Appeal from the Circuit Court of Crawford County; the Hon.
RANDALL S. QUINDRY, Judge, presiding. Judgment reversed.
On October 29, 1962, Orvie McKnight filed, in the Circuit Court of Crawford County, his complaint seeking to recover damages which he alleged he sustained as a result of an intersection collision, which occurred on October 17, 1960, between the truck he was driving and an automobile driven by defendant, Susan Dennis.
After defendant had filed an answer denying the several charges of alleged negligence, a motion was filed by plaintiff which alleged that at the time of the occurrence in question both parties to this litigation were insured by the Country Mutual Insurance Company for liability arising out of the operation of the motor vehicle involved in this collision; that thereafter the insurance company investigated the occurrence and obtained statements from the plaintiff and defendant and from other preoccurrence and post-occurrence witnesses; that it was the duty of the insurance company under the terms of its policy issued to the plaintiff, to investigate the occurrence on behalf of both parties and to refrain from taking any action which would be detrimental to the best interests of both the plaintiff and defendant; that the attorneys representing the defendant, Susan Dennis, have available to them for their use in the defense of the claim of the plaintiff, "copies of all of the investigative material secured by Country Mutual, regardless of whether it was secured on behalf of the plaintiff or on behalf of the defendant." The prayer of this motion was that the court "enter an order directing Country Mutual Insurance Company, which is the real party defending the instant case, to surrender to the plaintiff for his use and inspection all investigative material secured by the said Company in the investigation of the collision herein."
To this motion the defendant, Susan Dennis, filed an answer, admitting that Country Mutual Insurance Company was defending the action on behalf of the defendant; that it has employed counsel and that defendant's counsel have, available for their use, in the defense of the claim against the defendant, copies of the investigative material secured by said Insurance Company, which was obtained by said Company in performance of its duty as insurer of both plaintiff and defendant under their respective policies. The answer avers that the Insurance Company is not a party to this action, but offers to exhibit to plaintiff a copy of the statement obtained by the Insurance Company from plaintiff. The answer insisted, however, that under the authority of The People v. Ryan, 40 Ill. App.2d 352, 189 N.E.2d 763, the statement of the defendant taken by her insurer in fulfillment of its contractual obligation to her, under the terms of her policy, is confidential and privileged against unwilling disclosure. Attached to the motion were copies of the several insurance policies issued by the Company, insuring the plaintiff and defendant, and which referred to the vehicles involved in this collision.
The record discloses that the policy of insurance issued by Country Mutual Insurance Company to the plaintiff and defendant in this case contained this provision:
"The Company shall defend any suit alleging such bodily injury or property damage and seeking damages which are payable under the terms of this policy, even if any of the allegations of the suit are groundless, false or fraudulent; but the Company may make such investigation and settlement of any claim or suit as it deems expedient."
Recognizing its obligation under this provision of the policies it had issued, the Company made an investigation of the collision in question, and as a result thereof, obtained statements of the parties, of witnesses, also reports and documents and made memoranda to be used in defense of plaintiff's action. The insurer also selected and retained appellant as counsel to represent defendant, and its investigating file was delivered to appellant for his use in preparation for trial. It is this file which appellant, under the direction of his employer, the insurance carrier, declined to produce for inspection. Counsel, however, offered to produce the statement obtained from the plaintiff which he had secured from his employer, Country Mutual Insurance Company, but, it was "all investigative material secured by the Company in the investigation of the collision herein," which counsel for plaintiff sought to have appellant surrender to the plaintiff for his use and inspection, and which the order of the trial court directed appellant to produce.
The trial court held that no question of privilege from disclosure was involved herein because the insurance carrier had issued its policy of insurance to both the plaintiff and defendant, and that justice and equity required that each insured should have the benefit of the investigation made by the insurer. Accordingly the trial court sustained plaintiff's motion and entered an order directing counsel to produce the entire file and upon counsel's refusal so to do, held him in contempt of court, imposed a fine and counsel appeals.
Rule 17 of the Supreme Court provides in part:
"A party may at any time move for an order directing any other party or person to produce specified documents, relating to the merits of the matter in litigation, for inspection and to be copied or reproduced. . . . On the hearing the court may make any order that may be just."
"All matters which are privileged against disclosure upon the trial are privileged against disclosure through any discovery procedure. Disclosure of memoranda, reports or documents made by or for a party in preparation for trial or any privileged communications between any party or his agent and the attorney for the party shall not be required through any discovery procedure."
In People v. Ryan, 30 Ill.2d 456, 197 N.E.2d 15, it appeared that Della Emberton was involved in an automobile collision which resulted in the death of two persons. Subsequently, Della Emberton gave to an investigator of her insurance carrier a signed written statement which gave the details of the occurrence. This statement became a part of the files of the insurance company, and at the request of Willis P. Ryan, an attorney at law, was delivered to him by the insurance company. Prior to its delivery to Mr. Ryan, he, Ryan, had been employed by Della Emberton to represent her in a criminal proceeding in which she was charged with driving the automobile involved in the collision, while under the influence of intoxicating liquor. In the Criminal proceeding, Ryan was subpoenaed as a witness and directed to produce, upon the criminal hearing, the statement made by Della Emberton to the insurance company. Ryan declined, at the direction of his client, to do so and was found guilty of contempt of the process of the trial court and a fine was imposed. In reversing this judgment, the Supreme Court said that public policy dictates that the statement given by Della Emberton to her insurance carrier was clothed with the attorney-client privilege while in control of the insurer and that this privilege was not lost when the statement was transmitted by the insurer, with the consent of the insured, to her attorney for use in the defense of a criminal proceeding against the insured.
In Koch v. Mettler, 49 Ill. App.2d 251, 199 N.E.2d 417, an agent of the insurance carrier of the defendant had obtained from the defendant an accident report regarding a collision in which the plaintiff and defendant were involved and which was the basis of an action brought by the plaintiff against the defendant to recover damages for personal injuries sustained by the plaintiff in the accident. On the back of this accident report was a statement regarding the collision signed by the defendant. Later the adjuster interviewed the defendant and made a written memorandum which included the contents of his, the adjuster's, conversation with the defendant. These documents were delivered to the home office of the insurance company, ...