Philadelphia Indemnity Insurance Co. v. Pace Suburban Bus Service

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Appellate Court Date: 2017.01.18

13:56:48 -06'00'

Philadelphia Indemnity Insurance Co. v. Pace Suburban Bus Service,

2016 IL App (1st) 151659

Appellate Court PHILADELPHIA INDEMNITY INSURANCE COMPANY,

Caption Individually and a/s/o Countryside Association for People with

Disabilities, Plaintiff-Appellant, v. PACE SUBURBAN BUS

SERVICE, a Division of the Regional Transportation Authority,

Defendant-Appellee.

District & No. First District, Fourth Division

Docket No. 1-15-1659

Filed November 17, 2016

Decision Under Appeal from the Circuit Court of Cook County, No. 14-CH-9166; the

Review Hon. Diane J. Larsen, Judge, presiding.

Judgment Affirmed.

Counsel on Stephen R. Swofford, Kent J. Cummings, and Frank M. Ward III, of

Appeal Hinshaw & Culbertson LLP, of Chicago, for appellant.

William K. McVisk and Jennifer M. Theodore, of Johnson & Bell,

Ltd., of Chicago, for appellee.

Panel JUSTICE McBRIDE delivered the judgment of the court, with

opinion.

Presiding Justice Ellis and Justice Howse concurred in the judgment

and opinion.

OPINION

¶1 Plaintiff, Philadelphia Indemnity Insurance Company (Philadelphia), filed a four count

declaratory judgment complaint against defendant, Pace Suburban Bus Service (Pace), in the

circuit court with claims of equitable subrogation, equitable contribution, unjust enrichment,

and “Assignment from Countryside of all rights against Pace” relating to a $1.5 million

settlement it paid on behalf of Countryside Association for People with Disabilities

(Countryside) to Lisa Gomez, who had been injured while in Countryside’s care. Philadelphia

claimed that it should be reimbursed by Pace, in whole or in part, for that settlement, which it

had paid after Gomez had communicated a presuit settlement demand to Philadelphia. Pace

moved to dismiss Philadelphia’s complaint pursuant to section 2-619 of the Code of Civil

Procedure (Code). 735 ILCS 5/2-619 (West 2012). The circuit court granted that motion, and

Philadelphia now appeals.

¶2 The record shows that Pace, a division of the Regional Transportation Authority, entered

into an agreement with Countryside, entitled “Pace Advantage Vehicle Program Agreement”

(the leasing agreement) in 2010. Under the leasing agreement, Pace agreed to furnish a vehicle

to Countryside to transport individuals with disabilities to and from the Countryside facility in

exchange for $365 per month per vehicle. The leasing agreement further specified that Pace

would provide the vehicle and Countryside was responsible for providing its own drivers. Pace

vehicles utilized pursuant to the leasing agreement would be included in Pace’s “Risk

Financing Program,” which:

“shall provide commercial auto liability coverage to [Countryside] for any claims of

bodily injury, death, or property damage arising directly out of the provision of

Transportation Services provided with Pace vehicles as described in this agreement,

within the scope of Pace’s Self-Insured Retention and up to the liability limits of such

excess insurance that Pace may purchase, subject to the following terms, conditions,

and exclusions:

(a) Pace specifically excludes from insurance coverage afforded to

[Countryside] herein any claims, actions, damages arising as the result of willful

and wanton, reckless, or intentional conduct of [Countryside], its officers, agents,

employees, contractors, sub-contractors, agents, or volunteers.” (Emphasis in

original.)

¶3 The leasing agreement further provided that:

“The policies of excess insurance purchased by Pace and Pace’s Self-Insured Retention

shall be primary over insurance carried by [Countryside] for claims within the scope of

Pace’s Risk Financing Program. Any insurance or self-insurance maintained by

[Countryside] shall be in excess of Pace’s Self-Insured Retention and the policies of

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excess insurance purchased by Pace, without right of contribution, for claims within

the scope of Pace’s Risk Financing Program.”

¶4 Countryside obtained additional automobile liability coverage from Philadelphia, which

provided that it would:

“pay all sums an ‘insured’ legally must pay as damages because of ‘bodily injury’ or

‘property damage’ to which this insurance applies, caused by an ‘accident’ and

resulting from the ownership, maintenance or use of a covered ‘auto.’ ”

¶5 Philadelphia described the following descriptions of “Covered Auto[s]” in its policy.

