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Rauwolf v. Travelers Indemnity Co.

JUNE 27, 1974.




APPEAL from the Circuit Court of Coles County; the Hon. HARRY I. HANNAH, Judge, presiding.


A jury returned a verdict of not guilty upon plaintiff's claim for punitive damages arising from the conversion of personal property. He appeals the judgment entered upon such verdict and the order of the court which apportioned costs to the parties equally.

Here, it is urged that the court erred in admitting evidence that the verdict upon the claim for punitive damages "was not justified under the evidence," and that the court erred in admitting certain evidence.

In December, 1954, defendant became surety upon the bond of Hill Production Company given to the State of Illinois as required by the statute relating to permits for drilling oil and gas. In May, 1961, defendant and Hill Production executed a "rider" made a part of such bond which provided that if Hill failed to comply with the provisions of the statute, after due notice defendant's surety was authorized to comply with the request of the Department of Mines and Minerals and "to remove or correct any existing violations". *fn1

From the record it appears that plaintiff acquired the fee to the real estate in September, 1955, and that at various times in 1967, he acquired the personal property from Hill Production and the other parties interested. There is no issue as to plaintiff's ownership of the property.

In March, 1968, the Department of Mines and Minerals, acting through its official, Lane, sent a letter by certified mail to defendant, including:

"According to the records of this office there are still five plugged wells and one active well charged to the above described Blanket Bond. Hill Production Company has not replied to our requests. This is your THIRTY DAY NOTICE to restore the five plugged wells and to plug the one active well shown on the attached lists. We will appreciate your keeping us informed as to the progress in the matter."

On April 25, 1968, the same official wrote defendant referring to said notice and requesting a report upon the performance. Thereafter, defendant entered into an arrangement whereby one Harris plugged a well and restored five drill sites and for such services received the items of personal property at issue.

Defendant admits that it does not claim ownership or other interest in the personalty, that it did not, prior to removal of the property, examine records concerning the present ownership of the real estate or of the personal property and that it did not search for the Hill Production Company or its successors.

Plaintiff urges that the evidence clearly shows "a wilful, knowing appropriation of the property of the plaintiff", and that the verdict of the jury cannot stand under the rule in Pedrick v. Peoria & Eastern R.R. Co., 37 Ill.2d 494, 229 N.E.2d 504. Essentially it is contended that upon these facts plaintiff is entitled to punitive damages as a matter of law.

The count in the complaint seeking punitive damages alleges that defendant did "maliciously and wickedly and fraudulently" remove the property of the defendant. No allegation is made of facts which show express malice directed against plaintiff, or of fraud. No facts pleaded or in evidence suggest that defendant knew that plaintiff owned the property, or that the taking was directed against the interests of a known owner, or that defendant was acting in disregard of a known duty to others.

So far as can be ascertained from the record, the defendant by reason of its contract of surety, undertook to perform its legal obligation as such surety upon receipt of the "THIRTY DAY NOTICE" from the Department of Mines and Minerals, that Hill Production had not performed its statutory duty.

• 1 Upon such facts it cannot be said that there was any evidence showing express malice or an actual intent to injure plaintiff or any other.

• 2 Although plaintiff apparently alleges an intent to injure or defraud, the argument seeking punitive damages is in the context of wilful and wanton conduct. In Moore v. Jewel Tea Co., 116 Ill. App.2d 109, 253 N.E.2d 636, wilful and wanton conduct is defined as essentially a failure to exercise ordinary care so gross that it shows a lack of regard for the interests of others. The substance of that opinion is that the record showed ...

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