{ "id": 3627782, "name": "UNITED FARM FAMILY MUTUAL INSURANCE COMPANY, Plaintiff-Appellee, v. JOSEPH A. FRYE, as Personal Representative of the Estate of Joseph Frye, Deceased, et al., Defendants-Appellants", "name_abbreviation": "United Farm Family Mutual Insurance v. Frye", "decision_date": "2008-04-21", "docket_number": "No. 4\u201407\u20140495", "first_page": "960", "last_page": "972", "citations": [ { "type": "official", "cite": "381 Ill. App. 3d 960" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "240 N.E.2d 742", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1968, "pin_cites": [ { "page": "745-46" } ], "opinion_index": 0 }, { "cite": "99 Ill. App. 2d 153", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5323549 ], "weight": 2, "year": 1968, "pin_cites": [ { "page": "158-59" } ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/99/0153-01" ] }, { "cite": "368 N.E.2d 702", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1977, "pin_cites": [ { "page": "705" } ], "opinion_index": 0 }, { "cite": "53 Ill. App. 3d 274", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3393808 ], "year": 1977, "pin_cites": [ { "page": "279" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/53/0274-01" ] }, { "cite": "438 N.E.2d 943", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1982, "pin_cites": [ { "page": "945" } ], "opinion_index": 0 }, { "cite": "108 Ill. App. 3d 69", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3011719 ], "year": 1982, "pin_cites": [ { "page": "71" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/108/0069-01" ] }, { "cite": "529 N.E.2d 696", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1988, "pin_cites": [ { "page": "698-99" } ], "opinion_index": 0 }, { "cite": "175 Ill. App. 3d 265", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3555112 ], "year": 1988, "pin_cites": [ { "page": "268-70" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/175/0265-01" ] }, { "cite": "631 N.E.2d 1292", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1994, "pin_cites": [ { "page": "1295, 1298-99" }, { "page": "1299" } ], "opinion_index": 0 }, { "cite": "260 Ill. App. 3d 299", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2865245 ], "weight": 2, "year": 1994, "pin_cites": [ { "page": "302-03, 307-08" }, { "page": "308" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/260/0299-01" ] }, { "cite": "355 N.E.2d 24", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "year": 1976, "pin_cites": [ { "page": "28-29" }, { "page": "29" }, { "page": "29" } ], "opinion_index": 0 }, { "cite": "64 Ill. 2d 187", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5429542 ], "weight": 3, "year": 1976, "pin_cites": [ { "page": "195-96" }, { "page": "196" }, { "page": "196" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/64/0187-01" ] }, { "cite": "708 N.E.2d 1122", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "year": 1999, "pin_cites": [ { "page": "1134-35" }, { "page": "1138" }, { "page": "1138" } ], "opinion_index": 0 }, { "cite": "186 Ill. 2d 127", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 243917 ], "weight": 3, "year": 1999, "pin_cites": [ { "page": "150" }, { "page": "157-58" }, { "page": "158" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/186/0127-01" ] }, { "cite": "806 N.E.2d 223", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "year": 2004, "pin_cites": [ { "page": "226" }, { "page": "226" }, { "page": "226" } ], "opinion_index": 0 }, { "cite": "346 Ill. 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App. 3d 622", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 132415 ], "weight": 3, "year": 2000, "pin_cites": [ { "page": "628" }, { "page": "628" }, { "page": "629" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/321/0622-01" ] }, { "cite": "360 N.E.2d 247", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 5, "year": 1977, "pin_cites": [ { "page": "248" }, { "page": "248" }, { "page": "250" }, { "page": "251" } ], "opinion_index": 0 }, { "cite": "172 Ind. App. 329", "category": "reporters:state", "reporter": "Ind. App.", "case_ids": [ 1489804 ], "weight": 5, "year": 1977, "pin_cites": [ { "page": "330" }, { "page": "333" }, { "page": "335" }, { "page": "336" } ], "opinion_index": 0, "case_paths": [ "/ind-app/172/0329-01" ] }, { "cite": "370 N.E.2d 1044", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "year": 1977, "pin_cites": [ { "page": "1049" }, { "page": "1049" }, { "page": "1049" } ], "opinion_index": 0 }, { "cite": "69 Ill. 2d 167", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5454381 ], "weight": 3, "year": 1977, "pin_cites": [ { "page": "179" }, { "page": "179" }, { "page": "179" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/69/0167-01" ] }, { "cite": "710 N.E.2d 125", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1999, "pin_cites": [ { "page": "128" } ], "opinion_index": 0 }, { "cite": "304 Ill. App. 3d 697", "category": "reporters:state", "reporter": "Ill. 