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Morales v. Fail Safe

December 30, 1999

ORLANDO MORALES, PLAINTIFF-APPELLANT,
v.
FAIL SAFE, INC., DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County. 95 L 14595 Honorable Sophia Hall, Judge Presiding.

The opinion of the court was delivered by: Presiding Justice Zwick

On April 23, 1998, the trial court entered an order dismissing count II of Orlando Morales's Third Amended Complaint. The complaint sought to set forth a cause of action under the Illinois Liquor Control Act (235 ILCS 5/6-21 (West 1996)(popularly known as the "Dram shop Act") for injuries he sustained in a tavern operated by Fail Safe, Inc. The court based its order on two determinations. First, the court found that count II of the Third Amended Complaint could not relate back to plaintiff's First Amended Complaint under section 2-616 of the Code of Civil Procedure (735 ILCS 5/2-616 (West 1996)) because the dramshop action against Fail Safe was not filed within one year of March 26, 1995, the date of the alleged occurrence. Second, the court determined that plaintiff's First Amended Complaint did not contain sufficient information to put Fail Safe on notice of a dramshop claim sufficient to allow relation back under section 2-616. We have jurisdiction pursuant to Supreme Court Rule 304(a). 155 Ill. 2d R. 304(a). *fn1

On October 6, 1995, within one year of his injury, plaintiff filed a complaint against Big Time Productions, Inc. In the complaint he asserted that Big Time Productions owned and operated the Ka-Boom tavern at 770 North Halsted and that Big Time Productions was negligent on March 26, 1995 in failing to provide sufficient security to protect its patrons from "certain gang members" who had been "drinking excessively." Plaintiff alleged that he was attacked that day by a tavern patron who proceeded to "grind a beer bottle into his face." Plaintiff suffered serious injuries.

On October 18, 1995, plaintiff served Big Time Productions, Inc. with the complaint at the address where the tavern was located. The complaint was forwarded to an insurance adjuster representing the tavern, Maxon Young Associates, Inc.

On November 2, 1995, a letter was sent by James K. Joyce at Maxon Young, Associates to "Fail Safe, Inc. d/b/a KA-BOOM, c/o Big Time Productions, Inc." The letter stated that the "liquor liability policy" in effect covering the premises would not cover the allegations of plaintiff's complaint because the complaint alleged acts of negligence and was not grounded in the Dramshop Act. Joyce concluded the letter by asking that he be "notified immediately if at any future date the allegations [of the complaint are] changed to include" Dramshop liability.

On January 19, 1996, a letter was sent by an attorney/insurance broker named Gary Weiner to Ms. Meryl Lachman at Associated Underwriters on behalf of Ka-Boom tavern. The letter complained about Joyce's determination regarding coverage under Ka-Boom's liquor liability policy:

"First, it is clear that [Joyce] has taken a very limited examination of the complaint in that it clearly states in paragraph 7 of the complaint that the defendants were `drinking excessively.' I do not see how this could possibly be missed and it certainly is a direct allegation in the Complaint."

Weiner stated that the was "shocked" that Joyce "might even suggest this position [i.e., that there was no coverage under the policy]." Weiner sent a courtesy copy of the letter to Kenneth Barilich and Cal Fortis.

On February 27, 1996, no answer or appearance being filed, plaintiff obtained a default judgment against Big Time Productions, Inc. On March 6, 1996, the defendant moved to vacate the default.

On March 8, 1996, plaintiff moved to file an amended complaint and add Fail Safe, Inc. as a party defendant. The court allowed the motion and plaintiff filed the First Amended Complaint on March 18, 1996, still within one year of the date of the occurrence, with summons on Fail Safe to issue.

On April 18, 1996 Joyce responded to Weiner's earlier letter to Associated Underwriters and asserted that "the mere allegation of `drinking excessively' is insufficient to give rise under the Dramshop Act." Joyce stated that the insurer would provide a defense "if a claim under the Dramshop Act was alleged," and that should plaintiff's complaint be amended to allege a Dramshop action, the insurer would "proceed accordingly." A courtesy copy of the letter was sent to "Fail Safe, Inc. dba Ka-Boom."

On May 15, 1996, Big Time Productions filed an Answer to Count I of the First Amended Complaint, denying its allegations, including the allegation that it owned and operated Ka-Boom tavern. Fail Safe also filed its appearance and thereafter filed its Answer to the First Amended Complaint. In its Answer, Fail Safe admitted that it owned and operated the Ka-Boom tavern, but denied the remaining allegations.

In January of 1997, defendants filed their Answers to Interrogatories. Big Time Productions, Inc.'s Answers were signed by its President, Kenneth Barilich who was also the Secretary for Fail Safe. Cal Fortis was identified as a person having authority to speak for Fail Safe.

On January 16, 1997, plaintiff was granted leave to file a Second Amended Complaint in three counts. Counts I and II were identical to the First Amended Complaint. In Count III, the same allegations, in the alternative, ...


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