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Chubb Insurance Co. v. DeChambre

March 24, 2004

[5] CHUBB INSURANCE CO. AS SUBROGEE OF OPUS NORTH CORP., PLAINTIFF-APPELLANT,
v.
BRIAN DECHAMBRE AND PRAIRIE MATERIAL SALES, INC., DEFENDANTS-APPELLEES.



[6] Appeal from the Circuit Court of Cook County. No. 01 L 4450 Honorable Kathy M. Flanagan, Judge Presiding.

[7] The opinion of the court was delivered by: Justice Hall

[8]  The plaintiff, Chubb Insurance Co. (Chubb), as subrogee of Opus North Corp. (Opus), filed suit against the defendants, Brian DeChambre and Prairie Material Sales, Inc. (Prairie), seeking damages resulting from Mr. DeChambre's negligence. The circuit court of Cook County granted the defendants' motion for summary judgment. Chubb appeals.

[9]  On appeal, Chubb raises the following issues: (1) whether the granting of summary judgment based on the anti-subrogation rule was proper; (2) whether public policy considerations support Chubb's subrogation claim; and (3) whether the exculpatory language on the delivery tickets waived Chubb's right to subrogation.

[10]   In its complaint, Chubb alleged that, on October 27, 1998, Mr. DeChambre was operating a cement truck, owned by Prairie, and was making a delivery to the Willow Creek Center, a construction site for which Opus was the general contractor, as well as the owner of one of the buildings at the site. In operating the truck, Mr. DeChambre backed into a support column, causing the collapse of the completed roof of the building Opus owned. Opus sustained property damage in the amount of $105,021.90.

[11]   Chubb further alleged that it was entitled to proceed against the defendants because it made payments to or on behalf of its insured, Opus, pursuant to a policy of insurance issued by Chubb to Opus (the policy) and therefore, owned the claims against the defendants.

[12]   The defendants filed a request to admit facts. Chubb was requested to admit or deny the existence of endorsement No. 9 to the policy and whether it was in effect on October 28, 1998. Endorsement No. 9 provided in pertinent part as follows:

[13]   "ADDITIONAL NAMED INSURED

[14]   Contractors and subcontractors of any [sic] all tiers, and any owner of a specific builders risk project where Opus North corporation is contractually responsible for purchasing builders risk insurance as covered under this policy, and not more specivicspecificallyd [sic] elsewhere."

[15]   Subsequently, Chubb filed its answer to the request to admit facts, admitting that endorsement No. 9 was part of the policy issued by Chubb to Opus and that it was in effect on October 27, 1998.

[16]   On March 21, 2002, the defendants filed a motion for summary judgment. In their motion, the defendants argued that, pursuant to endorsement No. 9, which Chubb admitted was part of the policy and in effect on the day of the accident, the defendants were additional insureds on Opus's policy. Since an insurance carrier cannot subrogate against its own insured, the defendants were entitled to judgment as a matter of law.

[17]   On July 12, 2002, Chubb filed its response to the motion for summary judgment. While acknowledging that the defendants were named as additional insureds on Opus's policy, Chubb argued that the anti-subrogation rule did not apply in this case based on the no-coverage exception to the rule. Chubb maintained that the policy was intended to apply only to claims made by third parties and that the claim in this case involved damage to Opus's property.

[18]   On November 18, 2002, the circuit court issued its memorandum opinion and order. The court observed that Chubb had conceded that the defendants were additional insureds on the policy. The court found that the damage to the building was covered by policy. Since the defendants were additional insureds under the policy and Chubb was not permitted to subrogate against its own insured, the circuit court granted the defendants' motion for summary judgment.

[19]   This timely appeal followed.

[20]   ANALYSIS

[21]   I. STANDARD OF REVIEW

[22]   This court reviews motions for summary judgment de novo. Travelers Insurance Co. v. Eljer Manufacturing, Inc., 197 Ill. 2d 278, 757 N.E.2d 481, 491 (2001).

