{ "id": 3404834, "name": "TRIPLE-X CHEMICAL LABORATORIES, Plaintiff-Appellee, v. GREAT AMERICAN INSURANCE COMPANY, Defendant-Appellant", "name_abbreviation": "Triple-X Chemical Laboratories v. Great American Insurance", "decision_date": "1977-11-09", "docket_number": "No. 76-774", "first_page": "676", "last_page": "681", "citations": [ { "type": "official", "cite": "54 Ill. App. 3d 676" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "131 N.E.2d 100", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "7 Ill. 2d 393", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2713110 ], "opinion_index": 0, "case_paths": [ "/ill-2d/7/0393-01" ] }, { "cite": "64 N.E. 339", "category": "reporters:state_regional", "reporter": "N.E.", "opinion_index": 0 }, { "cite": "197 Ill. 190", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 844035 ], "opinion_index": 0, "case_paths": [ "/ill/197/0190-01" ] }, { "cite": "427 F.2d 425", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 2243477 ], "opinion_index": 0, "case_paths": [ "/f2d/427/0425-01" ] }, { "cite": "179 F.2d 827", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1255787 ], "year": 1970, "opinion_index": 0, "case_paths": [ "/f2d/179/0827-01" ] }, { "cite": "163 U.S. 289", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 468128 ], "weight": 2, "year": 1950, "opinion_index": 0, "case_paths": [ "/us/163/0289-01" ] }, { "cite": "235 Ill. App. 344", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3104993 ], "opinion_index": 0, "case_paths": [ "/ill-app/235/0344-01" ] }, { "cite": "324 N.E.2d 78", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "25 Ill. App. 3d 895", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2704756 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/25/0895-01" ] } ], "analysis": { "cardinality": 596, "char_count": 11663, "ocr_confidence": 0.887, "pagerank": { "raw": 1.114332161492222e-07, "percentile": 0.5714609230113415 }, "sha256": "95e2ec00e681b6ed00514dcfbcf615bc98a8838d1921bee364ce444080608bcc", "simhash": "1:2a4a5daca470eeda", "word_count": 1824 }, "last_updated": "2023-07-14T21:56:34.806209+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "TRIPLE-X CHEMICAL LABORATORIES, Plaintiff-Appellee, v. GREAT AMERICAN INSURANCE COMPANY, Defendant-Appellant." ], "opinions": [ { "text": "Mr. JUSTICE McNAMARA\ndelivered the opinion of the court:\nDefendant, Great American Insurance Company, appeals from an order of the circuit court of Cook County granting plaintiff, Triple-X Chemical Laboratories, summary judgment on the issue of liability. Since the parties have stipulated as to the correct amount of damages to be awarded if the order is affirmed, only the correctness of the grant of summary judgment is at issue.\nPlaintiff brought this action against eight fire insurers, seeking the benefits provided under its eight fire insurance policies, each issued by different companies, covering the contents and improvements on its plant located in the Village of Mundelein, Illinois. The losses resulted from two fires which occurred on August 18, 1972, and September 7, 1972. Subsequent to the filing of this action, seven of the eight insurers settled plaintiff\u2019s claim and were dismissed from the suit. Defendant settled plaintiff\u2019s claim as to the fire of August 18, but filed affirmative defenses as to plaintiff\u2019s claim arising out of the second fire. In its affirmative defenses, defendant asserted that plaintiff \u201cincreased the hazard\u201d and \u201cneglected\u201d to use all reasonable means to save and preserve the property at and after the loss, contrary to the policy provisions. After considering the pleadings, affidavits and depositions, the trial court held that there were no genuine issues of material fact regarding the defenses based on \u201cneglect\u201d and \u201cincrease of hazard\u201d clauses contained in the policy. The court therefore ruled that plaintiff was entitled to judgment as a matter of law.\nPlaintiff is a corporation engaged in the mixing, manufacturing and packaging of chemicals, both flammable and nonflammable. In November 1970, defendant issued plaintiff the policy in question. At the time the policy was issued, plaintiff used both explosion-proof and non-explosion-proof machines in its operations. An explosion-proof machine is one which has a motor totally encased, thus preventing sparks from escaping. Such machines generally are used in connection with the manufacture or packaging of flammable materials. At the time the policy was executed plaintiff made no representation, nor did any employee or agent of defendant inquire regarding plaintiff\u2019s use of non-explosion-proof machines to mix, manufacture, or package flammables.