{ "id": 3636227, "name": "JAMES A. SMITH, Plaintiff-Appellee and Cross-Appellant, v. GEORGE L. RICHARD et al., Defendants (Economy Fire & Casualty Company, Defendant-Appellee and Cross-Appellee; State Farm Mutual Automobile Insurance Company, Defendant-Appellant and Cross-Appellee)", "name_abbreviation": "Smith v. Richard", "decision_date": "1985-07-10", "docket_number": "No. 4-84-0297", "first_page": "378", "last_page": "387", "citations": [ { "type": "official", "cite": "134 Ill. App. 3d 378" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "189 N.E.2d 49", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "39 Ill. App. 2d 468", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 2455366 ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/39/0468-01" ] }, { "cite": "396 N.E.2d 260", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "77 Ill. App. 3d 401", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3290171 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/77/0401-01" ] }, { "cite": "212 N.E.2d 263", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "64 Ill. App. 2d 172", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5293829 ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/64/0172-01" ] }, { "cite": "505 F.2d 88", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 119145 ], "opinion_index": 0, "case_paths": [ "/f2d/505/0088-01" ] }, { "cite": "212 N.E.2d 263", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 1 }, { "cite": "64 Ill. App. 2d 172", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5293829 ], "opinion_index": 1, "case_paths": [ "/ill-app-2d/64/0172-01" ] } ], "analysis": { "cardinality": 799, "char_count": 19708, "ocr_confidence": 0.764, "pagerank": { "raw": 9.24033956956508e-08, "percentile": 0.5109458118986859 }, "sha256": "ef4bec7499c436e1e02b5b85d1e69388457bc2dc2c9c9b35156c5497a563c60d", "simhash": "1:b37ca88eb66784b1", "word_count": 3190 }, "last_updated": "2023-07-14T19:26:11.266607+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "JAMES A. SMITH, Plaintiff-Appellee and Cross-Appellant, v. GEORGE L. RICHARD et al., Defendants (Economy Fire & Casualty Company, Defendant-Appellee and Cross-Appellee; State Farm Mutual Automobile Insurance Company, Defendant-Appellant and Cross-Appellee)." ], "opinions": [ { "text": "PRESIDING JUSTICE GREEN\ndelivered the opinion of the court:\nOn February 4, 1981, plaintiff, James A. Smith, filed suit in the circuit court of Macon County against defendant, George L. Richard, seeking to recover for personal injuries resulting from a multivehicle collision in which a truck driven by defendant was involved. At the time of the collision, Richard was driving a mail route pursuant to a transportation services subcontract with the United States Postal Service (Postal Service). Negligence was charged.\nOn April 23, 1982, a second amended complaint was filed which not only sought damages for personal injuries as aforesaid, but also sought a declaratory judgment against defendant, State Farm Mutual Automobile Insurance Company (State Farm), providing that a policy of liability insurance issued by State Farm to Richard covered Richard\u2019s liability to plaintiff arising from the collision. In the alternative, plaintiff sought a declaration against defendant, Economy Fire and Casualty Company (Economy), that the uninsured motorist provision of its policy issued to plaintiff covered plaintiff\u2019s damages arising from the collision.\nA bench trial was held concerning plaintiff\u2019s request for declaratory judgment. On March 27, 1984, the court entered a judgment declaring that Richard\u2019s State Farm liability policy covered any tort liability of Richard to plaintiff arising from the collision. The court also declared that because of the coverage of the State Farm liability policy, the uninsured motorist\u2019s provision of the Economy policy did not impose any liability on Economy. The judgment contained a finding pursuant to Supreme Court Rule 304(a) (87 Ill. 2d R. 304(a)) making the judgment appealable. State Farm appeals. Plaintiff cross-appeals. We affirm.\nOn appeal, State Farm maintains that (1) the trial court erred in determining that if State Farm failed to notify the Postal Service of the termination of Richard\u2019s insurance coverage with State Farm, the termination was ineffective as to members of the general public; (2) the trial court\u2019s finding that State Farm failed to provide that notice to the Postal Service was contrary to the manifest weight of the evidence; (3) the record does not contain sufficient evidence to support a finding that the particular vehicle operated by Richard at the time of the accident was covered under the terms of the State Farm liability insurance policy in question; and (4) the trial court erred in refusing to allow State Farm to introduce certain evidence.