Appeal from the Appellate Court for the Fifth District; heard
in that court on appeal from the Circuit Court of Monroe County;
the Hon. Alvin H. Maeys, Jr., Judge, presiding.
MR. JUSTICE DOOLEY DELIVERED THE OPINION OF THE COURT:
Here the issue is whether there was a breach of the cooperation clause in a standard automobile insurance policy so that the responsibility of the insurer would be extinguished. It was framed in an action for declaratory judgment brought by M.F.A. Mutual Insurance Company that it was not liable under an automobile insurance policy issued to defendant George D. Cheek for damages suffered by a pedestrian struck by Cheek's car. The insurer alleged a violation of the cooperation clause of the policy.
The circuit court of Monroe County found in favor of the defendants, which included the pedestrian, Harold W. Miller, and his wife, who sought damages for loss of consortium. The Appellate Court for the Fifth District affirmed. (34 Ill. App.3d 209.) We granted leave to appeal.
The facts were stipulated. On November 12, 1971, Cheek, William Valleroy, and two other persons were riding in Cheek's car. Immediately following the accident with Miller, Cheek told the police, as well as a representative of his insurer, that he had been driving the automobile at the time. The other occupants in the car gave the same information to the insurer.
On June 2, 1972, the Millers filed suit against Cheek alleging negligence in his operation of the vehicle. The day after Cheek was served with summons, he informed his insurer that Valleroy, not he, was driving the car at the time of the occurrence. The reason for this change in Cheek's version of the accident is not shown by the record.
The insurer advised Cheek that in its opinion he had violated the cooperation clause of the policy by previously informing it that he was the driver. However, the insurer undertook the defense of the personal injury action with a reservation of its rights.
Meanwhile the Millers amended their complaint to allege that Valleroy was driving the car with Cheek's permission, and thus was an additional insured under the omnibus clause of the policy. Both Cheek and Valleroy were parties defendant in the insurer's declaratory judgment action. Both failed to appear and both were defaulted.
The insurer contends that the trial court, having previously entered default judgments against Cheek and Valleroy, could not render a judgment on the merits against it in favor of the Millers. Mr. and Mrs. Miller, plaintiffs in the action against Cheek and Valleroy, were necessary parties defendant to this action by the insurers. (Williams v. Madison County Mutual Automobile Insurance Co. (1968), 40 Ill.2d 404, 407.) They had a substantial right in the viability of the policy. This could not be defeated by the failure of Cheek and Valleroy to appear in these proceedings.
The principal issue, as we have noted, is whether Cheek's failure to properly advise his insurer that Valleroy was driving the car at the time of the accident was a breach of the cooperation clause so that the insurer had no responsibility for this occurrence. We agree with the appellate court that this failure was not fatal.
At the outset, the purpose of the cooperation clause should be observed. Its objective is to prevent collusion between the insured and the injured, as well as to make possible the insurer's investigation. Latronica ex rel. De Vries v. Royal Indemnity Co. (1956), 8 Ill. App.2d 337, 342; M.F.A. Mutual Insurance Co. v. Sailors (1966), 180 Neb. 201, 204, 141 N.W.2d 846, 849; Arton v. Liberty Mutual Insurance Co. (1972), 163 Conn. 127, 134, 302 A.2d 284, 288; Martin v. Travelers Indemnity Co. (5th Cir. 1971), 450 F.2d 542, 553.
In an action wherein the insurer asserts a breach of the cooperation clause, the burden of proof is upon the insurer to prove what in law constitutes the breach. State Farm Fire & Casualty Co. v. First National Bank & Trust Co. of Pekin (1972), 2 Ill. App.3d 768, 772; Gianinni v. Bluthart (1971), 132 Ill. App.2d 454, 463; Juvland v. Plaisance (1959), 255 Minn. 262, 268, 96 N.W.2d 537, 541; Iowa Mutual Insurance Co. v. Meckna (1966), 180 Neb. 516, 527, 144 N.W.2d 73, 80; Mariani v. Bender (1964), 85 N.J. Super. 490, 500, 205 A.2d 323, 328; Oregon Automobile Insurance Co. v. Salzberg (1975), 85 Wn.2d 372, 377, 535 P.2d 816, 819.
It seems well established that the failure of the insured to correctly inform the insurer of the identity of the driver of the automobile will not constitute such a breach of the cooperation clause if the insured timely corrects the initial report. Illustrative are Allstate Insurance Co. v. Keller (1958), 17 Ill. App.2d 44, and Rowoldt v. Farmers Mutual Insurance Co. (1940), 305 Ill. App. 93, wherein the insured repudiated his original version of the occurrence. In Allstate Insurance Co. v. Keller, the insured at first told his insurer that he was driving his car at the time of the accident. Some nine months later he advised the insurer that another occupant was driving at the time.
Again, in Rowoldt the insured originally denied having been involved in the accident. Some 12 days later, however, he changed his story, and gave a full account to the insurer. The appellate court pointed out that the rights of the insurer were not shown to have been prejudiced by the delay. The same result is reached by courts> of other States where the insured seasonably corrects a prior, untrue statement as to who was operating the vehicle at the time of the contingency insured against. See Aetna Casualty & Surety Co. v. Mills (Fla. App. 1966), 192 So.2d 59; M.F.A. Mutual Insurance Co. v. Sailors (1966), 180 Neb. 201, 141 N.W.2d 846; Mariani v. Bender (1964), 85 N.J. Super. 490, 205 A.2d 323; Rivera v. Merchants Mutual Casualty Co. (New York City Mun. Ct. 1960), 27 Misc.2d 139, 210 N.Y.S.2d 577; Henderson v. Rochester American Insurance Co. (1961), 254 N.C. 329, 118 S.E.2d 885; Brown v. State ...