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Dinn Oil Co. v. Hanover Ins. Co.

OCTOBER 19, 1967.




Appeal from the Circuit Court of Franklin County; the Hon. ROY O. GULLEY, Judge, presiding. Judgment reversed and cause remanded with directions. GOLDENHERSH, J.

Rehearing denied November 16, 1967.

Plaintiff, Dinn Oil Company, a corporation, appeals from the judgment of the Circuit Court of Franklin County dismissing plaintiff's suit against the defendants, The Hanover Insurance Company, hereafter referred to as "Hanover" and New York Underwriters Insurance Company, hereafter referred to as "Underwriters," and for costs.

Plaintiff's second amended complaint is in three counts. In the count directed against Hanover, plaintiff alleges that defendant is an insurance corporation doing business in Illinois, that a broker (also a defendant but not a party to the appeal) agreed to obtain certain insurance for plaintiff, including collision and comprehensive coverage, on a described tractor and trailer, that defendant, through its agent (also named as a defendant but not a party to this appeal) entered into an oral agreement to provide, for a period of 30 days, coverage similar to that provided in a policy then in force with another insurance company, a copy of which policy is attached to the complaint, that the agreement was "ratified" on two occasions by the same agent, the insured vehicles were involved in a collision and were destroyed, that upon being advised of the collision and destruction of the vehicles, defendant, Hanover, orally denied liability, and continues to refuse to pay plaintiff's claim.

In its count directed against Underwriters, plaintiff alleges issuance of a policy providing collision coverage for vehicles owned by plaintiff, including newly acquired vehicles, provided plaintiff notified defendant within 30 days of receiving delivery of such newly acquired vehicles, the acquisition of the new vehicles and the giving of notice to defendant, the destruction of the vehicles in a collision, and defendant, Underwriters, continued refusal to pay the claim.

Defendant, Hanover, moved to dismiss as to it, and in its motion states that subsequent to the collision plaintiff made a claim against the party whose truck collided with plaintiff's vehicles, settled the claim and executed a release reciting payment to it of $4,000, that "if there was a policy of insurance between plaintiff and this defendant" it contained the following provision:

"In the event of any payment under this policy, the company shall be subrogated to all the insured's rights of recovery therefor against any person or organization and the insured shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights. The insured shall do nothing after loss to prejudice such rights.",

that plaintiff, by executing the release violated the above provision and is precluded from recovering from this defendant.

The motion is supported by affidavit of defendant's counsel, and a copy of the release is attached.

Defendant, Underwriters, moved to dismiss the count directed against it, setting up the same release, and substantially the same defense.

Plaintiff moved for leave to file a proposed amendment as to each count. With respect to Hanover, it alleged that having denied that any policy of insurance was in force, defendant waived any defense based upon alleged breach of the terms of the policy.

With respect to Underwriters, it alleged that having denied liability on the ground that the damaged vehicles were not covered by its policy, defendant is estopped from asserting any defense based upon an alleged violation of the policy. The record does not show any ruling on the motion for leave to amend.

The release upon which defendants rely recites that plaintiff, in consideration of the payment to it of $4,000, releases the persons therein named from any and all claims arising out of the occurrence described. It contains the following statement:

"I declare, represent and agree that the Dinn Oil Company, Incorporated has presented a claim for their property damage to the Hanover Insurance Company under the collision coverage of an insurance policy with that company and that that company has denied that there was such coverage in effect at the time of the described accident."

The trial court allowed defendants' motions, entered judgment dismissing the cause as to them and for costs, made the findings required by section 50(2) of the Civil Practice Act (c 110, ...

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