\nThe evidence presented at the hearing concerning plaintiff\u2019s request for declaratory judgment indicated that on September 8, 1978, Richard executed a transportation services subcontract with the Postal Service which was effective August 12, 1978, through June 30, 1981. This subcontract, a copy of which was introduced into evidence, provided that Richard was to deliver mail over a specified route between Springfield and Shelbyville and to maintain public liability insurance on the vehicle being used to drive the mail route in accordance with the insurance requirements of Postal Service Regulation 7407. This regulation provides in part:\n\u201cThe maintenance of insurance coverage *** shall be a continuing obligation of the contract, and the lapse or termination of insurance coverage without replacement coverage being obtained shall be grounds for termination of the contractor\u2019s right to perform under the contract.\nThe contractor shall notify the contracting officer of any lapse in insurance coverage as far in advance of the beginning date of such lapse as possible.\u201d\nThe evidence further indicated that (1) on November 3, 1979, Richard obtained a public liability insurance contract from State Farm and paid a six-month premium; (2) on April 16, 1980, the liability coverage was increased by endorsement; and (3) prior to the end of the six-month policy period, State Farm extended the coverage of the policy beyond the original termination date.\nMike Reisinger, a State Farm insurance agent, testified that a certificate of insurance, prepared by the State Farm office in Bloomington on April 16, 1980, and countersigned by Reisinger on May 16, 1980, was sent to, and received by, the Postal Service Transportation Management Office in Hazelwood, Missouri. This certificate identified Richard\u2019s insured vehicle as a 1977 Mercedes van and indicated that his liability insurance coverage had been increased to $300,000 for the personal injuries of one individual.\nThis certificate further provided:\n\u201cThis endorsement is a part of your policy. Except for the changes it makes, all other terms of the policy remain the same and apply to this endorsement. It is effective at the same time as your policy if issued with it. If issued at a later date the name, policy number and effective date must be shown. * * *\nWe have coverage in force as shown below for the named insured. If the coverage is changed or terminated we will give the interested party 10 days written notice. U S Postal Service, Trans Mgmt Office, PO Box 6, Hazelwood MO 63042 * * *\nThis Certificate of Insurance neither affirmatively nor negatively amends, extends nor alters the coverage afforded by the described policy.\u201d\nAll the language of the certificate was part of a printed form, except the reference to the \u201cU S Postal Service ***\u201d which was typewritten in letters larger than the printed portion of the form. The context of the language of the certificate clearly indicates that the \u201cinterested party\u201d was the Postal Service.\nIn the declaratory judgment, the trial court found that (1) State Farm cancelled its policy with Richard effective June 22, 1980, by mailing a notice of cancellation to Richard, but (2) State Farm, by failing to give 10 days\u2019 notice to the Postal Service as required by the certificate of insurance, did not effectively terminate its policy of insurance as far as members of the general public who might be injured by Richard were concerned. State Farm disagrees, contending that it needed only to notify Richard in order to effectively cancel all future obligations of the policy.