Shelter Mut. Ins. Co. v. Flynn

2020 IL App (1st) 191123

155 N.E.3d 1109

440 Ill.Dec. 853

SHELTER MUTUAL INSURANCE COMPANY, Plaintiff-Appellee,

v.Haley FLYNN and Larry Herskovitz, Defendants

(Haley Flynn, Defendant-Appellant).

No. 1-19-1123

Appellate Court of Illinois, First District, Fourth Division.

April 30, 2020

Steven B. Pollack, of Lake Bluff, for appellant.

Christopher J. Pickett, Peter G. Syregelas, and Lauren E. Rafferty, of Lindsay, Pickett & Postel, LLC, of Chicago, for appellee.

PRESIDING JUSTICE GORDON delivered the judgment of the court, with opinion.

¶ 1 The instant appeal arises from a dispute over a motor vehicle insurance policy issued by plaintiff Shelter Mutual Insurance Company (Shelter Mutual) to defendant Haley Flynn. Flynn's policy originally provided liability and collision coverage for a 2010 Honda Civic. However, a few days after purchasing the vehicle, Flynn traded it in for a 2009 Honda Civic and requested the insurance agent she purchased the initial policy from to update the policy to reflect the change in vehicle; that change was never made, and the policy was renewed with the 2010 vehicle listed as the covered vehicle. Flynn then was involved in an accident involving a vehicle owned by defendant Larry Herskovitz. When Flynn filed a claim, Shelter Mutual denied Flynn's request for coverage, claiming that the 2009 vehicle was not insured under Flynn's policy. Flynn filed a small-claims lawsuit against Shelter Mutual based on its denial of coverage, and Shelter Mutual filed a counterclaim in the small-claims action, seeking declaratory judgment as to its duty to provide Flynn coverage. Shelter Mutual then also filed a separate declaratory judgment action in the chancery division of the circuit court of Cook County, seeking a declaration that it did not owe Flynn a duty to defend with respect to a lawsuit filed against her by Herskovitz. The two lawsuits were consolidated and transferred to the chancery division. Both Flynn and Shelter Mutual filed motions for summary judgment, and the trial court granted summary judgment in favor of Shelter Mutual. Flynn appeals, and for the reasons that follow, we dismiss the appeal for lack of jurisdiction.

¶ 2 BACKGROUND

¶ 3 On July 7, 2017, Flynn filed a small-claims complaint in the municipal division, case No. 2017 M1 119255, against Shelter Mutual and Danna Krischke, the insurance agent, alleging that Flynn was the named insured on an automobile insurance policy issued by Shelter Mutual and procured by Krischke, which provided Flynn with collision and liability coverage. Flynn alleged that on October 17, 2016, she purchased a 2010 Honda Civic (2010 vehicle) and sent a text message to Krischke requesting insurance coverage for the vehicle. Krischke obtained coverage for Flynn under a Shelter Mutual policy with effective dates from October 17, 2016, through February 16, 2017. On October 22, 2016, Flynn took advantage of the auto dealer's trade-in policy and traded in the 2010 vehicle for a 2009 Honda Civic (2009 vehicle). On October 31, 2016, Flynn sent Krischke a text message asking her to change the insurance policy to reflect the 2009 vehicle; Flynn alleged that she "relied on Krischke to make the change and believed the change was done based on their past dealings." On January 24, 2017, Shelter Mutual billed, and Flynn paid, a policy premium of $711.20, and Shelter Mutual issued Flynn policy documents reflecting a policy period of February 16, 2017, through August 16, 2017, but still showing the insured vehicle as the 2010 vehicle that Flynn had traded in, rather than the 2009 vehicle.

¶ 4 Flynn alleged that, on March 16, 2017, she was involved in a motor vehicle accident when she rear-ended a vehicle owned by Herskovitz. The collision caused damage to the 2009 vehicle in the amount of $4700, which Flynn paid directly to the repair shop. She also incurred $1029.68 in auto rental expenses while her vehicle was being repaired, which she paid as well. The collision also caused $4606.42 in damage to Herskovitz's vehicle, which Herskovitz's insurer paid. Flynn alleged that, on March 29, 2017, she called Krischke to inform her of the collision but was told that the 2009 vehicle "was not the covered vehicle under the policy." Krischke then charged Flynn an additional $2.80 in premium payments and sent Flynn new insurance cards showing an effective term from March 29, 2017, through August 16, 2017, and listing the 2009 vehicle as the covered vehicle. Flynn alleged that neither Krischke nor Shelter Mutual offered to refund any premiums Flynn paid on the 2010 vehicle during the policy period.

