*1
Ill
subsequently
our Unified Code of Corrections
sentence but
1973,
38,
statutorily
(Ill.
ch.
recognized
became
as a sentence.
Rev. Stat.
5—3(d).)
leading
People
par.
relying
case
on this distinction
1005 —
1072,
(See
People
24 Ill.
“We adhere to the decision announced Moran. Rule does not grant authority reviewing court the to reduce a sentence of imprisonment probation.” People Bolyard to a sentence of 583, 588, (1975), 61 170.
I gives do Bolyard reviewing right per not believe that court the se to review a probation denial of order to determine if the trial court abused its If complies statutory discretion. the trial court all guidelines provisions relating probation reviewing to then a court has no authority make a determination as whether the trial court did did not abuse its rendering imprisonment discretion in a sentence of probation. rather than one To hold otherwise permit reviewing would courts thwart the rule set supreme forth Moran and which our court reviewing directed Bolyard courts adhere (People Bolyard 588-89, 170). REIS, Plaintiff-Appellant, MARILYN v. AETNA CASUALTY AND SURETY ILLINOIS,
COMPANY OF Defendant-Appellee. (4th Division) First District No. 77-984 Opinion Supplemental opinion filed November filed on denial of 1978. rehearing March *3 Torshen, Ltd., H. Chicago (Jerome of H. Torshen and Edward G. Jerome
Wierzbicki, counsel), appellant. for McKenzie, & Baker Chicago (Francis Nelson, Morrissey, D. R. Thomas and Zulkey, counsel), Edward appellee. for J.
Mr. ROMITI delivered the opinion of the court: JUSTICE The issue this case is whether a homeowner’s insurer can refuse to defend its merely insured because part of the conduct complained inof the tort complaint allegedly occurred property on business the policy liability excludes injuries arising out pursuits of business insured, except ordinarily activities incident to nonbusiness activities. We hold that in light specific allegations of the complaint, tort and, required so, insurer was having to defend failed to do cannot now deny coverage. We ruling also hold that to the insurer’s amount of the exceeding premature limits was however, the facts had fully developed. not been may, That issue now be moot. We remand for a determination of the damages. amount of the 14,1974, Wummel,
On August Ricky as administrator of the estate of II, Clarence H. Resource, Wummel filed a suit against Harmony Machine Inc., Reis, Marilyn and Robert Marilyn Aldal. The alleged that Reis was an officer and employee Harmony, that Aldal was also an employee Harmony, Douglas Aldal Phillips’ supervisor; 7, 1970, that on October prior reporting Harmony, Phillips to work at a quantity consumed beverages prescription of alcoholic medications home; Marilyn work, at Reis’ Phillips reported that when he was incapable intoxicated and operating machinery driving automobile and that Aldal and Reis knew ought to have known this and, that Harmony’s Harmony, after arrived at premises, through Aldal and Reis: Carelessly negligently Douglas said undertook to treat the intoxication;
W. Phillips for his condition of 2. Carelessly and negligently offered medication to the said W. Douglas Phillips;
3. Carelessly negligently offered medication to the said Douglas W. Phillips, which aggravated physical medication Douglas condition of the said W. Phillips; 4. Carelessly negligently sleeping pills offered for which a *4 prescription necessary was W. Douglas Phillips; to the said 5. Carelessly negligently and W. Douglas Phillips ordered the said to leave the premises Harmony his Machine and to drive home; automobile back to his
6. Carelessly negligentiy and W. Douglas Phillips allowed the said was in which premises a condition intoxication to leave Harmony Machine in the of the dangerous to other individuals area in public thoroughfares premises using and other individuals Harmony premises; the area of the Machine Carelessly Douglas Phillips 7. W. negligentiy and ordered said home, knowing his to return to his condition intoxication driving danger made his of his car a to other motorists and individuals; in carelessly negligently Otherwise and an accident caused by Phillips
which the W. Douglas automobile driven collided decedent, an H. by plaintiff’s automobile driven Clarence Wummell II.
After left the which premises, he had an automobile accident in plaintiff’s decedent was killed.
