Court Opinion

ID: 3145873
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:11:32.983894+00
Date Added: 2024-06-11T12:13:49.077026
License: Public Domain

ILLINOIS OFFICIAL REPORTS
                                        Appellate Court

           Progressive Direct Insurance Co. v. Jungkans, 2012 IL App (2d) 110939

Appellate Court            PROGRESSIVE DIRECT INSURANCE COMPANY, Plaintiff-
Caption                    Appellee, v. KYLE JUNGKANS, Defendant-Appellant.

District & No.             Second District
                           Docket No. 2-11-0939

Filed                      June 27, 2012

Held                       An insurance company was not entitled to a declaration that its insured
(Note: This syllabus       violated their policy’s cooperation clause when the insured settled with
constitutes no part of     the driver of the vehicle that injured him, for the limits of the driver’s
the opinion of the court   policy, without notice to the insurer, where the driver was judgment proof
but has been prepared      and the insurer was not prejudiced by the settlement.
by the Reporter of
Decisions for the
convenience of the
reader.)

Decision Under             Appeal from the Circuit Court of Kendall County, No. 10-MR-7; the
Review                     Hon. Timothy J. McCann, Judge, presiding.

Judgment                   Judgment for plaintiff reversed; judgment for defendant entered.
Counsel on                 Michael W. Rathsack, of Law Offices of Michael W. Rathsack, of
Appeal                     Chicago, and Kathleen T. Zellner and Douglas H. Johnson, both of
                           Kathleen T. Zellner & Associates, P.C., of Downers Grove, for appellant.

                           Bill Porter and Reagan F. Goins, both of Chilton, Yambert & Porter, LLP,
                           of Geneva, for appellee.

Panel                      JUSTICE McLAREN delivered the judgment of the court, with opinion.
                           Justices Zenoff and Birkett concurred in the judgment and opinion.

                                             OPINION

¶1          Defendant, Kyle Jungkans, was injured while he was riding in a car driven by Billy
        Watts. He settled with Watts and Watts’ insurer, State Farm Insurance Companies (State
        Farm), for State Farm’s policy limit, then sought underinsured motorist (UIM) coverage
        under his policy with plaintiff, Progressive Direct Insurance Company. Plaintiff denied
        coverage, on the basis that defendant’s failure to notify it in advance of the settlement
        violated the policy’s cooperation clause. Plaintiff filed an action for a declaratory judgment
        (735 ILCS 5/2-701 (West 2010)). The trial court granted plaintiff summary judgment (735
        ILCS 5/2-1005(c) (West 2010)). Defendant appeals. We reverse the judgment and enter
        judgment for defendant.
¶2          Defendant’s policy with plaintiff included UIM coverage, with limits of $250,000 per
        person and $500,000 per occurrence. On September 24, 1999, defendant was seriously
        injured while riding in a car driven by Watts. Jennifer Walker owned the car, and her policy
        with State Farm had limits of $100,000 per person and $300,000 per occurrence. Defendant
        sued Watts for negligence. On November 6, 2009, he settled with Watts for the policy limit
        of $100,000. Defendant and Watts signed a release discharging Watts and Walker from
        future liability for the accident. Defendant did not notify plaintiff of the release until
        November 30, 2009.
¶3          Defendant then sought UIM coverage from plaintiff. Plaintiff denied the coverage,
        asserting that, by releasing Watts, defendant had violated the policy’s cooperation clause and
        had cut off plaintiff’s right of subrogation against Watts and State Farm. Plaintiff filed a
        complaint for a declaratory judgment to this effect, attaching a copy of the policy. The two
        pertinent policy provisions follow. The first is the cooperation clause:
            “NOTICE AND CONSENT REQUIREMENTS
                An insured person must notify us in writing at least 30 days before entering into any
            settlement with the owner or operator of an uninsured motor vehicle or an

