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05/22/89 Continental Casualty v. Michigan Mutual Insurance

May 22, 1989

CONTINENTAL CASUALTY COMPANY, INDI

v.

AND AS SUBROGEE OF U.S. TRUCK INC., PLAINTIFF-APPELLANT,

v.

MICHIGAN MUTUAL INSURANCE COMPANY, DEFENDANT-APPELLEE



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIRST DIVISION

539 N.E.2d 431, 183 Ill. App. 3d 778, 132 Ill. Dec. 121 1989.IL.777

Appeal from the Circuit Court of Cook County; the Hon. Lester D. Foreman, Judge, presiding.

September 15, 1989, Filed

APPELLATE Judges:

JUSTICE QUINLAN* delivered the opinion of the court. MANNING, P.J., and CAMPBELL, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE QUINLAN

Continental Casualty Company (Continental) filed suit in Cook County, Illinois, against Michigan Mutual Insurance Company (Michigan Mutual) for alleged bad faith in the negotiation and settlement of a claim in Michigan for its insured, U.S. Truck. Continental was U.S. Truck's excess insurance carrier and Michigan Mutual was U.S. Truck's primary insurance carrier. Michigan Mutual moved to dismiss the claim under the doctrine of forum non conveniens, based on the fact that Michigan, not Cook County, Illinois, was the more convenient forum. The trial court dismissed the claim and subsequently denied Continental's motion for reconsideration. Continental now appeals the trial court's dismissal of its case, as well as the trial court's denial of its motion to reconsider. We affirm.

The specific facts of the case are as follows. In January 1984, Daniel Sabo, while driving a vehicle leased to U.S. Truck in Highland, Michigan, hit a van and killed the driver of the van, Kevin Bovair. In May 1984, Bovair's estate filed a wrongful death claim (the Bovair case) against Sabo and U.S. Truck in the State of Michigan.

U.S. Truck was insured by Michigan Mutual under a primary policy of insurance with policy limits of $1 million per accident, and U.S. Truck was also insured by Continental under an excess policy of insurance with coverage beginning at amounts over $1 million but with policy limits of $2 million per accident. Because Michigan Mutual was the primary carrier, it was Michigan Mutual's responsibility to defend the Bovair claim, and attorneys were hired by Michigan Mutual to defend U.S. Truck. Settlement negotiations to resolve the Bovair case failed and then, allegedly, on the day the case was set to go to trial, Michigan Mutual offered its policy limit of $1 million as satisfying its obligations in the case and turned over the defense of the action to Continental, which claims it was consequently forced to settle for approximately $322,000.

Thereafter, on November 5, 1987, Continental filed its suit against Michigan Mutual in the circuit court of Cook County for alleged bad faith and negligence in handling the Bovair case. Michigan Mutual moved to dismiss the case on the basis of forum non conveniens, and the parties presented the following facts to the trial court.

Continental argued, in response to Michigan Mutual's motion, that it is an Illinois corporation which has its principal place of business in Cook County, Illinois, that most of its portion of the Bovair case was handled through its Chicago office, and that Continental's claims examiner in its Chicago office, James Nagy, was the person ultimately responsible for the final decisions in the handling and supervising of the Bovair case. Additionally, Continental asserted that Michigan Mutual does business in Illinois, and was, accordingly, properly subject to suit in Illinois.

Michigan Mutual, on the other hand, asserted that its principal place of business is in Michigan, and that the basis for Continental's claim against Michigan Mutual is the Bovair wrongful death case, which was brought in Michigan as a result of an accident in Michigan between Michigan residents. Additionally, Michigan Mutual argues that all of the occurrence witnesses reside in Michigan, and that all of the negotiations concerning the settlement of the case took place in Michigan, through the Michigan offices of both Michigan Mutual and Continental. Finally, Michigan Mutual notes that the law firm hired to defend the Bovair claim for U.S. Truck is a Michigan law firm, and the attorneys who handled the case reside in Michigan.

Based upon these facts, the trial court granted the defendant's motion to dismiss based on forum non conveniens. Later, when the plaintiff, Continental, moved the trial court to reconsider the dismissal, the court conducted a hearing and again examined all of the facts, as well as the complaint, and, based on the legal standards set forth in the cases of Gulf Oil Corp. v. Gilbert (1947), 330 U.S. 501, 91 L. Ed. 1055, 67 S. Ct. 839, and Adkins v. Chicago, Rock Island & Pacific R.R. Co. (1973), 54 Ill. 2d 511, 301 N.E.2d 729, adhered to its original ruling observing that even though Continental's choice of forum was to be given substantial deference, the controversy here was a Michigan controversy and thus the proper and more convenient forum was Michigan.

Plaintiff now, on appeal, contends that the trial court abused its discretion when it granted Michigan Mutual's motion to dismiss based on forum non conveniens. Forum non conveniens is a doctrine founded on considerations of fundamental fairness and sensible and effective judicial administration. (McClain v. Illinois Central Gulf R.R. Co. (1988), 121 Ill. 2d 278, 288, 520 N.E.2d 368, 372 (relying upon Adkins v. Chicago Rock Island & Pacific R.R. Co. (1973), 54 Ill. 2d 511, 514, 301 N.E.2d 729, 730).) This doctrine presupposes that there are two forums under which jurisdiction is proper. A court, however, may decline to exercise its jurisdiction over the parties and the subject matter of a case before it, if the other forum is more convenient and can better serve the ends of Justice. (McClain, 121 Ill. 2d at 288, 520 N.E.2d at 372 (relying upon Adkins, 54 Ill. 2d at 514, 520 N.E.2d at 730); Foster v. Chicago & Northwestern Transportation Co. (1984), 102 Ill. 2d 378, 381-82, 466 N.E.2d 198, 199.) The forum non conveniens determination is committed to the sound discretion of the trial court and may be set aside only when there has been a clear abuse of that discretion. (Piper Aircraft Co. v. Reyno (1981), 454 U.S. 235, 257, 70 L. Ed. 2d 419, ...


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