Harmony Inc. Machines was insured Crum Forster Insurance Companies which had issued compensation employers’ a workmen’s *100,000 policy providing appear for each accident. It does not from the record whether this in policy protected Marilyn Reis her capacity as Harmony. officer of in Certainly, it did her protect not her capacity. individual Crum September and Forster on filed an appearance in the suit on corporation behalf of the On and Reis. 18, 1974, September B. Harty Richard filed also an behalf appearance on Reis and Aldal. Marilyn Reis personally was insured under an owner’s apartment policy issued Aetna in Surety Company the amount of *50,000 per filed, Shortly occurrence. suit sent of the copy after was Reis complaint Aetna; this apparently was first notice accident given 4,1974, answered, to that insurer. On agreeing October to file appearance counsel,1 temporarily on her as but behalf additional reserving right deny coverage (1) been because notice had not promptly given required by policy has been (this contention not pursued); (2) it questionable was whether in an “occurrence” as defined policy alleged (this contention was later also dropped) (3) policy provide did since excluded bodily letter, Aetna, injury arising pursuits. out pointed *1,175,000 out that the ad than the damnum more coverage and that had already Harty she retained her excess represent case, While it not is material this in its it must be noted that the insurer is error persistent attorney only contention that it retained acted “additional counsel.” Assuming all, right duty that it had defend at it had a to act for Reis as the counsel, directing handling negotiations, the conduct of the case and settlement While etc. right separate employ Reis had a counsel the ad because damnum exceeded limits, attorney finally could act as “additional until Aetna refused to counsel” defend.
782 objection
claim. No Harty of kind was made to the that fact had appearance entered an on her behalf before Aetna was notified. 28, February On depositions participating after certain and in the defense of up point, the case until that Aetna sent Reis a letter liability all denying ground on the sole the pursuit that exclusion precluded any coverage the in that lawsuit. Aetna letter stated its by complaint plaintiff denial based on and that if the the filed question. was thereafter Aetna would reconsider the amended by The attorney retained Aetna then withdrew from the case. Aetna did
not, however, judgment file a determine the declaratory action to question Harty coverage. attorney Crum and continued Forster’s A three attorneys. judgment against defense was rendered all *250,000 *350,000. by trial defendants for This was reduced the court to *100,000 by point because of At that Reis filed the payment Phillips. a exist present declaratory judgment, contending suit for did I, policy, pay expenses the demanding, count that Aetna the post appeal appeal for the including appeal, defense those on bond declaratory the pay attorneys’ fees incurred in judgment, the tort action, including judgment, full costs judgment pay amount of court, summary coverage, granted finding and interest. The trial delay appeal. judgment there was no reason to Aetna and found All case. three the instant judgment Reis the adverse appealed underlying tort judgment appealed adverse defendants had also case, in the instant by heard the court argument action. After oral District, (Ill. 23 Rev. Stat. a Rule Order Appellate by Court for the Second 110A, Wummel in tort par. 23), ch. reversed breached action, law, the defendants that none of finding, a matter of however, action, The second district’s duty owed the deceased. moot, is decision still because that action both present does not render the because, if is no there even subject supreme court and to review Reis, affirmed, to defend required if Aetna was is appeal or that decision cost of it is liable for the then, opinion, in this later as discussed defense.