\nOn August 18, 1972, plaintiff\u2019s premises were damaged by fire. On August 25, plaintiff received a report from the office of the State Fire Marshal alleging certain fire code violations. Included was a notation that all motors on the plaintiff\u2019s premises should be of the explosion-proof type. Compliance was ordered within 30 days. Plaintiff was able to comply immediately with several items, but as of September 7 the replacement of all non-explosion-proof motors had not been completed. On September 7, 1972, plaintiff\u2019s premises again were damaged by fire.\nIn addition to what we have noted, defendant\u2019s affirmative defenses asserted that plaintiff had increased the hazard insured against by using non-explosion-proof motors after receipt of the fire marshal\u2019s report. It also stated that the September 7 fire was caused by plaintiff\u2019s use of a non-explosion-proof machine to fill stove polish, a flammable substance. Support for this allegation was found in the affidavit of William McNamara, one of plaintiff\u2019s employees.\nMartin R. Rosenthal, plaintiff\u2019s president, stated in a supplemental affidavit that before, at, and after execution of the insurance policy, non-explosion-proof machines were used to manufacture and package certain flammable materials. The affidavit further recited that at no time prior to September 7 had any representative, agent, or employee of plaintiff received any warning or notice of policy cancellation from defendant referring to the use of non-explosion-proof machines.\nDefendant argued in the trial court that there was a genuine issue of material fact as to whether plaintiff had neglected to use all reasonable means to save and preserve the property at and after the loss. In this court, defendant has waived any argument as to the correctness of the trial court\u2019s ruling on its affirmative defense based upon the \u201cneglect\u201d clause of the policy. Defendant has failed to argue the point in its brief. Under Supreme Court Rule 341(e)(7) (Ill. Rev. Stat. 1975, ch. 110A, par. 341(e)(7)), points not argued in appellant\u2019s brief are deemed waived. See Riley v. Unknown Owners (1975), 25 Ill. App. 3d 895, 324 N.E.2d 78.\nDefendant, however, contends that there was a genuine issue of material fact concerning the increase of hazard on the part of plaintiff. Defendant maintains that plaintiff\u2019s conduct subsequent to the receipt of the fire marshal\u2019s report on August 25 constituted evidence of that increase in hazard which could absolve defendant from liability under the policy. Defendant points to that portion of the report which required that all electrical apparatus on plaintiff\u2019s premises be equipped with explosion-proof motors. Compliance was ordered within 30 days. However, plaintiff continued to use both types of machines, and the September 7 fire was the result of a spark from a non-explosion-proof motor igniting a flammable substance. Defendant concludes that plaintiff\u2019s continued use of such machines substantially increased the risk of fire.\nAccepting defendant\u2019s allegations as true and correct, they do not substantiate defendant\u2019s defense of increase of hazard. In the absence of fraud or deceit, which are not alleged here, an insurer is deemed to insure against the risks inherent in the business of the insured at the time the policy is issued. (See Simmons v. Home Insurance Co. (1925), 235 Ill. App. 344.) In determining the nature and extent of the risks insured against, the insurer is bound by what it knows or should have known concerning the normal and customary hazards inherent in the insured\u2019s business. (Supreme Lodge Knights of Pythias v. Kolinski (1896), 163 U.S. 289, 41 L. Ed. 163; Norwich Union Indemnity Co. v. Haas (7th Cir. 1950), 179 F.2d 827.) If the insurer does not intend to insure against a risk which is necessarily incident to the business of the insured, it should specifically exclude such risk from the coverage of the policy. Bremen State Bank v. Hartford Accident & Indemnity Co. (7th Cir. 1970), 427 F.2d 425.\nThe record discloses that at the time defendant issued its policy approximately 20 percent of plaintiff\u2019s business consisted of mixing, manufacturing and packaging of flammable substances. At the inception of the policy both explosion-proof and non-explosion-proof machines were located on plaintiff\u2019s premises. Even a routine inspection of those premises would have revealed that flammable substances were stored in close proximity to non-explosion-proof machines. This would place defendant on inquiry as to whether such machines were used in connection with flammable substances. Since an increase in hazard clause is for the benefit of the insurer, a company which knows or ought to know of facts which would entitle it to take advantage of the clause should not be permitted thereafter to retain the insured\u2019s premium and treat the policy as if in full force until a loss occurs and then for the first time seek to secure a forfeiture. (Orient Insurance Co. v. McKnight (1902), 197 Ill. 190, 64 N.E. 339.) Defendant here has suggested that it assumed plaintiff would not use non-explosion-proof machines in connection with flammables. It is elementary that an insured will not be bound by unexpressed and unwritten assumptions of the insurer. If such were the case, any policy could be avoided at an insurer\u2019s whim.