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09/30/97 ILLINOIS FARMERS INSURANCE COMPANY v.

September 30, 1997

ILLINOIS FARMERS INSURANCE COMPANY, AS SUBROGEE OF DOROTHY NILLES, AS PARENT AND GUARDIAN OF DEREK NILLES, A MINOR, PLAINTIFF-APPELLANT,
v.
ARNOLD MAKOVSKY, DEFENDANT-APPELLEE, AND VIRGINIA JANKOWICZ, DEFENDANT.



Appeal from the Circuit Court of Cook County. Honorable Maureen D. Roy, Judge Presiding.

As Corrected October 7, 1997.

The Honorable Justice Burke delivered the opinion of the court. Wolfson, P.j., and Cerda, J., concur.

The opinion of the court was delivered by: Burke

The Honorable Justice BURKE delivered the opinion of the court:

Plaintiff Illinois Farmers Insurance Company appeals from an order of the circuit court dismissing plaintiff's personal injury action against defendant Arnold Makovsky (Makovsky) with prejudice pursuant to Supreme Court Rule 103(b) (134 Ill. 2d R. 103(b)) for failure to exercise reasonable diligence in obtaining service of process on Makovsky and an order denying plaintiff's motion to reconsider the dismissal. On appeal, plaintiff contends that the trial court erred in dismissing its action because Rule 103(b) is inapplicable where the statute of limitations, which the trial court failed to apply, had not expired, i.e. plaintiff brought its cause of action against Makovsky as the subrogee to the rights of Derek Nilles, who was a minor at the time he was involved in an accident with Makovsky, an uninsured motorist, and the statute of limitations applicable to Derek had not run at the time of the trial court's dismissal with prejudice. For the reasons set forth below, we reverse.

Following a car accident on August 27, 1990, in which Derek Nilles, a minor, was injured, Dorothy Nilles, Derek's mother, filed an uninsured motorist claim against plaintiff, her own insurance company. Plaintiff settled this claim with Dorothy for $50,000: $16,666 for attorney fees; $472.67 for investigation expenses; $67 for the cost of opening a guardianship file; and the remainder of $32,794.33 was placed into an interest bearing account in trust for Derek until he reached his majority. Dorothy and Derek signed a receipt and release for the settlement which stated, in pertinent part:

"For and in consideration of the sum of Fifty Thousand Dollars ($50,000.00) RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, the undersigned, a minor, and the parent (guardian) of Derek Nilles hereby RELEASES and discharges Illinois Farmers Insurance Co., their principals, agents and representatives from any and all rights, claims and injury damages of any kind (known and unknown), existing or arising in the future, and accordingly does hereby expressly, voluntarily, knowingly and advisedly WAIVE any and all rights granted to him/her or said minor for injury damages resulting from or related to an accident that occurred on or about the 27th day of August, 1990, at or near 50th & Roberts Road-Bridgeview.

This release shall not destroy or otherwise affect the rights of persons on whose behalf this payment is made, or persons who may claim to be damaged by reason of the accident other than the undersigned to pursue any legal remedies they may have against the undersigned or any other person.

***

Further, the undersigned agree to reimburse and indemnify all released parties for any amounts which any insurance carriers, government entities, hospitals or other Persons or organizations may recover from them in reimbursement for amounts paid to or on my behalf of the undersigned as a result of this accident by way of CONTRIBUTION, SUBROGATION, INDEMNITY, or OTHERWISE."

On August 19, 1992, plaintiff filed a complaint against Makovsky and Virginia Jankowicz (Jankowicz), which alleged that: plaintiff was the subrogee of Dorothy Nilles and her son Derek Nilles, a minor, "by virtue of a certain automobile policy of insurance"; on August 27, 1990, Makovsky was driving in a southwest direction on Roberts Road, Jankowicz was driving on Roberts Road in a southern direction and Derek was crossing the street on foot; Makovsky and Jankowicz acted negligently; and as a direct and proximate result, Derek was struck by one of the cars, incurring injury, pain, disability and medical expenses.

On August 26, 1992, plaintiff filed a summons directed to both defendants. Service of the summons was not obtained on Makovsky because a neighbor told the process server that Makovsky had moved. On October 28, 1992, plaintiff filed a motion to voluntarily dismiss Jankowicz as a party to its complaint pursuant to its settlement with her. On April 20, 1993, the trial court dismissed plaintiff's case for want of prosection. On May 25, the trial court vacated the dismissal, and granted plaintiff leave to file an alias summons. On June 14, plaintiff filed an alias summons directed to Makovsky, along with an affidavit of compliance that stated that Makovsky "was a resident at the time the cause of action arose but has subsequently became a non-resident of this state." On June 22, the trial court again dismissed plaintiff's case for want of prosecution. On June 24, plaintiff filed a second alias summons directed to Makovsky. On August 17, plaintiff filed a motion to vacate the dismissal, which the trial court granted.

On March 4, 1994, plaintiff filed an "affidavit of prove-up," stating that the allegations in the complaint were true and that plaintiff expended $50,000 in settlement of Derek's claim for injuries. The trial court entered a default judgment in favor of plaintiff and against Makovsky in the sum of $50,000, plus costs.

On July 19, 1995, Makovsky filed a special and limited appearance and motion to quash service and vacate the default judgment against him. Makovsky argued that service of process on him was made under the statute providing service of process for non-residents of Illinois and, because he was a resident of Illinois at the time of the occurrence and had lived in Illinois since the accident, service of process on him pursuant to the statute applicable to non-residents was ineffective. Makovsky also attached an affidavit to his motion, stating that he was a resident of Illinois on August 27, 1990, and resided at 8136 South Octavia in Bridgeview, had lived "continuously and openly" in Illinois since that time and resided at 8136 South Octavia during the ...


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