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Wausau Ins. Co. v. All Chicagoland Moving & Storage Co. - 333 Ill. App. 3d 1116, 268 Ill. Dec. 139, 777 N.E.2d 1062 (2002)

Rule:

Subrogation has been defined as the substitution of another person in the place of a claimant whose rights he succeeds to in relation to the debt or claim asserted, which he has paid involuntarily. The right of subrogation may be grounded in equity or based on an express or implied agreement. To establish its status as a subrogor, an insurer must prove that: (1) a third party is primarily liable to the insured for the loss; (2) the insurer is secondarily liable to the insured for the loss pursuant to an insurance policy; and (3) the insurer paid the insured under the policy, thereby extinguishing the debt of the third party.

A prima facie case of bailment creates a rebuttable presumption that the defendant acted negligently. A bailee for hire must exercise reasonable care under the circumstances, but he is not an insurer of the bailed property. Whether a bailee has met the burden of showing that damage to the bailed property occurred without the bailee's fault is ordinarily a question of fact for the trier of fact. However, even though the question is ordinarily a question of fact, a question of law that may be dispensed with by summary judgment is presented if only one conclusion may be drawn from the undisputed facts. 

Facts:

Plaintiff, Wausau Insurance Company (Wausau), initiated a subrogation action against All Chicagoland Moving & Storage Company (Chicagoland), alleging that Chicagoland dropped and damaged an electron microscope owned by the McCrone Group, Inc. (McCrone), and insured by Wausau. Wausau's amended complaint alleged that Chicagoland acted negligently and breached a bailment agreement with McCrone. The trial court granted Wausau summary judgment and awarded $90,500 in damages, and Chicagoland appealed.

Issue:

Did the trial court err in: (i) granting summary judgment in favor of Wausau, and in (ii) awarding Wasau $90,500 in damages?

Answer:

(i) No; (ii) Yes.

Conclusion:

The appellate court affirmed the trial court’s grant of summary judgment to the insurer on its claim for subrogation. According to the court, to recover under a bailment theory, a plaintiff must establish: (i) an express or implied agreement to create a bailment; (ii) a delivery of the property in good condition; (iii) the bailee's acceptance of the property; and (iv) the bailee's failure to return the property or the bailee's redelivery of the property in a damaged condition. Moreover, the court noted that prima facie case of bailment would create a rebuttable presumption that the defendant acted negligently. In the case at bar, the appellate court found that a prima facie case of bailment had been shown and that the insurer had shown it was entitled to subrogation. However, the court found that the insurer had not properly established damages and that the trial court abused its discretion in restricting discovery that might help in assessing damages, therefore, the part of judgment that awarded damages to the insurer was reversed.

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