Appeal from the Circuit Court of Cook County, First Municipal
District; the Hon. DAVID CERDA, Judge, presiding. Judgment
The plaintiff, an attorney, was a beneficiary under a land trust which held title to property located at 4221-31 West Cermak Road in Chicago. This property was covered by a policy of liability insurance issued by the defendant, American Indemnity Company and the plaintiff was an insured under this policy.
One Elector Ralph filed suit against the City of Chicago for injuries allegedly received in a fall at 4233 West Cermak. An amended complaint was filed against Cosmopolitan National Bank, the trustee of the land trust. This amendment alleged that the bank possessed and had control over the building located at 4233 West Cermak, "including the appurtenances thereto, specifically a certain wooden projection in the front of said building which did then and there block off a portion of the public sidewalk at that address." This amendment went on to allege:
"6. That on to-wit the 18th day of November, 1962, plaintiff who was then and there a pedestrian passing upon and along and over the sidewalk in front of 4233 West Cermak Road, Chicago, Illinois, was then and there caused to move from her direct course on the said sidewalk to a narrow lane or passage upon which there was an existing defect in the said sidewalk as more particularly described in Count I of this amended complaint, . . . ."
After being advised of the suit and being made a party thereto, the plaintiff notified the insurance company of the pending suit and requested that it undertake the defense. The insurance company refused to assume the defense because the premises, as described in the complaint, were not covered by the policy.
The plaintiff then wrote another letter to the law firm representing the insurance company stating:
". . . I submit that the enclosed complaint, amended complaint, and letter and notice from the Cosmopolitan National Bank make clear that the premises involved are those that were covered under the policy. Neither the Bank nor the beneficiaries had any interest in 4233 Cermak Road, and thus the property involved is the property which your client insured. You have therefore declined to defend because of a clerical error made by the plaintiff's attorney. Or, if this is not a clerical error, and the accident occurred at 4233, then there is a complete defense which you are in effect saying should be asserted by the assured at its own expense. I must respectfully ask if you consider this a fair manner in which to treat a policyholder who fulfilled its obligations to pay premiums because it felt the insurer would meet its obligations to provide a defense to a lawsuit arising out of the operation of the insured premises.
"If I were to call the attorney for the plaintiff and advise him of his error, then he would certainly amend his complaint to correct the address. I shall not do this at the present time because I have advised my clients that until it is absolutely certain that the Insurer is failing to fulfill its obligations we should not do anything which might conceivably be said to prejudice the defense of this case. I can not believe it is in the best interest of a reputable insurance company like your client to give its assured the Hobson's choice of either cooperating with the plaintiff or taking upon itself the burden of defense."
The plaintiff again wrote to American Indemnity Company and made a similar plea. The insurance company in refusing to defend, stated:
"Since receiving your letter of May 13, 1966, enclosing a Summons in the above case together with the Second Amended Complaint at Law, we have given careful consideration to your request that we defend the suit. We have also conducted additional investigation and are convinced that the accident actually did occur at the place alleged in the Second Amended Complaint which, as you know, involves an area not covered by our policy of insurance.
"We are quite certain that there has been no mistake in describing the area where the accident occurred and are equally sure that the plaintiff would be ill-advised to make any change at this late date with respect to the place of accident. As you know, the location pleaded was first given in the statutory notice to the City of Chicago and has been repeated three times in the successive Complaints filed in this case. In addition to that, we have the firm commitment of the plaintiff herself to our investigator that the accident did occur at the place alleged in the various pleadings.
"Under the above circumstances, we question whether you will consider it desirable to suggest to the plaintiff's attorney that there is any `error' with respect to the place of the accident. If the plaintiff's attorney is persuaded to make such a change at this late date, he would, of course, run the risk of destroying such claim as he has against the City of Chicago, which is the principal target of his suit.
"In any event, since we are convinced that the accident actually occurred at the location alleged in the various Complaints, we return the Summons and Seconded (sic) Amended Complaint to you so that you may file ...