“Owned ‘Autos’ Only” were described as, “Only those ‘autos’ you own *** includ[ing] those

‘autos’ you acquire ownership of after the policy begins.” “Hired ‘Autos’ Only” were

described as, “Only those ‘autos’ you lease, hire, rent or borrow.” Finally, “Non-owned

‘Autos’ Only” were described as, “Only those ‘autos’ you do not own, lease, hire, rent or

borrow that are used in connection with your business.”

¶6 The Philadelphia policy further provided that:

“For any covered ‘auto’ you own, this coverage form provides primary insurance. For

any covered ‘auto’ you don’t own, the insurance provided by this coverage form is

excess over any other collectible insurance.”

¶7 The following facts regarding the underlying incident come from the September 6, 2013,

presuit settlement demand letter of Lisa Gomez and her draft complaint, which were attached

to Philadelphia’s complaint. On the morning of July 10, 2013, Robert Gottardo, a Countryside

employee, drove a Pace van to pick up and transport Countryside clients to the facility for daily

services. Lisa Gomez, a 42-year-old woman who suffers from an intellectual disability and

who “functions at the level of a five year-old child,” was picked up from her home in

Schaumburg around 7:30 a.m. Upon arriving at the Countryside facility at approximately 8:30

a.m., Gottardo rolled up the windows, exited the vehicle, and placed a sign in the van window

reading “Vehicle Checked, Vehicle Empty,” while Gomez remained strapped into her seat

inside. Gottardo entered the facility and informed other Countryside employees that Gomez

was a “no-show” that day. Gottardo then left the Countryside lot in his personal vehicle.

Gomez was left unattended in the vehicle for more than five hours, during that time the

temperature outside the van reached 90 degrees.

¶8 At approximately 1:50 p.m., Gottardo returned to the van. He later admitted to another

Countryside employee that he saw Gomez in the back of the van at that time, but he decided

not to tell anyone at Countryside that he had abandoned her in the van all day. Gottardo did not

check on Gomez at that time and instead began to drive his normal route. Gottardo arrived at

Gomez’s home at approximately 2:45 p.m., at which time Gomez was having a heat-induced

seizure. Gomez’s mother recognized that Gomez was having a seizure and yelled to Gottardo

to call 9-1-1. Gottardo left the scene before emergency personnel arrived. Gomez was

unconscious when the Schaumburg fire department and paramedics arrived. It was determined

that she had suffered numerous medical conditions, including a heart attack, septic shock,

gastrointestinal hemorrhage, and infections caused in part by exposure to urine and feces

soaked clothing.

¶9 The record further contains an incident report and account from Kim Nygaard, a

Countryside employee. In the incident report, Nygaard described the “Type of Incident” as one

of “egregious neglect.” In her account, Nygaard explained that around 3:55 p.m., she was

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contacted by a case worker, “Lori,” who told her that a parent had called to express concern

that an ambulance “had to come to the bus because a girl was having a seizure.” Nygaard stated

that, at that point, Countryside was unaware of any issue involving Gomez. About 10 minutes

later, Gottardo returned to Countryside and was asked by staff member Maggie Kukielka about

the parent’s complaint. Gottardo admitted that he had abandoned Gomez in the van and that he

did not inspect the van that morning. He further admitted that when he realized Gomez had

been abandoned in the van, he did not tell anyone at Countryside, call for emergency medical

treatment, or check on her well-being. Nygaard further stated that “effective immediately”

Countryside would be implementing a new safety protocol, requiring all vans to be searched by

both the driver and another Countryside employee.

¶ 10 That evening, the Lake County sheriff’s office arrested Gottardo and charged him with a

Class 4 felony of reckless conduct under section 12-5(a)(2) of the Criminal Code of 2012

(Criminal Code) (720 ILCS 5/12-5(a)(2) (West 2012)), which provides that “A person

commits reckless conduct when he or she, by any means, lawful or unlawful, recklessly

performs an act or acts that *** cause great bodily harm or permanent disability or

disfigurement to another person.” Gottardo was indicted of two counts of reckless conduct,

which specifically provided that he did the following:

“Count 1 *** committed the offense of RECKLESS CONDUCT, in that the said

defendant, while acting in a reckless manner, caused great bodily harm to Lisa Gomez

in that the said defendant, the bus driver of Lisa Gomez, left Lisa Gomez, who was

unresponsive, in a secured vehicle in hot weather conditions[.]