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Serv.", "opinion_index": 1 }, { "cite": "875 N.E.2d 1096", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 2007, "pin_cites": [ { "page": "1105" } ], "opinion_index": 1 }, { "cite": "226 Ill. 2d 395", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3610563 ], "year": 2007, "pin_cites": [ { "page": "411" } ], "opinion_index": 1, "case_paths": [ "/ill-2d/226/0395-01" ] }, { "cite": "754 N.E.2d 327", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 2001, "pin_cites": [ { "page": "334" } ], "opinion_index": 1 }, { "cite": "197 Ill. 2d 88", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 259033 ], "year": 2001, "pin_cites": [ { "page": "99-100" } ], "opinion_index": 1, "case_paths": [ "/ill-2d/197/0088-01" ] }, { "cite": "674 N.E.2d 52", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1996, "pin_cites": [ { "page": "55-56" } ], "opinion_index": 1 }, { "cite": "285 Ill. App. 3d 115", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1295605 ], "year": 1996, "pin_cites": [ { "page": "120-21" } ], "opinion_index": 1, "case_paths": [ "/ill-app-3d/285/0115-01" ] } ], "analysis": { "cardinality": 1087, "char_count": 26891, "ocr_confidence": 0.835, "pagerank": { "raw": 6.90477003525228e-08, "percentile": 0.41964261236852035 }, "sha256": "33e71dfd802c77f2b4a5bdf31c0a09fb1cac147e13d13ceeac4aa04c7e4be406", "simhash": "1:12e44f8a0d2de41a", "word_count": 4184 }, "last_updated": "2023-07-14T18:23:38.608554+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "UNITED FARM FAMILY MUTUAL INSURANCE COMPANY, Plaintiff-Appellee, v. JOSEPH A. FRYE, as Personal Representative of the Estate of Joseph Frye, Deceased, et al., Defendants-Appellants." ], "opinions": [ { "text": "JUSTICE KNECHT\ndelivered the opinion of the court:\nIn July 2003, husband Joseph Frye (Joseph-deceased) and wife Wilma F. Frye, both residents of Indiana, died as a result of injuries sustained in an automobile collision on an Illinois roadway. The accident occurred while the parties were in an automobile insured under a policy issued in Indiana by plaintiff, United Farm Family Mutual Insurance Company (Farm Bureau), an Indiana corporation.\nIn July 2005, defendant, Joseph A. Frye (Joseph-estate), personal representative of the estate of Joseph-deceased, filed a wrongful-death action against Jamie Thompson, special representative of Wilma\u2019s estate, in the Pike County circuit court. Farm Bureau hired counsel, Larry Kuster, to represent Wilma\u2019s estate in the wrongful-death action.\nIn February 2006, Farm Bureau filed its complaint for declaratory judgment. In its complaint, Farm Bureau asserted it had no duty to defend or indemnify Wilma\u2019s estate in the wrongful-death action. Farm Bureau also asserted the estate of Joseph-deceased could not recover as an uninsured motorist (UIM).\nIn March 2007, the Pike County circuit court granted Farm Bureau\u2019s motion. Defendant Joseph-estate appealed. On appeal, Joseph-estate argues (1) the policy issued to Joseph-deceased and Wilma is internally inconsistent and inherently ambiguous; (2) the estate of Joseph-deceased is entitled to UIM coverage under Illinois public policy; and (3) Farm Bureau should be estopped from raising coverage defenses for its delay in filing the declaratory-judgment action. We affirm.\nI. BACKGROUND\nWilma and Joseph-deceased, wife and husband, resided together in Munster, Indiana. They secured an automobile insurance policy from Farm Bureau to cover the period of June 16, 2003, through December 16, 2003 (Policy). The 2001 Saturn insured by the Policy was licensed and registered in Indiana, and it was principally located in Indiana but occasionally driven outside that state. Joseph-deceased and Wilma purchased the Policy in Indiana.