkins, Judge, presiding.

Attorneys                David M. Barish and Abdu-Raheem Igbadume, of Katz,
for                      Friedman, Eagle, Eisenstein, Johnson, Bareck & Bertuca, P.C., of
Appellant:               Chicago, for appellant.

Attorneys                David W. Porter and Rita Louise Lowery Gitchell, of Chilton
for                      Yambert Porter LLP, of Geneva, for appellee.
Appellee:

                                        26