¶ 5 Flynn alleged that she made a claim for coverage under her policy but that, on April 12, 2017, Shelter Mutual denied coverage, claiming that the policy covered the 2010 vehicle and not the 2009 vehicle. On April 26, 2017, Flynn e-mailed Shelter Mutual's customer service, asking for her "current evidence of insurance cards" and received insurance cards showing a policy period from February 16, 2017, through August 16, 2017, and listing the 2009 vehicle as the covered vehicle. On May 9, 2017, Flynn again e-mailed Shelter Mutual's customer service with the same request and received the same cards.

¶ 6 Count I of the complaint was for breach of contract against Shelter Mutual and alleged that a valid contract for insurance existed between Flynn and Shelter Mutual, which covered the 2009 vehicle for damage to it by collision, for auto rental expenses, and for liability to others caused by the vehicle. Count I further alleged that Shelter Mutual breached the contract by refusing to pay Flynn for damage to the 2009 vehicle and for her auto rental and by refusing to pay for Flynn's liability to Herskovitz, "thereby making Flynn an uninsured motorist despite Flynn paying the full premiums demanded by Shelter [Mutual] for the policy period."

¶ 7 Count II of the complaint was for "waiver" against Shelter Mutual and alleged that Shelter Mutual had affirmatively waived its right to deny coverage for the 2009 vehicle when it kept the premiums paid by Flynn instead of refunding the premiums or issuing a new policy for the 2009 vehicle. Count II further alleged that Shelter Mutual waived its right to deny coverage for the 2009 vehicle by issuing evidence of insurance coverage cards on April 26, 2017, and May 9, 2017, that listed the 2009 vehicle as the covered vehicle for the policy period effective February 16, 2017, through August 16, 2017.

¶ 8 Count III of the complaint was for "vexatious and unreasonable conduct" under section 155 of the Illinois Insurance Code ( 215 ILCS 5/155 (West 2016) ) against Shelter Mutual and alleged that Shelter Mutual had engaged in vexatious and unreasonable conduct in denying coverage for the collision despite issuing insurance cards showing the 2009 vehicle as a covered vehicle and despite keeping Flynn's insurance premiums.

¶ 9 Finally, count IV of the complaint was for negligence against Krischke and alleged that Krischke had a duty to exercise reasonable skill, care, and diligence to procure insurance on the correct vehicle. Count IV alleged that Krischke undertook the duty to act as Flynn's insurance agent and to procure auto insurance for her but breached that duty by failing to make the change that Flynn requested on October 31, 2016, which would have changed the covered vehicle on the policy.

¶ 10 Attached to Flynn's complaint were a number of exhibits. First was a copy of Flynn's insurance policy with Shelter Mutual, which states that it is "evidence of insurance as of 05/09/2017." Flynn is listed as the named insured, and Krischke is listed as the agent. The policy lists an effective date of February 16, 2017, through August 16, 2017, and states that the "described automobile" was the 2009 vehicle. The definitions section of the policy contains a definition of "[d]escribed auto" that provided:

"Described auto means the vehicle described in the Declarations , but only if a named insured owns that vehicle. It includes:

* * *

(d) A temporary substitute auto ."¹

¶ 11 The policy also defined "[n]on-owned auto" as:

"Non-owned auto means any auto being used, maintained, or occupied with permission , other than:

(a) The auto listed in the Declarations ;

(b) An auto owned by any insured , or a resident of any insured's household; or

(c) An auto that any insured , or a resident of any insured's household has general consent to use .

A rental auto is a non-owned auto if it is not an auto described by (a), (b), or (c) above, is not a temporary substitute auto , and otherwise meets the definition of rental auto ."

¶ 12 The policy also included a provision titled "Thirty-Day Temporary Insurance on Replacement Autos," which provided, in relevant part:

"The temporary insurance provided under this section does not apply to any claim that is covered by any other policy of insurance regardless of the types of coverage provided by that policy.

The insurance provided by this policy with respect to the described auto applies to any other auto in which you acquire ownership , if it replaces the described auto and you no longer own the described auto . The insurance on this replacement auto includes only those coverages that applied to the described auto . This coverage expires at the earlier of:

(1) 12:01 A.M. on the thirty-first day after you acquire ownership of the auto ; or

(2) The date this policy lapses.

To obtain this temporary coverage, you must notify us , while this policy is in force, and within 30 days after the date you acquire ownership of the replacement auto , that you want this policy to apply to it."

¶ 13 With respect to coverage for bodily injury and property damage liability coverage, the policy provided that:

"We will pay damages on behalf of an insured ; but this agreement is subject to all conditions, exclusions, and limitations of our liability, stated in this policy."

The policy further provided, in relevant part:

"Damages means money an insured is legally obligated to pay another perso

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