Century-National Insurance v. Tracy

737 N.E.2d 353, 316 Ill. App. 3d 639, 249 Ill. Dec. 963, 2000 Ill. App. LEXIS 822
CourtAppellate Court of Illinois
DecidedOctober 6, 2000
Docket2-99-1257, 2-99-1289 cons.
StatusPublished
Cited by12 cases

This text of 737 N.E.2d 353 (Century-National Insurance v. Tracy) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Century-National Insurance v. Tracy, 737 N.E.2d 353, 316 Ill. App. 3d 639, 249 Ill. Dec. 963, 2000 Ill. App. LEXIS 822 (Ill. Ct. App. 2000).

Opinion

JUSTICE GALASSO

delivered the opinion of the court:

Plaintiff, Century-National Insurance Company (Century), brought a declaratory action against defendants, James Joseph Tracy (James), Debra Tracy (Debra), and CMDK Development Corporation (CMDK), alleging that James was not entitled to underinsured motorist benefits under a policy issued to CMDK. Century appeals from a directed finding entered by the trial court at the conclusion of Century’s case and the award of Supreme Court Rule 137 (155 111. 2d R. 137) sanctions against Century and its attorney, Daniel Súber.

The record on appeal reveals the following pertinent facts. CMDK was co-owned by James and his wife, Debra. They were the sole principals and employees of CMDK, which was owned and operated as a partnership. The record contains no evidence that, during the relevant period of time, CMDK was incorporated. In procuring a business auto insurance policy for a 1987 Chevy half-ton pickup truck (insured vehicle) allegedly owned by CMDK, certain information regarding the application for insurance was provided to several insurance agents/ brokers and, ultimately, to plaintiff. The application for insurance was signed by “D. Tracy.” Debra was the only driver listed on it. On September 28, 1993, plaintiff issued a business auto policy to CMDK that covered the insured vehicle. This policy provided comprehensive, liability, collision, medical payments, and uninsured/underinsured motorist coverage from September 28, 1993, to September 28, 1994. The policy was a named-driver policy and specifically required that all drivers of the covered vehicle be reported to plaintiff and endorsed on the policy.

On February 24, 1994, the driver of the insured vehicle was involved in a two-car accident in Aurora, Illinois. There were no passengers in the insured vehicle. The driver presented police with a driver’s license that stated he was Kevin Tracy. The driver reported some injuries and was taken to Mercy Center Hospital. Ambulance records indicated that the driver told ambulance personnel that he was Kevin Tracy. X-ray records at Mercy Center Hospital showed that the name Kevin Tracy was crossed out in certain places and replaced with the name James Tracy. Laura Tijerna was the operator and sole occupant of the other vehicle involved in the subject accident. Subsequently, James filed a complaint for personal injuries against Tijerna arising out of the subject accident. Later, Tijerna, insured through Economy Preferred Insurance Company, paid James $50,000, the single-person limit of her policy, in settlement of the lawsuit.

On December 28, 1995, James filed a complaint against Century pursuant to the underinsured motorist provision of the policy for injuries he was alleged to have sustained in the subject traffic accident. On November 21, 1996, after the parties had failed to reach a settlement, James made a demand upon Century for arbitration, per terms of the policy. On March 3, 1998, Century filed a complaint for declaratory judgment against James and CMDK. This complaint sought a declaration that Century owed no obligations to defendants under the policy. The complaint alleged that defendants provided insufficient evidence that James Tracy, rather than Kevin Tracy, was involved in the subject accident and that defendants had misrepresented that James was the individual involved in the accident.

On April 3, 1998, Century filed a first amended complaint, in which Debra was added as a defendant. Counts I and II realleged that defendants provided insufficient evidence that James was the individual involved in the accident. In counts III, and V, Century alleged that Debra had materially misrepresented CMDK as being a corporate entity for the purposes of obtaining insurance and had materially omitted the fact that James, an unlicensed motorist, was the true owner and driver of the truck.

On January 20, 1999, an evidentiary hearing was held on counts I and II of the first amended complaint. Arguments related to the allegations in counts III, FV^ and V of Debra’s misrepresentation of CMDK’s corporate status, her omission of information related to James’s status as an unlicensed driver, and his operation of the insured vehicle were reserved for a hearing on June 2, 1999. At the close of Century’s case at the January 20 hearing, the trial court granted defendants’ oral motion for a directed finding.

On April 16, 1999, Century filed a second amended complaint for declaratory judgment. Therein, Century realleged that Debra had misrepresented CMDK as being a corporation. Further, Century alleged that Debra materially omitted James’s name from the insurance application and that James was a nonpermissive user of the insured vehicle.

On June 2, 1999, a hearing was held as to the remaining counts of Century’s second amended complaint. After Century completed its case in chief, wherein it unsuccessfully attempted to introduce evidence that James had provided the information used in completing the application for insurance, the trial court granted defendants’ motion for a directed finding. On August 5, 1999, Century filed a motion for leave to file a third amended complaint to include allegations that James had misrepresented CMDK as being a corporation, that James had materially omitted his name from being a named driver of the insured vehicle, and that defendants had violated the terms of the policy because James, who did not have a valid driver’s license at the time of the accident, had no reasonable belief that he was entitled to drive the insured vehicle. The trial court continued the matter until October 14, 1999, ordering Century to file a petition pursuant to Illinois Supreme Court Rule 183 (134 111. 2d R. 183) explaining therein why it should be permitted to file an amended complaint after the requisite filing date. On October 14, 1999, the trial court denied the motion for leave to file a third amended complaint.

On July 2, 1999, defendants filed a motion for Rule 137 (155 111. 2d R. 137) sanctions against Century and its attorney, Daniel Súber. On July 15, 1999, Century filed a cross-motion for Rule 137 sanctions against defendants and their attorneys. After a hearing on October 14-15, 1999, the trial court awarded defendants $2,000 in sanctions against Century and its attorney, Daniel Súber, and denied the cross-motion for sanctions.

On appeal, plaintiff raises the following arguments, namely, (1) whether the trial court’s directed finding that James, rather than Kevin Tracy, his brother, was driving the insured vehicle at the time of an accident on February 24, 1994, was against the manifest weight of the evidence; (2) whether the trial court abused its discretion in barring evidence that James made false representations in applying for the subject insurance policy; (3) whether the trial court’s directed finding of June 2, 1999, was against the manifest weight of the evidence; (4) whether the trial court abused its discretion in denying Century leave to file a third amended complaint; (5) whether the trial court abused its discretion in awarding Rule 137 sanctions; and (6) whether the trial court abused its discretion in compelling disclosure of and admitting into evidence a letter from plaintiffs attorney Súber to Century concerning the pending litigation. Due to our determinations of issues 1, 2, and 5, discussed below, we do not need to address issues 3, 4, and 6.

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Bluebook (online)
737 N.E.2d 353, 316 Ill. App. 3d 639, 249 Ill. Dec. 963, 2000 Ill. App. LEXIS 822, Counsel Stack Legal Research, https://law.counselstack.com/opinion/century-national-insurance-v-tracy-illappct-2000.