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01/20/94 LISA MAXTON v. CHUCK C. GAREGNANI

January 20, 1994

LISA MAXTON, ADMINISTRATOR OF THE ESTATE OF PHYLLIS MAXTON, DECEASED; LISA A. MAXTON; BRANDON MAXTON, A MINOR, BY LISA MAXTON, HIS MOTHER AND NEXT FRIEND; AND LORI RUGGERI AND STEPHEN MICHAEL RUGGERI, ADMINISTRATORS OF THE ESTATE OF LEAH RUGGERI, DECEASED, PLAINTIFFS AND COUNTERDEFENDANTS-APPELLANTS,
v.
CHUCK C. GAREGNANI, DEFENDANT AND COUNTERDEFENDANT, AND HONDA MOTOR COMPANY, LTD., AND AMERICAN HONDA MOTOR COMPANY, INC., DEFENDANTS, AND ALLSTATE INSURANCE COMPANY, DEFENDANT AND COUNTERPLAINTIFF-APPELLEE.



Appeal from the Circuit Court of Williamson County. No. 88-L-50. Honorable Thomas W. Haney, Judge Presiding. This Opinion Substituted by Court for Vacated Opinion of July 27, 1993,

Maag, Welch, Goldenhersh

The opinion of the court was delivered by: Maag

JUSTICE MAAG delivered the opinion of the court:

Plaintiffs, Lisa Maxton, et al., appeal from the trial court's order of February 13, 1992, granting defendant Allstate's motion for summary judgment. Plaintiffs claim that the trial court erred in granting Allstate's motion for summary judgment because questions of material fact remain.

The facts of this case are as follows: On September 4, 1987, Jamie Garegnani purchased automobile insurance from Allstate on a 1980 Datsun 200SX vehicle which she and her husband, Chuck Garegnani, jointly owned. Jamie purchased the insurance from Wayne Schwartz, an Allstate sales representative, by paying him with a check in the amount of $52.25. An application for automobile insurance was filled out by Mr. Schwartz on behalf of the Garegnanis, and Jamie signed the application. Jamie was given a copy of the document. The application constituted a binder of insurance (see Jacobs v. Atlas Insurance Co. (1909), 148 Ill.App. 325, 326) or insurance contract which became effective September 4, 1987, at 2:15 p.m. No expiration date appears on the face of the binder.

On January 28, 1988, Chuck was driving the 1980 Datsun when it collided with a vehicle driven by Lisa Maxton. A suit was filed on March 17, 1988, by the occupants of Lisa Maxton's vehicle against Chuck Garegnani.

In March 1988, approximately two weeks after summons was served on Chuck, Jamie called Schwartz to inform him about the accident. Schwartz told her that their insurance had been cancelled before the accident occurred. Although the suit against Chuck is still pending, it is not the subject of this appeal.

On September 18, 1990, a first amended complaint was filed. Count VII of the amended complaint seeks a declaratory judgment against Allstate on the issue of coverage. On March 27, 1990, Allstate filed a counterclaim for declaratory judgment which is also at issue before this court.

The Garegnanis claim that the binder of insurance is the only document that they received from Allstate. At the time that the Garegnanis applied for automobile insurance, Schwartz apparently told Jamie that she would receive a policy and a renewal notice in the mail when another premium was due. Because the Garegnanis never received anything else in the mail, they believed that they had insurance coverage on their vehicle at the time of the collision with Lisa Maxton's vehicle.

Allstate claims that on September 24, 1987, it mailed a notice of cancellation of the binder of insurance to the Garegnanis. The mailing of the cancellation notice was generated by a machine; therefore, no witness could testify that the letter was actually mailed to the Garegnanis. According to Allstate, the notice of cancellation stated that the reason that the Garegnanis' insurance was cancelled was due to the fact that they had discovered two traffic violations on Jamie's motor vehicle record. Allstate's letter to the Garegnanis stated that their insurance would terminate on October 30, 1987, and was signed by "R. Keller," which is an alias used by Allstate for this region of the country. Allstate claims that it mailed the cancellation notice to the address that the Garegnanis provided in the application for insurance.

The record indicates that the notice that allegedly was mailed to the Garegnanis was mailed to them at "Route 1, Box 5, Blue Bld Es, Herrin, IL 62948" instead of "Route 1, Box 5, Blue Blaze Estates, Herrin, IL 62948," as the Garegnanis had provided in the application for insurance. The Garegnanis testified that when they applied for the automobile insurance, they had a new address and were told by the manager of the complex in which they lived that Rural Route No. 1 was the correct route number. A few months after the Garegnanis moved to Blue Blaze Estates, they realized that they were not receiving all of their mail and inquired into the problem at the local post office. The post office informed them that the correct route number was Rural Route No. 2. The Garegnanis apparently never informed Allstate of the change in their address.

Allstate claims that the contract of insurance entered into between Allstate and the Garegnanis on September 4, 1987, was cancelled on October 30, 1987, at 12:01 a.m. as provided in the letter dated September 24, 1987. Further, Allstate contends that even if the insurance had not been cancelled, the Garegnanis failed to notify Allstate of the accident "at once," as provided in the policy of insurance, and hence, they provided late notice of the accident to Allstate which is allegedly in contravention of the provisions in the Garegnanis' automobile policy.

On July 29, 1991, Allstate filed a motion for summary judgment on Count VII of plaintiffs' first amended complaint and on both counts of Allstate's counterclaim for declaratory judgment. Both the plaintiffs' and Allstate's causes of action sought a determination as to whether Chuck Garegnani was insured by Allstate when his vehicle collided with Lisa Maxton's vehicle. On February 13, 1992, the trial court granted Allstate's motion for summary judgment against the plaintiffs. The trial court determined that Allstate had effectively cancelled the Garegnanis' insurance, and even if the insurance had not been cancelled, the Garegnanis were not entitled to recover from Allstate because they had given late notice of the automobile accident to Allstate. Plaintiffs filed a timely notice of appeal from the trial court's order on February 18, 1992. Because questions of material fact remain, we believe that the trial court erred in granting Allstate's motion for summary judgment; therefore, we reverse and remand to the trial court.

Summary judgment is a drastic remedy and should only be allowed when the right of the moving party is clear and free from doubt. ( Loyola Academy v. S & S Roof Maintenance, Inc. (1992), 146 Ill. 2d 263, 271, 586 N.E.2d 1211, 1215.) This is so even though the use of the summary judgment procedure is encouraged as an aid in the expeditious Disposition of a law suit. ( Loyola, 146 Ill. 2d at 271, 586 N.E.2d at 1215.) Under section 2-1005 of the Code of Civil Procedure (735 ILCS 5/2-1005 (West 1992)), the sole function of the court reviewing the trial court's entry of summary judgment is to determine whether the lower court correctly ruled that no genuine issue of fact had been raised and, if none was raised, whether judgment was correctly entered as a matter of law. ( Hudlin v. City of East St. Louis (1992), 227 Ill. App. 3d 817, 825, 591 N.E.2d 541, 547.) The reviewing court must determine whether the ...


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