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Nikola Pritza v. the Village of Lansing

November 24, 2010

NIKOLA PRITZA, PLAINTIFF-APPELLANT,
v.
THE VILLAGE OF LANSING, A MUNICIPAL CORPORATION, AND ILLINOIS MUNICIPAL RISK LEAGUE MANAGEMENT ASSOCIATION,
DEFENDANTS-APPELLEES,



Appeal from the Circuit Court of Cook County, 08 CH 05099 The Honorable Martin S. Agran, Judge Presiding.

The opinion of the court was delivered by: Justice Toomin

JUSTICE TOOMIN delivered the opinion of the court: In this appeal, we determine whether the Illinois Municipal League Risk Management Association (IMLRMA), a risk management pool, is a form of self-insurance such that participating municipalities are exempted from certain requirements of the Illinois Safety and Family Financial Responsibility Law under the Illinois Vehicle Code (625 ILCS 5/7-100 et seq. (West 2008)), and the underinsured coverage requirement of the Illinois Insurance Code (215 ILCS 5/143 (West 2008)).

Plaintiff-appellant, Nikola Pritza, filed the instant declaratory judgment action seeking reformation of a policy issued by defendant IMLRMA to co-defendant, the Village of Lansing, Illinois, to include underinsured motorist coverage. Plaintiff's original complaint seeking uninsured motorist coverage was previously dismissed because the vehicle at issue was insured. Plaintiff did not appeal the dismissal but instead brought a claim for underinsured motorist coverage. The IMLRMA policy does not include underinsured motorist coverage. The court granted defendants' motion for summary judgment, finding that IMLRMA was not insurance and Lansing was self-insured and therefore not subject to section 143a-2 of the Insurance Code (215 ILCS 5/143a-2 (West 2000)) or section 155 (215 ILCS 5/155 (West 2000)). Defendants argue the statutory provisions do not apply to Lansing because it is exempt as a municipality and do not apply to either Lansing or IMLRMA because the IMLRMA agreement is not an insurance "policy" and defendants are not "insurers"; rather, Lansing's participation in the IMLRMA is self-insurance. For the following reasons, we affirm that judgment.*fn1

BACKGROUND

On January 25, 2000, Terry Williams, parked his Buick Park Avenue vehicle and entered a Burger King restaurant. WIlliams left his vehicle unattended with the engine running and the keys in the ignition. Timothy Cooper stole the vehicle. Williams witnessed the event and immediately contacted the police, who then pursued Williams. Cooper lost control and struck a vehicle operated by plaintiff, Nikola Pritza, a police officer with the police department for defendant Village of Lansing, Illinois. Officer Pritza suffered injuries to his neck and was taken by ambulance to the hospital. Cooper was arrested and later convicted. Plaintiff filed a claim and received benefits pursuant to the Illinois Workers' Compensation Act (820 ILCS 305/1 et seq. (West 2000)).

Plaintiff also filed a two-count complaint alleging negligence against both Williams and Cooper. Cooper sought to obtain coverage through his insurer, State Farm Insurance Company (State Farm). State Farm filed suit for declaratory judgment and moved for summary judgment, arguing that it had no duty to defend or indemnify Cooper as he was not a permissive user of Williams' vehicle at the time of the occurrence. The trial court granted State Farm's motion. Williams did not produce any evidence that he was insured. Plaintiff nonsuited his complaint against Williams and Cooper and requested copies of any vehicle liability insurance policies maintained by Lansing, but Lansing did not forward any such insurance policies.

Plaintiff refiled his cause of action against Williams and Cooper. However, Williams then disclosed that he indeed had liability insurance coverage under a policy issued by Foremost Property and Casualty Insurance Group, in the amount of $20,000. The policy limits were offered to plaintiff to settle the action. Plaintiff notified Lansing of his intent to accept the settlement offer of $20,000, pursuant to the requirements of the Workers' Compensation Act. Lansing did not object, and plaintiff settled the action against Williams. Thereafter, a default judgment was entered against Cooper in the amount of $250,000.

On August 19, 2005, plaintiff directed further correspondence to Lansing, demanding arbitration for plaintiff's claim for any uninsured motorist coverage maintained by Lansing. Lansing informed plaintiff that coverage was provided by IMLRMA. In turn, plaintiff filed a request for arbitration with the American Arbitration Association, but defendants refused to participate in arbitration.

On February 8, 2008, plaintiff filed a complaint for declaratory judgment seeking uninsured motorist coverage as well as damages inuring from defendant's vexatious withholding of policy benefits under section 155 of the Illinois Insurance Code (215 ILCS 5/155 (West 2000)). Plaintiff alleged IMLRMA was an insurance company authorized to issue policies of insurance. Defendants moved to dismiss based on the fact that the IMLRMA agreement did not contain any provision for uninsured motorist coverage. On October 2, 2008, the court entered its dismissal of plaintiff's complaint, ruling that the vehicle driven by Cooper was not uninsured. In its order, the court granted plaintiff leave to file an amended complaint.

Thereafter, plaintiff filed an amended complaint, seeking reformation of the IMLRMA agreement to include a provision for underinsured motorist coverage. Defendants moved to dismiss pursuant to section 2-615 of the Illinois Code of Civil Procedure (735 ILCS 5/2-615 (West 2008)), arguing that as a municipality, Lansing was exempt from the Illinois Safety and Family Financial Responsibility Law requirements under the Illlinois Vehicle Code (625 ILCS 5/7-203 (West 2000)) and the underinsured coverage requirement of the Illinois Insurance Code (215 ILCS 5/143 (West 2000)). The court denied the motion. The parties subsequently filed cross-motions for summary judgment. On December 8, 2009, the court granted defendants' motion, finding that IMLRMA was not an insurance carrier and Lansing as a member was self-insured and not subject to section 143a-2 of the Illinois Insurance Code (215 ILCS 5/143a-2 (West 2000)). Plaintiff thereafter appealed, seeking review of both the October 2, 2008, order dismissing his original complaint, and the court's December 8, 2009, order. We hold we are without jurisdiction to review the October 2, 2008, judgment and therefore dismiss that portion of the instant appeal, but review and affirm the court's December 8, 2009, judgment.

