Stokes v. Pekin Insurance Co.

Rule 23 Order filed
June 24, 1998;
Motion to publish granted
July 28, 1998.                 NO. 5-97-0679

                                  IN THE 

                        APPELLATE COURT OF ILLINOIS

                              FIFTH DISTRICT
_________________________________________________________________

WILLIAM K. STOKES, LOLA STOKES, and  )  Appeal from the 
STEPHANIE L. STOKES, by Her Mother   )  Circuit Court of 
and Next Friend, LOLA STOKES,        )  Montgomery County.
                                     )  
     Plaintiffs-Appellants,          )   
v.                                   )  No. 97-MR-7
                                     )
PEKIN INSURANCE COMPANY,             )  Honorable
                                     )  John W. McGuire, 
     Defendant-Appellee.             )  Judge, presiding.  
_________________________________________________________________

     PRESIDING JUSTICE WELCH delivered the opinion of the court:
     On April 2, 1996, Stephanie L. Stokes sustained severe
injuries as a result of an automobile accident in which she was a
passenger in a car owned by Linda Anderson and driven by Geneva E.
Rhodes.  At the time of the accident, Anderson was insured by
defendant, Farmers Automobile Insurance Association, incorrectly
sued as Pekin Insurance Company.  The insurance policy issued to
Anderson and effective at the time of the accident provides for
liability motorist coverage of $100,000 for each person and
$300,000 for each accident.
     On February 5, 1997, plaintiffs filed a complaint for
declaratory judgment seeking a determination as to whether the
$100,000-per-person limit or the $300,000-per-accident limit
applies.  Defendant filed a motion to dismiss arguing that such a
determination prior to a judgment of liability is premature.  On
June 16, 1997, the circuit court granted  defendant's  motion  to dismiss, and this appeal follows.
     We review de novo a decision by the circuit court granting a
motion to dismiss.  Federal Insurance Co. v. St. Paul Fire & Marine
Insurance Co., 271 Ill. App. 3d 1117, 1121 (1995).  We accept all
well-pleaded facts as true for purposes of reviewing the circuit
court's dismissal of plaintiffs' complaint for declaratory
judgment.  Miles Kimball Co. v. Anderson, 128 Ill. App. 3d 805, 806
(1984).  
     The only issue before us on appeal is whether plaintiffs'
complaint, seeking a determination as to the limits of liability as
to the insurance policy issued to the owner of the automobile in
which Stokes was injured, is premature.  Defendant argues that the
circuit court acted properly in following the nearly identical case
of Batteast v. Argonaut Insurance Co., 118 Ill. App. 3d 4 (1983),
and the similar case of Weber v. St. Paul Fire & Marine Insurance
Co., 251 Ill. App. 3d 371 (1993), in holding that the declaratory
judgment action is premature prior to a finding of liability.  This
court sitting in the first district decided Batteast, and this
court sitting in the third district decided Weber.  Plaintiffs do
not attempt to distinguish either Batteast or Weber from the case
at bar but argue that the fifth district appellate court has ruled
differently on the issue presented in the instant action and that
language in the supreme court's decision in Murphy v. Urso, 88 Ill. 2d 444 (1981), allows this declaratory judgment action to survive
dismissal.
     The law surrounding the court's authority to issue a
declaratory judgment is well established.  In determining the
ripeness of a declaratory action, the court must first determine
whether the complaint recites in sufficient detail an actual and
legal controversy between the parties which demonstrates that the
plaintiff is interested in the controversy.  Best v. Taylor Machine
Works, 179 Ill. 2d 367 (1997).  Illinois courts should liberally
construe the declaratory judgment statute and should not be
restricted by unduly technical interpretations.  First of America
Bank, Rockford, N.A. v. Netsch, 166 Ill. 2d 165, 174 (1995).  This
court has held that an "actual controversy" exists where there is
a legitimate dispute admitting of an immediate and definite
determination of the parties' rights, the resolution of which would
help terminate all or part of the dispute.  Dolezal v. Plastic &
Reconstructive Surgery, S.C., 266 Ill. App. 3d 1070, 1083 (1994)
(citing City of Chicago v. Department of Human Rights 141 Ill. App.
3d 165, 169-70 (1986)).  A declaratory judgment action is used "to
afford security and relief against uncertainty with a view to
avoiding litigation, rather than in aid of it."  (Emphasis added.) 
Dolezal, 266 Ill. App. 3d at 1083 (quoting City of Chicago, 141
Ill. App. 3d at 169-70).
     In addition, the complaint must show that the underlying facts
and issues of the case are not moot or premature.  Pincham v.
Cunningham, 285 Ill. App. 3d 780, 782 (1996).  This court cannot
pass judgment on mere abstract propositions of law, render an
advisory opinion, or give legal advice as to future events. 
Pincham, 285 Ill. App. 3d at 782.
     The circuit court granted defendant's motion to dismiss, based
on this court's decisions in Batteast and Weber.  In Batteast, the
plaintiff brought a personal injury action against St. Bernard's
Hospital, alleging that he suffered permanent brain damage while in
