{ "id": 3175999, "name": "INTER-INSURANCE EXCHANGE OF THE CHICAGO MOTOR CLUB, Plaintiff-Appellee, v. TRUCK INSURANCE EXCHANGE, INC., Defendant-Appellant", "name_abbreviation": "Inter-Insurance Exchange of Chicago Motor Club v. Truck Insurance Exchange, Inc.", "decision_date": "1980-09-17", "docket_number": "No. 79-848", "first_page": "733", "last_page": "737", "citations": [ { "type": "official", "cite": "88 Ill. App. 3d 733" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "375 N.E.2d 115", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "pin_cites": [ { "page": "118" }, { "page": "118" } ], "opinion_index": 0 }, { "cite": "71 Ill. 2d 210", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5450406 ], "weight": 2, "pin_cites": [ { "page": "215" }, { "page": "215" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/71/0210-01" ] }, { "cite": "375 N.E.2d 575", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "opinion_index": 0 }, { "cite": "59 Ill. App. 3d 283", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3359828 ], "weight": 2, "pin_cites": [ { "page": "285" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/59/0283-01" ] }, { "cite": "399 N.E.2d 686", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "80 Ill. App. 3d 309", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3233424 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/80/0309-01" ] } ], "analysis": { "cardinality": 491, "char_count": 9600, "ocr_confidence": 0.917, "pagerank": { "raw": 4.565170110192638e-08, "percentile": 0.28604853024249677 }, "sha256": "12b2a1676e6a1edace27f1faaf1c3ef20eab62cd33e7bd75410f3d703b993ca1", "simhash": "1:737bf0802baeacc3", "word_count": 1530 }, "last_updated": "2023-07-14T21:35:06.826169+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "INTER-INSURANCE EXCHANGE OF THE CHICAGO MOTOR CLUB, Plaintiff-Appellee, v. TRUCK INSURANCE EXCHANGE, INC., Defendant-Appellant." ], "opinions": [ { "text": "Mr. JUSTICE STENGEL\ndelivered the opinion of the court:\nIn 1976 Charles D. Adams filed a suit against L\u00e1veme E. Sargent for property damage arising out of an automobile accident which occurred in Knox County on February 13, 1975. Sargent filed a motion to dismiss the complaint, asserting as a bar to the cause of action plaintiff\u2019s release of all claims for both personal injury and property damage, executed on August 23, 1976, in consideration of a $6,000 settlement payment by Sargent\u2019s insurer, Farmers\u2019 Insurance Group. Then, Inter-Insurance Exchange of the Chicago Motor Club filed a motion to intervene and a motion to add the Farmers\u2019 Insurance Group as defendant. Chicago Motor Club asserted a right to intervene in order to protect its interest as the insurer and subrogee of Adams. The motion to intervene included allegations that plaintiff\u2019s release was accepted by Farmers\u2019 Insurance Group with full knowledge of Chicago Motor Club\u2019s position as subrogee and also that plaintiff executed the release for personal injury claims only. The complaint which Chicago Motor Club proposed to file against Farmers\u2019 Insurance Group stated that Farmers\u2019 had committed fraud upon Chicago Motor Club by obtaining a release from Adams under false pretenses with full and actual knowledge of Chicago Motor Club\u2019s claim.\nSargent filed a motion to dismiss the third-party complaint on the ground that liability insurers are expressly excluded from being brought in as a third party under section 25 of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, par. 25(2)). The trial court, on October 12, 1977, granted defendant\u2019s motion to dismiss and denied the Chicago Motor Club\u2019s motion to intervene. The other motions were determined to be moot. The order dismissed the cause of action with prejudice, but no appeal was taken from the court\u2019s rulings.\nOn March 30,1978, Chicago Motor Club, as plaintiff, filed this action against defendant Truck Insurance Exchange, Inc., a division of Farmers\u2019 Insurance Group, alleging that defendant fraudulently induced the breach of the insurance contract between plaintiff and its insured Adams by inducing Adams to execute a release of all liability. Attached to the complaint as exhibits were plaintiff\u2019s policy of insurance and an affidavit and correspondence indicating that defendant had actual knowledge of plaintiff\u2019s subrogation claim prior to Adams\u2019 execution of the release. At the bench trial on the merits of plaintiff\u2019s suit, Adams testified that he had been insured by plaintiff at the time of the 1975 accident with Sargent and that he was later represented by an attorney. Two of plaintiff\u2019s employees testified as to the details of their handling Adams\u2019 claim. Ernest Caves, a claims investigator, identified the bills to repair Adams\u2019 auto, which bills plaintiff paid, and then identified several letters which gave notice to defendant of plaintiff\u2019s subrogation claim. He testified to a conversation with defendant\u2019s claims manager about the subrogation claim, and he also stated that Adams\u2019 attorney knew about the claim before the release was executed but declined to represent plaintiff because he was moving. J oseph Kucera, who was formerly plaintiff\u2019s district claims manager, described a telephone conversation with an employee of defendant who acknowledged receipt of a letter from plaintiff concerning the subrogation claim and promised to let plaintiff know as soon as his investigation was complete.\nDefendant presented no evidence at the trial but asked the court to take judicial notice of plaintiff\u2019s answers to two interrogatories and of the release signed by Adams. Plaintiff asked the court to take judicial notice of the prior proceeding which was dismissed. After hearing arguments of counsel, the trial court found in favor of plaintiff and entered judgment in the sum of $1,502 plus costs. Defendant\u2019s post-trial motion was denied, and this appeal followed.