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Gibraltar Ins. Co. v. Varkalis

NOVEMBER 4, 1969.

GIBRALTAR INSURANCE COMPANY, AN ILLINOIS CORPORATION, PLAINTIFF-APPELLANT,

v.

MICHAEL VARKALIS, ADMINISTRATOR OF THE ESTATE OF VERONICA VARKALIS, DECEASED, AND KENNETH ROBINSON, DEFENDANTS-APPELLEES.



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

MR. JUSTICE MCCORMICK DELIVERED THE OPINION OF THE COURT AS MODIFIED ON REHEARING.

This appeal was originally taken from an order entered in the trial court dismissing the complaint filed by the plaintiff, Gibraltar Insurance Company, praying for a declaratory judgment to adjudicate the rights of the parties under an automobile policy which had been issued by plaintiff. Defendants Michael Varkalis, administrator of the estate of Veronica Varkalis, and Kenneth Robinson filed a motion in the trial court to dismiss the complaint. The trial court sustained the motion, and from that ruling this appeal is taken. The question presented to this court is whether the action of the trial court was proper.

On October 28, 1966, plaintiff filed a complaint alleging, among other things, that the action was brought for a declaratory judgment "to declare and determine the rights of the parties hereto"; that the plaintiff was a licensed insurance company engaged in that business; that on or about December 17, 1960, plaintiff issued to Kenneth Robinson a policy effective December 15, 1960, and "that by the terms of said policy, in consideration of the payment of the premium and in reliance upon statements and declarations and applications for insurance, but subject to the limits of liability, exclusions and conditions set forth in said policy, the plaintiff undertook to insure the defendant, Kenneth Robinson, against loss arising out of the defendant's legal liability to pay damage for injuries to person or damages to property of any person caused by the automobile described in the aforementioned policy of insurance; and by the terms of which plaintiff agreed to defend at the Company's expense, any suit for injuries or property damage brought against said defendant, Kenneth Robinson, arising out of the operation of the vehicle covered by the policy described herein."

The complaint further alleged that on May 12, 1961, Kenneth Robinson, while operating the automobile so insured, in which Veronica Varkalis was a passenger, struck Veronica Varkalis on the head with a bottle, pushed her from the automobile, and repeatedly ran over her, causing her death. It was alleged that by the terms of said policy, assault and battery were to be deemed an accident unless committed by or at the direction of the insured; that the plaintiff denied that it had any duty or obligation to defend Kenneth Robinson, or that in the event a judgment was entered against him it had any obligation to pay defendant Varkalis under the provisions of plaintiff's policy of insurance, for the reason that the policy does not cover assault and battery done at the direction of the insured.

It was further alleged that a cause of action had arisen under the Declaratory Judgments Act (Ill Rev Stats 1965, c 110, § 57.1) which controversy is justiciable within the provision of the statute; that plaintiff therefore prays that the court find and declare that plaintiff owes no duty to defend Kenneth Robinson or to pay any judgment entered in favor of Michael Varkalis, administrator, against Kenneth Robinson.

On December 5, 1966, defendant filed a motion to dismiss the complaint for declaratory judgment. On May 26, 1967, the court entered an order giving leave to the plaintiff to file its first amended complaint, and allowing the motion to dismiss the original complaint filed by defendant to stand as a motion to dismiss the first amended complaint.

On May 26, 1967, the plaintiff filed its first amended complaint for declaratory judgment and that complaint repeats in substance the allegations with reference to the death of Veronica Varkalis and further alleges that by the terms of its exclusion clause it does not apply to bodily injuries caused intentionally by or at the direction of the insured. It is alleged that a suit was filed by Michael Varkalis as Administrator of the Estate of Veronica Varkalis v. Kenneth Robinson, a copy of which was attached as Exhibit B. It is further stated that "Gilbraltar Mutual Casualty Company was called upon to defend and did provide a defense for said Kenneth Robinson as reflected in court order dated May 15, 1967, marked Exhibit C, and court order dated May 15, 1967 and marked Exhibit D, and Exhibit D-2."

The complaint further alleged that "on May 15, 1967 a bench trial was held after waiver of jury and Judge Butler found for the plaintiff and against the defendant, Kenneth Robinson, in the amount of $30,000.00 less $4,500.00 or $25,500.00 as reflected in court order dated May 15, 1967 attached as Exhibit E"; that the plaintiff "denies that it has any obligation to pay under the provisions of said policy on the behalf of Kenneth Robinson any judgment rendered against him in the case of `Michael Varkalis, Administrator of the Estate of Veronica Varkalis, Deceased v. Kenneth Robinson', . . . for the reason that said policy of insurance does not cover bodily injury or death caused intentionally by or at the direction of the insured; that said Kenneth Robinson was indicted for unlawfully, wilfully, feloniously and of his malice aforethought, killing and murdering said Veronica Varkalis, pleaded guilty and was sentenced as reflected in attached Exhibit F."

The prayer for relief is the same as that in the original complaint, asking that the court find the plaintiff owes no duty to defendant Kenneth Robinson, or to pay any judgments entered in favor of Michael Varkalis, administrator, against Kenneth Robinson, and that the court "find and declare that such other and further rights in the premises as are necessary and proper for the full determination of the controversy and as justice may require."

