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February 4, 1994


Appeal from the Circuit Court of Cook County. The Honorable Arthur Dunne, Judge Presiding.

Rehearing Denied February 4, 1994.

Egan, McNAMARA, Giannis

The opinion of the court was delivered by: Egan

PRESIDING JUSTICE EGAN delivered the opinion of the court:

This is an insurance coverage case. The plaintiffs appeal from an order dismissing their complaint against their insurer, Universal Casualty Company (Universal). The plaintiffs contend that the trial Judge erred in concluding that the plaintiffs failed to comply with a notice provision of their policy with Universal following a hit-and-run accident. The principal arguments of the plaintiffs are that one notice provision of the Universal insurance policy violates the public policy as expressed by the legislature in the Illinois Insurance Code (the Code) (Ill. Rev. Stat. 1989, ch. 73, par. 613 et seq.); and, alternatively, that a conflict exists between the notice provisions of the policy thus creating an ambiguity that must be resolved in the plaintiffs' favor.

The plaintiffs, Phyllis Jones, Deborah Jones, Paulette Jones and Akissi Jones filed suit against Universal on behalf of themselves and others similarly situated seeking declaratory relief regarding coverage under their insurance policy with Universal. The suit of Akissi Jones, a minor, was settled. The trial Judge granted Universal's Section 2-615 motion (Ill. Rev. Stat. 1991, ch. 110, par. 2-615) and dismissed the complaint of the remaining three plaintiffs; he later denied leave to file an amended complaint.

The plaintiffs do not now argue the sufficiency of the first complaint; the issue before us, therefore, is whether the Judge erred in denying the motion to file the amended complaint. A proposed amended complaint is insufficient, and thus not curative of an earlier complaint's defects, only if, taking as true all well-pleaded facts and the inferences to be drawn therefrom, it is apparent that no set of facts can be proved which will entitle a plaintiff to recover. ( Capitol Indemnity Corp. v. Stewart Smith Intermediaries, Inc. (1992), 229 Ill. App. 3d 119, 123, 593 N.E.2d 872.) With those principles as guidelines, we turn to the allegations of the amended complaint.

On July 14, 1990, each of the plaintiffs sustained bodily injury when the car in which they were riding was "struck by a hit-and-run vehicle." The identity of the driver and the owner of the hit-and-run vehicle could not be ascertained. The plaintiffs reported the incident to the State Police within 24 hours of the accident. In that report the plaintiffs said that their automobile was traveling on an interstate highway in Chicago when the car next to it "improperly changed lanes and struck" their car. The other car left the scene without exchanging information.

Phyllis Jones was hospitalized from July 14 until July 16, 1990, as a result of the collision. Phyllis Jones was the named insured on two automobile insurance policies. She held an insurance policy issued by Universal which covered bodily injury to her and the other car occupants. That policy requires sworn, written notice to Universal of any hit-and-run accident within 30 days of the accident. Phyllis Jones also held an insurance policy covering property damage to the car; that policy was issued by American Ambassador Insurance Company (American).

Phyllis Jones purchased both policies through Mr. Rubens (Rubens), who was an "employee or agent" of Yale Insurance Agency, Inc. (Yale), which "is licensed as an insurance agency." Rubens is a "licensed insurance producer," and "acted as an insurance producer in selling an insurance policy to Phyllis Jones." Phyllis Jones learned about Yale through a television commercial and conducted business with Yale by telephone and mail. Rubens completed course work, took continuing education classes, and passed an examination to act as an insurance producer. Yale and Rubens "are deemed to know the reporting requirements for the insurance policies they sell."

Phyllis Jones called Rubens on July 16, 1990, as soon as she was released from the hospital, and asked him how she should report the accident. He told her to call American; neither Rubens nor Yale told her at any time "that she was obligated to file a sworn, written statement of her claim to Universal," that American "only provided property damage coverage," and that she "should also report the * * * claim to her automobile liability insurer, Universal." When she filed a claim with American on July 16, 1990, American did not tell her she should have informed Universal. The plaintiffs did not submit sworn, written notice to Universal within 30 days of the accident.

The plaintiffs did not file a claim with Universal immediately because the conduct of Yale, Rubens, and American induced Phyllis Jones to reasonably believe that she had satisfied all the pertinent reporting and notice provisions and that no other steps were required to protect her rights.

More than 30 days after the accident, the plaintiffs retained attorney Josette Belvedere to represent them. Belvedere was informed by American that it only insured property damage; eventually, after persistent and repeated attempts, Belvedere was informed that Universal provided liability coverage.

After Belvedere learned of the Universal policy, each of the plaintiffs promptly submitted claims for uninsured motorist benefits under the Universal policy. On October 26, 1990, the plaintiffs notified Universal of the accident. On April 12, 1991, Universal denied coverage in a letter to Belvedere on the ground that the plaintiffs had not filed a statement under oath within 30 days of the accident as required by the policy.

The amended complaint alleged that uninsured motorist coverage for hit-and-run vehicles is mandated by the Illinois Insurance Code and that the policy's 30-day notice provision for hit-and-run accidents violates the Illinois public policy expressed in the Code.

The amended complaint also alleged the following:

(1) The car which struck the plaintiffs was statutorily presumed to be uninsured under the Code because the other car did not file a report of the accident with the Secretary of State within 120 days of the accident.

(2) Another provision of the policy requires that reasonable notice of an accident be given to the insurer as soon as practicable. The plaintiffs maintained, therefore, that the policy contained ...

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