ANALYSIS

Plaintiff maintains the court erred in granting both defendant's motion to dismiss the original complaint for uninsured motorist coverage and subsequent motion for summary judgment on the amended complaint for reformation to include underinsured motorist coverage. Plaintiff further asserts defendant IMLRMA violated Insurance Code section 155 (215 ILCS 5/155 (West 2000)). Regarding plaintiff's dismissed uninsured motorist coverage claim, defendants contend:

(1) plaintiff abandoned the allegations in his original complaint; and (2) plaintiff was not entitled to uninsured motorist coverage under the IMLRMA agreement because the owner of the vehicle had insurance and plaintiff obtained a settlement from the owner's insurer. Regarding plaintiff's underinsured motorist coverage claim, defendants maintain: (1) the IMLRMA agreement does not provide underinsured motorist coverage, and if there was such coverage it was excluded; (2) the Insurance Code does not apply to defendants because neither of them is an insurer and the IMLRMA agreement is not an insurance policy; and, further, (3) the Insurance Code does not apply to defendant Lansing because municipalities are exempt.

We first address defendants' contention that plaintiff abandoned his uninsured motorist coverage allegations in the original complaint when he filed his amended complaint. In response, plaintiff submits that the court granted him leave to file an additional theory; he restated all the facts from the original complaint, but pled in the alternative that he was entitled to underinsured motorist coverage.

We find merit to defendants' contention. Illinois courts adhere to the well-established principle that where an amendment is complete in itself and does not refer to or adopt the prior pleading, the earlier pleading ceases to be a part of the record for most purposes, being in effect abandoned and withdrawn. Pfaff v. Chrysler Corp., 155 Ill. 2d 35, 61, 610 N.E.2d 51, 63 (1992), citing Bowman v. County of Lake, 29 Ill. 2d 268, 272, 193 N.E.2d 833, 835 (1963). Allegations in a former complaint, not incorporated in the final amended complaint, are deemed waived. Thus, when a party files such an amended complaint, he thereby waives any objection to the trial court's ruling on the former complaint. Pfaff v. Chrysler Corp., 155 Ill. 2d 35, 61, 610 N.E.2d 51, 63 (1992), citing Foxcroft Townhome Owners Ass'n v. Hoffman Rosner Corp., 96 Ill. 2d 150, 153, 449 N.E.2d 125, 126 (1983), citing Bowman, 29 Ill. 2d at 272, 193 N.E.2d at 835.

Notwithstanding the efficacy of this salutary principle, we cannot address any issues on appeal stemming from plaintiff's original complaint for declaratory judgment for uninsured motorist coverage, as we lack jurisdiction. Though plaintiff also contends, in response to defendants' abandonment argument, that the October 2, 2008, judgment was not appealable because it did not contain Supreme Court Rule 304(a) (210 Ill. 2d R. 304(a)) language, it is well established that a declaratory judgment has the force of a final judgment with respect to the rights of the parties subject to that judgment. Universal Underwriters Insurance Co. v. Judge & James, Ltd., 372 Ill. App. 3d 372, 380, 865 N.E.2d 531, 540 (2007), appeal denied, 225 Ill. 2d 678, 875 N.E.2d 1125 (2007), citing Board of Trustees of Addison Fire Protection District No. 1 Pension Fund v. Stamp, 241 Ill. App. 3d 873, 881, 608 N.E.2d 1274, 1282 (1993). The statute allowing for such relief provides for the finality of declaratory judgments within its own language. Djikas v. Grafft, 344 Ill. App. 3d 1, 10, 799 N.E.2d 887, 895 (2003), citing 735 ILCS 5/2-701(a) (West 2000). Section 2-701(a) of the Illinois Code of Civil Procedure (Code) provides:

"No action or proceeding is open to objection on the ground that a merely declaratory judgment or order is sought thereby. The court may, in cases of actual controversy, make binding declarations of rights, having the force of final judgments, whether or not any consequential relief is or could be claimed, including the determination *** of the construction of any *** contract or other written instrument, and a declaration of the rights of the parties interested." (Emphasis added.) 735 ILCS 5/2-701(a) (West 2008). " '[F]inality attaches to a declaratory judgment on the date judgment is entered.' " Universal Underwriters Insurance Co., 372 Ill. App. 3d at 380, 865 N.E.2d at 540, quoting Djikas, 344 Ill. App. 3d at 10, 799 N.E.2d at 895. Illinois Supreme Court Rule 301 provides that "[e]very final judgment of a circuit court in a civil case is appealable as of right. The appeal is initiated by filing a notice of appeal." 155 Ill. 2d R. 301. Illinois Supreme Court Rule 303(a)(1) provides that the notice of appeal from final judgments in civil cases must be filed with the clerk of the circuit court within 30 days after the entry of the final judgment. 210 Ill. 2d R. 303(a)(1).

In Universal Underwriters Insurance Co., the plaintiff insurance company brought a legal malpractice action against its attorneys, alleging that they were negligent in not appealing from orders in the underlying proceeding. We held there was no merit to the attorneys' argument that an order entered in a declaratory judgment action was not final and appealable. Universal Underwriters Insurance Co., 372 Ill. App. 3d at 382, 865 N.E.2d at 542. The order fixed absolutely the rights of the parties on issues concerning insurance coverage and left no issues remaining; the fact that the parties could have filed motions concerning ...


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