***

Count 2 *** committed the offense of RECKLESS CONDUCT, in that the said

defendant, while acting in a reckless manner, caused great bodily harm to Lisa Gomez

in that the said defendant, the bus driver of Lisa Gomez, located Lisa Gomez, who was

unresponsive, in his assigned vehicle and failed to contact emergency services[.]”

¶ 11 On February 11, 2014, Gottardo entered a negotiated guilty plea to Class 4 felony reckless

conduct in exchange for a sentence of 24 months probation.

¶ 12 Meanwhile, on September 6, 2013, counsel for Gomez sent a presuit settlement demand

letter to Philadelphia, which included the facts of the underlying incident as set out above, and

indicated that counsel was “authorized to accept a settlement from Countryside and Robert

Gottardo in the amount of six million dollars.” Counsel for Gomez also indicated that they

would “initiate ligation against Countryside and Robert Gottardo” if they did not receive a

response within seven days.

¶ 13 At some point thereafter, Pace became aware of Gomez’s claim against Countryside. On

September 20, 2013, general counsel for Pace sent a letter to Countryside indicating that Pace

was “excluding this claim from coverage because we consider the conduct of Countryside’s

employee, Robert Gottardo, both willful and wanton, and reckless.” In the months that

followed, counsels for Philadelphia and Pace exchanged a number of letters in which

Philadelphia asserted that Pace had a duty to cover the claims, and Pace maintained that it did

not.

¶ 14 On November 15, 2013, counsel for Gomez sent a letter to counsels for Philadelphia and

Countryside, agreeing to presuit mediation so long as, among other things, “Principals from

Countryside and PACE and/or their insurers with full authority to settle this case must attend

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the mediation in person.” Counsel for Gomez also attached a draft complaint against

Countryside and Pace to the letter, but indicated that he would “hold off filing suit until we

exhaust our efforts to settle.”

¶ 15 Counsel for Countryside forwarded that letter and draft complaint to Pace on November

22, 2013. Counsel for Countryside noted that the draft complaint contained a number of

“allegations of negligence” including that Countryside “fail[ed] to check the van to confirm

Gomez was removed from the van; fail[ed] to operate, inspect, supervise and manage the van

and the unloading of disabled clients from the van; and failed to properly train its employees,

including Gottardo.” Counsel for Countryside maintained that these claims were covered by

“the Agreement” and therefore, “Pace has a duty to defend Countryside in any lawsuit filed by

Gomez.”

¶ 16 Although Pace continued to maintain that Gomez’s claims were excluded from coverage, it

attended the first mediation session, but without authority to negotiate a settlement. Pace

apparently did not attend further mediation sessions.

¶ 17 On January 9, 2014, counsel for Philadelphia emailed counsel for Pace. Counsel for

Philadelphia stated that it had been participating in settlement negotiations and was

considering accepting the mediator’s proposed settlement of $1.5 million. Counsel for

Philadelphia asked Pace to “accept its responsibility and agree to settle this matter on behalf of

Countryside and Mr. Gottardo.” In apparent anticipation that Pace would continue to deny the

claim, counsel further stated that Philadelphia “fully intends to proceed against Pace to recover

any judgment or settlement amount, defense costs incurred, and any other amounts that may be

recoverable.”

¶ 18 At some point thereafter, Philadelphia paid $1.5 million to Gomez on behalf of

Countryside in settlement of her claims. Pace did not contribute to that settlement amount.

¶ 19 On May 30, 2014, Philadelphia filed a four count complaint against Pace seeking recovery

from Pace on the grounds of equitable subrogation, equitable contribution, unjust enrichment,

and “Assignment from Countryside of all rights against Pace.” Pace moved to dismiss

Philadelphia’s complaint pursuant to section 2-619 of the Code, arguing that Pace is a

self-insured municipality—not an insurance carrier—and as a result, the doctrines of equitable

subrogation and equitable contribution did not apply to it. Pace contended that its Risk

Financing Program is publicly funded, and public policy does not support the use of public

funds for tort liability. Pace further argued that even if it was considered an “insurer,” it had no

obligation to contribute anything to settle Gomez’s claim, because “the loss was excluded

under the Pace agreement.” Pace specifically maintained that her damages were “the direct

result of Gottardo’s reckless conduct, and the Pace/Countryside agreement specified that Pace

would not pay for damages due to the reckless conduct of Countryside employees.”