\nDefendant further contends that Rosenthal\u2019s deposition testimony reveals a genuine issue of material fact regarding plaintiff\u2019s practice of using non-explosion-proof machines in connection with flammables. In particular, defendant relies upon the following colloquy between Rosenthal and defense counsel at that deposition:\n\u201cQ. How many machines did you \u2014 filling machines do you have that could fill the stove polish?\nA. Oh, golly, probably six or seven.\nQ. And what kind of motors did you have on those units?\nA. Explosion-proof \u2014 not all of them. The ones that we used were explosion-proof though.\u201d\nDefendant maintains that this testimony reveals a business practice which contradicts the assertions in Rosenthal\u2019s supplemental affidavit relating to the use of non-explosion-proof machines to fill flammable substances. This contention ignores the fact that defense counsel\u2019s initial question was directed to the time period following the receipt of the fire marshal\u2019s report. This testimony had no bearing on prior practices of plaintiff.\nDefendant also directs our attention to Rosenthal\u2019s following deposition testimony:\n\u201cQ. Now, did you give any directives to any of your employees of what filling machines to use, and which ones not to use after you received [the fire marshal\u2019s report]?\nA. Yes. And more important, as we scheduled the jobs, the jobs sort of had their machines, and the jobs which were scheduled employed when there was any kind of fire hazard, or flammable material, were directed towards the safe machines.\nQ. And this occurred after when you received this letter?\nA. Actually it had occurred before that, but I think it was restressed in that period.\u201d\nAgain, defense counsel\u2019s preliminary question was directed to the time period after receipt of the report. Taken in context, the statement, \u201c[ajctually it had occurred before that,\u201d refers to the interval between the fire marshal\u2019s physical inspection of the premises on August 18 and the issuance of the report on August 25 because Rosenthal had just testified that several of the items contained in the report had been corrected by the time of its receipt. Rosenthal\u2019s deposition testimony was not in conflict with the facts set forth in his supplemental affidavit and was insufficient to create a material question of fact.\nThe conclusion is unavoidable that there is no factual dispute as to the nature of plaintiff\u2019s operations at the time the policy was issued and that these operations involved non-explosion-proof machines and flammable substances. Neither affidavits, counteraffidavits, nor deposition testimony support defendant\u2019s claim that there was a change of usage or an increase of hazard from the time the policy was issued.\nDefendant relies upon the fire marshal\u2019s report and plaintiff\u2019s subsequent use of non-explosion-proof machines as amounting to an increase in hazard. Such use was merely a continuation of prior practice. The receipt of the report by plaintiff in no way altered the nature or extent of the insured risk. At most, the continued use of such machines amounted to negligence. Negligence on the part of the insured will not defeat the insurer\u2019s liability since one of the purposes of liability insurance is to guard against one\u2019s negligence. Cerny-Pickas & Co. v. C.R. Jahn Co. (1955), 7 Ill. 2d 393, 131 N.E.2d 100.\nFor the reasons stated, the order of the circuit court of Cook County awarding summary judgment to the plaintiff on the issue of liability is affirmed.\nOrder affirmed.\nJIGANTI and McGILLICUDDY, JJ., concur.", "type": "majority", "author": "Mr. JUSTICE McNAMARA" } ], "attorneys": [ "Conklin, Leahy & Eisenberg, of Chicago (Daniel J. Leahy and Franklin A. Nachman, of counsel), for appellant.", "C. Barker Rhodes, Jr., Kenneth H. Hoch, and Barry H. Braitman, all of Sonnenschein, Carlin, Nath & Rosenthal, of Chicago, for appellee." ], "corrections": "", "head_matter": "TRIPLE-X CHEMICAL LABORATORIES, Plaintiff-Appellee, v. GREAT AMERICAN INSURANCE COMPANY, Defendant-Appellant.\nFirst District (3rd Division)\nNo. 76-774\nOpinion filed November 9, 1977.\nConklin, Leahy & Eisenberg, of Chicago (Daniel J. Leahy and Franklin A. Nachman, of counsel), for appellant.\nC. Barker Rhodes, Jr., Kenneth H. Hoch, and Barry H. Braitman, all of Sonnenschein, Carlin, Nath & Rosenthal, of Chicago, for appellee." }, "file_name": "0676-01", "first_page_order": 698, "last_page_order": 703 }