I. it has a whether Illinois, in doubt over a insurer In wait until insured, sidelines simply stand on its cannot defend In a coverage. contesting question completed before tort action duty to insurer has coverage so potential there is case where defense, it exclusionary it has a valid defend, but the insurer believes rights as to declaratory judgment (1) must either secure defend (2) original tort action pending trial obligations before or (1977), Paul (Thornton v. rights. under a reservation tort action v. Coronet Surety Co. Casualty & 1048; 337, 366 N.E.2d Ill. 3d App. v. State Elas 914; N.E.2d Co. Insurance Ill. 3d (1976), App. 944, 352 Co. App. Insurance Ill. 3d (1976), 39 Farm Automobile Mutual Construction Fragman 556; denied Ill. (1976), 63 N.E.2d Co. N.E.2d Construction 1 Ill. (1971), App. 3d Co. Preston Sunberg Palmer 575; (1966), 71 appeal denied 49 Ill. 2d (1972), Sims appeal denied 34 Ill. (1966), 184, 193 Casualty Co. Illinois National exists, course of fails to take either but the insurer duty to defend Where a action subsequent and in a action, unjustified, its failure to defend it, questions disputing is barred the insured America Co. North Indemnity Co. v. Insurance (Associated coverage. Thornton v. Paul 807, 386 *6 Co. v. Coronet Casualty Surety & Aetna 1048; 337, App. 3d 366 N.E.2d v. Elas State 914; Co. 744, Insurance Ill. 358 N.E.2d (1976), App. 44 3d 944, 352 Co. Farm Mutual Automobile Insurance (1976), App. 39 Ill. 3d Cowan v. Insurance appeal 556; denied 60, 63 Ill. 2d (1976), N.E.2d 315; 883, 318 N.E.2d North America Company of (1974), App. 22 Ill. 3d Co. Co. v. Preston Construction Fragman Construction 1 Ill. (1971), App. v. Palmer appeal 575; denied 1002, 614, (1972), 49 Ill. 2d 3d 274 N.E.2d appeal denied Sunberg (1966), 463, 22, 217 (1966), Ill. 2d N.E.2d App. 71 Casualty Sims v. Illinois National Co. Ill. 631; (1963), App. Ill. 43 2d 34 2d 184, estoppel resulting 193 123.) N.E.2d This is not a collateral insured, only prior adjudication applies since that doctrine (Apex necessarily adjudication. where the in the first upon issue was ruled v. 153, Mutual Insurance Co. Christner (1968), App. 99 Ill. 2d 240 N.E.2d 883, v. Cowan Insurance Co. North America 742; (1974), App. 22 Ill. 3d of Rather, in nature 315.) estoppel equitable 318 N.E.2d referred to is right “the insurer has no to insist that and arises from the doctrine that inuring to its provisions of the insurance contract insured be bound benefit, i.e., already it has breached provisions, the ‘Exclusions’ when insured, inuring to the benefit of by violating provisions contract Co. (Sims Casualty v. Illinois National i.e., provisions.” the defense Palmer 184, 197, 193 123, 129; quoted Ill. N.E.2d (1963), App. 43 2d appeal denied Sunberg (1966), 463, 467, 22, 32, 217 N.E.2d App. 71 2d Surety & Co. v. Coronet Insurance Casualty Aetna 631; (1966), 34 Ill. 2d Co. and Associated 744, 749, 914, 917; N.E. (1976), App. 44 Ill. 3d 358 Indemnity Co. Insurance Co. North America (1978), App. 68 3d North America see also Cowan v. Insurance Co. 807, 529; 386 N.E.2d therefore, 883, (1974), 315.) Obviously, 22 Ill. 3d since 318 N.E.2d declaratory Aetna this case refused to defend and did not seek coverage, there was it cannot raise defense if it had a defend the tort action. noncoverage 784
