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Fidelity & Casualty Insurance v. Wil-Freds, Inc.

Citations: 145 Ill. App. 3d 1085; 496 N.E.2d 336; 99 Ill. Dec. 761; 1986 Ill. App. LEXIS 2580Docket: No. 2—85—0865

Court: Appellate Court of Illinois; July 29, 1986; Illinois; State Appellate Court

Narrative Opinion Summary

In a declaratory judgment action, Wil-Freds, Inc. appealed a summary judgment in favor of Fidelity Casualty Insurance Co. of New York, which denied its own summary judgment motion. The dispute centered around a missing insurance policy allegedly obligating Fidelity to defend and indemnify Wil-Freds against a lawsuit filed by Du Page County, alleging negligent construction and breach of contract. Wil-Freds claimed that the terms of the missing policy, supported by an affidavit and policy excerpts, included provisions covering the alleged damages. However, Fidelity argued the claims were excluded. The trial court granted summary judgment to Fidelity, citing no obligation to defend or indemnify Wil-Freds due to insufficient policy details. On appeal, the court reversed this decision, identifying genuine issues of material fact regarding the missing policy's terms. The court emphasized that Fidelity failed to prove the exclusions applied without the complete policy, necessitating an evidentiary hearing to determine policy terms. Consequently, the case was remanded for further proceedings to resolve the factual disputes, with Fidelity's summary judgment reversed and Wil-Freds' motion denial upheld.

Legal Issues Addressed

Burden of Proof in Insurance Exclusion Claims

Application: The insurer must prove that the alleged loss falls within an exclusion of the policy, which cannot be established solely through a qualified affidavit.

Reasoning: Fidelity, as the plaintiff, must prove that the alleged loss falls within an exclusion of the policy, which cannot be established merely through the qualified affidavit of its employee.

Evidentiary Hearing Requirement for Missing Policy Terms

Application: An evidentiary hearing is required to determine the terms of a missing insurance policy before declaratory relief can be granted.

Reasoning: An evidentiary hearing is necessary to ascertain the terms of the missing policy before any declaratory relief can be considered.

Insurance Policy Interpretation and Missing Policy Terms

Application: A party cannot be granted summary judgment when the terms of a missing insurance policy are in dispute and critical documents are not available.

Reasoning: The trial court erred in granting summary judgment to Fidelity due to a genuine dispute regarding the terms of the missing policy, emphasizing that insufficient documentation prevents resolution of factual issues.

Summary Judgment in Declaratory Judgment Actions

Application: Summary judgment is inappropriate where genuine issues of material fact exist, specifically regarding the terms of a missing insurance policy.

Reasoning: The court views the third issue as decisive, noting that summary judgment can only be granted when there are no genuine material fact issues and the moving party is entitled to judgment as a matter of law.