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         underinsured motor vehicle, or any liability insurer. In order to preserve our right of
         subrogation, we may elect to pay any sum offered in settlement by, or on behalf of, the
         owner or operator of an uninsured motor vehicle or an underinsured motor vehicle.
         If we do this, the insured person agrees to assign to us all their rights against the owner
         or operator of the uninsured motor vehicle or underinsured motor vehicle, to the
         extent of our payment.
              Any judgment or settlement for damages against an owner or operator of an
         uninsured motor vehicle or an underinsured motor vehicle that arises out of a lawsuit
         brought without our written consent is not binding on us.” (Emphases in original.)
     The second pertinent provision reads:
         “OUR RIGHTS TO RECOVER PAYMENT
              We are entitled to the rights of recovery that the insured person to whom payment
         was made has against another, to the extent of our payment. That insured person may be
         required to sign documents related to the recovery and must do whatever else we require
         to help us exercise those recovery rights, and do nothing after an accident or loss to
         prejudice those rights.
              However, we may not assert rights of recovery against the owner or operator of an
         uninsured motor vehicle or an underinsured motor vehicle, if the person seeking
         coverage under Part III–Uninsured/Underinsured Motorist Coverage provides us with
         written notice at least 30 days prior to entering into a settlement that an offer of
         settlement has been made by, or on behalf of, the owner or operator of an uninsured
         motor vehicle or an underinsured motor vehicle, and if we do not elect to pay to, or
         on behalf of, that person an amount equal to the amount offered in full settlement by, or
         on behalf of, the owner or operator of the uninsured motor vehicle or underinsured
         motor vehicle.
              When an insured person has been paid by us and also recovers from another, the
         amount recovered will be held by the insured person in trust for us and reimbursed to us
         to the extent of our payment. If we are not reimbursed, we may pursue recovery of that
         amount directly against that insured person.
              If an insured person recovers from another without our written consent, the insured
         person’s right to payment under any affected coverage will no longer exist.
                                                ***
         These provisions will be applied in accordance with state law.” (Emphases in original.)
¶4       Plaintiff’s complaint contended that, by releasing Watts without first timely notifying
     plaintiff, defendant violated the cooperation clause and destroyed plaintiff’s right of
     subrogation, and that, as a result, defendant had forfeited any UIM payments.
¶5       Defendant moved to dismiss the complaint (see 735 ILCS 5/2-619(a)(9) (West 2010)).
     As pertinent here, he argued that, even if he had violated the cooperation clause, plaintiff still
     could not recover. That was because, since the time of the accident, Watts had no significant
     assets, so that plaintiff had suffered no substantial prejudice from losing its subrogation right.
¶6       Defendant’s motion attached several documents. The first, a letter dated January 22,

