APPEAL from the Circuit Court of McLean County; the Hon.
WILLIAM T. CAISLEY, Judge, presiding.
MR. PRESIDING JUSTICE MILLS DELIVERED THE OPINION OF THE COURT:
This case has been in the circuit court twice, once before in this tribunal, across the hall to the Illinois Supreme Court, and is now here before us again.
Regrettably it must go back once more.
The scenario arises from the traditional display of merriment associated with ringing out the old and ringing in the new on New Year's Eve and the early morning hours of New Year's Day. According to our plaintiff here, his enjoyment of the festivities surrounding the coming of 1973 was abruptly ended when he was struck by a wooden object wielded by Ben Paul, the proprietor of a spirit dispensary known as Ben's Den, Inc.
Defendant Paul the "Ben" of "Ben's Den" was charged with aggravated battery as a result of the incident. On the day set for trial, a charge of battery was added, and he was found guilty of the new charge following a bench trial on stipulated facts. The aggravated battery charge was "nolle prossed."
On August 7, 1973, Thornton filed a two-count complaint charging defendants Ben Paul and Ben's Den, Inc., with wilful and wanton misconduct, seeking $14,000 in compensatory and punitive damages.
At the time of the event in question, the defendants, Paul and Ben's Den, Inc., had a liability insurance policy with Illinois Founders Insurance Company. That policy provided that Illinois Founders will pay all sums which the insured shall become legally obligated to pay as damages for personal injuries caused by an occurrence arising out of the ownership, maintenance or use of the insured premises and that Illinois Founders will defend any such suit against the insured. The term "occurrence" was defined as "an accident, including continuous or repeated exposure to conditions, which result in bodily injury or property damage neither expected nor intended from the standpoint of the insured * * *."
Also appended to the policy was an endorsement which stated:
"EXCLUSION OF ASSAULT AND BATTERY
It is agreed that the insurance does not apply to Bodily Injury or Property Damage arising out of assault and battery or out of any act or omission in connection with the prevention or suppression of such assault and battery."
After investigating the incident, Illinois Founders determined that it was outside of the policy coverage and notified Paul of its denial of coverage. Paul then engaged the services of a personal attorney who filed an answer and an affirmative defense.
Following discovery depositions, Thornton, with leave of the court, filed an amended complaint alleging that Paul "negligently" struck him. The amended complaint sought $30,000 in damages. Paul's personal attorney requested Illinois Founders to defend against the amended complaint, and in a letter dated August 19, 1974, Illinois Founders refused.
Sometime between July 24, 1974, and March 16, 1975, Paul and Thornton entered into an agreement wherein Thornton agreed to settle his right to pursue Ben Paul or Ben's Den for any portion of a judgment which may be rendered, for the sum of $100. The agreement expressly provided that Thornton was free to pursue his suit to judgment and collect any judgment from Illinois Founders.
On March 17, 1975, a default judgment was entered for $30,000 after Paul's attorney failed to either file a responsive pleading to the amended complaint or answer the call for trial. The trial court was never advised of the agreement.
On April 16, 1975, Thornton filed an affidavit for garnishment against Illinois Founders, and following a hearing, Illinois Founders was ordered to pay Thornton the amount of the judgment, plus costs. A notice of appeal was filed from that judgment. Illinois Founders then filed a section 72 petition to vacate the default which was denied. A second notice of appeal was filed. The appeals were consolidated in this court.
On August 8, 1977, this court filed an opinion affirming the trial court. (Thornton v. Paul (1977), 51 Ill. App.3d 337, 366 N.E.2d 1048.) The decision was appealed to the supreme court, which affirmed as to the section 72 petition but reversed and remanded the garnishment action. Thornton v. Paul (1978), 74 Ill.2d 132, 384 N.E.2d 335.
The supreme court initially noted the general rule that an insurer's failure to defend estops it from later raising policy defenses for noncoverage in a subsequent action in garnishment by the insured or a judgment creditor. The court concluded, however, that "because of the conflict of interests and the ethical problems that would have been presented if Illinois Founders would have undertaken the defense of the defendants, the insurer's failure to defend should not estop it from raising the defense of noncoverage in the garnishment action." (74 Ill.2d 132, 155, 384 N.E.2d 335, 345.) The supreme court further determined that Illinois Founders was not collaterally estopped from asserting its defense due to the default judgment.
Finally, the court examined the effect of Paul's battery conviction. After noting that a number of courts> have held that a criminal conviction conclusively establishes the facts upon which it is based, the court decided to follow the majority position which permits the use of criminal convictions as prima facie evidence of the underlying offense. The court stated:
"The court in the criminal case adjudicated the conduct of defendant Ben Paul to constitute battery. We noted above the holdings of the Oregon court in Casey, and the Pennsylvania court in Hurtt that proof of a criminal conviction is conclusive proof of the facts on which it is based. We think the preferred rule is that stated by the Appellate Court for the Second District in Smith v. Andrews (1964), 54 Ill. App.2d 51, 203 N.E.2d 160, which held proof of a conviction to be admissible in a civil case as prima facie evidence. We are not concerned here with the effect of a guilty plea. This approach preserves the opportunity to rebut the factual basis of the conviction insofar as those facts are applicable to the civil proceeding. Also, it does not conclusively establish that there was no duty to defend as the Oregon court held in Casey. In our case, the evidence of the defendant ...