The plaintiff does not allege that at the time it provided defense for Kenneth Robinson there was any reservation of rights served upon Robinson. The original motion to dismiss the complaint filed on December 5, 1966, which motion the court ordered to be considered with reference to the amended complaint, sets out that from the record of the court it appears that "plaintiff had further notice of such a claim on or before March 9, 1964, when it caused its attorney to file an appearance for Kenneth Robinson, . . . and thereby undertook to defend said claim of said Administrator against plaintiff's insured, Kenneth Robinson"; that on April 13, 1964, the attorney for plaintiff filed a motion to dismiss the cause, the motion was denied on May 11, 1964, and the answer filed by plaintiff's attorney was ordered to stand as the answer to the complaint.

It is also alleged that plaintiff's attorney participated in a pretrial conference on June 10, 1965, and at other times. It is stated that "by reason of said undertakings and said participation in said cause . . ., plaintiff is estopped from now asserting non-liability upon its policy and plaintiff has waived any right to assert such non-liability."

On an affidavit attached to the motion to dismiss, Joseph P. Griffin states that he is a partner in the law firm of Griffin and Gallagher; that the law firm is attorney of record for Michael Varkalis; that on May 31, 1961, the affiant served upon Robinson a notice of attorney's lien, and that on June 1, 1961, a letter was sent to Robinson informing him that Griffin and Gallagher were the legal representative of the estate of Veronica Varkalis, and requesting that Robinson forward the letter and lien to his insurance company.

On July 13, 1961, the affiant received a telephone call from a Mr. Casati who identified himself as an adjuster for Gibraltar Insurance Company, and stated that "his company was considering the proposition that it had no liability to defend the claim of Veronica Varkalis because it had evidence to the effect that the injuries inflicted upon her by Robinson were inflicted intentionally upon her."

It is stated that on March 29, 1962, Griffin and Gallagher filed suit in the Circuit Court of Cook County on the said claim and that summons was served upon Robinson on April 3, 1962; that on February 13, 1964, a letter was written by the firm of Griffin and Gallagher to Gibraltar Mutual Casualty Company, advising that no appearance had been filed in the lawsuit on behalf of Kenneth Robinson, a photocopy of which letter was attached. It is stated that on March 19, 1964, "by the law firm of Anthony R. Lazzara, the appearance in said cause . . . of defendant, Kenneth Robinson was filed; that on the same date, March 19, 1964, said law firm filed . . . the Answer of said defendant, Kenneth Robinson; that on April 13, 1964 said law firm, on behalf of said defendant, Kenneth Robinson, filed a Motion to Strike the Complaint in the said cause . . .; that said law firm represented defendant Kenneth Robinson in argument on said Motion in court on May 11, 1964 when said motion was denied. That a representative of the law firm of Anthony R. Lazzara attended a number of pre-trial conferences held in such case before Judges Benjamin Wham, Frank Bicek, and Robert McAuliffe in this court."

The plaintiff here argues that the action was based on a written contract — the automobile policy issued to Kenneth Robinson — and that the ten-year statute is therefore applicable; that since the ten-year statute is relevant, time had not expired within which to file a declaratory judgment suit, and that the trial court therefore erroneously dismissed the suit. Plaintiff further argues that the cause of action accrued on May 15, 1967, the date on which judgment was entered in the trial court in favor of Michael Varkalis against Kenneth Robinson. Therefore, according to plaintiff's theory, if we should apply the five-year statute the plaintiff would have until May 15, 1972, to file suit for declaratory judgment.

The answer to plaintiff's argument is to be found in its own complaint filed seven months before the May 15 judgment was entered. In that complaint it was alleged that plaintiff had no duty to Kenneth Robinson or to the administrator who might obtain a judgment against Robinson. In other words, plaintiff recognized that a controversy already existed; namely, the one which arose on May 12, 1961, when Veronica Varkalis was killed, and this recognition is apparent from its very denial of a duty to pay. The cause of action accrued from the moment of death.

The Declaratory Judgments Act is statutory and provides for a remedy "unknown to the common law." State Farm Mut. Automobile Ins. Co. v. Morris, 29 Ill. App.2d 451, 459, 173 N.E.2d 590. The purpose of the act is not to replace, but to add to existing remedies. It is cumulative with other methods of judicial determination.

It has been held that where an action is statutory it is "a civil action not otherwise provided for" within the meaning of section 16 (or its predecessor, section 15) of Chapter 83. Blakeslee's Storage Warehouses, Inc. v. City of Chicago, 369 Ill. 480, 17 N.E.2d 1; Lyons v. County of Morgan, 313 Ill. App. 296, 40 N.E.2d 103. In Wakat v. Harlib, 253 F.2d 59 (7th Cir), the plaintiff had sued police for violations of the Federal Civil Rights Act. Defendants urged that the plaintiff's cause of action was barred by the Illinois Limitations Act. Under the Illinois act the plaintiff had had two years within which to bring suit for [in the words of the statute] "Actions for damages for an injury to the person, or for false imprisonment, or malicious prosecution, or for a statutory penalty, . . ." In that case the plaintiff argued that the action was within another section of the Limitations Act which provided a five-year limitation for specified actions, "and all civil actions not ...


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