APPELLATE COURT OF ILLINOIS, FOURTH DISTRICT
548 N.E.2d 130, 191 Ill. App. 3d 496, 138 Ill. Dec. 900 1989.IL.1940
Appeal from the Circuit Court of Douglas County; the Hon. Frank W. Lincoln, Judge, presiding.
JUSTICE STEIGMANN delivered the opinion of the court. SPITZ and McCULLOUGH, JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE STEIGMANN
Plaintiffs, Lindsey Daugherty (Daugherty) and Rockford Mutual Insurance Company (Rockford), appeal the trial court's invalidation of the assignment of a lawsuit from Daugherty to Rockford. Specifically, Daugherty assigned to Rockford any professional negligence claims Daugherty could bring against defendant, Philip Blaase (Blaase), an insurance broker.
Daugherty purchased a public liability insurance policy from Rockford with a $100,000 limit and a $1 million umbrella liability policy. These policies were to provide Daugherty with indemnification for damages for which he was responsible as a result of tort liability to a third person. They were purchased through Blaase. The umbrella liability policy would have indemnified Daugherty for losses of between $500,000 and $1 million. Thus, a $400,000 "coverage gap" existed in Daugherty's insurance protection.
During the period of coverage, Daugherty was involved in an automobile accident with Rose M. Smith (Smith). Smith sued Daugherty for damages arising out of the accident, and Rockford settled the claim. The settlement agreement provided for an up front lump-sum payment of $310,000, with periodic payments of $3,000 (adjusted annually) for the life of Smith. Thus, the settlement exceeded Rockford's $100,000 limit, invading the "coverage gap."
In consideration of Rockford's settlement with Smith beyond Rockford's liability limit, Daugherty assigned to Rockford all professional negligence claims he had against Blaase. Rockford's settlement with Smith took place before any judgment in favor of Smith was entered against Daugherty. When Rockford attempted to litigate the malpractice action, Blaase responded by asserting that the assignment of Daugherty's lawsuit to Rockford was void. The trial court agreed with Blaase and granted summary judgment in his favor.
Rockford appeals that judgment. At issue is (1) whether Daugherty incurred any damages as a result of Blaase's alleged negligence, a prerequisite to the assignment of Daugherty's claim against Blaase to Rockford, and (2) whether an action based on insurance broker malpractice is assignable.
In its order granting summary judgment, the court determined that Daugherty sustained no damages as a result of Blaase's alleged professional negligence. Alternatively, the court reasoned that claims for pecuniary loss resulting from Blaase's alleged professional negligence are not assignable. The court concluded that Daugherty's assignment to Rockford of his malpractice action was void and of no effect.
When reviewing the trial court's entry of summary judgment, this court has to determine first whether the trial court correctly ruled that no genuine issue of material fact had been raised. If none was raised, then this court must determine as a matter of law whether summary judgment was correctly entered based on the uncontroverted facts. (Coomer v. Chicago & North Western Transportation Co. (1980), 91 Ill. App. 3d 17, 21, 414 N.E.2d 865, 868; Murphy v. Rochford (1977), 55 Ill. App. 3d 695, 698, 371 N.E.2d 260, 263.) Rockford does not challenge the court's finding that no genuine issue of material fact was present; instead, Rockford challenges the court's finding that, as a matter of law, the assignment was invalid.
Illinois law mandates that an assignor actually or potentially possess the entity to be assigned. (Town & Country Bank v. Country Mutual Insurance Co. (1984), 121 Ill. App. 3d 216, 218, 459 N.E.2d 639, 640, citing North Chicago Street R.R. Co. v. Ackley (1897), 171 Ill. 100, 49 N.E. 222.) Daugherty argues that before he assigned his action to Rockford, he was potentially exposed in the form of the Smith lawsuit to a pecuniary loss due to Blaase's ...