[23]   Summary judgment is proper if, and only if, the pleadings, depositions, admissions, affidavits and other relevant matters on file show that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Prowell v. Loretto Hospital, 339 Ill. App. 3d 817, 822, 791 N.E.2d 1261, 1265 (2003). The purpose of summary judgment is not to try a question of fact but to determine if one exists. Prowell, 339 Ill. App. 3d at 822, 791 N.E.2d at 1265. In determining whether a genuine issue of material fact exists, a court must construe the pleadings, admissions and affidavits strictly against the movant and liberally in favor of the opponent. Prowell, 339 Ill. App. 3d at 822, 791 N.E.2d at 1265. A triable issue of material fact exists where the material facts are disputed or where reasonable persons might draw different conclusions from undisputed facts. Prowell, 339 Ill. App. 3d at 822, 791 N.E.2d at 1265.

[24]   II. ANTI-SUBROGATION RULE

[25]   At the outset, we are confronted with the defendants' assertion that Chubb has waived certain of its arguments on appeal because it failed to raise them in the circuit court. See Lajato v. AT&T, Inc., 283 Ill. App. 3d 126, 136, 669 N.E.2d 645, 652 (1996) (contentions not raised in the trial court are waived on appeal, even in a summary judgment case).

[26]   Nevertheless, this court is not bound by the principle of waiver and, in the interest of a just result, we may elect to address an argument. See American Federation of State, County & Municipal Employees, Council 31 v. County of Cook, 145 Ill. 2d 475, 584 N.E.2d 116 (1991). We elect to address Chubb's arguments on the merits.

[27]   The doctrine of subrogation is a creature of chancery and is a method whereby one who has involuntarily paid a debt or claim of another succeeds to the rights of the other with respect to the claim or debt paid. Dix Mutual Insurance Co. v. LaFramboise, 149 Ill. 2d 314, 319, 597 N.E.2d 622, 624 (1992). The right of subrogation is an equitable right and remedy which rests on the principle that substantial justice should be attained by placing ultimate responsibility for the loss upon the one against whom in good conscience it ought to fall. Dix Mutual, 149 Ill. 2d at 319, 597 N.E.2d at 624. Subrogation is allowed to prevent injustice and unjust enrichment but will not be allowed where it would be inequitable to do so. Dix Mutual, 149 Ill. 2d at 319, 597 N.E.2d at 624. There is no general rule that can be laid down to determine whether a right of subrogation exists since this right depends upon the equities of each particular case. Dix Mutual, 149 Ill. 2d at 319, 597 N.E.2d at 624.

[28]   However, it is well settled that an insurer may not subrogate against its own insured or any person or entity who has the status of a co-insured under the insurance policy. Dix Mutual, 149 Ill. 2d at 323, 597 N.E.2d at 626. In Dix Mutual, the court held that a tenant, by the payment of rent, had contributed to the payment of the insurance premium, thereby gaining the status of a co-insured. Since the landlord and the tenant intended for the insurance policy to cover any fire damage to the premises, regardless of who caused it, the insurance company could not maintain an action against the tenant. Dix Mutual, 149 Ill. 2d at 323, 597 N.E.2d at 626.

[29]   Chubb contends that the anti-subrogation rule does not apply in this case because the defendants did not attain the status of additional insureds. Chubb maintains that in order for the anti-subrogation rule to bar its claim in this case, all of the following must be true: (1) premiums must have been paid to include the defendants as additional insureds; (2) there must have been a contract between Opus and the defendants; (3) the insurance policy must entitle the defendants to coverage for damage to their truck or for damage done by the defendants to the primary insured's property; and (4) the extent of the damages must exceed the defendants' coverage under their primary insurance.

[30]   Chubb argues that there is no evidence that any premiums were paid by Opus to provide additional coverage to the defendants. See American Country Insurance Co. v. Cline, 309 Ill. App. 3d 501, 722 N.E.2d 755 (1999) (it would be inequitable to allow an additional insured to avoid responsibility for its own conduct and seek full coverage where the insurer has not been fully compensated); see also Benge v. State Farm Mutual Automobile Insurance Co., 297 Ill. App. 3d 1062, 697 N.E,2d 914 (1998) (courts have applied the anti-subrogation rule to prevent an insurance carrier from transferring a loss back to the party who has paid for protection from the ...


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