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       2010, from Edward R. Kirby & Associates, Inc. (Kirby), a private investigator, to defendant’s
       attorney, Kathleen T. Zellner & Associates, P.C. (Zellner), stated that Kirby’s “limited
       investigation” had shown that Watts’ only “readily identifiable” assets were three 1995 motor
       vehicles. Moreover, there was an unsatisfied 2005 judgment against him for $5,249; two
       paternity suits had been filed against him; and, on January 8, 2010, he had been sentenced
       to four years in prison for aggravated driving under the influence of alcohol, apparently based
       on the accident that had injured defendant. The letter concluded, “Given that [Watts] is
       currently incarcerated and we find no immediate assets, we are discontinuing any further
       investigation at this time.”
¶7         Defendant’s motion attached another letter from Kirby to Zellner, dated February 18,
       2010, stating that a “limited investigation” had revealed that Walker had no “assets of note”
       other than two vehicles, including the car involved in the accident. Finally, the motion
       attached a letter dated January 14, 2010, from Asia Bell, a claims representative for State
       Farm, to Zellner. It stated:
                “Per our conversation *** today ***, Billy Watts has no other insurance with State
           Farm and per our policyholder Ms. Walker neither one of them [has] any assets. State
           Farm has reimbursed [plaintiff] the $5,000 in [sic] which they paid for medical
           payments.”
¶8         After the trial court denied defendant’s motion to dismiss, he filed an answer that
       included several “affirmative defenses,” including that plaintiff had not been prejudiced by
       his settlement with Watts and that the settlement had not extinguished its subrogation right.
¶9         The parties filed cross-motions for summary judgment. Plaintiff’s motion argued that,
       because defendant had violated the cooperation clause, he could not recover UIM benefits.
       Plaintiff asserted that, under Home Insurance Co. v. Hertz Corp., 71 Ill. 2d 210, 215 (1978),
       because the unlimited release did not specifically designate an amount to cover plaintiff’s
       subrogation interest, plaintiff could not bring an action against Watts unless, before the
       release was executed, Watts or State Farm had known of plaintiff’s interest. However, there
       was no evidence that either one had known. Addressing defendant’s no-prejudice argument,
       plaintiff contended that a judgment against Watts would not have been limited to Watts’
       assets at the time of Kirby’s investigation. Further, it was not for defendant to say whether
       plaintiff would pursue a subrogation action.
¶ 10       Defendant’s motion for summary judgment conceded that he had violated the cooperation
       clause. However, he contended that the Hertz rule favored him because, before the release
       was signed, Walker (whom defendant characterized as a tortfeasor) and State Farm had
       indeed known of plaintiff’s subrogation interest. Defendant relied on affidavits by Walker
       and Bell. Walker’s affidavit stated that, as of November 6, 2009, she knew that plaintiff had
       the right to sue her. Bell’s affidavit stated as follows. She had processed the settlement of the
       claim between defendant and Watts. State Farm reimbursed plaintiff “for the $5000.00 in
       [sic] which they [sic] paid for medical payments for [defendant].” Bell “had knowledge of
       [plaintiff’s] subrogation rights with regard to [defendant’s] claim prior to the release being
       executed on November 6, 2009.”
¶ 11       In response to defendant’s motion for summary judgment, plaintiff asserted in part that,

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       under Farmers Automobile Insurance Ass’n v. Suligoy, 180 Ill. App. 3d 896, 898 (1989), the
       “knowledge issue” was an affirmative defense that defendant had failed to raise in his answer
       and thus had forfeited. Also, plaintiff asserted, Bell’s affidavit was insufficient to prove that
       she had known, pre-release, of plaintiff’s specific right of subrogation against Watts.
       Defendant replied that Bell’s affidavit implied that she had known of the specific right
       involved in this case, and he added that he had raised the “knowledge issue” in his
       affirmative defenses.
¶ 12        The trial court granted summary judgment to plaintiff (and thus denied summary
       judgment to defendant), explaining first that Walker’s affidavit was irrelevant because she
       was neither the tortfeasor nor the tortfeasor’s insurer. Further, the court noted, the release did
       cut off plaintiff’s right of subrogation against Watts. There was no assurance that Watts
       would have been judgment-proof–he could have come into a large sum of money, however
       unlikely the possibility–and, even had he been judgment-proof, plaintiff would have had the
       right to file an action against him anyway. Defendant timely appealed.
¶ 13        On appeal, defendant advances two arguments for why the trial court erred in granting
       plaintiff summary judgment and denying him summary judgment. First, plaintiff’s right of
       subrogation survived defendant’s settlement with Watts, because State Farm knew of
       plaintiff’s subrogation right before the settlement. Second, plaintiff may not escape its
       obligations by relying on his violation of the cooperation clause, because plaintiff failed to
       establish that it was substantially prejudiced or even to raise a genuine factual issue on this
       score. Plaintiff responds first that (a) defendant waived or forfeited the “knowledge” defense,
       because he did not plead it as an affirmative defense; and (b) defendant failed to raise a
       genuine issue on the matter of foreknowledge, much less to establish as a matter of law that
       State Farm knew in advance of plaintiff’s subrogation right. Plaintiff responds second that
       it proved that defendant’s failure to notify it timely of the settlement did cause it prejudice.
       For the following reasons, we agree with defendant.
¶ 14        Summary judgment is proper when the pleadings, depositions, and other matters on file,
       when viewed in the light most favorable to the nonmovant, show that there is no genuine
       issue of material fact and that the moving party is entitled to judgment as a matter of law. 735
       ILCS 5/2-1005(c) (West 2010); Shannon v. Boise Cascade Corp., 208 Ill. 2d 517, 523-24
       (2004). Our review is de novo. Morris v. Margulis, 197 Ill. 2d 28, 35 (2001).
¶ 15        We turn first to the “knowledge” issue. Relying on Suligoy, plaintiff contends that
       defendant forfeited this defense because he failed to plead it in his answer. Suligoy does state
       that knowledge is an affirmative defense that must be pleaded. Suligoy, 180 Ill. App. 3d at
       898. However, we agree with defendant that this holding–which Suligoy assumed rather than
       supported with case law or reasoning–contradicts the established rule that an insurer who
       invokes a cooperation clause must affirmatively show that it was prejudiced by the insured’s
       failure to notify it in advance of his settlement with the tortfeasor. See M.F.A. Mutual
       Insurance Co. v. Cheek, 66 Ill. 2d 492, 499-500 (1977); Marsh v. Prestige Insurance Group,
       58 Ill. App. 3d 894, 896 (1978).
¶ 16        Thus, in Richter v. Standard Mutual Insurance Co., 279 Ill. App. 3d 501 (1996), the
       insurer contended that it need not provide coverage, because the insured had settled with the

