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09/13/88 Mid-State Savings & Loan v. Insurance Exchange

September 13, 1988




Before proceeding to a review of the facts, there are two motions concerning the record which must be considered. On April 11, 1988, defendants made a motion to supplement the record herein with the entire record in the underlying action. On April 29, 1988, defendants filed a motion to amend the record on appeal by adding a certified report of proceeding of the arguments of counsel on the motion for summary judgment, a certified docket sheet in this cause, and from the underlying action, certified copies of portions of the common law record which the trial Judge indicated in his affidavit were considered at the time of the hearing on the motion for summary judgment. Objections to both motions were filed.


529 N.E.2d 696, 175 Ill. App. 3d 265, 124 Ill. Dec. 715 1988.IL.1368

Appeal from the Circuit Court of Champaign County; the Hon. John P. Shonkwiler, Judge, presiding.


JUSTICE SPITZ delivered the opinion of the court. McCULLOUGH and KNECHT, JJ., concur.


This is an appeal from an order of the circuit court of Champaign County granting summary judgment in favor of the plaintiffs. Plaintiffs Mid-State Savings & Loan Association, Mid-State Appraising, Inc., d/b/a Mid-State Realty (Mid-State), Joseph Corley, and Joann Corley sought a declaration from the trial court that the defendants, Illinois Insurance Exchange, Inc., Crum & Forster Managers Corporation, and LWB Syndicate, Inc., were equitably estopped from denying coverage to plaintiffs for claims made by defendant Dependable Realty, Inc. (Dependable Realty), against plaintiffs in the underlying action pending in the circuit court, Champaign County (case No. 86 -- L -- 864). All defendants except Dependable Realty seek to have the summary judgment overturned on appeal.

On appeal, a "reviewing court may, in its discretion, and on such terms as it deems just" order the record to be amended to correct errors or add matters which should have been included. (107 Ill. 2d R. 366(a)(3).) The reviewing court is to decide controversies as to whether the record accurately sets out what occurred in the trial court and to make sure the record conforms to the truth. (107 Ill. 2d R. 329.) Matters which were not filed in the trial court or which were not considered by the trial Judge will not be considered by a reviewing court by way of a motion to supplement the record on appeal. Nameoki Township v. Cruse (1987), 155 Ill. App. 3d 889, 508 N.E.2d 1080.

The motion to supplement the record by adding the entire record in the underlying action is denied. On the other hand, the motion to amend the record filed April 29, 1988, pursuant to Supreme Court Rule 329 is granted over the objections thereto.

The trial Judge tape-recorded the argument of counsel on the summary judgment. However, because of some malfunction, the proceedings could not be transcribed. Defendants' attorneys learned of this on March 15, 1988, and on April 26, 1988, the parties appeared before the trial court to argue the approval of the report of proceedings prepared by appellants. Supreme Court Rule 323(c)(107 Ill. 2d R. 323(c)) sets out the procedure for obtaining a report of proceedings where no verbatim transcript is available. Pursuant to Rule 323, the trial court settled and approved the proposed report and certified that he had considered the matters contained in the record of the underlying action which defendants have attached to their motion before this court.

Petitioners' objections to the motion boil down to the fact that the proposed report of proceedings was not presented to the trial court in the time limits set out in Rule 323(c). As a practical matter, however, the defendants were unaware of the difficulty until the time limits in Rule 323(c) had already expired, and this is indicated by the trial Judge's interlineation in his affidavit. Therefore, defendants' motion is construed as a motion for an extension of time to file the report of proceedings, supported by affidavit, as is required by Supreme Court Rule 323(e). (107 Ill. 2d Rule 323(e).) The affidavit of the trial Judge demonstrates the need for the extension and the reasonable excuse for failing to file the motion earlier.

The record as amended discloses that on March 15, 1986, the Illinois Insurance Exchange, Inc., issued a certificate of insurance for Realtors Errors and Omissions Insurance for Mid-State Realty in the amount of $100,000, an identical certificate to Joseph R. Corley for $100,000, and to Joann Corley for $100,000. The insurance by its terms was to indemnify the insureds for claims made "by reason of any act, error or omission in professional services rendered."

On June 26, 1986, Dependable Realty sued Mid-State Savings and Loan Association, Mid-State Appraising, Inc., Mid-State Realty, Inc., Joseph W. Corley, and Joann Corley. The 16-count complaint included allegations of tortious interference with a contractual relationship, tortious interference with prospective economic advantage, breach of a fiduciary duty by an officer-director, inducing such a breach of a fiduciary duty, unfair competition, breach of contract, fraud, theft of trade secrets, and various conspiracies based on the same facts. All of the counts are related to Joseph and Joann Corley leaving Dependable Realty and forming their own company under the name of Mid-State Realty, Inc., allegedly taking business and employees and leaving behind debts.

On July 25, 1986, the law firm of Dobbins, Fraker, Tennant, Joy & Perlstein entered an appearance on behalf of the Mid-State Companies. On the same day, Follmer & West entered an appearance on behalf of both Corleys. These ...

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