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Ins. Co. of N. America v. Cape Indus.





Appeal from the Circuit Court of McLean County; the Hon. James A. Knecht, Judge, presiding.


On June 5, 1981, plaintiffs, Insurance Company of North America (INA) and INA of Illinois, brought suit in the circuit court of McLean County against defendants, Cape Industries, Ltd. (Cape), North American Asbestos Corporation (NAAC), St. Paul Fire & Marine Insurance Company (St. Paul), and Dorothy Sumey et al., seeking a declaration that policies of liability insurance issued by plaintiffs wherein NAAC was the named insured, provided no coverage or protection for defendant (Cape). St. Paul was alleged to have issued a policy giving liability coverage to NAAC over and above the limits of the INA policies. The other defendants, Sumey et al., are persons, or personal representatives of persons (1) who were allegedly injured or killed as a result of exposure to asbestos sold by Cape while acting as an "agent and stockholder" of NAAC, and (2) who have filed suits at law against Cape for damages resulting from that exposure.

In count I, plaintiffs contended that by the terms of the policies, no coverage was extended to Cape. Count II asserted that Cape had breached the terms of the INA policies by failing to cooperate with plaintiffs in the defense of the suits brought by Sumey et al. On November 7, 1984, plaintiffs filed a motion for summary judgment as to count II. The motion stated that in companion litigation in which plaintiffs here were plaintiffs and Cape a defendant, findings had been made that Cape had refused to cooperate with plaintiffs "in the defense of personal injury actions pending in McLean County, Illinois, against Cape." The motion further set forth that more than 30 days had elapsed since the entry of judgments making those findings final and that neither a post-hearing motion nor a notice of appeal had been filed. The motion contended that, accordingly, (1) Cape, NAAC, and St. Paul were collaterally estopped in the instant case to deny that Cape and NAAC were each in "breach of its duty to cooperate with these Plaintiffs," and (2) because Sumey et al. had no "better rights" to recovery by garnishment under the policies than Cape or NAAC had for coverage under the policies, they were also estopped from any prospective rights to garnish the policies.

Defendants Sumey et al. responded to the motion for summary judgment by contending that no collateral estoppel was operative as to them because (1) they were not parties to the cited cases, and (2) those cases involved cooperation by Cape as to claims concerning acts of commission or omission by Cape which were different than those causing the injuries for which they had brought suit.

After a hearing on the motion for summary judgment, the circuit court entered an order on March 12, 1985, determining:

1. Cape, NAAC, and St. Paul were collaterally estopped from claiming coverage;

2. the rights of the other defendants were dependent on those of the rights of Cape and NAAC and were "thus estopped as well"; and

3. the foregoing ruling rendered moot the issues of count I.

The purport of the order was to dismiss as to defendant Retha McCandless, administrator, over whom that court had no jurisdiction, and to grant plaintiffs the declaratory relief sought as to other defendants.

Defendants Sumey et al. have appealed. Plaintiffs have moved to dismiss the appeal on the grounds that they have made payment on claims to the full extent of the policy limits, thus mooting any significance to the declaration on appeal. We deny the motion to dismiss, and reverse the summary judgment as to count II. We remand with directions that count I be reinstated.

• 1 Plaintiffs are in a somewhat awkward and unusual posture in having obtained a declaratory judgment and now asking that the appeal be dismissed as moot. Granting their request would allow the declaration, which they contend to be insignificant, to stand. In order to effectively defend against the motion, defendants Sumey et al. would have to conduct a substantial investigation. Any evidentiary hearing on the question would be one that can better be handled in the trial court. Considering all the foregoing matters and our determination that the summary judgment was erroneous, we determine the best procedure to be to deny the motion.

If plaintiffs wish to do so, they may raise the issue of mootness because of exhaustion of policy limits in the trial court on remand. The trial court would be in a better position to hear that question than we are. Furthermore, the case would be in a more appropriate posture for consideration of that issue because there would then be no existing declaratory judgment. A declaration of mootness here would permit a declaratory judgment to stand without those desiring to challenge its propriety having an opportunity to do so.

We now proceed to the merits of the appeal from the summary judgment. As is well known, summary judgments may be entered only if the "pleadings, depositions and admissions on file, together with" any affidavits show as a matter of law that the moving party is entitled to judgment. (Ill. Rev. Stat. 1983, ch. 110, par. 2-1005(c).) The only factual matters shown here in accordance with the foregoing are (1) the uncontested allegations of the motion for summary judgment that in "companion litigation" the circuit court of McLean County had made a binding determination that, in regard to other claims against Cape wherein plaintiffs were alleged to have liability insurance coverage, Cape had failed to cooperate with plaintiffs, and (2) the portions of the response of defendants Sumey et al. in which they stated that they were not parties to the foregoing cases and that those cases involved other acts of commission or omission by Cape.

• 2 The motion for summary judgment requested that the trial court take judicial notice of the judgments containing the findings relied on for estoppel. The record does not indicate whether the trial court did take judicial notice of its records in those cases. Under a supreme court decision of the past decade, a court may now take judicial notice of its own records. (People v. Davis (1976), 65 Ill.2d 157, 357 N.E.2d 792.) However, the Davis court noted that documents were submitted to the court in order to satisfy the court of the validity of the judgment of which judicial notice was ...

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