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       tortfeasor without first obtaining the insurer’s consent. Disagreeing, the appellate court held
       that, once the insured had brought his accident within the terms of the policy, the insurer had
       the burden to prove that the cooperation clause applied and barred recovery. Id. at 508-09.
       Here, plaintiff has never denied that defendant’s UIM claim is within the scope of the policy;
       it has instead relied on the cooperation clause, and the related subrogation-rights provision,
       to defeat an otherwise valid claim. Therefore, per Richter, we conclude that defendant did
       not need to raise the “knowledge” issue as an affirmative defense in his answer.
       Parenthetically, we note that defendant arguably did so, as his answer alleged that plaintiff’s
       subrogation right was not extinguished by his settlement with Watts.
¶ 17        We turn to the merits of defendant’s first argument on appeal. Defendant notes the
       holding of Home Insurance Co, 71 Ill. 2d at 215:
            “[A]n unlimited release executed by an insured-subrogor for consideration not
            specifically including an amount designated as covering the insurer’s subrogation interest
            does not bar a subsequent subrogation action by an insurer-subrogee against the
            tortfeasor, if the tortfeasor or his insurance carrier had knowledge of the insurer-
            subrogee’s interest prior to the release.” (Emphasis added.)
¶ 18        Defendant observes that the use of “or” instead of “and” demonstrates that prior
       knowledge by either the tortfeasor or his insurer will preserve the subrogation right of the
       victim’s insurer. See also Richter, 279 Ill. App. 3d at 507-08 (accident victim’s insurer did
       not lose subrogation right by settlement that was obtained without insurer’s consent, because
       tortfeasor’s insurer knew in advance of settlement that insurer had that right). He maintains
       that Bell’s affidavit established that in advance of the settlement State Farm knew of
       plaintiff’s right to be subrogated to defendant against Watts. Plaintiff responds that Bell’s
       affidavit was insufficient because it stated no facts to show that Bell knew that plaintiff
       intended “to pursue its subrogation interest against Mr. Watts for any monies paid to
       [d]efendant under the [UIM] policy.” Defendant replies that there was no requirement that
       State Farm know what plaintiff intended to do at some later point.
¶ 19        We agree with defendant that there is no genuine dispute that State Farm knew in
       advance of the settlement that plaintiff had a subrogation right against Watts and that this
       was sufficient to defeat the invocation of the cooperation clause. Bell said plainly that she
       knew in advance of plaintiff’s subrogation right. Although this statement was a conclusion,
       it hardly required elaboration; Bell would have known whether she had been aware of
       plaintiff’s subrogation right, a routine fact of insurance litigation. Under the case law, that
       was sufficient. Thus, there is no genuine issue of fact as to whether plaintiff retained its
       subrogation right, especially as, per Richter, it was ultimately plaintiff’s burden to prove that
       defendant’s settlement cut off that right.
¶ 20        Further, even were we to hold that there was a genuine issue of material fact on the issue
       of knowledge, the judgment still cannot stand, because plaintiff failed to raise a factual issue
       on whether it was prejudiced by defendant’s noncompliance with the cooperation clause.
¶ 21        As plaintiff concedes, it may not enforce the cooperation clause unless it proves that
       defendant’s failure to notify it timely of the settlement substantially prejudiced it. Cheek, 66
Ill. 2d at 499-500; Marsh, 58 Ill. App. 3d at 897. Plaintiff contends that it suffered prejudice

