Farmers Automobile Insurance Association v. Neumann

2015 IL App (3d) 140026, 28 N.E.3d 830

• Court: Appellate Court of Illinois
• Decided: February 5, 2015
• Docket: 3-14-0026
• Status: Unpublished

Opinion

2015 IL App (3d) 140026

Opinion filed February 5, 2015 _____________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

A.D., 2015

FARMERS AUTOMOBILE INSURANCE ) Appeal from the Circuit Court ASSOCIATION, ) of the 10th Judicial Circuit, ) Tazewell County, Illinois, Plaintiff-Appellee, ) ) v. ) ) JOHN E. NEUMANN, ) Appeal No. 3-14-0026 ) Circuit No. 12-MR-137 Defendant-Appellant ) ) (Christopher Bitner, ) ) Honorable Defendant). ) Paul Gilfillan, ) Judge, Presiding. )

____________________________________________________________________________

JUSTICE O'BRIEN delivered the judgment of the court, with opinion. Justices Carter and Lytton concurred in the judgment and opinion. ____________________________________________________________________________

OPINION

¶1 Defendant insured, John E. Neumann, appealed from a circuit court order granting the

motion of the plaintiff insurer, Farmers Automobile Insurance Association (Farmers), for

summary judgment and denying Neumann’s cross-motion for summary judgment, and finding that Farmers owed no duty to defend Neumann in one of two civil lawsuits that had been filed

against Neumann. We reverse the grant of summary judgment in favor of Farmers and grant

Neumann’s motion for summary judgment.

¶2 FACTS

¶3 The defendant in this declaratory judgment action, John E. Neumann, was involved in a

traffic incident on August 27, 2011, with the other defendant in this action, Christopher Bitner,

wherein Neumann allegedly hit Bitner with his automobile while Bitner was directing traffic as a

City of Pekin police officer. As a result of the accident, two civil lawsuits were filed naming

Neumann as a defendant. The first was a complaint filed by Bitner (No. 12-L-101) (Bitner

complaint), alleging intentional assault and intentional battery by Neumann. Neumann tendered

the Bitner complaint to his insurer, the plaintiff in this action, Farmers. Farmers rejected the

defense of the Bitner complaint on the basis that the automobile liability policy issued to

Neumann did not cover any claims for intentional conduct.

¶4 After rejecting the defense of the Bitner action, Farmers filed the instant action for a

declaratory judgment that it owed no duty to defend Neumann against the Bitner complaint.

Neumann answered the declaratory judgment complaint, asserting affirmative defenses and

attaching his affidavit. Neumann’s affidavit asserted that he did not intend to strike nor intend to

cause bodily harm to Bitner. Farmers moved to strike both the affidavit and the affirmative

defenses, arguing that the affirmative defenses were not proper affirmative defenses and the

affidavit was an improper attempt to assert “true but unpleaded facts.” The circuit court granted

both motions. Farmers filed a motion for summary judgment, arguing that it did not owe

Neumann a defense to the Bitner complaint.

2 ¶5 Thereafter, a second civil action involving the same incident on August 27, 2011, was

filed against Neumann, this one by CCMSI Insurance Company, as subrogee of the City of Pekin

(No. 13-L-89) (CCMSI complaint). That action alleged that Neumann was negligent and sought

to recover the amounts of worker's compensation that CCMSI would have to pay to Bitner as a

result of the accident. Neumann filed a motion to consolidate the Bitner and CCMSI actions,

which was granted. The consolidation order states that all filings shall reference and be filed in

the first case number (the Bitner action). Farmers acknowledged, under a reservation of rights,

its duty to defend Neumann against the CCMSI complaint.

¶6 Then, in this case, Neumann filed a cross-motion for summary judgment, asserting that,

because the actions were consolidated, Farmers should defend both actions. The circuit court

granted Farmers’ motion for summary judgment and denied Neumann’s motion, and Neumann

appealed.

¶7 ANALYSIS

¶8 This matter is before us on the grant of summary judgment in favor of Farmers. Summary

judgment is appropriate only where “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 2010).