¶ 20 Pace twice amended its motion to dismiss, and in its second amended motion, it attached an

affidavit from Craig Kalck, the insurance manager for Pace. Kalck averred that Pace is

“self-insured for commercial automobile coverage up to $3,000,000 through its Risk

Financing Program,” that “[a]pproximately 70% of the funding for Pace’s Risk Financing

Program is through RTA sales tax funding,” and that “Pace’s Risk Financing Program is not

reinsured.” Kalck further stated that if Pace was required to pay for a portion of the settlement,

“the money will be paid entirely from Pace’s Risk Financing Program. Pace has no insurance

coverage of any kind that will indemnify Pace for payments within the self-insured retention of

$3,000,000.” After briefing and a hearing on Pace’s motion, the circuit court dismissed the

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complaint against Pace, finding that under the Supreme Court’s decision in Antiporek v.

Village of Hillside, 114 Ill. 2d 246 (1986), it was against public policy to require Pace to pay

from public funds, since it is a self-insured governmental entity.

¶ 21 In this appeal, Philadelphia challenges the circuit court’s dismissal of its complaint

pursuant to section 2-619 of the Code. Under section 2-619(a)(9) of the Code, a defendant may

file a motion for dismissal on the grounds “the claim asserted against defendant is barred by

other affirmative matter avoiding the legal effect of or defeating the claim.” 735 ILCS

5/2-619(a)(9) (West 2010). “[A] motion to dismiss under section 2-619(a) of the Code

[citation] admits the legal sufficiency of the complaint ***.” Kean v. Wal-Mart Stores, Inc.,

235 Ill. 2d 351, 361 (2009). When ruling on the section 2-619 motion to dismiss, the trial court

should construe the pleadings “in the light most favorable to the nonmoving party” and “must

accept as true all well-pleaded facts in plaintiff’s complaint and all inferences that may

reasonably be drawn in plaintiff’s favor.” Sandholm v. Kuecker, 2012 IL 111443, ¶ 55.

Exhibits attached to the complaint become part of the complaint and will also be

considered. Abbott v. Amoco Oil Co., 249 Ill. App. 3d 774, 778-79 (1993). Thus, “the trial

court may consider pleadings, depositions, and affidavits.” Zedella v. Gibson, 165 Ill. 2d 181,

185 (1995). “We review an order granting a section 2-619(a)(9) motion de novo, considering

whether the existence of a genuine issue of material fact should have precluded the dismissal

or, absent such an issue of fact, whether dismissal is proper as a matter of law.” Bainter v.

Village of Algonquin, 285 Ill. App. 3d 745, 750 (1996) (citing Kedzie & 103rd Currency

Exchange, Inc. v. Hodge, 156 Ill. 2d 112, 116-17 (1993)). Additionally, because we review the

trial court’s judgment, not its rationale, we may affirm for any reason supported by the record

regardless of the basis cited by the trial court. D’Attomo v. Baumbeck, 2015 IL App (2d)

140865, ¶ 30.

¶ 22 On a motion to dismiss pursuant to section 2-619(a)(9) of the Code, the defendant, as the

movant, “has the burden of proof on the motion, and the concomitant burden of going

forward.” 4 Richard A. Michael, Illinois Practice § 41:8, at 481 (2d ed. 2011). “When a motion

to dismiss is based on facts not apparent from the face of the complaint, the movant must

support its motion with affidavits or other evidence.” City of Springfield v. West Koke Mill

Development Corp., 312 Ill. App. 3d 900, 908 (2000); Kedzie & 103rd Currency Exchange,

Inc. v. Hodge, 156 Ill. 2d 112, 116 (1993); see also Hollingshead v. A.G. Edwards & Sons, Inc.,

396 Ill. App. 3d 1095, 1101-02 (2009) (“By presenting an affidavit supporting the basis for the

motion, the defendant satisfies the initial burden of going forward ***.”). If the defendant can

carry this burden of going forward, “the burden then shifts to the plaintiff, who must establish

that the affirmative defense asserted either is ‘unfounded or requires the resolution of an

essential element of material fact before it is proven.’ ” Epstein v. Chicago Board of

Education, 178 Ill. 2d 370, 383 (1997) (quoting Kedzie & 103rd Currency Exchange, Inc., 156

Ill. 2d at 116). The plaintiff may establish this by presenting “affidavits or other proof.” 735

ILCS 5/2-619(c) (West 2010). The plaintiff’s failure to properly contest the defendant’s

affidavit by submitting a counteraffidavit may be fatal to his cause of action, as the failure to

challenge or contradict supporting affidavits filed with a section 2-619 motion results in an

admission of the fact stated therein. Fayezi v. Illinois Casualty Co., 2016 IL App (1st) 150873,

¶ 44.