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       because its subrogation right was abrogated by the settlement. Defendant responds that the
       mere loss of the subrogation right does not satisfy the prejudice requirement and that,
       because all the evidence showed that Watts was judgment-proof, there was, as a matter of
       law, no prejudice. For the following reasons, we agree with defendant both that a judgment-
       proof tortfeasor defeats a claim of prejudice and that Watts fit this description.
¶ 22        Apparently, only one Illinois opinion addresses whether a judgment-proof tortfeasor
       negates an insurer’s claim of substantial prejudice from its insured’s violation of a
       cooperation clause. The import of that opinion is unclear, however. In Mulholland v. State
       Farm Mutual Automobile Insurance Co., 171 Ill. App. 3d 600 (1988), cited by neither party,
       the plaintiff settled against Rudy, one of the alleged tortfeasors in the accident that injured
       three people whose estates the plaintiff represented. Rudy paid the limit of her policy with
       Allstate. The plaintiff did not timely notify State Farm of the settlement but sought UIM
       benefits from State Farm. In response, State Farm invoked a cooperation clause, which
       disallowed UIM benefits to an insured who settled a lawsuit without consent and thereby
       “hurt[ ]” State Farm’s right to recover from the tortfeasor. The trial court held that the clause
       did not apply. It explained that State Farm had not been “hurt” by a settlement because
       nothing in the record showed that Rudy, who had been 16 years old at the time, had had any
       assets other than the Allstate policy. Id. at 605.
¶ 23        The appellate court affirmed. The court agreed with the trial court that State Farm could
       not have been “hurt” by the plaintiff’s settlement with a tortfeasor who had had no significant
       assets other than the insurance policy that had supplied all the money for the settlement. Id.
       This holding would appear to have been dispositive by itself; it meant that the cooperation
       clause did not apply. Nonetheless, the court went on to consider State Farm’s argument that
       it had been “hurt” by the loss of its subrogation rights, regardless of their value or lack of it.
       The court did not decide whether the mere loss of subrogation rights established harm.
       Instead it ruled that State Farm’s subrogation rights had not been cut off, because Allstate
       had known before the settlement was reached of State Farm’s subrogation rights. Id. at 607.
¶ 24        Mulholland’s import is unclear. Read in isolation, the first holding that we have
       summarized would seem to establish that showing “substantial prejudice” requires proving
       more than the loss of subrogation rights; it requires proving further that those rights were
       actually worth something other than the ability to litigate. Although the holding turned on
       the meaning of the word “hurt” in the cooperation clause, we see no difference between
       saying that an insurer is “hurt” by noncooperation and saying that the insurer is “prejudiced”
       by it. Thus, for practical purposes, the Mulholland court held that a judgment-proof
       tortfeasor, such as Rudy, defeats an insurer’s claim that it was substantially prejudiced by the
       insured’s violation of a cooperation clause. Nonetheless, the court went on to consider
       separately State Farm’s argument that it had been “hurt” merely by the loss of its subrogation
       rights, even though the court had just stated that those rights were worthless.1 Thus,

