Multiple Calls, Visits Found Insufficient To Establish Lack Of Insured Cooperation

February 9, 2022 / Writing and Speaking

By Don R. Sampen, published, Chicago Daily Law Bulletin, February 8, 2022

The 1st District Appellate Court recently reversed a finding that a workers compensation insured lacked coverage due to the insured’s lack of cooperation with the insurer’s investigation of an employee’s alleged injury.

The case is Country Mutual Insurance Co. v. Under Construction & Remodeling, Inc., 2021 IL App (1st) 210600 (Dec. 22). The injured worker, Kazimierz Szymanski, an employee of Under Construction, was represented by Katz, Friedman, Eagle, Eisenstein, Johnson, Bareck & Bertuca P.C. of Chicago. Country Mutual was represented by Chilton Yambert Porter LLP of Geneva.

In November 2019, Szymanski claimed he was injured on the job and filed for adjustment with the Illinois Workers’ Compensation Commission. Subsequently, Country Mutual, Under Construction’s workers’ comp carrier, conducted a “premium audit” for a prior policy period, but did not find Szymanski listed on the company’s records.

In early 2020, in response to Szymanski’s claim, Country Mutual attempted to contact Under Construction with a series of unanswered telephone calls, letters, and emails — some 14 in all — initiated by Country Mutual’s claims representative and later by a “special investigation unit.” That unit also visited the address for the company listed on the Secretary of State’s website, but was able only to leave a business card and letter.

In April 2020, Country Mutual filed this declaratory judgment action seeking a finding, among other things, that it had no duty to defend or indemnify Under Construction in connection with Szymanski’s workers’ comp claim. Through a second alias summons, Country Mutual obtained personal service on the insured’s registered agent.

Although Szymanski appeared and defended, Under Construction did not, and the court entered a default judgment against the company. Country Mutual then filed a motion for summary judgment arguing again that Under Construction’s lack of cooperation voided its coverage.

Country Mutual further contended it was greatly prejudiced by its inability to obtain all facts relating to Szymanski’s claim. Although Szymanski opposed the motion, he filed no affidavit in response, and the trial court granted summary judgment in favor of Country Mutual. Szymanski appealed.


In an opinion by Justice Robert E. Gordon, the 1st District reversed. He observed that the purpose of an insurance policy’s cooperation clause is to prevent collusion between the insured and injured person and to make the insurer’s investigation of the claim possible.

Where an insurer seeks a declaration of no coverage based on breach of that clause, moreover, the insurer has the obligation to prove the breach and, in addition, to prove resulting prejudice to the insurer. To establish the breach, the insurer must show that it exercised reasonable diligence in seeking the insured’ participation.

Gordon proceeded to note what he deemed to be a variety of deficiencies with Country Mutual’s attempts here to secure cooperation. He observed that a number of Country Mutual’s attempted communications with Under Construction did not make clear that the company was required to respond.

Country Mutual’s affidavit in the trial court also did not show the phone number called, or the person sought to be reached, or the times of the calls, and the calls could have been made in early morning when company personnel were out on a job.

In addition, only one letter was sent by certified mail, and all the letters were sent to the address listed on the policy. No letter, however, was sent to the registered agent’s address, and none was sent the address shown on Under Construction’s insurance application. Country Mutual also sent the emails to only one of two email addresses the insurer had for the company.

As to the special investigation unit, Gordon found fault with the fact that it became involved only after the declaratory judgment complaint had been filed. And that unit’s attempts consisted only of an email, two telephone calls, and two attempts at in-person contact.

Gordon further noted that Under Construction had cooperated in the earlier “premium audit” that took place at the end of 2019, and the fact it did so, wrote Gordon, suggested that further investigation was necessary.

In sum, Gordon said that Country Mutual made only “several rote attempts to reach Under Construction,” and then filed suit claiming it had violated the cooperation clause. He contrasted these efforts with those of the insurer in Founders Insurance Co. v. Shaikh, 405 Ill.App.3d 367 (2010), where the insurer hired a private investigator to track down the insured.

The 1st District therefore reversed in favor of Szymanski.

Key Point

An insurer seeking to avoid coverage based on the insured’s breach of the cooperation clause must show that its attempts to secure the insured’s participation consist of more than unreturned phone calls and unanswered letters sent to the same address, at least if the insurer has other potential means of communicating with the insured.

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