\nOn July 3, 2003, Wilma and Joseph-deceased were involved in an automobile accident, which resulted in their deaths. The accident occurred in Pike County, Illinois. The Policy provided coverage to Joseph-deceased and Wilma under the medical-expense-and-physical-damage coverages. Payments pursuant to the Policy coverages totaled over $62,000, for medical expenses, death benefits, and property damage.\nIn June 2005, Joseph-estate demanded the policy limits from Farm Bureau under the liability and UIM coverages in the Policy. In July 2005, Joseph-estate filed a wrongful-death complaint on behalf of the estate of his father, Joseph-deceased, against Wilma\u2019s estate in Pike County, in an effort to secure for the estate the $100,000 policy limit for liability. In the complaint, Joseph-estate alleged Wilma caused the collision when attempting a U-tum.\nFarm Bureau provided Wilma\u2019s defense in the pending wrongful-death action. In August 2005, Larry Kuster entered an appearance on behalf of Wilma\u2019s estate. Farm Bureau, in providing the defense, did not make a reservation of rights. Also, in August 2005, Wilma\u2019s estate moved to dismiss the wrongful-death case. This motion was denied in December 2005. Wilma\u2019s estate petitioned this court for interlocutory appeal; we denied the request. Frye v. Thompson, No. 4\u201406\u20140090 (February 23, 2006) (leave to appeal denied).\nIn February 2006, Farm Bureau filed its complaint for declaratory judgment. Farm Bureau set forth two claims. In the first claim, Farm Bureau maintained it had no duty to defend or indemnify Wilma\u2019s estate because the Policy excludes liability coverage for claims between insured spouses. Farm Bureau relied upon the household exclusion in the Policy:\n\u201cEXCLUSIONS \u2014 What we will not cover.\nThis insurance does not apply to:\nHi sfc #\n15. bodily injury to the insured or to any person related to the insured by blood, marriage[,] or adoption and who is a resident of the same household as the insured.\u201d\nIn the second claim of its complaint, Farm Bureau asserted it had no duty to defend or indemnify Wilma\u2019s estate under the UIM coverage, because the Policy excludes coverage for vehicles that are insured under the Policy (owned-vehicle exclusion).\n\u201cINSURING AGREEMENT \u2014 What we will pay under Coverage K.\nWe will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an uninsured or underinsured motor vehicle. The bodily injury must be caused by an accident arising out of the ownership, maintenance),] or use of an uninsured or underinsured motor vehicle.\u201d\nThe Policy defines \u201cuninsured motor vehicle\u201d as, in part, \u201ca land motor vehicle licensed for highway use\u201d but excludes a land motor vehicle \u201cinsured under the liability coverage of this policy.\u201d\nUpon Farm Bureau\u2019s motion for summary judgment, the circuit court entered declaratory judgment in Farm Bureau\u2019s favor. This appeal followed.\nII. ANALYSIS\nJoseph-estate sets forth three main arguments on appeal: (1) the Policy is internally inconsistent and inherently ambiguous; (2) Illinois public policy requires the estate of Joseph-deceased be compensated under the UIM coverage; and (3) Farm Bureau should be estopped from raising coverage defenses because it delayed filing the declaratory-judgment action. We begin with the second argument.\nA. Indiana Law Applies\nJoseph-estate\u2019s second argument turns on whether Illinois or Indiana law applies. To answer this question, we begin by ascertaining whether a conflict between the laws of these states exists. See McGrew v. Pearlman, 304 Ill. App. 3d 697, 701, 710 N.E.2d 125, 128 (1999). One does.\nIllinois and Indiana have considered the legality of using the owned-vehicle exclusion to deny UIM coverage and reached different conclusions. In Illinois, courts have refused to enforce the owned-vehicle exclusion. For example, in Squire v. Economy Fire & Casualty Co., 69 Ill. 2d 167, 179, 370 N.E.2d 1044, 1049 (1977), the court concluded the Illinois Insurance Code \u201crequires coverage of insured persons regardless of the motor vehicle the uninsured motorist is driving, and regardless of the vehicle in which the insured person is located when injured.