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Dora Township v. Indiana Insurance Co.

OPINION FILED JANUARY 4, 1979.

DORA TOWNSHIP ET AL., PLAINTIFFS-APPELLANTS,

v.

INDIANA INSURANCE CO., DEFENDANT-APPELLEE. — (W.B. OYE, INDIV. AND AS ADM'R OF THE ESTATE OF RUBY JUANITA OYE, DECEASED, DEFENDANT.)



APPEAL from the Circuit Court of Moultrie County; the Hon. JOSEPH C. MUNCH, Judge, presiding.

MR. JUSTICE TRAPP DELIVERED THE OPINION OF THE COURT:

Plaintiffs appeal from the order of the trial court in declaratory judgment which determined that the defendant, Indiana Insurance Company, had no obligation to provide coverage or defense for the plaintiffs under a policy of insurance issued by Indiana.

Plaintiffs were sued by W.B. Oye, individually and as administrator of the estate of his wife, for damages arising from a collision at an intersection of plaintiff township roads. The gist of the underlying action was that the township and its highway commissioner carelessly and negligently failed to place and maintain stop signs at an intersection, with the proximate result that Mrs. Oye drove into the intersection, collided with another automobile and died as the result of injuries sustained. Indiana denied coverage by reason of an exclusionary clause which we consider hereafter.

Initially, Indiana argues that there was a failure of proof by plaintiffs. The amended complaint for declaratory judgment included as attached exhibits a copy of the insurance policy issued to plaintiffs, a file stamped copy of the amended underlying complaint for damages, and copies of letters showing transmittal of the complaint to Indiana and defendant's denial of coverage by letter.

The amended complaint in declaratory judgment alleged the filing of the Oye complaint against the plaintiffs and the filing of an amended complaint against the township in September 1977. As to those allegations of the filing of the suit against defendants by Oye, Indiana's answer to the complaint for declaratory judgment alleged that it has "insufficient knowledge to form a belief as to the allegations * * *." Those allegations in the answer of Indiana were verified by its trial attorney. It is now argued by Indiana that there was a failure of proof in that plaintiffs failed to introduce evidence showing the filing of the Oye complaint and the amended complaint as alleged, or the existence of the pending litigation.

Plaintiffs argue that by reason of section 36 of the Civil Practice Act (Ill. Rev. Stat. 1975, ch. 110, par. 36), exhibits attached to the complaint become a part of the pleading and are deemed admitted unless specifically denied and need not be introduced into evidence. Habada v. Graft (1975), 33 Ill. App.3d 810, 338 N.E.2d 255; William Aupperle & Sons, Inc. v. American National Bank & Trust Co. (1975), 28 Ill. App.3d 573, 329 N.E.2d 458.

Indiana contends that section 40(2) of the Civil Practice Act (Ill. Rev. Stat. 1975, ch. 110, par. 40(2)) provides that a verified answer of insufficient knowledge to form a belief concerning the matters alleged in the complaint requires that there be proof of the fact of an existing lawsuit against the plaintiffs.

• 1 While we doubt the propriety of the form of Indiana's answer in those instances where exhibits are attached as a part of the pleading, it is unnecessary to consider the issue further. The transcript of the hearing upon the motion for summary judgment discloses that Indiana's counsel undertook the initial statement of the nature and background of the proceedings to the trial court. At that time he stated that the declaratory judgment action arose by reason of the underlying action of Oye as administrator against the plaintiffs. In McCormick, Evidence § 267, at 643 (2d ed. 1972), it is said:

"If an attorney is employed to manage a party's conduct of a lawsuit he has prima facie authority to make relevant judicial admissions by pleadings, by oral or written stipulations, or by formal opening statement, which unless allowed to be withdrawn are conclusive."

Counsel's statement in open court constituted a judicial admission binding upon Indiana and it was not necessary for plaintiffs to introduce proof of the fact of the action underlying the complaint for declaratory judgment.

Indiana issued a policy designated "COMPREHENSIVE GENERAL LIABILITY INSURANCE COVERAGE" to the plaintiffs. That policy contained an endorsement:

"In consideration of the premium for which this policy is issued, it is agreed the policy does not apply to any loss or claim arising out of the existence of any highways, roads, streets, sidewalks, culverts or bridges, owned, maintained, repaired or controlled by the named insured." (Emphasis supplied.)

The issue argued here is whether the exclusionary endorsement is ambiguous so that such endorsement and the policy must be construed most strongly against the insurer. Manchester Insurance & Indemnity Co. v. Universal Underwriters Insurance Co. (1972), 5 Ill. ...


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