It is well established in Illinois that insurer’s duty to defend a tort action is determined the allegations complaint. of the tort (Maryland Casualty Co. v. Peppers (1976), 187, 24; Ill. 2d 355 N.E.2d Elas v. State Farm Mutual Automobile Insurance Co. (1976), 39 Ill. App. 944, appeal 60, denied 3d 352 N.E.2d Fragman (1976), 556; 63 Ill. 2d Construction Co. v. Preston Construction Co. 1002, (1971), 1 Ill. App. 3d appeal denied Thompson v. Glover 575; N.E.2d (1972), 49 Ill. 2d (1969), 115 Ill. App. 2d 132.) N.E.2d When allegations complaint within, within, “state facts which bring the case potentially policy, of the the insurer is from unjustified this time on the insured.” McFayden v. North River defending Co. Insurance , appeal denied (1965) 170-71, 62 Ill. App. 833, 836, 2d 209 N.E.2d , quoted in Fragman Construction Co. v. Preston (1966) 33 Ill. 2d Construction Co. 1002, 1007, 1 Ill. (1971), 614, 617, App. 3d 274 N.E.2d 618, appeal denied 575; accord, Associated Indemnity (1972), 49 Ill. Co. v. Insurance Co. North America 807; (1978), 68 Ill. App. 3d 529; Maryland Casualty Co. v. Peppers (1976), 64 Ill. Surety Co. v. Coronet Insurance Co. Elas State Farm Mutual 44 Ill. 358 N.E.2d Automobile Insurance Co. denied safely The insurer can justifiably complaint clearly
refuse allegations to defend when the show beyond that the claim is policy coverage. We rule that the allegations did not clearly show that the claim beyond policy coverage to defend the Wummel action. thus Aetna obligated the Wummel Paragraph alleged quantity consumed beverages prescription alcoholic and certain drugs in apartment. agree Reis’ We paragraph the defendant clearly does not contending indicate that Wummel was she could recover *7 against Reis because of these activities. But adequacy doubt as to the pleadings bring liability within coverage to the occurrence the of a (Continental Co. v. in resolved favor of the insured. I. Alexis duPont School District (Del. 1974), 7A Appleman A.2d (1962).) Insurance Law & complaint Practice Since the must be §4683 liberally policy coverage, construed to find a claim within when reasonably possible, complaint alleging we construe the as a claim consumption because of the in either drugs apartment of and alcohol Reis’ Dramshop (Ill. par. 135), the Act Rev. Stat. ch. or for negligence.
Aetna, liability, attempted protect when it denied to itself informing complaint (which the insured that if Wummel amended the she did), it never would reconsider its refusal to defend. But Aetna should liberal; very in pleading have borne mind that the rules of are furthermore, trial to pleadings be amended even after conform duty defend cannot be proof. why This is the insurer’s to the one reason coverage, fall within the clearly alleged scope limited claims which of to extend, expectations are to be but must if insured’s reasonable realized, pleadings might possibly be to claim which under scope if within the of presented potentially that claim falls case, the trial of the tort action coverage. presented In this the evidence at Machine, Harmony but also allegedly related not to what at occurred in appellate what at And the court allegedly apartment. to occurred Reis’ in reversing liability premised, part, at least the case noted that Reis’ Phillips pills apartment. the fact at sleeping on obtained alcohol and her court, judgment, special That held that there was reversing no such relationship justify holding preventing Phillips, to liable for an as Reis guest, liquor male contents of having adult house access to her it is obligation her medicine chest. While true that the to defend does not (Thompson Glover depend on the ultimate outcome of the suit v. Gleason Allstate Insurance Co. 253 N.E.2d nevertheless, fact 383), liability based, at at least in on the fact obtained the part, trial Paragraph supports alcohol and where did our conclusion that pills he amended, which a action attempt was never did to state cause of concluded, theory recovery though, appellate of court even as was, law, a claim as matter merit.2 without Aetna has conceded that if complaint brief alleged a claim against Reis because of acts occurring at the apartment, required it was to provide coverage. Since we hold attempted that count 10 allege a cause to action, it follows from Aetna’s own admission that it had defend and that breached that duty when it refused to defend.