\u201d The Squire court based its holding on section 143a of the Insurance Code (215 ILCS 5/143a (West 2002)), which requires liability insurance policies to cover insureds \u201cwho are legally entitled to recover damages from owners or operators of uninsured motor vehicles.\u201d See also Squire, 69 Ill. 2d at 179, 370 N.E.2d at 1049.\nIndiana courts, however, have concluded owned-vehicle exclusions do not violate Indiana law. In United Farm Bureau Mutual Insurance Co. v. Hanley, 172 Ind. App. 329, 360 N.E.2d 247 (1977), the court was faced with an argument similar to the one Joseph-estate makes here. Two sons of the insured were, with permission, in the vehicle of another. One son was driving; the other was a passenger. Both sons were insureds under the policy. They were in an accident that left the driving son dead and the other injured. See Hanley, 172 Ind. App. at 330, 360 N.E.2d at 248. The injured son sought compensation for his injuries under the liability coverage and the UIM coverage of the policy. Because the household exclusion applied, the injured son was barred from recovering under the liability portion of the policy. The injured son then argued the UIM provisions were triggered. Hanley, 172 Ind. App. at 333, 360 N.E.2d at 248. The Hanley court found recovery barred, upon concluding the combination of the exclusions did not violate Indiana law. The Hanley court noted decisions in Illinois \u201cawarded [UIM] coverage to insureds who were otherwise excluded from liability coverage by operation of the household exclusion,\u201d but it called this the minority view and refused to follow it. Hanley, 172 Ind. App. at 335, 360 N.E.2d at 250.\nJoseph-estate concedes under normal conflict-of-law analysis, Indiana law would apply. We agree. Absent a choice-of-law provision, we look to Illinois choice-of-law rules to ascertain the applicable law. See Westchester Fire Insurance Co. v. G. Heileman Brewing Co., 321 Ill. App. 3d 622, 628, 747 N.E.2d 955, 961 (2000). Under Illinois choice-of-law rules for insurance contracts, Illinois courts use the \u201cmost significant contacts\u201d test. Westchester Fire Insurance, 321 Ill. App. 3d at 628, 747 N.E.2d at 961. Insurance policies \u201care \u2018 \u201cgoverned by the location of the subject matter, the place of delivery of the contract, the domicile of the insured or of the insurer, the place of the last act to give rise to a valid contract, the place of performance, or other place bearing a rational relationship to the general contract.\u201d \u2019 \u201d Westchester Fire Insurance, 321 Ill. App. 3d at 629, 747 N.E.2d at 961, quoting Lapham-Hickey Steel Corp. v. Protection Mutual Insurance Co., 166 Ill. 2d 520, 526-27, 655 N.E.2d 842, 845 (1995), quoting Hofeld v. Nationwide Life Insurance Co., 59 Ill. 2d 522, 528, 322 N.E.2d 454, 457-58 (1975). All of these considerations lean toward applying Indiana law.\nJoseph-estate argues, however, Illinois public policy requires the application of Illinois law here. He contends Illinois courts have called the owned-vehicle exclusion \u201cillegal and unenforceable\u201d and the enforcement of an \u201cillegal\u201d exclusion would violate Illinois public policy. Joseph-estate further maintains Illinois has an interest in protecting the individuals who are injured on its roadways.\nTo determine Illinois public policy, we look to our constitution, the legislative enactments, and decisions of the courts. See Morris B. Chapman & Associates, Ltd. v. Kitzman, 193 Ill. 2d 560, 569, 739 N.E.2d 1263, 1270 (2000). As shown above, the decisions of Illinois courts have interpreted section 143a as rendering owned-vehicle exclusions \u201cillegal and unenforceable.\u201d See Squire, 69 Ill. 2d at 179, 370 N.E.2d at 1049.\nWe conclude Joseph-estate is not asking the correct question of what Illinois public policy would allow. The question is not simply whether Illinois public policy would want to prevent harm to individuals on its roadways. While we agree Illinois would want to protect these individuals from harm while in Illinois, we do not agree this shows Illinois public policy requires Illinois law to govern how out-of-state residents can contract with their insurance companies to be fiscally protected or compensated for injuries sustained in another state.