We review de novo a ruling on a motion for summary judgment. Standard Mutual Insurance Co.

v. Lay, 2013 IL 114617, ¶ 15.

¶9 An insurer’s duty to defend its insured is broader than its duty to indemnify. Pekin

Insurance Co. v. Wilson, 237 Ill. 2d 446, 456 (2010). In determining whether an insurer has a

duty to defend its insured, a court must look to the allegations in the underlying complaint and

the relevant portions of the insurance policy. Outboard Marine Corp. v. Liberty Mutual

3 Insurance Co., 154 Ill. 2d 90, 107-08 (1992). The court must focus on the allegations of the

complaint, liberally construed in favor of the insured. United States Fidelity & Guaranty Co. v.

Wilkin Insulation Co., 144 Ill. 2d 64, 73 (1991). If the allegations of the underlying complaint

fall within, or potentially within, the policy coverage, then the insurer has a duty to defend.

Outboard Marine Corp., 154 Ill. 2d at 125.

¶ 10 Neumann contends that the consolidation of the two lawsuits was equivalent to a single

lawsuit with several causes of action, and since Farmers already acknowledged its duty to defend

on one claim, it had to defend both claims. Section 2-1006 of the Illinois Code of Civil

Procedure (the Code) permits a court to consolidate cases pending in the same court as long as a

substantial right is not prejudiced. 735 ILCS 5/2-1006 (West 2010). Three forms of

consolidation are recognized:

“(1) where several cases are pending involving substantially the same subject

matter, the court may stay the proceedings in all but one and then see whether the

disposition of the one case may settle the others, thereby avoiding multiple trials on the

same issues; (2) where several cases involve an inquiry into the same event in its general

aspects, the cases may be tried together, but with separate docket entries, verdicts and

judgments, the consolidation being limited to a joint trial; and (3) where several actions

are pending that might have been brought as a single action, the cases may be merged

into one action, thereby losing their individual identities, and be disposed of in one suit.”

Dowe v. Birmingham Steel Corp., 2011 IL App (1st) 091997, ¶ 21.

¶ 11 Neumann argues that the present consolidation order falls into the third category, while

Farmers contends that it fell into the second category. The motion to consolidate alleged that

both complaints arose out of a single incident, claiming identical injuries to the same person, and

4 it would serve the interests of judicial economy to consolidate the lawsuits. The order granting

the consolidation stated that all filings would be filed in the first case number. To determine

whether a particular consolidation was for disposition, the test is whether the cases might have

been the subject of a single proceeding or could have been brought as one action. Dowe, 2011 IL

App (1st) 091997, ¶ 22. Although the complaints had different named plaintiffs, they both arose

from a single incident, involving injury to a single person. Considering that the purpose of

consolidation is to expedite the resolution of lawsuits, conserve time, and avoid duplicating

efforts and unnecessary expenses, we find that the lawsuits were consolidated into one action.

See Dowe, 2011 IL App (1st) 091997, ¶ 24. Since Farmers had a duty to defend against the

CCMSI action, it also had a duty to defend the consolidated Bitner action. See United States

Fidelity & Guaranty Co., 144 Ill. 2d at 73 (if a lawsuit pleads several theories of recovery, even

if only one theory falls within the insurance policy’s coverages, the insurer owes a duty to defend

the entire lawsuit).

¶ 12 Even if the cases had not been consolidated, we would still find that the order granting

Farmers’ summary judgment motion was in error. A court is not required to put on blinders and

may look beyond the complaint at other evidence appropriate to a motion for summary

judgment. American Economy Insurance Co. v. Holabird & Root, 382 Ill. App. 3d 1017, 1032

(2008); see also Pekin Insurance Co. v. Wilson, 237 Ill. 2d 446, 459 (2010) (a circuit court may,

under certain circumstances, look beyond the underlying complaint in order to determine an

insurer's duty to defend). The CCMSI complaint was filed by an outside party, not a third-party

plaintiff seeking coverage as a putative additional insured. See Holabird & Root, 382 Ill. App.