their care.  The defendant, Argonaut Insurance Company, had issued
an insurance policy to the hospital, and the policy was effective
at the time of the injury.  During the settlement negotiations, a
dispute arose as to the amount of coverage available under the
insurance policy.  Because the dispute hindered negotiations, the
plaintiff brought a complaint for declaratory judgment, seeking a
judicial determination of the extent of coverage provided by the
policy.  Batteast, 118 Ill. App. 3d at 5.
     In affirming the circuit court's dismissal of the complaint,
this court stated:
     "Regardless of their disagreement [as to whether coverage is
     $1 million or $3 million], the plaintiff's right to any amount
     is contingent upon a finding of liability in the underlying
     tort action.  Even if liability is later established, a
     resolution of the dispute would remain unnecessary unless the
     damages awarded exceeded $1 million.  Moreover, if we were to
     allow this action, there is no reason why every tort claimant
     would not, upon filing a personal injury action, concomitantly
     file a declaratory judgment action to determine the maximum
     amount of coverage to which he would be entitled in the event
     that liability was subsequently established.  We cannot create
     the right to such premature litigation.  The instant fact
     situation does not present an actual controversy between the
     parties."  Batteast, 118 Ill. App. 3d at 6.
Although this court in Batteast held that the plaintiff did not
have standing to maintain the declaratory judgment action, this has
been characterized a misnomer.  See Weber, 251 Ill. App. 3d at 372.
     The other decision cited by the circuit court supporting its
decision to dismiss plaintiffs' complaint was Weber v. St. Paul
Fire & Marine Insurance Co., 251 Ill. App. 3d 371 (1993).  In
Weber, the plaintiff filed a five-count complaint against a nursing
home that was insured by the defendant, St. Paul Fire and Marine
Insurance Company.  The complaint sought treble damages under the
Nursing Home Care Act (Ill. Rev. Stat. 1991, ch. 111«, par. 4153-
602).  When the defendant denied coverage under that act, the
plaintiff filed a declaratory judgment action seeking a
determination of whether the insurance policy issued by the
defendant to the nursing home included coverage for exposure to
treble damages under the Nursing Home Care Act.  The circuit court
held the insurance policy would provide coverage if such damages
were awarded in the underlying tort action.  Weber, 251 Ill. App.
3d at 372.
     In reversing the circuit court's decision, this court held
that the action was not ripe for adjudication as the issue of
whether or not the insured has a duty to indemnify does not arise
until an insured becomes legally obligated to pay the damages in
the underlying action.  Weber, 251 Ill. App. 3d at 373.  This court
held, "[A] declaratory judgment action brought to determine an
insurer's duty to indemnify its insured, brought prior to a
determination of the insured's liability, is premature since the
question to be determined is not ripe before adjudication in the
underlying action."  Weber, 251 Ill. App. 3d at 373-74.
     As stated earlier, plaintiffs do not attempt to distinguish
this court's decision in Batteast or Weber but merely argue that
they should not be followed because the fifth district has taken a
different approach.  Plaintiffs cite two fifth district cases that
have granted declaratory judgments when faced with a similar fact
pattern.  In Stearns v. Millers Mutual Insurance Ass'n, 278 Ill.
App. 3d 893 (5th Dist. 1996), plaintiff filed a complaint for
declaratory judgment seeking a determination as to the extent of
coverage provided to the plaintiffs under an automobile insurance
policy issued to plaintiff Karen Stearns.  The parties agreed that
plaintiff Stearns was covered under the policy and that defendant
tendered a $100,000-per-person limit to the plaintiffs.  The
plaintiffs rejected this tender, contending that they were entitled
to separate recoveries up to $300,000.  The circuit court granted
declaratory judgment in favor of the plaintiffs, and this court
affirmed the circuit court's order on appeal.
     The second case cited by plaintiffs is General Casualty Co. v.
McCowan, 221 Ill. App. 3d 96 (5th Dist. 1991).  In McCowan, the
defendant was involved in an automobile accident with Arnold
Sternberg.  While an action against Sternberg was pending, the
plaintiff, General Casualty Company, Sternberg's insurance company,
brought a declaratory judgment action to determine the amount of
insurance coverage afforded by its automobile liability policy. 
General Casualty Company sought a determination that only the
$50,000-per-person coverage was afforded, while McCowan sought a
determination that the $100,000-per-accident coverage was
available.  The circuit court held that the $50,000-per-person
coverage was available, and this court affirmed the circuit court's
finding on appeal.
     Although plaintiffs cite both Stearns and McCowan for the
proposition that the declaratory judgment in the instant case is
not premature, we point out that in neither Stearns nor McCowan was
this issue addressed.  It is clear that the circuit court granted