\nRather, the true question is whether Illinois public policy mandates Illinois law governs a purely Indiana insurance contract: one between two individual residents and a corporate resident, involving a vehicle licensed in Indiana, which happens to be involved in an accident in Illinois. Joseph-estate has not shown Illinois public policy requires this court to interject Illinois law here. No Illinois resident claims he was denied coverage under the suit. The liability coverage would have applied to any Illinois resident injured as a result of Wilma\u2019s negligence. Moreover, section 143a, upon which Illinois courts rely to find such exclusions \u201cillegal and unenforceable,\u201d explicitly applies only to vehicles registered or garaged in Illinois. See 215 ILCS 5/143a (West 2002). Section 143a thus cannot serve as the basis for concluding a vehicle registered in Indiana by Indiana residents must provide the UIM coverage to cover injuries to other Indiana-resident members of their household simply because the vehicle is driven in Illinois. Indiana has ascertained its residents can bargain away such coverage, which likely results in lower premiums. The holding Joseph-estate seeks would require this Illinois court to interfere with Indiana\u2019s ability to determine whether lower premiums or greater coverage is better for Indiana citizens when Illinois residents are not affected.\nIndiana law applies to this contract. Under Indiana law, the owned-vehicle exclusion prevents Joseph-estate\u2019s recovery of damages under the UIM coverage of the Policy.\nB. The Policy Is Not Internally Inconsistent or Ambiguous\nJoseph-estate argues he is nevertheless entitled to the UIM coverage because the Policy is internally inconsistent and inherently ambiguous. Joseph-estate maintains the Policy\u2019s household exclusion renders Wilma an UIM, while the owned-vehicle exclusion renders her an insured motorist, creating an absurd result. Joseph-estate contends the two exclusions combined provide \u201cthe legal protection equivalent to wet tissue paper.\u201d\nFarm Bureau responds by asserting the Policy contains provisions interpreted and enforced by courts in Indiana. We agree with Farm Bureau.\nHaving determined Indiana law permits the two clauses, we cannot find an inherent inconsistency between the household exclusion and the owned-vehicle exclusion. As shown above, these clauses have been enforced in Indiana. See Hanley, 172 Ind. App. at 336, 360 N.E.2d at 251.\nIn addition, contrary to the sweeping assertions of Joseph-estate, the application of these two clauses does not create a worthless Policy. Farm Bureau paid claims from this collision under other coverages. Moreover, the liability coverage and the UIM coverage, although they provided no coverage to Joseph-deceased in this collision, had purpose. They provided protection from collisions of vehicles not covered under the Policy or vehicles not driven by members of the household.\nIn addition, we find Joseph-estate has not proved the terms of the Policy to be ambiguous. We recognize the difficulty of following insurance contracts, but Joseph-estate has not shown any ambiguity to render the contract unenforceable.\nC. Farm Bureau Is Not Estopped From Denying Coverage\nJoseph-estate last argues Farm Bureau should be estopped from raising coverage defenses under the \u201cmend-the-hold\u201d and equitableestoppel doctrines. Joseph-estate emphasizes the following facts: Farm Bureau did not file the declaratory judgment action until more than 31 months after the accident, 8 months after he made the policy limits demand, and 6 months after the lawsuit was filed; Farm Bureau defended Wilma\u2019s estate without making a reservation of rights; and Farm Bureau admitted through Kuster\u2019s answers to interrogatories there was coverage of the claim. Joseph-estate contends Farm Bureau, through its actions, conceded coverage and cannot now maintain there is none.\nWe first find Kuster\u2019s answer to interrogatories in the underlying wrongful-death action cannot be held against Farm Bureau. Kuster is the attorney for Wilma\u2019s estate. Although Kuster was paid by Farm Bureau, Joseph-estate has not identified anything in the record to indicate he represented Farm Bureau.