Court Finds 11-month Delay In Giving Notice May Not Be ‘Late’

October 18, 2022 / Writing and Speaking

By Don R. Sampen, published, Chicago Daily Law Bulletin, October 18, 2022

The 2nd District Appellate Court recently reversed a finding that an 11-month delay in giving notice of an injury to an insurer constituted late notice, because of a lack of evidence in the record addressing the relevant late notice factors.

The case is West Bend Mutual Insurance Co. v. TRRS Corp., 2022 IL App (2d) 210506 (Sept. 9). The insurer, West Bend, was represented by McKenna Storer of Chicago. James Urtis of Chicago represented the insured corporate entities — TRRS.

TRRS is a tire retreading and repair company with a facility in Lake in the Hills. In 2017 an employee, Gary Bernardino, injured his shoulder while operating a forklift. He went to the hospital, and TRRS’s general manager, Michael Sardinas, told him that the company would cover his expenses.

In 2018, however, Bernardino filed a workers’ compensation claim and brought suit against TRRS and two of its suppliers. Some 11 months after the injury, TRRS reported the workers’ comp claim and tendered defense of the separate lawsuit to West Bend, TRRS’s commercial general liability and workers’ comp carrier.

West Bend then filed this coverage action seeking a determination that it was not obligated to cover the Bernardino claims due to late notice. It filed a summary judgment motion, and the trial court, applying Country Mutual Insurance Co. v. Livorsi Marine, Inc., 222 Ill. 2d 203 (2006), found in favor of West Bend.

The court held that Sardinas, as corporate manager, was sophisticated in insurance matters and should have known to give notice, and the 11-month delay was unreasonable. TRRS took this appeal.


In an opinion by Justice Susan F. Hutchinson, the 2nd District reversed. She initially reviewed the West Bend policy’s notice requirement. It required that TRRS notify West Bend “at once” if injury occurs that may be covered. Hutchinson noted that the term “at once” had not received much attention in the case law, but similar language in other policies generally was construed as requiring “reasonable” notice, which she said would apply here.

She then took up the standards for reasonable notice as set forth in Livorsi and West American Insurance Co. v. Yorkville National Bank, 238 Ill. 2dd 177 (2010). Those cases require consideration of (1) the policy language, (2) the insured’s sophistication in commerce and insurance matters, (3) the insured’s awareness of an event that may trigger coverage, (4) the insured’s diligence in ascertaining whether coverage is available, and (5) prejudice to the insurer from late notice.

In this case, the record reflected that Sardinas had been reluctant to give notice because Bernardino had suffered an earlier injury to the same shoulder, and Sardinas was not certain what impact that might have on coverage. He also was not certain whether the facility in which Bernardino had been working was covered by West Bend. These concerns, according to Hutchinson, bore on several of the notice factors.

Hutchinson wrote that the record was insufficient to determine whether either Sardinas or TRRS was sophisticated in insurance. Sardinas had attended a seminar on risk management some seven years earlier, but Hutchinson thought that would make him closer to a layman than a sophisticate.

As for TRRS, Yorkville held that the corporate entity in that case, a bank, was presumptively well-versed in insurance or business matters. Hutchinson, however, noted that no case had ever held that all corporate entities are so well versed.

While some cases determined sophistication based on such factors as the insured’s access to primary and excess coverage, a general counsel, a coverage counsel, and an ability to pay litigation expenses, Hutchinson said evidence of those types of factors for TRRS were not known. Too many questions remained to determine the reasonableness of the 11-month delay. The 2nd District reversed in favor of TRRS and remanded for further proceedings.

Key Points

According to this court, an insured’s uncertainty about the availability of coverage may cut against a finding of late notice. Also according to this court, a lack of evidence addressing a sufficient number of Livorsi-Yorkville late-notice factors may prevent the entry of summary judgment for the insurer based on late notice.

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