\nThe evidence indisputably showed that by the terms of his Postal Service subcontract, Richard was required to give proof to the Postal Service that he had proper liability insurance and to notify the Postal Service of any lapse in that policy. The evidence was also undisputed that State Farm's agent was advised of Richard\u2019s need for this proof of coverage and that the certificate in question was issued for that reason. Under these circumstances, we conclude that the amount of premiums which Richard paid was consideration not only for the original policy of insurance, but also for the issuance of the certificate which stated that it was part of the policy. The premiums were also consideration for the promises, contained in the certificate, for State Farm to give notice of termination to the Postal Service. (But see United States Pipe & Foundry Co. v. United States Fidelity & Guaranty Co. (5th Cir. 1974), 505 F.2d 88.) In undertaking to give the notice to the Postal Service, State Farm assumed an obligation that Richard also had by the terms of his Postal Service subcontract. While the Postal Service looked to Richard to inform them of his lack of liability insurance, performance by State Farm of its promise to give the notice would have provided the Postal Service with the information it needed to cancel Richard\u2019s subcontract and protect the public from the danger of an uninsured truck carrying United States mail on the highways.\nClearly, after a liability insurance carrier has accepted premiums and issued a policy of liability insurance, the failure of the insured to pay subsequent premiums does not absolve the insurer of the duty to give such notice to terminate the policy as the insurer is required to give by the statutes applicable or by the terms of the policy. The previous premiums are the consideration for the promise to give the notice of termination. Particularly, where as here, the rights of a person injured by the insured are involved, strict compliance by the insurer with the policy provisions in regard to termination are required in order to relieve the insurer of coverage for liability of the insured. (Kerr v. Pusateri (1965), 64 Ill. App. 2d 172, 212 N.E.2d 263.) If State Farm did not give the Postal Service the cancellation notice required by the certificate, which was a part of the policy, State Farm did not absolve itself from liability that would otherwise have existed under the instant policy.\nPlacing a duty of giving notice upon State Farm is consistent with an established public policy of this State. An example of this public policy is evinced in section 7 \u2014 315 of the Illinois Vehicle Code (Ill. Rev. Stat. 1983, ch. 951/2, par. 7 \u2014 315), which applies to individuals whose licenses have been revoked. That section requires that in order to obtain a restoration of driving privileges, an applicant must produce a certificate of an authorized insurance carrier (1) certifying the existence of a proper liability policy covering the applicant; and (2) containing an agreement by the insurer to give the Secretary of State 10 days prior written notice of any cancellation of the policy. As with section 7 \u2014 315, the obvious purpose of the Postal Service regulation concerning insurance requirements and notice of cancellation is to give the public financial protection from the possible tort of uninsured drivers.\nWe consider next State Farm\u2019s assertion that any finding that it did not send notice of cancellation to the Postal Service is contrary to the manifest weight of the evidence. State Farm admits that the notice was not sent within 10 days as required by the certificate, but maintains that the evidence shows that it was sent approximately one month prior to the August 20,1980, collision.\nThe employees of the Postal Service Transportation Management Office in Hazelwood, Missouri, testified that (1) a file is maintained for each contractor and subcontractor; (2) a subcontractor\u2019s insurance documents are placed in that subcontractor\u2019s file; (3) Richard\u2019s file contained the certificate of insurance issued by State Farm; and (4) there is no indication in Richard\u2019s file that a cancellation notice was ever received from State Farm.\nState Farm presented no evidence that (1) any particular third-party notice form was printed by the computer; (2) any alleged notice was ever put into an envelope; (3) any envelope was ever addressed to the Postal Service; or (4) any envelope addressed to the Postal Service was taken to a post office or delivered to the Postal Service. The only evidence presented by State Farm was that the number \u201c1\u201d which appeared in a particular box on a particular computer form signified to State Farm employees that a \u201cnotice\u201d to third-parties (e.g., the Postal Service) had been printed. However, the State Farm employees did not indicate in their testimony when the notice was printed or what type of notice was printed. The trial court\u2019s finding that no notice was given in accordance with the provisions of the certificate of insurance was not contrary to the manifest weight of the evidence.