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Gallaway v. Schied

JULY 11, 1966.




Appeal from the Circuit Court of Cook County; the Hon. CHARLES S. DOUGHERTY, Judge, presiding. Affirmed.


Plaintiffs obtained default judgments in the aggregate sum of $6,050 on January 20, 1960, against defendant, Barbara Schied for personal injuries and property damage suffered by them through her alleged negligence in the operation of a motor vehicle. To satisfy said judgments, plaintiffs filed garnishment proceedings against Apex Mutual Insurance Company, her insurer. Apex defended on the ground that it was not liable due to Barbara's failure to comply with the cooperation clause of the policy and the court sustained this defense, discharging the garnishment action. Plaintiffs appeal from this order.

We review the essential facts and events in their chronological order. The accident occurred on December 12, 1959, within the effective period of the policy. On December 15, 1959, Barbara reported the incident to Apex by phone and on December 28, 1959, she forwarded her written report. It was a regular accident report form which she filled in as required, except that in lieu of giving details of the accident she wrote: "The accident is on police report."

Plaintiffs filed their suit for injuries and damages and caused summons to be served on her which summons she promptly forwarded to Apex. The record indicates that Gillin and Richter, attorneys hired by Apex, filed appearance for Barbara on February 29, 1960, and an answer contesting the action on March 7, 1960. In the meantime, Apex forwarded a letter dated March 4, 1960, to Barbara addressed to 3419 N. Lowell Avenue, Chicago, the address given in the policy and in the report as her place of residence. Apex informed her that Gillin and Richter had been retained to represent her in the suit; that it would be necessary to give the attorneys full cooperation; that she contact them within five days relative to the defense, giving the attorneys' phone number, and that she keep Apex fully apprised of her whereabouts, specifically if she intended to leave her present address for a period in excess of two days. Her attorneys proceeded to file interrogatories and take depositions of the plaintiffs.

In a letter dated June 24 and addressed to Barbara at the Lowell Avenue address, the attorneys advised her that her deposition was scheduled for July 19, 1960, and that she appear at their office on the latter date.

On July 23, 1960, a letter similarly addressed to the insured, advised her that the deposition was rescheduled to August 15, 1960, and that it was necessary for her to appear at counsels' office a half hour before the time designated.

On September 7, 1960, another letter was addressed to her at the Lowell Avenue address and to "General Delivery, Chicago" by the attorneys wherein it was stated that when she failed to appear on August 15, 1960, counsel phoned her employer and was informed that she had terminated her employment; that a call to her mother resulted in being informed that Barbara had moved away two weeks previously and had given her new address as "General Delivery, Chicago"; that it was imperative that she immediately contact the attorneys' office relative to her deposition. The letter concluded with a warning that it was necessary for her to cooperate under the terms of her policy with Apex; that if they received no cooperation from her in the future they would have no alternative but to withdraw from the defense of the litigation; and that the insurance company would assume no liability for any judgment rendered against her or be liable for costs in defending the action against her. Both letters, the one addressed to Lowell Avenue and the one addressed "General Delivery" were returned unclaimed.

Apex forwarded a "Reservation of Rights" *fn1 letter dated September 8, 1960, to Barbara at the Lowell Avenue address and to "General Delivery." These were returned unclaimed.

A telegram dated September 30, 1960, and forwarded to the Lowell Avenue address by Apex, contained a statement that she failed to cooperate and unless this was corrected Apex would remove itself from her defense. This telegram was returned unclaimed.

In a letter dated October 4, 1960, addressed to Barbara and forwarded to the Lowell Avenue address, the attorneys enclosed copies of plaintiffs' notice and petition filed on October 17, 1960, for a rule to show cause based upon her failure to appear for deposition. The letter referred to the prior letters and the necessity for her to cooperate with Apex and the attorneys. This letter was returned with the legend "Move, Left No Address." On October 17, 1960, a rule to show cause issued returnable October 25, 1960. Presumably, the rule was continued to a later date because the record discloses that on November 17, 1960, a hearing on the rule was had and the court, finding defendant at fault, struck her pleading and declared her in default. A default against her was entered with an order that the complaint be taken as confessed against her.

In the meantime, on or about October 27, 1960, Apex hired a private investigator to locate the insured. The investigation was not effective in locating the whereabouts of Barbara and written reports, submitted on January 18 and January 26, 1961, reported some information that she could be on the West Coast, possibly San Francisco or Los Angeles.

At the garnishment stage, counsel stipulated that a police officer investigating the incident would state that Barbara "was driving along, fell asleep, and was involved in the accident" and that he would further say that he "observed" an odor of alcohol on her breath.

It is elementary that any suit brought by the plaintiffs on the policy would be subjected to all defenses against liability Apex might have if the insured had sued. Plaintiffs had no greater rights than those of the insured. Zitnik v. Burik, 395 Ill. 182, 69 N.E.2d 888 (1946); Firebaugh v. Jumes, 341 Ill. App. 1, 92 N.E.2d 790 (1950); Schneider v. Autoist Mut. Ins. Co., 346 Ill. ...

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