3d at 1032 (a third-party complaint filed by a codefendant could be considered in deciding an

insurer’s duty to defend on a motion for summary judgment); but see Pekin Insurance Co. v.

5 United Contractors Midwest, Inc., 2013 IL App (3d) 120803, ¶ 32 (a third-party complaint was

not considered because it was potentially self-serving, filed by a putative additional insured after

the declaratory judgment action was filed). Although the CCMSI complaint was filed after the

declaratory judgment action, it was not filed by Neumann. There was no indication that the

CCMSI complaint was self-serving, or filed merely to fill in information. Thus, it should have

been considered by the circuit court in determining Farmers’ duty to defend.

¶ 13 Even though we are reversing the grant of summary judgment in favor of Farmers, we

will consider Neumann’s argument that the circuit court erred in striking his affidavit and his two

affirmative defenses. We find that neither action was in error.

¶ 14 As stated above, typically, determinations of a duty to defend are limited to the

allegations of the complaint and the underlying insurance documents. And, other pleadings can

be considered in certain situations. Under the same authority, in certain circumstances, courts

may also look to “true but unpleaded facts” of which the insurer has knowledge. Holabird &

Root, 382 Ill. App. 3d at 1026. However, in this case, Neumann did not allege true but

unpleaded facts, but rather gave a conclusory statement regarding his intent, seeking to broaden

the scope of the Bitner pleadings and trigger Farmers’ duty to defend. Illinois Supreme Court

Rule 191 (eff. July 1, 2002) states that affidavits must be made on the personal knowledge of the

affiants to facts admissible in evidence and not consist of conclusions. There was no abuse of

discretion in striking Neumann’s self-serving affidavit. See American Service Insurance Co. v.

China Ocean Shipping Co. (Americas), Inc., 402 Ill. App. 3d 513, 524 (2010) (the granting of a

motion to strike an affidavit in support of a summary judgment motion is within the discretion of

the trial court).

6 ¶ 15 Neumann pled two affirmative defenses in response to Farmers’ complaint. Essentially,

he denied that he was liable for the allegations in the Bitner complaint, claimed that there was

insufficient factual support to show “intentional” actions, alleged that Farmers had conducted its

own investigation, alleged that Farmers had his statement, alleged that no discovery had been

completed in the Bitner action, and alleged that Farmers had a duty to defend that suit. Neumann

argues that the affirmative defenses that he raised were proper, while Farmers contends that they

were not proper affirmative defenses. We review de novo any order of the circuit court striking a

pleading as being substantially insufficient. Richco Plastic Co. v. IMS Co., 288 Ill. App. 3d 782,

785 (1997).

¶ 16 Section 2-613(d) of the Code provides that the facts constituting an affirmative defense,

which includes “any defense which by other affirmative matter seeks to avoid the legal effect of

or defeat the cause of action set forth in the complaint,” must be plainly set forth in the answer or

the reply. 735 ILCS 5/2-613(d) (West 2010). The test for determining the factual sufficiency of

an affirmative defense is the same as that applied in deciding a motion to dismiss; the facts

constituting the defense must be plainly set forth and the court will disregard any conclusions of

law or fact not supported by allegations of specific fact. Richco Plastic Co., 288 Ill. App. 3d at

785. An affirmative defense does not negate the essential elements of the plaintiff's cause of

action, but rather admits the legal sufficiency of the cause of action, asserting new matter by

which the plaintiff’s apparent right of recovery is defeated. Vroegh v. J&M Forklift, 165 Ill. 2d

523, 530 (1995). In this case, Neumann raised defenses, not affirmative defenses, so the

affirmative defenses were properly stricken.

¶ 17 CONCLUSION

7 ¶ 18 For the foregoing reasons, we reverse the judgment of the circuit court of Tazewell

County granting summary judgment in favor of Farmers and remand and order that the circuit

court enter summary judgment in favor of Neumann, finding that Farmers owes a duty to defend

the Bitner action.

¶ 19 Reversed and remanded.