But if ignore ten, even we the allegations in paragraph Aetna had a duty to defend. Aetna negligence contends that because the involved the Wummel claim on arose the premises Harmony there was no coverage. However, a liability homeowner’s policy, the absence of an express provision contrary, policy providing is not a limited coverage only applicable the designated premises; designed on rather it be a type broad protecting nearly everywhere. the insured * * * Where, here, policy “agreed pay homeowner’s all sums which the insured shall legally become obligated pay damages bodily because of injury or property damage to which this insurance applies, caused provision occurrence” and contains no other not, course, state a The fact that is insufficient to cause action does defending. pleadings if An must excuse an insurer from insurer defend state facts bringing policy coverage, regardless injury within insured’s actual (1962). Appleman plaintiff. 7A Insurance Law and Practice §4683 *8 any is liable is the insurer
describing coverage provided, what coverage liable unless legally which the be accident insured v. Thomas Marine Insurance Co. (St. Paul Fire & expressly excluded. cert. denied 1973), 282 So. 2d (Fla. (Fla. App. 1973), So. 2d liability arising is there an exclusion of And nowhere the Aetna easily Aetna could premises, although any occurring act on business out of Rather, principal had it wanted to. provision have written such a reads as follows: upon exclusion relied apply: “This does not F— Liability Coverage Coverage Under E —Personal Payments to Others:
Medical
e # o arising out of damage bodily injury property d. insured, therein except activities pursuits business pursuits.” ordinarily incident to nonbusiness which are business injuries arising All out of provision this are excluded pursuits. are business pursuits. business'premises all that occurs on Not However, of medication giving whether we need even determine must be considered person an prescription sleeping pills intoxicated happens to be merely the individual pursuit a business because which therein activities apply does not employee, since the exclusion pursuits. ordinarily are incident to nonbusiness situation factual involving a similar parties The have cited no cases Farm Fire & we find State However, and we have found none. Co. v. MacDonald be 230 N.E.2d in his usual engaged analogically persuasive. In that case the insured while He struck horseplay. little occupation engaged a repairing elevators hurt door, mallet rebounded a rubber mallet a fire at 87 finding coverage reasoned someone else. The court 19-21, 515, 516: readily resolved in the case before us is not question
“The We must determine foregoing cases. respective in the posed pursuits’ his ‘business momentary whether deviation —the activity as an be classified horseplay with the mallet —should whether pursuits, ordinarily incident to nonbusiness time, in the manner place swinging at mallet there indicated, Apparently, whatsoever. purpose had The question. precise this which have decided are no cases exception expressing this the insurance contract language of than elucidate rather tends to obscure exclusion of hypothetical suggests a plaintiff meaning the clause. this which, be covered opinion, in its would situation particular suggests contract clause. It that of salesman event, entertaining on a In such golf customer course. plaintiff in a engaged contends salesman would be if, injured in the he his pursuit,’ game, ‘business course of the *9 club, injury his come swinging golf customer while the would exception activity within the to the exclusion of as an policy ordinarily incident pursuits. to nonbusiness is
Apparently, pursuit from his MacDonald’s deviation business horseplay without the the significance plaintiff, to the fact that it bears causes purpose pursuit, no relation to the business It that the appears hypothetical concern. to us situation suggested by plaintiff may the readily analogous be as considered Indeed, to the before an as horseplay case us. we find act of at least alien to repairing an as akin to as pursuit elevator and a nonbusiness an and injurious golf swing, inadvertent which business have But regardless overtones. it is propriety analogy, the such our task to policy question construe the clause reference particular facts of this case. dispute
It is beyond meaning than phrase, of the ‘other ordinarily activities therein which are incident to nonbusiness unclear, pursuits’ it has ambiguous, long recognized is been that an insurance contract is unlike most In an contracts. insurance contract, statutory requirements, absent company the determines policy provisions. drafts its The the as insured takes contract Any he it. lack meaning finds in the such clearness contract the responsibility the That policy insurer. construction of the adopted will be which the the favors insured resolves ° uncertainty his °. favor. A question construction the the which clause of uncertainty resolves the the favor of insured can be made ordinary exclusionary without perverting meaning the of the that clause, and clear it is definite the language clause. Under of “business part as a which occur types of activities certain included contract be covered meant to pursuits” were incident policy. afforded protection within the least it is at pursuit, and during business occurred consideration action, which impulsive defendant’s logical to conclude a nonbusiness ordinarily incident type injury, caused the determination. opposite an be to reach it would pursuit, whereby insurer contract in an insurance expressions Equivocal construed properly are range of its seeks to narrow er. Under circumstances insur against the strongly most of this case and pertinent provisions policy, of the we believe inquiry further enigma into the meaning of the of the exception to exclusionary clause would be fruitless.” An reading insured reasonably exclusion would assume that it was the nature activity of the which controlling (see 7A Appleman Practice, Insurance Law & (Cum. Supp. 1978)), §4501.10 and that the insurer only meant peculiarly exclude business activities from coverage. Otherwise, if we consider activities to be merely excluded performed because premises hours, on business or during business we ignore the language of the exemption to the exclusion. As we noted earlier, if the insurer had intended to exclude all activities conducted on premises not, could have said so. Since it did we will not write such language into the contract. allegation
Since the
gave
the insured
sleeping
medication and
pills
Phillips
clearly beyond
coverage, it is immaterial
whether the allegations that the
permitted
insured
or ordered
premises
leave the
fall within
scope
exclusion. The
defend extends to cases where
alleges several causes of
action or
recovery,
theories of
one of which is within the coverage of the
*10
policy although
may
the other
Maryland
not be.