               1
               As Marsh noted, the “apparent purpose” of a cooperation clause is to protect the insurance
       company’s subrogation rights. Marsh, 58 Ill. App. 3d at 897; accord State Farm Mutual Automobile
       Insurance Co. v. Fennema, 2005-NMSC-010, ¶ 9, 137 N.M. 275, 110 P.3d 491. Thus, it is curious

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       Mulholland does not appear to be internally consistent. As Illinois case law is unclear, we
       turn to foreign jurisdictions, where the law is both clear and consistent.
¶ 25       Numerous jurisdictions have held that an insurer may not rely on a technical violation
       of a cooperation clause to deny coverage if the tortfeasor with whom the insured settled was
       judgment-proof.2 See Muth v. AIU Insurance Co., 982 So. 2d 749, 752 (Fla. Dist. Ct. App.
       2008); Bantz v. Bongard, 864 P.2d 618, 623-24 (Idaho 1993); Kapadia v. Preferred Risk
       Mutual Insurance Co., 418 N.W.2d 848, 852 (Iowa 1988); Greenvall v. Maine Mutual Fire
       Insurance Co., 1998 ME 204, ¶¶ 11, 12, 715 A.2d 949; MacInnis v. Aetna Life & Casualty
       Co., 526 N.E.2d 1255, 1259-60 (Mass. 1988); Sorensen v. Farmers Insurance Exchange, 927
P.2d 1002, 1005 (Mont. 1996); Thrower v. Anson, 752 N.W.2d 555, 563 (Neb. 2008)
       (interpreting statute requiring insurer to prove that it was “adversely affected” by settlement);
       Fennema, 2005-NMSC-010, ¶¶ 11, 12, 137 N.M. 275, 110 P.3d 491; Hasper v. Center
       Mutual Insurance Co., 2006 ND 220, ¶ 18, 723 N.W.2d 409; Federated Service Insurance
       Co. v. Granados, 889 P.2d 1312, 1315-16 (Or. App. 1995); Hernandez v. Gulf Group Lloyds,
       875 S.W.2d 691, 694 (Tex. 1994); State Farm Mutual Automobile Insurance Co. v. Green,
       2003 UT 48, ¶¶ 31-34, 89 P.3d 97; Thiringer v. American Motors Insurance Co., 588 P.2d
191, 193 (Wash. 1978). The reason for this rule is straightforward: the mere right to sue the
       tortfeasor is of no value if there is no reasonable likelihood of obtaining a judgment that is
       worth the cost of litigation. As one court said in applying the prejudice rule to reject an
       insurer’s reliance on a cooperation clause where the tortfeasor was judgment-proof:
           “A judgment against [the tortfeasor] would not have been worth the paper it was printed
           on and no reasonable person would have expended the costs, let alone the attorney’s fees,
           it would have required to get it. When [the insurer] lost the opportunity to secure the
           judgment, it lost nothing. Under our law, a technical and illusory ‘loss’ of this kind
           cannot result in the forfeiture of insurance coverage.” Southeastern Fidelity Insurance
           Co. v. Earnest, 395 So. 2d 230, 231 (Fla. Dist. Ct. App. 1981).
¶ 26       We agree that “[a]llowing an insurer to avoid coverage when it lost subrogation rights
       which carried no reasonable possibility of collection beyond the tendered policy limits would
       constitute a forfeiture and ‘would produce an undeserved windfall to the insurance

       that the Mulholland court first held that the cooperation clause should be disregarded because the
       worthlessness of State Farm’s subrogation rights meant that it had suffered no prejudice–yet then
       considered State Farm’s argument that it had been prejudiced by the alleged loss of those rights.
               2
                This statement does not, of course, include jurisdictions that do not require a showing of
       substantial prejudice. However, it does include one jurisdiction (New Mexico) that holds that the
       breach of a cooperation clause creates a rebuttable presumption of prejudice (see Fennema, 2005-
       NMSC-010, ¶¶ 11, 12, 137 N.M. 275, 110 P.3d 491), although of course there the burden of proof
       is reversed. As Marsh makes clear, Illinois requires substantial prejudice and does not afford the
       insurer a rebuttable presumption of prejudice based on the mere breach.

