Economy Fire & Casualty Company v. Brumfield

SUPREME COURT CASES

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State: Illinois

Court: 4th District Appellate

Docket No: 4-07-0658 Rel

Case Date: 08/13/2008

Preview:Filed 8/13/08

NO. 4-07-0658 IN THE APPELLATE COURT OF ILLINOIS FOURTH DISTRICT

ECONOMY FIRE & CASUALTY COMPANY; ) Appeal from ST. PAUL FIRE & MARINE INSURANCE ) Circuit Court of COMPANY; METLIFE AUTO & HOME; and ) Champaign County METROPOLITAN PROPERTY & CASUALTY ) No. 00CH118 INSURANCE COMPANY and Its Affiliates, ) Warwrick, Rhode Island, ) Plaintiffs and ) Counterdefendants) Appellees and Cross) Appellants, ) v. ) HOLLIS L. BRUMFIELD, ) Defendant and ) Counterplaintiff) Appellant and Cross) Appellee, ) and ) MICHAEL J. DREWES; CONSTANCE DREWES; ) BEAU DREWES; ZACHARY FITZPATRICK; DAN ) FITZPATRICK; CINDY FITZPATRICK; ) STEVE MILLER, Trustee in Bankruptcy ) for the Estate of BEAU DREWES and ) MICHAEL J. DREWES; AMERICAN FAMILY ) INSURANCE COMPANY; and PERSONALCARE ) Honorable HEALTH MANAGEMENT, INC., ) Harry E. Clem, Defendants. ) Judge Presiding. _________________________________________________________________ JUSTICE TURNER delivered the opinion of the court: This litigation arises from an October 1999 car accident, in which defendant Beau Drewes, who was driving a vehicle owned by his father and defendant Michael Drewes, struck a vehicle driven by defendant and counterplaintiff-appellant and cross-appellee Hollis L. Brumfield. Michael's car was insured by

plaintiff and counterdefendant-appellee and cross-appellant

Economy Fire and Casualty Company (Economy Fire), a subsidiary of St. Paul Fire and Marine Insurance Company (St. Paul). St. Paul

was sold to Metlife Auto and Home (Metlife), a branch of Metropolitan Property and Casualty Insurance Company and its affiliates (Metropolitan) (St. Paul, Metlife, and Metropolitan are collectively referred to as counterdefendants). Brumfield Economy Fire

brought suit and obtained a judgment against Beau.

had declined to defend Beau and had filed this declaratoryjudgment action. Beau assigned any cause of action he had

against Economy Fire to Brumfield, who filed a counterclaim in this case, asserting Economy Fire breached its duty to defend Beau. Brumfield appeals several orders of the Champaign County circuit court that resulted in him being denied damages after the court had found Economy Fire breached its duty to defend Beau. On appeal, he contends Economy Fire's breach of the

duty to defend Beau caused Beau damages because (1) Beau lost the opportunity to settle Brumfield's claim against him and (2) the judgment against Beau would have been less if he had been represented by counsel. We affirm. I. BACKGROUND At the time of the October 1999 accident, one of Beau's passengers was defendant Zachary Fitzpatrick, whose parents are defendants Dan and Cindy Fitzpatrick. - 2 The Fiztpatricks' suit

against Beau and Michael is not raised by the parties in this appeal. Additionally, we note defendant Constance Drewes is

Beau's mother and Michael's wife and was a named insured on the insurance policy with Economy Fire. On January 18, 2000, Brumfield filed a negligence complaint against Beau based on the October 1999 accident. The

complaint did list Michael as a respondent in discovery but did not raise any allegations against him. Beau's permission to use In a January

Michael's vehicle was not raised by the complaint.

27, 2000, letter, an insurance agent of St. Paul informed Beau that, based on his and Michael's statements, it was clear Beau was not a permissive driver at the time of the October 1999 accident. Thus, the insurer denied coverage to Beau under his

parents' policy, and the agent informed Beau that "any claims which may be made against you will be your personal responsibility." In July 2000, Economy Fire filed a declaratory-judgment action, seeking a judgment that Beau was entitled to neither a defense nor indemnity in Brumfield's suit because Beau did not have Michael's permission to drive the vehicle involved in the accident. In August 2000, Brumfield filed an amended complaint,

raising negligent-entrustment and spoliation-of-evidence claims against Michael. The negligent-entrustment count alleged that

Michael entrusted his vehicle to Beau, "who was, therefore, - 3 -

operating said vehicle with the permission of [Michael] at the time of the collision." Brumfield attached his amended complaint

to his answer in the declaratory-judgment case. In September 2000, Economy Fire and the other counterdefendants filed a motion for a default judgment against Michael, Constance, and Beau in the declaratory-judgment action. Brumfield filed an objection to the default-judgment motion. In

November 2000, a default judgment was entered against Beau in the Brumfield suit. In December 2000, the trial court held a hearing Beau did not appear

on Economy Fire's default-judgment motion. at the hearing, but Brumfield did. Fire's motion.

The court granted Economy

In January 2002, a jury found in favor of Brumfield on the negligent-entrustment count and awarded him a $468,958.24 judgment. limit. In April 2002, Michael and Beau individually filed for bankruptcy under chapter 7 of the United States Bankruptcy Code (11 U.S.C.

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