Mid-Century Insurance Company v. Founders Insurance Company
404 Ill.App.3d 961, 936 N.E.2d 780, 344 Ill. Dec. 251 (1st dist. 6th div. 2010)Words & Phrases
Equitable ContributionTrial Judge
Rita Mary NovakAppellate Judge
Justice Garcia; McBride and R. Gordon concur.Holding
Insurer not liable for equitable contribution because two policies did not cover same property.Fact Summary
Byran and Daniella Berry, owned two cars — a Durango and a Cavalier. In January 2005, the Mid-Century Durango policy lapsed. On February 8, 2005, Founders issued the Berrys an automobile policy covering the Cavalier. Around the same time, Mid-Century informed the Berrys of an agent error that resulted in the Durango policy lapsing. The Berrys paid $250 to reinstate the Durango policy with Mid-Century, and they received an insurance card listing the Durango as covered. However, Mid-Century’s February 2010 declaration of insurance listed the Cavalier and not the Durango as the insured vehicle under the policy.
On February 23, 2005, Bryan Berry hit a pedestrian while driving the Cavalier and the pedestrian filed suit in December of 2006. Mid-Century denied the Berrys coverage in April 2007. The pedestrian settled against Bryan Berry for $100,000, which was the Founders’ policy’s per person liability limit. Founders satisfied the settlement.
Mid-Century filed a declaratory judgment action challenging its duty to indemnify its insured for liability in a traffic accident, and Founders filed a counterclaim for equitable contribution. The circuit court held for Founders, ruling that equitable contribution applied.
The appellate court reversed the circuit court. First, the court addressed whether the Mid-Century policy provided coverage for the Cavalier. The appellate court analyzed whether the Berrys and Mid-Century made a mutual mistake on the insurance contract. Both parties failed to realize that the reinstated policy identified the Cavalier as the covered vehicle instead of the Durango. Because the Berrys were not parties to the suit, Founders attempted to stand in the Berrys’ shoes to enforce the policy’s plain language that covered the Cavalier. However, the Berrys never sought coverage for the Cavalier when they signed the reinstated contract with Mid-Century. The court concluded that equitable contribution did not apply under the facts, and distinguished the case from Copley because the two policies at issue did not cover the same car. Copley v. Pekin Ins. Co., 488 N.E.2d 1004 (Ill. 1986). The court noted that the parties’ clear intentions meant the Mid-Century policy of February 10, 2005 should have covered the Durango. Because no policy was in effect covering the Cavalier, no basis existed to apportion Mid-Century with liability from the accident.