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Shriver Ins. Agency v. Utica Mut. Ins. Co.

Shriver Ins. Agency v. Utica Mut. Ins. Co.

Appellate Court of Illinois, Second District

June 12, 2001, Filed

No. 2-00-0877

Opinion

 [*244]   [**1254]   [****869]  JUSTICE BOWMAN delivered the opinion of the court:

Defendant, Utica Mutual Insurance Company (Utica), appeals from the denial of its motion to dismiss and the entry of summary judgment in favor of plaintiff, Shriver Insurance Agency (Shriver), by the circuit court of Du Page County. The court found that the exclusion upon which Utica relied in disclaiming its duty to defend Shriver in an action brought against it by Reliance Insurance Company (Reliance) did not apply and that Utica was liable to Shriver for the expenses Shriver incurred in defending the underlying action.

On appeal, Utica contends that the trial court erred in granting Shriver's summary judgment motion, as the comparison of the allegations  [*245]  in Reliance's complaint with the language of Utica's insurance policy established that Utica had no duty to defend Shriver in the lawsuit [***2]  brought by Reliance. Additionally, Utica contends that the "true but unpleaded facts" doctrine relied upon by the trial court did not apply to create the potential for coverage.

Shriver is an insurance agency that had a contract for several years with Home State Holdings Group (Home State) to act as Home State's agent. As its agent, Shriver collected and remitted premiums on insurance policies issued under the contract. Home State sold insurance on behalf of out-of-state insurance companies, or "fronting companies." Up until May 1997, Home State sold insurance on behalf of Security Insurance Company (Security). It also sold insurance on behalf of Reliance. In May 1997, the policies covering Shriver's customers, Robinson Bus Company and White Transportation (collectively Robinson), which had been fronted by Security for Home State, were canceled by Home State four months before expiration. Home State issued new policies, fronted by Reliance, at a lower rate. As a result, Home State owed Shriver approximately $ 208,000 in unearned premiums on the canceled Security policy and Shriver owed Home State an undisclosed amount for the premiums on the Reliance policy. The new policy had a new [***3]  deposit and new installments. Home State told Shriver that it could offset the old premium on the Security policy against the new premium on the Reliance policy.

Subsequently, Reliance wrote Shriver, informing it that Shriver should not be offsetting premiums and that it should be  [**1255]   [****870]  paying Reliance directly. In August 1998, Reliance filed a complaint in the United States District Court for the Northern District of Illinois, alleging that Shriver had failed to pay Reliance the premiums it collected on the insurance policies issued to Robinson.

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323 Ill. App. 3d 243 *; 750 N.E.2d 1253 **; 2001 Ill. App. LEXIS 435 ***; 255 Ill. Dec. 868 ****

SHRIVER INSURANCE AGENCY, Plaintiff-Appellee, v. UTICA MUTUAL INSURANCE COMPANY, Defendant-Appellant.

Subsequent History: Released From Publication July 19, 2001.

Prior History:  [***1]  Appeal from the Circuit Court of Du Page County. No. 99--MR--969. Honorable Bonnie M. Wheaton, Judge, Presiding.

Disposition: Reversed and remanded.

CORE TERMS

premiums, insured, unpleaded, allegations, coverage, duty to defend, receive money, lawsuit, insurance policy, questionnaire, summary judgment motion, errors and omissions, motion to dismiss, trial court, offset, credited, fronted, underlying action, collected, contends, collection of premiums, insurance company, no duty

Civil Procedure, Summary Judgment, Entitlement as Matter of Law, Appropriateness, General Overview, Genuine Disputes, Materiality of Facts, Insurance Law, Types of Insurance, Malpractice & Professional Liability Insurance, Errors & Omissions Policies, Appeals, Standards of Review, De Novo Review, Summary Judgment Review, Standards of Review, Liability & Performance Standards, Good Faith & Fair Dealing, Duty to Defend, Remedies, Declaratory Judgments, Claim, Contract & Practice Issues, Policy Interpretation, Ordinary & Usual Meanings, Plain Language, Parol Evidence