{
  "id": 2434410,
  "name": "EMPIRE FIRE & MARINE INSURANCE COMPANY, Plaintiff-Appellant, v. FAITH TRUCK LINES, INC., et al., Defendants (Jerry Adams et al., Defendants-Appellees)",
  "name_abbreviation": "Empire Fire & Marine Insurance v. Faith Truck Lines, Inc.",
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  "last_updated": "2023-07-14T17:15:09.210343+00:00",
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  "casebody": {
    "judges": [],
    "parties": [
      "EMPIRE FIRE & MARINE INSURANCE COMPANY, Plaintiff-Appellant, v. FAITH TRUCK LINES, INC., et al., Defendants (Jerry Adams et al., Defendants-Appellees)."
    ],
    "opinions": [
      {
        "text": "JUSTICE PINCHAM\ndelivered the opinion of the court:\nPlaintiff, Empire Fire & Marine Insurance Company (Empire), filed a declaratory judgment action against defendant Faith Truck Lines (Faith), a trucking company, seeking a declaration that under the provisions of its insurance policy, Empire had no duty to defend or indemnify Faith and Faith\u2019s driver, Jerry Adams, both Empire\u2019s insureds, for claims or judgments arising from an explosion. Following a bench trial, the trial court held that Empire was bound to assume the obligations of the defense and indemnification of Faith and Adams and entered judgment in favor of the defendants. Empire appeals. We affirm.\nThe facts are as follows. On July 19, 1982, Jerry Adams, a truck driver for defendant, Faith, delivered a load of hydrochloric acid, purchased from K & A Steel Chemicals (K & A) by Electronic Plating, to Electronic Plating. During the course of Adams\u2019 delivery of the acid at Electronic Plating, a chemical reaction and explosion occurred inside the tank into which the acid was being pumped, chlorine gas escaped from the tank and several people in the vicinity were overcome by fumes.\nCharlie Woodard, president and owner of Faith, telephoned Bruce Reinger, president of IMG Insurance Agency, the afternoon of July 19, 1982, and notified him of the accident. Faith had acquired most of its insurance through the IMG Insurance Agency. Reinger and IMG were not expressly designated authorized agents of Empire. Clemens & Associates in Bloomington was the only authorized agent of Empire in the State of Illinois. However, from the inception of Faith\u2019s original policy with Empire, on October 22, 1979, and during the subsequent renewal periods leading up to the July 19, 1982, accident, Faith gave notice of all claims against it to Reinger, who then reported the claims to Clemens and Clemens notified Empire, which never objected to this procedure. Empire used Reinger and IMG as intermediaries or agents in contacting Faith for delivery of Faith\u2019s policies, billing, collecting premiums and other matters related to the policies.\nOn July 26, 1982, Reinger mailed a written report to Fireman\u2019s Fund Insurance Companies, which he believed covered Faith\u2019s loss under a general liability policy. Fireman\u2019s Fund contends that it did not receive notice of the accident until June 10,1983.\nIn January 1983, Electronic Plating brought suit against Faith, Adams and K & A seeking compensation and punitive damages for property losses incurred as a result of the accident. Faith forwarded documents pertaining to the suit to Reinger, who did not forward the papers to anyone else. A default judgment was entered against Faith. Faith sent notice of the default to Reinger. After Reinger received notice of the default judgment, Reinger contacted Fireman\u2019s Fund to inquire about the status of the claim. Fireman\u2019s Fund advised Reinger that Faith\u2019s policy with Fireman\u2019s Fund did not cover the accident and suggested that Reinger contact Faith\u2019s automobile insurance carrier. By early July 1983, Reinger contacted Clemens about the accident. On July 8, 1983, Clemens forwarded notice of the loss to Empire.\nThe subject insurance policy, Empire Business Auto Policy number BA955062, was issued to Faith in 1979. Faith was the only insured named in the policy, which stated, inter alia, \u201cAnyone else is an insured while using with your permission a covered auto you own, hire or borrow ***.\u201d (Emphasis in original.) The policy also provided that Empire would pay \u201call sums the insured legally must pay as damages because of bodily injury or property damage *** caused by an accident and resulting from the ownership, maintenance or use of a covered auto.\u201d (Emphasis in original.) Other pertinent provisions include:\n\u201cWORDS AND PHRASES WITH SPECIAL MEANING ***\nA. \u2018You\u2019 and \u2018your\u2019 mean the person or organization shown as the named insured in ITEM ONE of the declarations.\nB. \u2018We\u2019, \u2018us\u2019 and \u2018our\u2019 mean the company providing the insurance. * * *\nA. YOUR DUTIES AFTER ACCIDENT OR LOSS.\n1. You must promptly notify us or our agent of any accident or loss. You must tell us how, when and where the accident or loss happened. You must assist in obtaining the names and addresses of any injured persons and witnesses.\n2. Additionally, you and other insureds\u25a0 must.\n(b.) Immediately send us copies of any notices or legal papers received in connection with the accident or loss ***.\u201d (Emphasis in original.)\nThe policy did not define the term \u201cagent.