Timely Notice of an Insurance Claim
Molda was in a car accident with Wilson while he was on the job in August, 2005. His employer, Metrolift, had an automobile insurance policy with First Chicago, under which he was covered. The policy was secured from an insurance broker, Associated Specialty Insurance. The First Chicago policy listed Associated’s name, address, and telephone number on its declarations page as the producer, and provided no other contact information or reference to a phone number or person to contact if a claim was to be made other than “our authorized representative.” The policy had been in place for a number of years; and anytime Metrolift needed to make a claim, it would call and provide all documents and information to Associated, who would then forward that information to First Chicago. Metrolift notified Associated of the accident two days after it occurred. No action was taken by either party. Only after Wilson filed a suit against Molda in January, 2008, did First Chicago receive notice of the lawsuit. First Chicago filed a declaratory action that it had no duty to defend or indemnify based on unreasonable notice by Metrolift.
The two issues on appeal were as a matter of law, whether First Chicago was estopped from arguing untimely notice because Associated was First Chicago’s agent for purpose of notice, and second whether notice to First Chicago was timely in March, 2008. The court held that there was a question of material fact as to whether First Chicago was estopped from arguing untimely notice. The court reasoned that Associated may have been an apparent agent based on prior conduct and the fact that it was the only contact in the insurance policy. Second, the court held that it could not say as a matter of law that notice was unreasonable. Using the five factor test, the court said that First Chicago did not show it suffered any prejudice, and it could not be shown that Metrolift knew or understood that its notice to Associated did not provide notice to First Chicago.
First Chicago Insurance Co. v. Molda, 408 Ill.App.3d 839, 948 N.E.2d 206, 350 Ill.Dec. 137 (Ill.App. 1 Dist., 2011), No. 1-10-1138.