¶ 23 In this case, Pace brought its motion to dismiss pursuant to section 2-619 of the Code,

arguing, among other things, that its status as a self-insured municipality prevented

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Philadelphia from bringing its claims. See Smith v. Waukegan Park District, 231 Ill. 2d 111,

121 (2008) (holding that tort immunity is a proper affirmative matter because it completely

negates the plaintiff’s ability to bring the claim). In support of its motion, Pace filed an

affidavit from its insurance manager, which established that Pace was self-insured up to $3

million and did not have any insurance coverage which would indemnify it for payments

within the self-insured retention of $3 million. The trial court agreed that public policy

prevented Philadelphia from bringing its claims and dismissed Philadelphia’s complaint

against Pace.

¶ 24 In this court, Philadelphia does not challenge Pace’s status as a self-insured municipality,

but claims that the court erred in finding that “public policy allows Pace to avoid its contractual

obligations” and dismissing its claim for equitable subrogation. Pace responds that equitable

subrogation cannot be sought from a municipality’s self-insured retention. Pace contends that

it is not an “insurance carrier” that issues a “policy of insurance,” and therefore, equitable

subrogation does not apply. Pace additionally argues that even if the leasing agreement with

Countryside could be considered an insurance policy, it would have no obligation to cover the

claim because the leasing agreement contained an exclusion for reckless conduct.

¶ 25 Equitable subrogation is a remedial device that prevents unjust enrichment. American

Family Mutual Insurance Co. v. Northern Heritage Builders, L.L.C., 404 Ill. App. 3d 584, 588

(2010). An insurer who indemnifies its insured for a loss may be subrogated to the rights of the

insured against the party at fault under the equitable doctrine that the economic burden

“ ‘should be shifted to the party responsible for the loss.’ ” State Farm General Insurance Co.

v. Stewart, 288 Ill. App. 3d 678, 686 (1997) (quoting In re Estate of Ito, 50 Ill. App. 3d 817,

823 (1977)). The purpose of equitable subrogation is grounded in equity to work out an

adjustment between the parties “by securing the ultimate discharge of a debt by the person who

in equity and good conscience ought to pay it.” 16 Steven Plitt, Daniel Maldonado & Joshua D.

Rogers, Couch on Insurance 3d § 222:8, at 222-30 (2005). Subrogation is allowed to prevent

injustice and unjust enrichment but will not be allowed where it would be inequitable to do so.

Dix Mutual Insurance Co. v. LaFramboise, 149 Ill. 2d 314, 319 (1992).

¶ 26 As our supreme court has explained, equitable subrogation and equitable contribution are

distinctly different. Home Insurance Co. v. Cincinnati Insurance Co., 213 Ill. 2d 307, 315-16

(2004). Equitable contribution arising among coinsurers permits one insurer who has paid the

entire loss, or greater than its share of the loss, to be reimbursed from other insurers who are

also liable for the same loss. Id. at 316. Subrogation, by contrast, places the entire burden for a

loss on the party ultimately liable or responsible for it and by whom it should have been

discharged. Id.

¶ 27 To establish a right to equitable subrogation, Philadelphia bears the burden to establish the

following: (1) that the defendant is primarily liable to the insured for a loss under a policy of

insurance; (2) that the plaintiff is secondarily liable to the insured for the same loss under its

policy; and (3) the plaintiff discharged its liability to the insured and at the same time

extinguished the liability of the defendant. Chicago Hospital Risk Pooling Program v. Illinois

State Medical Inter-Insurance Exchange, 397 Ill. App. 3d 512, 525 (2010) (citing Home

Insurance Co., 213 Ill. 2d at 316-17).

¶ 28 Pace relies on the following cases to argue that equitable subrogation cannot be sought

from a municipality’s self-insured retention and that public policy dictates that self-insured

municipalities should not be “treated like commercial insurers”: Antiporek v. Village of

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Hillside, 114 Ill. 2d 246, 250 (1986); State Farm Automobile Insurance Co. v. Du Page

County, 2011 IL App (2d) 100580, ¶ 49; Aetna Casualty & Surety Co. of Illinois v. James J.

Benes & Associates, Inc., 229 Ill. App. 3d 413 (1992); and Yaccino v. State Farm Mutual

Automobile Insurance Co., 346 Ill. App. 3d 431, 440 (2004).