\nDefendant first contends this cause of action for fraudulent inducement to breach the contract of insurance between plaintiff and Adams is barred by the doctrine of res judicata which prohibits the relitigation of issues where three requirements are met: (1) the issues either were actually decided or could have been presented in the prior case; (2) the prior case was decided on the merits; and (3) the prior case was between the present parties or their privies. Defendant\u2019s contention must fail. The issue which is at the heart of the instant cause \u2014 defendant\u2019s improper attempt to defeat plaintiff\u2019s subrogation claim \u2014 was not and could not have been presented in the prior proceeding because plaintiff\u2019s petition to intervene in that proceeding was denied. Plaintiff, having previously been denied intervention to present this very claim, cannot now in fairness be barred on the ground that its claim could have been raised in the original suit. (United Security Insurance Co. v. Hayman (1980), 80 Ill. App. 3d 309, 399 N.E.2d 686.) Hence, res judicata is not applicable to this cause.\nTaken with this case is defendant\u2019s motion for leave to file an amended answer asserting the defense of res judicata. The motion is denied.\nNext defendant argues that the trial court erred in ruling that Country Mutual Insurance Co. v. Transit Casualty Co. (1978), 59 Ill. App. 3d 283, 375 N.E.2d 575, is applicable to this case. In Country Mutual we invoked the rule then newly announced by the Illinois Supreme Court that \u201can unlimited release executed by an insured-subrogor for consideration not specifically including an amount designated as covering the insurer\u2019s subrogation interest does not bar a subsequent action by an insurer-subrogee against the tortfeasor, if the tortfeasor or his insurance carrier had knowledge of the insurer-subrogee\u2019s interest prior to the release.\u201d Home Insurance Co. v. Hertz Corp. (1978), 71 Ill. 2d 210, 215, 375 N.E.2d 115, 118; Country Mutual, 59 Ill. App. 3d 283, 285, 375 N.E.2d 575.\nDefendant claims that Home Insurance Co. and Country Mutual permit only an action to recover plaintiff\u2019s subrogation interest and do not extend to this action for fraudulent inducement. Since the rationale for the new rule is to prevent sharp practices and dishonesty amounting to fraud in the procurement of a general release, it would be illogical to say that the release which was fraudulently procured does not bar the subrogation claim but does bar a cause of action for fraud. We find that the trial court applied the correct rule of law in deciding this cause.\nDefendant\u2019s final argument is that the evidence was insufficient to sustain plaintiff\u2019s cause of action. Defendant says there was no evidence of any misrepresentation of a material fact and that such evidence was necessary to plaintiff\u2019s cause of action for fraudulent inducement to breach the contract of insurance between plaintiff and its insured.\nThe contract here expressly provided that plaintiff \u201cshall be subrogated to all the insured\u2019s rights of recovery\u201d and that \u201c[t]he insured shall do nothing after loss to prejudice such rights.\u201d Plaintiff alleged the following facts in its complaint:\n(1) That plaintiff was the subrogor of its insured;\n(2) That defendant procured a release from plaintiff\u2019s insured which release purported to be complete and unconditional;\n(3) That prior to obtaining the release, defendant had knowledge of plaintiff\u2019s subrogation interest;\n(4) That the release was asserted as a defense to plaintiff\u2019s subrogation claim and was the basis for the dismissal of that claim;\n(5) That plaintiff was thus damaged to the extent of its subrogation claim.\nThese allegations were all supported by evidence at trial. Under the holding in Home Insurance Co. v. Hertz Corp. it is not necessary to allege and prove actual fraud in order for the insurer-subrogee to maintain a subrogation action against the tortfeasor. In Home Insurance Co., the court observed that the procurement of a release under these circumstances \u201camounts to a fraud upon the insurer\u2019s right\u201d and thus is no defense to a subrogation action. (71 Ill. 2d 210, 215, 375 N.E.2d 115, 118.) Similarly, in the case at bar, proof that defendant procured the release with knowledge of plaintiff\u2019s claim amounted to a fraud upon plaintiff\u2019s right, and such proof was sufficient to sustain the cause of action.\nDefendant also argues that the automobile repair bills introduced in evidence were not shown to be connected to the accident, but, to the contrary, the record discloses sufficient connection to allow the trier of fact to find that the bills were for the damage resulting from the accident.\nDefendant additionally contends that plaintiff failed to prove that the underlying subrogation claim was meritorious since Sargent\u2019s liability was never established. We consider that issue to have been waived because it was not raised in the trial court, and in fact, defendant\u2019s counsel conceded at trial that \u201cthe merits of the accident have no relevance to the instant cause of action.\u201d Defendant is now precluded from requiring plaintiff to prove liability for damages arising out of the accident for the first time on appeal.\nFor the reasons stated, we affirm the judgment of the Circuit Court of Knox County.\nAffirmed.\nALLOY, P. J., and SCOTT, J., concur.", "type": "majority", "author": "Mr. JUSTICE STENGEL" } ], "attorneys": [ "John P. Nicoara, of Baner & Nicoara, of Peoria, for appellant.", "Harry C. Bulkely, of Lucas, Brown & McDonald, of Galesburg, for appellee." ], "corrections": "", "head_matter": "INTER-INSURANCE EXCHANGE OF THE CHICAGO MOTOR CLUB, Plaintiff-Appellee, v. TRUCK INSURANCE EXCHANGE, INC., Defendant-Appellant.\nThird District\nNo. 79-848\nOpinion filed September 17, 1980.\nJohn P. Nicoara, of Baner & Nicoara, of Peoria, for appellant.\nHarry C. Bulkely, of Lucas, Brown & McDonald, of Galesburg, for appellee." }, "file_name": "0733-01", "first_page_order": 755, "last_page_order": 759 }