Casualty Co. v. Peppers
(1976), 64 Ill. 2d
The belatedly insurer has raised the contention an exclusion of liability coverage payments and medical coverage, bodily where the injury any arose out premises premises, other than an insured limits coverage apartment. to Reis’ inconsistency The of this contention is demonstrated the fact expressly provides medical payments coverage for accidents premises on the insured or elsewhere. The cited only applies exclusion injuries to arising premises out themselves, presumably such accidents falling glass. injury The here did not arise any premises out of and the clearly inapplicable. exclusion is insurer, in both its summary judgment motion for in its appeal, brief on has contended that coverage there was no because the complaint only sought impose liability to in upon capacity Reis her owner ruled, and officer of the company. already As we have this is incorrect since liability was alleged against an apartment Reis as addition, owner. But in we would point out that Reis could not have been held liable solely because she was an Harmony owner and officer of ct It Machines. is hornbook law that person mere fa that a is an “t]he * * * officer corporation of a does not render him liable for the torts of a corporation officers, directors, or of other agents, or but he must be so connected with the tortious act that he would be personally liable for his willful act negligent conduct regard without to the corporation.” (13 §352, Ill. L. & Prac. Corporations (1955), at 509 in
789 Fletcher, (Perm, ed.).) Reis Corporations 3A Cyclopedia accord §1137 in way if participated been she in some could have held liable suggested never Reis alleged complaint. acts in the And the Rather, throughout Aldal’s principal was liable as for conduct. complaint, alleged performed that Reis and Aldal failed to plaintiff allegations It that these as to Reis perform complained the acts of. be apartment her nor on the groundless, and that she was neither at were occurred, complained conduct as Aetna premises when the its motion support to its seems contend memorandum summary policy expressly agreed But judgment. the insurer its bodily against damages suit the insured because of seeking defend injury applied, allegations to which the insurance even if of the groundless, suit were false and fraudulent.
II. defend, Since Aetna by refusing breached its contract cannot now contend does not Accordingly, exist. should the reinstated, judgment liable, against be insured Aetna will be as a law, matter of up the amount of that judgment limits (Associated Indemnity Co. v. Insurance Co. North America (1978), Casualty Aetna & Surety Co. Coronet 529; Ill. App. 3d N.E.2d Insurance Co. Fragman 914; (1976), App. 44 Ill. N.E.2d Construction Co. Preston Construction Co. (1971), 1 Ill. denied N.E.2d (1972), 49 plus interest on the event,
total paid. amount until In any liable for the cost incurred by the insured for her conducting own defense time it from the denied (Tiffiny Co. Decorating liability. v. General Accident Fire & Life Assurance Corp. County 12 Ill. App. 3d N.E.2d Mutual Insurance Co. v. Murray 61, 239 Sims Illinois National Co. Since, however, pay an insurer is not required attorney’s
fees to guard counsel whom the insured engaged excess of the insurance where the insurer has forced the insured its (McCabe Liability v. Employers’ attorney actions engage own *11 Corp. (1937), Assurance Fidelity Casualty & 18, 687; 212 N.C. 192 S.E. v. Riley
Co. 7A (5th 153; Cir. 1967), Appleman & 380 F.2d Insurance Law Practice (1962)), only should liable be held for costs of §4691 by defense liability incurred the insured from the time it denied (Allstate Co. v. Insurance withdrew from the defense of the suit. Consolidated Mutual Co. Insurance 535, 35 (1970), App. Div. 2d 313 law, N.Y.S.2d 181.) Under it attorneys’ Illinois is not liable for the fees incurred insured in pursuing declaratory judgment action. (Brown Bag v. Casualty Corp. (1969), Co. Bituminous App. 117 2d
287, 577; 254 N.E.2d County Mutual Murray (1968), Insurance Co. v. Ill. App. 2d 498.) The insurer is liable all for of the costs of Reis’ Reichert v. Continental Insurance judgment. from the tort Co. (La. App. 1974), 290 writ denied (La. So. 2d 1974), 294 So. 2d