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       company.’ ” Hasper, 2006 ND 220, ¶ 18, 723 N.W.2d 409 (quoting Bantz, 864 P.2d at 624).3
       A cooperation clause exists to protect the insurance company’s substantial interests, not
       merely to afford it the chance to litigate for the sheer joy of it. We also note that the
       substantial-prejudice rule requires just that: substantial prejudice. Thus, the theoretical
       possibility that the tortfeasor might win the lottery or inherit millions before the statute of
       limitations runs (neither having happened here yet) does not create a reasonable possibility
       that the insurer will obtain significant relief by pursuing an action against him. As one court
       noted, allowing such farfetched theoretical possibilities to amount to substantial prejudice
       would “completely negate” the prejudice requirement. Earnest, 395 So. 2d at 231.
¶ 27        Although the question of prejudice is ordinarily one of fact (see Marsh, 58 Ill. App. 3d
       at 896; Hasper, 2006 ND 220, ¶ 19, 723 N.W.2d 409), a question of fact may become one
       of law, amenable to disposition by summary judgment, if the undisputed facts allow only one
       reasonable conclusion (see Nolan v. Johns-Manville Asbestos, 85 Ill. 2d 161, 171 (1981)).
       That is the situation here. We hold that defendant was entitled to summary judgment because
       he established as a matter of law that plaintiff cannot meet its burden to prove that it suffered
       substantial prejudice from defendant’s settlement with Watts. Plaintiff adduced no evidence
       that Watts had any assets of note.4 Defendant adduced unrebutted evidence that, from the
       time of the accident through the close of Kirby’s investigation into Watts’ finances, Watts
       had minimal assets, was subject to two unsatisfied judgments (with the possibility of more
       judicially imposed financial obligations), and was serving a four-year prison term.5 Not only
       do these facts defeat plaintiff’s motion for summary judgment, they establish that defendant
       is entitled to judgment as a matter of law because plaintiff may not invoke its policy’s
       cooperation clause in order to deny defendant UIM coverage. We reverse the judgment in
       favor of plaintiff and enter judgment for defendant (see Ill. S. Ct. R. 366(a)(5) (eff. Feb. 1,
       1994)).

¶ 28       Judgment for plaintiff reversed; judgment for defendant entered.

               3
                 We note that several courts have held that deciding whether an insurer was prejudiced by
       the insured’s violation of a cooperation clause requires considering all of the relevant factors, such
       as the amount of the tortfeasor’s assets, the likelihood of recovery via subrogation, the extent of the
       insured’s damages, and the expenses and risks of litigating the insured’s cause of action. See
       Kapadia, 418 N.W.2d at 852; Hasper, 2006 ND 220, ¶ 18, 723 N.W.2d 409; Green, 2003 UT 48,
       ¶ 33, 89 P.3d 97. This general statement is not inconsistent with the conclusion that, if the tortfeasor
       is clearly judgment-proof, then the insurer cannot prove substantial prejudice.
               4
                We agree with the trial court that Walker’s financial situation was irrelevant because she
       was neither the tortfeasor nor the insurer.
               5
                According to the Department of Corrections Web site, Watts was placed on mandatory
       supervised release on September 29, 2011, and his anticipated discharge date is September 29, 2012.
       www2.illinois.gov/idoc/Offender/Pages/InmateSearch.aspx (last visited May 17, 2012).

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