\u201d However, \u201cClemens & Associates\u201d appears trader the designation \u201cAgent\u2019s Name and Address\u201d on the declaration pages of the policy and on several of the subsequent endorsements. Although Reinger and IMG are not mentioned in the policy, Reinger forwarded Faith\u2019s application for insurance coverage by Empire to Clemens and delivered the policy to Faith.\nThe trial court held that Clemens\u2019 and Empire\u2019s receipt and acceptance of prior notices of claims forwarded by Faith to Reinger and IMG created an apparent agency. The trial court noted that the law favors insurance coverage and held further that Empire was required to assume responsibility for the defense and indemnification of the claims arising from the accident.\nOn appeal, Empire contends that Reinger and IMG were Faith\u2019s brokers, not agents of Empire, and that the trial court erred in finding that Reinger and IMG were Empire\u2019s agents for receipt of notice of loss. We disagree.\nThe narrow issue is whether Faith and Adams, on the basis of the acts of Empire and Clemens, reasonably believed that Reinger and IMG were Empire\u2019s agents for the purpose of receipt of notice of loss. Generally, a broker acts on behalf of and as the agent of the insured and an agent acts on behalf of the insurance company. (Continental Casualty Co. v. Aetna Insurance Co. (1980), 82 Ill. App. 3d 402, 407, 402 N.E.2d 756, 759.) However, a broker can act as an agent of the insurance company or as the agent of both the insured and the insurer (City of Chicago v. Barnett (1949), 404 Ill. 136), and an insurance company may be estopped to deny the agency of a broker which has arisen from a course of dealings between the parties. Ledbetter v. Crudup (1983), 114 Ill. App. 3d 401, 403, 449 N.E.2d 265, 267.\nFrom 1979 through 1982 Faith forwarded its notices of claims to Reinger and IMG, who then notified Clemens, which in turn contacted Empire. The brokerage agent for Clemens, Marjorie Evelsizer, testified that this was the standard and appropriate procedure from which these parties never deviated. Additionally, Empire, through Clemens, used Reinger and IMG as its agents for the purpose of delivering Empire\u2019s insurance policy to Faith and as its agents in billing and collecting policy premiums to and from Faith. Empire, through Clemens, allowed Faith to report prior claims and losses through Reinger and IMG, and all other contacts between Empire and Faith were made through Reinger and IMG.\nEstoppel is based on the principle that one cannot act in a particular manner and then assume an inconsistent position to the prejudice of another who has relied upon such act. (Sponemann v. Country Mutual Insurance Co. (1983), 120 Ill. App. 3d 211, 221, 457 N.E.2d 1031.) Clemens repeatedly accepted notices of loss from Reinger and IMG and used Reinger and IMG for deliveries, billing and collections. We conclude, therefore, that such conduct on the part of Clemens and Empire\u2019s concomitant acquiescence justified Faith in believing that this method of reporting claims to Empire was proper. By reason of this course of conduct by Empire, Clemens, Reinger, IMC, and Faith with respect to the reporting of vehicular accidents, an apparent agency was created in Reinger and IMC and Empire is estopped to deny the apparent agency of Clemens and IMC to the detriment of Faith and Adams. We further conclude that Empire has a duty to defend and indemnify its insureds, Faith and Adams, for the claims and judgments resulting from the accident.\nEmpire lastly contends that if this court finds that Reinger and IMC were not agents of Empire for the purpose of receipt of notice of loss, then this court must determine whether the notice received by Clemens was reasonable under the circumstances. Having reached the conclusion that Reinger and IMC were the apparent agents of Empire for the purpose of receiving notice of Faith\u2019s loss, we need not address this issue.\nThe judgment of the circuit court is affirmed.\nAffirmed.\nLORENZ, P.J., and MURRAY, J., concur.",
        "type": "majority",
        "author": "JUSTICE PINCHAM"
      }
    ],
    "attorneys": [
      "Dowd & Dowd, Ltd., of Chicago (Michael E. Dowd, Marybeth Jacobsen, and Philip J. McGuire, of counsel), for appellant.",
      "Tressler, Soderstrom; Maloney & Priess, of Chicago (Robert S. Soderstrom, Shaun McFarland, and Kimberly Kentra Gralen, of counsel), for appellee Jerry Adams.",
      "Michael W. Rathsack, of Chicago, for appellee Electronic Plating Company, Inc."
    ],
    "corrections": "",
    "head_matter": "EMPIRE FIRE & MARINE INSURANCE COMPANY, Plaintiff-Appellant, v. FAITH TRUCK LINES, INC., et al., Defendants (Jerry Adams et al., Defendants-Appellees).\nFirst District (5th Division)\nNo. 86-1096\nOpinion filed December 30, 1988.\nRehearing denied January 30, 1989.\nDowd & Dowd, Ltd., of Chicago (Michael E. Dowd, Marybeth Jacobsen, and Philip J. McGuire, of counsel), for appellant.\nTressler, Soderstrom; Maloney & Priess, of Chicago (Robert S. Soderstrom, Shaun McFarland, and Kimberly Kentra Gralen, of counsel), for appellee Jerry Adams.\nMichael W. Rathsack, of Chicago, for appellee Electronic Plating Company, Inc."
  },
  "file_name": "0356-01",
  "first_page_order": 378,
  "last_page_order": 382
}