a declaratory judgment action regarding the limits of liability
prior to a finding of liability, but the issue of ripeness was
never discussed.  On appeal, this court only addressed whether the
circuit court's grant of the declaratory judgment was an abuse of
discretion.  Apparently, the issue of ripeness was never raised by
the parties.  As the issue of ripeness was not discussed or even
mentioned in either Stearns or McCowan, we do not find these cases
controlling in the instant action.  We will not speculate as to why
the decisions did not address the issue of ripeness, but we note
that the issue of ripeness is not jurisdictional and may be waived
if not raised in the circuit court.  In re General Order of October
11, 1990, 256 Ill. App. 3d 693, 696 (1993).
     Plaintiffs additionally argue that according to language in
the supreme court's decision of Murphy v. Urso, 88 Ill. 2d 444
(1981), a declaratory judgment action in the instant case should be
allowed.  In Murphy, the issue before the supreme court was whether
an insurer waived its policy defenses to a garnishment suit when
the insurer failed to either defend its insured or seek a judgment
declaring that it had no duty to defend.  The supreme court in
Murphy did not directly address the issue of whether a declaratory
judgment action, sought to determine the limits of liability of an
insurance policy prior to a finding of liability, is premature. 
However, in resolving the issue it did face, the supreme court
stated:
     "Where the issues in an underlying suit and a declaratory
     judgment action are separable, defining the question of
     coverage in a collateral proceeding prejudices no party.  The
     situation changes when the issues are substantially the same
     ***."  Murphy, 88 Ill. 2d  at 455.
Plaintiffs attempt to utilize this language to allow a declaratory
judgment in the instant action.
     We do not believe that plaintiffs' action fits within this
exception.  Plaintiffs argue that the issue of liability in the
underlying suit and the declaratory judgment action are entirely
different and unrelated issues and that none of the facts in the
one would arise in the trial of the other.  We disagree because
unless liability is ultimately determined to be greater that
$100,000, any declaratory judgment action as to whether the policy
limit is above $100,000 is meaningless.  Unless liability is
determined to be greater than $100,000, the result of the
declaratory judgment action is nothing more than an advisory
opinion.  Therefore, the relevance of the declaratory judgment
action is integrally related to the underlying suit of liability. 
Accordingly, we believe that these issues are inseparable, and
therefore, the Murphy exception is inapplicable.
     Returning to plaintiffs' complaint, a declaratory judgment
action is ripe if the complaint shows an "actual controversy." 
However, plaintiffs' complaint fails to do so.  Although plaintiffs
argue in a pretrial memorandum and at oral argument that plaintiffs
have incurred over $100,000 in medical bills, that defendant has
offered $100,000 as a settlement based upon the belief that this is
the limit of liability they are permitted to offer, and that the
case would probably be resolved within a week after the issuance of
a declaratory judgment, none of these details are raised in
plaintiffs' complaint.  Plaintiffs' complaint merely contains the
bare allegations that "[i]t is the position of the Defendant that
their maximum limit of liability for all damages sustained by all
parties is limited by the `Each Person' limit" and that "[t]here is
an actual controversy between Plaintiffs and Defendant, the
resolution which will aid in the termination of the controversy or
some part thereof."  A complaint must recite in sufficient detail
an actual and legal controversy.  Plaintiffs' complaint is
insufficient to show an "actual controversy".  If we were to find
an "actual controversy" based upon the bare allegations in
plaintiffs' complaint, we must find an "actual controversy" in
every complaint which seeks a declaratory judgment as to liability
limits, even if there is little chance that liability will
ultimately exceed the disputed limits.  This court may not issue
advisory opinions that are contingent upon the possible happening
of a future event.  Drayson v. Wolff, 277 Ill. App. 3d 975, 979
(1996).  In addition, this court will not encourage piecemeal
litigation.  Stern v. Stern, 105 Ill. App. 3d 805, 807 (1982). 
Accordingly, we cannot find an "actual controversy" based upon
plaintiffs' complaint.
     In conclusion, this court in Batteast has addressed the
precise issue we face on appeal.  Batteast was decided following
the Murphy decision and has not been overturned.  Plaintiffs fail
to cite any authority where any court has determined that a
declaratory judgment action similar to that sought by plaintiffs is
ripe for adjudication.  Although we acknowledge that the
declaratory judgment statute must be liberally construed and should
not be restricted by unduly technical interpretations, plaintiffs'
complaint simply fails to demonstrate an actual controversy.
     Accordingly, we must affirm the decision of the circuit court
of Montgomery County.

     Affirmed.

     MAAG and RARICK, JJ., concur.