\nState Farm next points out that (1) both the State Farm policy issued to Richard and the certificate of insurance issued to the Postal Service identified the insured vehicle as a 1977 Mercedes van; (2) plaintiff admits in his pleading that Richard was driving a lVa-ton 1973 International truck at the time of the accident; (3) the State Farm policy issued to Richard provided that \u201cliability coverage extends to [an insured\u2019s] use *** of a newly acquired car *** [if the car] replaces [insured\u2019s] car *** but only if [insured or insured\u2019s spouse] *** tell us about it within 30 days after its delivery to [insured or insured\u2019s spouse.]\u201d\nState Farm argues that the vehicle operated by Richard at the time of the accident was not covered by the policy in question because there was insufficient evidence to show that Richard did tell State Farm \u201cabout it within 30 days after its delivery.\u201d State Farm also maintains that the trial court\u2019s failure to make a specific finding concerning this issue constitutes a reversible error. However, no finding of fact is necessary to support a judgment of this nature. See 87 Ill. 2d R. 366(b)(3)(i); Getzoff v. Paris (1979), 77 Ill. App. 3d 401, 396 N.E.2d 260.\nThe record clearly indicates that (1) due to certain acts of the lessor of the Mercedes van, Richard did not have access to that vehicle after the latter part of May 1980; (2) Richard called the office of Mike Reisinger, a State Farm insurance agent, on June 3, 1980, and Reisinger\u2019s secretary placed a note concerning the telephone conversation in Richard\u2019s file; (3) this note stated \u201cMr. Richard intends to replace this veh. [sic] with another today. Will let us know.\u201d; (4) Richard went to Minnesota and purchased the International truck on June 19, 1980; and (5) the accident with plaintiff occurred on August 20,1980.\nReisinger testified that he might have had a conversation with Richard after the date of the conversation evinced by the June 3, 1980, note, but did not think that any such conversation took place. Richard testified that (1) shortly before obtaining the International truck, he informed Reisinger that he was purchasing the truck and wanted State Farm to insure it; and (2) Reisinger answered, saying, \u201c[n]o problem.\u201d However, on cross-examination, Richard stated that he would not swear this was so but thought that it was. Richard was impeached by prior deposition testimony in which he had stated that he had not talked to Reisinger after the June 3, 1980, conversation, and that on the day of the collision he intended to call Reisinger and tell him about the International truck, but did not do so. At the hearing, Richard testified that the deposition testimony was not accurate, but did not say why he had so testified at the deposition.\nDespite the impeached nature of Richard\u2019s testimony, we do not find the trial court\u2019s conclusion, inherent in its decision, that State Farm had notice of the substitution of vehicles and its agent had bound it to cover the International truck, to be contrary to the manifest weight of the evidence. Reisinger unquestionably had notice of Richard\u2019s intent to obtain another vehicle. The court could have concluded that he would have been likely to check with Richard if Richard had not contacted him. The trial court heard and observed the witnesses. As Richard did say that he believed he informed Reisinger of the substitution of vehicles, we cannot properly reject the trial court\u2019s appraisal of the testimony.\nState Farm also maintains that the trial court erred in refusing to allow it to introduce evidence concerning Richard\u2019s failure to notify State Farm of this lawsuit as required by the terms of the policy. State Farm submits that it suffered prejudice as a result of Richard\u2019s failure to give notice of the suit because it was unable to properly investigate the circumstances of the case.\nWhere an insurer fails to plead lack of notice by an insured, such lack of notice is not at issue and is, therefore, waived. (Bergmann v. Multi-State Inter-Insurance Exchange (1963), 39 Ill. App. 2d 468, 189 N.E.2d 49.) Here, State Farm did not raise this issue in its pleadings. Accordingly, the trial court did not err in refusing to allow State Farm to introduce evidence of Richard\u2019s failure to give notice.