\nWe also find it irrelevant that over 31 months had passed since the accident before Farm Bureau filed the declaratory-judgment action. A duty to defend does not arise until after the underlying lawsuit is filed. See Grinnell Mutual Reinsurance Co. v. LaForge, 369 Ill. App. 3d 688, 698, 863 N.E.2d 1132, 1140 (2006).\n1. The \u201cMend-the-Hold\u201d Doctrine\nWe turn to Joseph-estate\u2019s first argument: the \u201cmend-the-hold\u201d doctrine prohibits Farm Bureau from relying on the coverage defenses raised in the declaratory-judgment action. Under the mend-the-hold doctrine, in the insurance context, insurers may not deny a claim for one reason and then change \u201cthe reason for its denial in the midst of litigation.\u201d LaForge, 369 Ill. App. 3d at 699, 863 N.E.2d at 1140. \u201c \u2018 \u201c[It] is not permitted thus to amend [its] hold.\u201d \u2019 \u201d LaForge, 369 Ill. App. 2d at 699, 863 N.E.2d at 1140, quoting Gibson v. Brown, 214 Ill. 330, 341, 73 N.E. 578, 582 (1905), quoting Ohio & Mississippi Ry. Co. v. McCarthy, 96 U.S. 258, 267-68, 24 L. Ed. 693, 696 (1877).\nOther than relying on Kuster\u2019s interrogatory answer, Joseph-estate has not identified any place in the record showing Farm Bureau denied his claim for coverage for one reason and changed the reason after litigation began. In fact, the record shows Farm Bureau had not denied Joseph-estate\u2019s claims before Joseph-estate filed the wrongful-death action. Joseph-estate made its claim under the liability coverage portion of the Policy on June 6, 2005. While making its claim, Joseph-estate maintained he needed a prompt response because the statute of limitations was about to expire. On June 15, 2005, Farm Bureau informed Joseph-estate it did not yet have an authorized response to his claim and it would take some time to get one. On July 1, 2005, the wrongful-death suit was filed.\nEven if Joseph-estate could rely on Farm Bureau\u2019s provision of a defense for Wilma\u2019s estate as admitting coverage and then Farm Bureau\u2019s declaratory-judgment action as a change of position, the mend-the-hold doctrine does not apply. This court will not apply the doctrine \u201cin the absence of detriment to the party seeking its application, unfair surprise, or arbitrariness.\u201d LaForge, 369 Ill. App. 3d at 699, 863 N.E.2d at 1141. Joseph-estate has not established, much less argued, he suffered detriment or unfair surprise at the alleged change in position. Nor has he shown any arbitrariness to justify application of the doctrine here. Further, Joseph-estate cannot claim he incurred costs of litigation as a result of the alleged change of position, because he made his demand shortly before he filed suit and before he received word on Farm Bureau\u2019s position.\n2. Equitable Estoppel\nJoseph-estate argues the doctrine of equitable estoppel prohibits Farm Bureau from denying coverage. Joseph-estate maintains because Farm Bureau undertook defending Wilma\u2019s estate without a reservation of rights and did not seek a declaratory judgment until after the motion to dismiss in the underlying suit was denied, the doctrine prohibits Farm Bureau from denying coverage.\nFarm Bureau maintains, in part, the equitable estoppel doctrine does not apply because Joseph-estate has not shown prejudice. We agree.\nJoseph-estate\u2019s position focuses on an insurer\u2019s responsibilities when faced with a claim it believes is not covered by a duty to defend. In that situation, \u201cthe insurer may not simply refuse to defend the insured.\u201d Johnson v. State Farm Fire & Casualty Co., 346 Ill. App. 3d 790, 794, 806 N.E.2d 223, 226 (2004). The insurer must, instead, \u201ceither (1) defend the lawsuit under a reservation of rights or (2) seek a declaratory judgment that no coverage exists.\u201d Johnson, 346 Ill. App. 3d at 794, 806 N.E.2d at 226. We will find an insurer \u201cestopped from raising a policy defense to coverage only if it fails to take either of these two actions\u201d (Johnson, 346 Ill. App. 3d at 794, 806 N.E.2d at 226) and it \u201cis later found to have wrongfully denied coverage\u201d (Employers Insurance of Wausau v. Ehlco Liquidating Trust, 186 Ill. 2d 127, 150, 708 N.E.2d 1122, 1134-35 (1999)). Proof of prejudice, in these circumstances, is not required. See Wausau, 186 Ill. 2d at 157-58, 708 N.E.2d at 1138.