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Meudt v. Travelers Insurance Co.





APPEAL from the Circuit Court of Cook County; the Hon. DANIEL P. COMAN, Judge, presiding.


These two causes have been consolidated. In 76-895, defendant appeals from the denial of its motion to vacate an order granting summary judgment in favor of plaintiff, and in 77-324, it appeals the denial of its section 72 petition (Ill. Rev. Stat. 1975, ch. 110, par. 72). The following issues have been presented for our consideration: (1) whether the trial court erred in denying defendant's Rule 191(b) motion to stay the proceedings until certain evidence was obtained; (2) whether the trial court erred in refusing to consider an affidavit attached to its motion to vacate the summary judgment; (3) whether the trial court erred in denying its motion to vacate; and (4) whether the trial court erred in denying its section 72 petition.

Effective June 26, 1974, defendant insured certain contractor's equipment belonging to plaintiff. On December 23, 1974, after a report of a loss from plaintiff's agent, a claim representative of defendant (Jeff Bruce) was assigned to the claim. Bruce contacted plaintiff's wife and, upon being informed that some equipment had been taken from plaintiff's truck when it was stolen, he requested an itemized list of the loss. On December 30, 1974, plaintiff supplied Bruce with a police report concerning the theft of his truck and with the requested list of equipment claimed to have been stolen. After Bruce compared the list with a schedule of equipment attached to the policy, he asked for further substantiation of the value of the lost property and, on January 20, 1975, plaintiff supplied Bruce with receipts and cancelled checks concerning the purchase of each item of lost equipment. Bruce and plaintiff then reviewed each item in detail to ascertain an overall value of the loss, and on January 29, 1975, Bruce reported to his superiors as follows:

"I believe Mr. Meudt, has been helpful in this case and has been above suspicion regarding false or fraulent [sic] claim. I therefore, recommend payment of $18,016 to the insured upon approval from my superior."

The next day a draft in that amount was issued by defendant to plaintiff in payment of his loss.

Thereafter, on February 3, 1975, Bruce's superior received a phone call from someone who identified himself as Mr. Farrone and said he was an investigator for the Auto Theft Division of an unspecified law enforcement agency. Farrone indicated that Meudt was under some form of investigation; that he had spent some time in prison for mail fraud; and that he had a record of filing insurance claims. Bruce and his superior then decided to stop payment on the draft issued to plaintiff and to make an additional investigation. Bruce thereafter made inquiries and turned the compiled data over to defendant's attorney.

Plaintiff subsequently sued to enforce the settlement agreement and, while defendant did not deny the existence of the agreement, he raised two affirmative defenses; i.e., the agreement was induced by fraudulent representations of plaintiff; and that plaintiff violated the policy's false swearing provision.

On January 16, 1976, plaintiff moved for summary judgment and attached Bruce's discovery deposition which formed the basis of the above statement of facts. On the same day, defendant was ordered to respond to the motion within 28 days, and a hearing was set for March 12, 1976. By stipulation of the parties, defendant was given an additional 14 days to respond but did not do so, and when it did not appear for the March 12 hearing, summary judgment was entered in favor of plaintiff in the amount of $18,016 plus 5% interest from February 1, 1975.

On April 2, 1976, the trial court allowed defendant to file its response to the motion for summary judgment and set defendant's motion to vacate the summary judgment for hearing on April 14. To its response, defendant attached portions of plaintiff's answers to an interrogation (allegedly under oath), the unsworn answers to questions propounded to a gasoline station attendant, the records of plaintiff's two prior criminal convictions and an affidavit of an attorney who represented another insurance company.

It appears from his answers that early one morning in December 1974, plaintiff brought his truck to a certain gasoline station for the repair or replacement of the starter; that he informed the attendant of contractor's equipment in the plywood shelter built on the flat bed of the truck; that he paid the attendant in advance and, having an extra key, he told the attendant to remove the key in the truck and to place it on top of the carburetor underneath the truck's hood or to take the key into the station; that plaintiff told the attendant to do this so he could pick up the truck either during or after business hours; that at 10:30 p.m., when plaintiff returned to the station, the truck was gone and he reported its disappearance to the police; that the following morning, the attendant told plaintiff that the key had been left on the carburetor per instructions; that when the truck was recovered, plaintiff found the key in that location, but the equipment was missing; that the lock on the vent window had been broken; and that the police had reported the truck had been "hot wired."

The answers given by the station attendant, Brazeau, conflicted with those of plaintiff in the following respects: (1) plaintiff did not tell Brazeau that the equipment was on the truck until he announced that the truck had been recovered; (2) plaintiff had not told Brazeau to leave the key on the carburetor and he had, in fact, locked it in the station at the close of the business day; and (3) plaintiff had paid in advance for the repairs on the day previous to bringing the truck in.

Records of the United States District Court, also attached to the motion to vacate, revealed that plaintiff had been found guilty of mail fraud (which in some manner involved insurance) on May 31, 1972, and of concealing a motor vehicle stolen in interstate commerce on December 7, 1972.

Finally, there was attached the affidavit of John E. Wilson, an attorney representing Omaha Indemnity Company, stating that on January 18, 1975, a judgment for $3,000 was rendered against plaintiff in favor of Omaha which required the return of funds paid to plaintiff on a fraudulent insurance claim.

On May 6, 1976, defendant filed a Rule 191(b) (Ill. Rev. Stat. 1975, ch. 110A, par. 191(b)) motion, which was denied by the trial court, requesting a stay in the proceedings until the deposition of Officer Bagnole could be obtained and in order to find the attendant, Brazeau. Affidavits of defendant's attorney and of Bruce were attached to the motion with the former, stating that since December, 1975, he had telephoned the station four or five times to ascertain the whereabouts of Brazeau, who had terminated his employment there in October, 1975, and that within one week prior to filing the affidavit, the station owner had agreed to obtain information as to Brazeau's whereabouts from a frequent customer who knew Brazeau. Bruce's affidavit stated that at the beginning of March, 1976, he visited the gasoline station and was told that Brazeau had quit six months before; that on March 22, following up on a tip, he went to the "Y Not" bar in search of one Alex Pappas, who was reputed to know of Brazeau's whereabouts, but Pappas was not there; that on March 30, during the course of an hour and ...

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