\nFinally, State Farm requests that if we uphold the trial court\u2019s determination that it has liability under its policy, we limit the liability to $10,000 which was the minimum amount required by Postal Service regulation for bodily injury to a single individual. We recognize that such a ruling would have some consistency with the public policy involved. However, as we have determined that a failure to give proper cancellation notice to the Postal Service kept the full policy in force, we do not deem it appropriate to reduce the liability below the stated limits of the policy.\nIn his cross-appeal, plaintiff submits that if this court were to determine that State Farm owed no duty to provide liability insurance coverage to Richard in this case, then the court should also determine that plaintiff is entitled to uninsured motorist\u2019s coverage under the policy issued to him by Economy. Because of our decision that State Farm owes a duty to provide insurance coverage in this case, we need not grant the relief requested by the cross-appeal.\nFor the reasons stated herein, we affirm.\nAffirmed.\nMILLS, J., concurs.", "type": "majority", "author": "PRESIDING JUSTICE GREEN" }, { "text": "JUSTICE TRAPP,\ndissenting:\nI dissent because of a strong conclusion that the majority opinion disregards critical factors in evidence relating to the contractual liability of appellant.\nThe opinion takes as an energizing premise that the premium paid was consideration for the issuance for the certificate of insurance. The date of plaintiff\u2019s injury was August 20, 1980. The finding of the trial court, that Richard was notified of cancellation of his insurance policy on June 22,1980, is not an issue.\nThe record shows that the reason for cancellation was nonpayment of premium. I cannot believe that nonpayment of premium may be transmogrified into consideration for liability coverage. The opinion cites Kerr v. Pusateri (1965), 64 Ill. App. 2d 172, 212 N.E.2d 263, as supporting authority. That opinion, however, involves a wholly different relationship in that it was admitted that no notice of cancellation of the policy was sent to the insured until after the collision causing plaintiff\u2019s injury.\nThe record is clear that by the endorsement of the policy, G & C Tracking Company, the contractor for the mail route, was an additional insured. Richard was a subcontractor under G & C. The postal service was not treated as an additional insured.\nThe evidence deposition of Kenneth Wankoski, Manager, Transportation Management Office of the United States Postal Service, emphasizes that there were, and now are, no postal regulations concerning contracts for transporting mail that require that an insurance company notify the postal service of a cancellation of the liability insurance of a contractor. Rather the requirements for notice of cancellation of the insurance of a contractor are placed upon the contractor. Wankoski testified that while evidence of insurance is required of the contractor, all such insurance transactions are conducted directly with the contractor. He stated that insurance companies do not issue notice of changes in policy to the postal service and, in effect, that the postal service does not expect to deal with, or rely upon, the issuance of notice of such changes by the insurer.\nThe net result of this opinion is to create a contractual duty which no party contemplated or agreed to, for which no consideration was paid, and which liability might continue as long as Richard managed to retain a subcontract for the transportation of mail. I would reverse the judgment of the trial court.", "type": "dissent", "author": "JUSTICE TRAPP," } ], "attorneys": [ "James V. Mancuso, Jr., of Decatur, for appellant.", "Wayne L. Bickes, of Rosenberg, Rosenberg, Bickes, Johnson & Richardson, Chartered, of Decatur, for appellee James A. Smith.", "Gary M. Peplow and David L. Requa, both of Heyl, Royster, Voelker & Allen, of Springfield, for appellee Economy Fire & Casualty Company." ], "corrections": "", "head_matter": "JAMES A. SMITH, Plaintiff-Appellee and Cross-Appellant, v. GEORGE L. RICHARD et al., Defendants (Economy Fire & Casualty Company, Defendant-Appellee and Cross-Appellee; State Farm Mutual Automobile Insurance Company, Defendant-Appellant and Cross-Appellee).\nFourth District\nNo. 4\u201484\u20140297\nOpinion filed July 10, 1985.\nTRAPP, J., dissenting.\nJames V. Mancuso, Jr., of Decatur, for appellant.\nWayne L. Bickes, of Rosenberg, Rosenberg, Bickes, Johnson & Richardson, Chartered, of Decatur, for appellee James A. Smith.\nGary M. Peplow and David L. Requa, both of Heyl, Royster, Voelker & Allen, of Springfield, for appellee Economy Fire & Casualty Company." }, "file_name": "0378-01", "first_page_order": 400, "last_page_order": 409 }