Safeco Insurance v. Jelen

JUSTICE CARTER,

concurring in part and dissenting in part:

I agree with the majority’s conclusion that the section 2 — 619 motions to dismiss (735 ILCS 5/2 — 619 (West 2006)) and the motion to transfer the case to Warren County were properly granted. I dissent, however, because I disagree with the majority’s ruling that the section 2 — 615 motions to dismiss (735 ILCS 5/2 — 615 (West 2006)) should have been denied.

Following American Standard Insurance Co. of Wisconsin v. Cleveland, 124 Wis. 2d 258, 267, 369 N.W.2d 168, 173 (App. 1985), I would find that the claim raised is one of contract and that the most significant contacts test must be used to determine whether the substantive law of Minnesota (forbids subrogation in this context) or Illinois (allows subrogation in this context) should apply. See Restatement (Second) of Conflict of Laws §188 (1971); Westchester Fire Insurance Co. v. G. Heileman Brewing Co., 321 Ill. App. 3d 622, 628, 747 N.E.2d 955, 961 (2001). In the American Standard case, two Wisconsin residents, Herd Cleveland and Thomas McGree, were involved in a traffic accident in Minnesota. American Standard Insurance Co. of Wisconsin, 124 Wis. 2d at 260, 369 N.W.2d at 170. They were traveling in separate automobiles and Cleveland was 100% negligent in causing the accident. American Standard Insurance Co. of Wisconsin, 124 Wis. 2d at 260, 369 N.W.2d at 170. Both were insured by Wisconsin insurers under policies issued in Wisconsin. American Standard Insurance Co. of Wisconsin, 124 Wis. 2d at 260, 369 N.W.2d at 170. On appeal, one of the issues that the Wisconsin appellate court had to decide was whether to apply Wisconsin’s subrogation law, which would allow American Standard to recover subrogation, or Minnesota’s no-fault law, which prohibited contractual subrogation by insurers. American Standard Insurance Co. of Wisconsin, 124 Wis. 2d at 266-67, 369 N.W.2d at 173. The appellate court applied the most significant contacts test and determined that Wisconsin’s subrogation law controlled American Standard’s right to recover subrogation. American Standard Insurance Co. of Wisconsin, 124 Wis. 2d at 267, 369 N.W.2d at 173. In so doing, the appellate court noted that, “American Standard’s subrogation right [was] a purely contractual right derived from the insurance policy.” American Standard Insurance Co. of Wisconsin, 124 Wis. 2d at 267, 369 N.W.2d at 173.

I would reach the same conclusion in the present case. Although an underlying tort gave rise to the injuries for which Safeco made payment, the claim raised in this suit is one of subrogation. The tort claim has been raised in a separate suit filed in Warren County by Iola Bednar against Susan Jelen and Steven Gregory. As with the insurer in American Standard, Safeco’s right to subrogation is purely a contractual right derived from the relationship between the insurance company and the insured. See American Standard Insurance Co. of Wisconsin, 124 Wis. 2d at 267, 369 N.W.2d at 173. Safeco’s claim, therefore, is a contract claim and must be analyzed under the most significant contacts test. See Restatement (Second) of Conflict of Laws §188 (1971); Westchester Fire Insurance Co., 321 Ill. App. 3d at 628, 747 N.E.2d at 961. Minnesota, as the state where the contract was entered into, has the most significant contacts with this case. Minnesota law should be applied and Safeco should not be allowed to proceed on a claim for subrogation against the section 2 — 615 defendants. I would find, therefore, that the circuit court properly granted the section 2 — 615 motions to dismiss.

For the reasons stated, I concur in part and respectfully dissent in part.