\nA different equitable estoppel applies, however, if the insurer initially undertakes the duty to defend without reserving its rights, but later reserves rights or files a declaratory-judgment action. See Wausau, 186 Ill. 2d at 158, 708 N.E.2d at 1138. In the cases where the duty to defend was undertaken but then disputed, an insurer will not be equitably estopped from denying coverage unless prejudice exists. See Maryland Casualty Co. v. Peppers, 64 Ill. 2d 187, 195-96, 355 N.E.2d 24, 28-29 (1976); American States Insurance Co. v. National Cycle, Inc., 260 Ill. App. 3d 299, 302-03, 307-08, 631 N.E.2d 1292, 1295, 1298-99 (1994); Mid-State Savings & Loan Ass\u2019n v. Illinois Insurance Exchange, Inc., 175 Ill. App. 3d 265, 268-70, 529 N.E.2d 696, 698-99 (1988).\nIn this case, Joseph-estate has not shown prejudice. The duty to defend was not owed to Joseph-estate. Joseph-estate has not shown how he was prejudiced by Farm Bureau\u2019s conduct, and he has not provided any basis for the conclusion barring Farm Bureau from a valid defense would be equitable.\nThe only argument Joseph-estate makes for prejudice is that Wilma\u2019s estate was prejudiced because she was not allowed to control her defense. Notwithstanding the problems that arise on using an adversary\u2019s alleged prejudice to trigger estoppel, case law shows courts should not conclusively presume prejudice \u201cfrom the mere entry of appearance and assumption of the defense.\u201d Peppers, 64 Ill. 2d at 196, 355 N.E.2d at 29; see also Royal Globe Insurance Co. v. Tutt, 108 Ill. App. 3d 69, 71, 438 N.E.2d 943, 945 (1982). Prejudice will be found if \u201cby the insurer\u2019s assumption of the defense the insured has been induced to surrender his right to control his own defense.\u201d Peppers, 64 Ill. 2d at 196, 355 N.E.2d at 29. Prejudice must be proved \u201c \u2018by clear, concise, and unequivocal evidence.\u2019 \u201d National Cycle, 260 Ill. App. 3d at 308, 631 N.E.2d at 1299, quoting Old Mutual Casualty Co. v. Clark, 53 Ill. App. 3d 274, 279, 368 N.E.2d 702, 705 (1977). Joseph-estate argues nothing more than Wilma\u2019s estate was denied the opportunity to hire counsel. This argument is insufficient.\nJoseph-estate\u2019s case law on this point is distinguishable. Joseph-estate relies on Apex Mutual Insurance Co. v. Christner, 99 Ill. App. 2d 153, 240 N.E.2d 742 (1968). In Christner, however, the insured, rather than a third-party plaintiff in an underlying action, sought equitable estoppel. In addition, a motion for summary judgment against the insured was pending in the underlying lawsuit before the insurer sought a declaratory judgment and summary judgment was entered before the declaratory-judgment case was decided. See Christner, 99 Ill. App. 2d at 158-59, 240 N.E.2d at 745-46.\nIII. CONCLUSION\nFor the reasons stated, we affirm the trial court\u2019s judgment.\nAffirmed.\nSTEIGMANN, J., concurs.", "type": "majority", "author": "JUSTICE KNECHT" }, { "text": "JUSTICE MYERSCOUGH,\nspecially concurring:\nI specially concur. I agree with the majority that Indiana law applies. The Illinois Insurance Code permits out-of-state insurance companies to issue policies in conformance with the laws of their respective states:\n\u201cThe policies of a company, not organized under the laws of this State, may contain any provision which the law of the state or country under which the company is organized prescribes shall be in such policies when issued in this State, and the policies of such insurance company organized under the laws of this State may, when issued or delivered in any other state or country, contain any provisions required by the laws of the state or country in which the same are issued, anything in this Code to the contrary notwithstanding.\u201d 215 ILCS 5/443 (West 2006).