III. Reis, insurer, appeal, both below and on also contended that the having defend, liable, law, duty breached its as a matter judgment, entire amount of the even that which was in excess of the course, policy present, limits. At there is judgment against But, insured. since the Appellate determination of the Court for District subject appeal, Second is still the issue is not moot. We cannot however, agree, appellant with the that the insurer’s for an excess judgment automatically duty follows from breach of its to defend. We recognize that the third district in Elas v. State Farm Mutual Automobile Co. Insurance (1976), 39 Ill. App. appeal denied 352 N.E.2d (1976), 63 that the insurer indicated would be liable for the Blakely judgment policy (Compare entire even if it exceeds the limits. Employers’ American Insurance Co. (5th Cir. 1970), 728.) 424 F.2d However, that statement was dictum since the court limited limits, recovery policy injured party having the insured and entered agreement holding into an the insured harmless personal recovery contrary. her. The general rule is to the The mere failure not, faith, to defend does the absence of bad the insurer liable render (Aetna judgment for that in excess limits. amount of Casualty Surety & Co. v. Coronet Co. Insurance 914; v. Traders & General Co. 744, 358 N.E.2d Comunale Insurance National Union Fire Insurance Co. (1958), 50 Cal. 2d 328 P.2d Hendry Grange Carricato Mutual 1969), (Ky. S.W.2d Nevertheless, Co. Cir. a breach of (5th 1967), damages 372 F.2d limits, inexorably imprisoned within the duty to defend are not by the breach. consequences proximately but are measured caused Co. (State Farm Insurance Co. v. Insurance Mutual Automobile Allstate 246.) Accordingly, if the tort Rptr. Cal. Cal. if that Aetna in bad faith judgment is reinstated and Reis can show (Associated Indemnity Co. v. Insurance Co. North defend refused to faith America 529), bad or defense, claim, because it abandoned her negligently failed to settle the entered, she recover the total amount of the excess judgment against her. the issue erroneously trial ruled for the defendant on
Since the court defend, damages. determine the amount of of its did not *12 to defend required Aetna was we determine while Accordingly, so, for a we reverse do failing in and breached action tort Minimally, as pay. must damages Aetna of the amount determination attorney’s fees from it is liable for opinion, II this in Part set forth the event tort In appeal. costs of plus to defend the time it refused reinstated, part liable for then it would at least be judgment is limits, and costs. plus interest judgment within the court is reasons, circuit judgment of the foregoing For this proceedings further accordance reversed and remanded for opinion.
Reversed and remanded. LINN,
JOHNSON, J., J., P. concur. OF OF DENIAL REHEARING SUPPLEMENTAL OPINION MR. opinion ROMITI court: delivered JUSTICE Thornton Paul rehearing Allstate contends On petition for supreme by our recently decided Ill. (1978),74 court, requires us to case the trial court for reverse and remand the jurisdiction coverage. longer determination of We find that we have no consider this it issue as moot. Johnson Siefferman Com. Railway Express Agency, Inc. v. IllinoisCommerce (1940),374 L. & Error Appeal Prac. §22 (1953). supreme court in Thornton held that conflicting because
interest insured, insurer and the the insurer’sfailure to defend the underlying tort proceedings estop did not raising, garnishment proceeding, the defense noncoverage as a defense against the plaintiff’sattempt to recover the judgment awarded in the tort action. The did, court in however, Thornton hold that the insurer was liable for the costs of defense. original Since our down, decision was handed the Illinois Supreme Court denied leave to in Wummel v. Harmony Machines, Inc., underlying action herein involved. Since there neither is nor judgment can be a Reis, favor of Wummel issue whether the insurer is liable for judgment or is estopped deny coverage is now moot. being Reis, There existingagainst insurer only liable under defense, count I costs of and Thornton did not alter the insurer’s regard. this
Accordingly, the petition rehearing defendant’s is denied. LINN, JJ., concur. JOHNSON