\nHowever, I write separately to note the contradiction within the Insurance Code. All drivers of vehicles in Illinois must possess mandatory minimum UIM and underinsured (UDIM) insurance but vehicles registered in another state need only possess insurance in conformance with the other state\u2019s laws. Illinois public policy mandates $20,000/$40,000 limits on UIM and UDIM coverage. Simply put, drivers in Illinois, whether residents or not, are required to possess those insurance limits to drive upon the roads in Illinois. Absolute liability lies for failure to possess those insurance limits:\n\u201cSection 3 \u2014 707 is the penalty provision for violation of the mandatory insurance provisions of the Code. See 625 ILCS 5/7\u2014 601, 7 \u2014 602 (West 2000). The purpose to be achieved, then, is enforcement of the mandatory insurance requirement, which was instituted for the protection of the public (see State Farm Mutual Automobile Insurance Co. v. Universal Underwriters Group, 285 Ill. App. 3d 115, 120-21[, 674 N.E.2d 52, 55-56] (1996)), and to promote public safety and financial responsibility (see 625 ILCS 5/7 \u2014 100 through 7 \u2014 708 (West 2000) (\u2018Illinois Safety and Family Financial Responsibility Law\u2019)). In the legislature\u2019s words, \u2018the State has a compelling interest in ensuring that drivers *** demonstrate financial responsibility, including family financial responsibility, *** in order to safely own and operate a motor vehicle.\u2019 See 625 ILCS 5/7 \u2014 701 (West 2000). Thus, the legislature, in its wisdom, has determined that important public interests are served by eliminating uninsured vehicles from the roads of this state. It makes sense, then, that they should place an absolute obligation on the operators, who are directly responsible for placing a motor vehicle on the road, to ascertain the insured status of the motor vehicle or suffer the consequences. Thus, section 3 \u2014 707, which defines the penalty for a violation of the mandatory insurance requirements set forth in sections 7 \u2014 601 of the Code, is appropriately read as imposing absolute liability and expressing the public policy of Illinois.\u201d People v. O\u2019Brien, 197 Ill. 2d 88, 99-100, 754 N.E.2d 327, 334 (2001).\nFurther, Illinois law, contrary to Indiana law, mandates those minimum limits on the vehicle regardless of the operator. State Farm Mutual Automobile Insurance Co. v. Illinois Farmers Insurance Co., 226 Ill. 2d 395, 411, 875 N.E.2d 1096, 1105 (2007). See also this recently enacted provision of the Insurance Code:\n\u201cAny policy of private passenger automobile insurance must provide the same limits of bodily injury liability, property damage liability, [UIM] and [UDIM] bodily injury, and medical payments coverage to all persons insured under that policy, whether or not an insured person is a named insured or permissive user under the policy. If the policy insures more than one private passenger automobile, the limits available to the permissive user shall be the limits associated with the vehicle used by the permissive user when the loss occurs.\u201d Pub. Act 95 \u2014 395, \u00a75, eff. January 1, 2008 (adding 215 ILCS 5/143.13a) (2007 Ill. Legis. Serv. 4757 (West)).\nClearly, Wilma Frye, the deceased, should have been insured here in compliance with the mandatory insurance public-policy requirement of Illinois. But, in effect, the majority permits an uninsured vehicle to be driven upon the roads of this state, contrary to the public policy of our state. Both Wilma Frye and her husband, Joseph Frye, were in violation of that public policy and the statutory mandate of such sections as section 7 \u2014 601, for example, when driving and permitting the operation of their vehicle in Illinois. Both could have been prosecuted for that violation under our absolute-liability statute governing drivers, even though their Indiana insurance company bore no responsibility to comply with the mandatory insurance laws of Illinois.", "type": "concurrence", "author": "JUSTICE MYERSCOUGH," } ], "attorneys": [ "Kent R. Schnack (argued), of Schnack Law Offices, of Quincy, for appellants.", "William L. Siebers (argued), of Scholz, Loos, Palmer, Siebers & Duesterhaus, of Quincy, for appellee." ], "corrections": "", "head_matter": "UNITED FARM FAMILY MUTUAL INSURANCE COMPANY, Plaintiff-Appellee, v. JOSEPH A. FRYE, as Personal Representative of the Estate of Joseph Frye, Deceased, et al., Defendants-Appellants.\nFourth District\nNo. 4\u201407\u20140495\nArgued November 15, 2007.\nOpinion filed April 21, 2008.\nMYERSCOUGH, J., specially concurring.\nKent R. Schnack (argued), of Schnack Law Offices, of Quincy, for appellants.\nWilliam L. Siebers (argued), of Scholz, Loos, Palmer, Siebers & Duesterhaus, of Quincy, for appellee." }, "file_name": "0960-01", "first_page_order": 976, "last_page_order": 988 }