¶ 29 In Antiporek, 114 Ill. 2d at 248, our supreme court considered a case in which a child was

injured while sledding on the Village of Hillside’s property, and the child’s mother brought

suit against the village for the child’s injuries. When the plaintiff filed her complaint, the Local

Governmental and Governmental Employees Tort Immunity Act granted certain immunities to

local public entities but such immunities were waived if an entity was protected by a “policy of

insurance” issued by an insurance “company” (Ill. Rev. Stat. 1983, ch. 85, ¶ 9-103(c)).

Antiporek, 114 Ill. 2d at 247. The village participated in a risk pooling association, and the

plaintiff argued that such participation operated to waive those immunities. The trial court

entered judgment for the plaintiff, rejecting the village’s immunity defense. The appellate

court reversed, and the supreme court affirmed the appellate court, finding that the Village’s

pooled self-insurance was “tantamount” to self-insurance, not commercial insurance, and thus,

did not waive the Village’s tort immunity. Id. at 250-52.

¶ 30 The court, explaining the purpose behind the immunity waiver rule, stated that, in the case

of commercial insurance, “the immunity is waived since government funds are no longer in

jeopardy and immunity would inure to the benefit of private investors who have assumed the

risk of insurers.” Id. at 250. However, “when a municipality self-insures, it bears all risks itself,

and settlements or awards are paid directly from government coffers.” Id.

¶ 31 Likewise, in State Farm Automobile Insurance Co., 2011 IL App (2d) 100580, ¶¶ 4-8, a

Du Page County employee was involved in a car accident while driving a county-owned

vehicle. The employee was killed, and the other driver sued the county and the employee’s

estate for her injuries. Id. ¶ 6. State Farm, who insured the employee settled with the other

driver for $400,000, then sought subrogation from the county. Id. ¶¶ 17-20. The court found

that State Farm was not entitled to equitable subrogation because the county was a self-insured

municipality and not an insurer or insurance company that provided insurance coverage. Id.

¶ 40. It thus found the first requirement of equitable subrogation to be lacking, specifically that

“the defendant must be a carrier that is primarily liable to the insured for a loss under a policy

of insurance.” (Emphasis in original.) Id. See also Aetna Casualty & Surety Co. of Illinois, 229

Ill. App. 3d at 421-22 (holding that the Village of Clarendon Hill’s pooled self-insurance “is

not and ought not to be treated as a private insurance carrier,” and thus had no obligation to

contribute to a claim paid by Aetna); Yaccino, 346 Ill. App. 3d at 440 (holding that the City of

West Chicago’s self-insurance was not an “insurer,” and, accordingly, a clause in a State Farm

insurance policy which provided that its coverage was excess where there was “other

coverage” available from “any other insurer” did not apply).

¶ 32 The cases described above represent the common understanding of what constitutes

“insurance” versus “self-insurance.” The term “insurance,” or an “insurance contract,”

generally refers to a policy issued by an authorized and licensed insurance company whose

primary business is to assume certain risks of loss of its insureds, in exchange for the payment

of a “premium.” “Self-insurance,” by contrast, is defined as “ ‘the retention of the risk of loss

by the one upon whom it is directly imposed by law or contract.’ ” Fellhauer v. Alhorn, 361 Ill.

App. 3d 792, 796 (2005) (quoting American Nurses Ass’n v. Passaic General Hospital, 471

A.2d 66, 69 (N.J. Super. Ct. App. Div. 1984)). Unlike an insurance policy holder, a

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self-insuring municipality “ ‘bears all risks itself, and settlements or awards are paid directly

from government coffers.’ ” State Farm Mutual Automobile Insurance Co., 2011 IL App (2d)

100580, ¶ 37 (quoting Antiporek, 114 Ill. 2d at 250).

¶ 33 Although we agree with the public policy outlined in the cases cited by Pace and would be

hesitant to characterize Pace as an insurance company, we ultimately conclude that we need

not reach the issue of whether public policy overrides the contractual promises to insure that

Pace made in the lease agreement or whether Pace can be treated as an insurer issuing a policy

of insurance. As stated above, this court can affirm the trial court’s judgment for any reason

supported by the record. Because we find the Pace provision excluding reckless conduct

dispositive of this appeal, we will turn to an analysis of that issue. In so holding, we note that

Philadelphia relies solely on Illinois Municipal League Risk Management Ass’n v. State Farm

Fire & Casualty Co., 2016 IL App (1st) 143336, to support its position that the public policy

outlined in the above cases does not apply. However, because we are not deciding this case on

that basis and because that case contains no exclusion similar to the one found here, we need

not discuss it further.

¶ 34 Assuming that the leasing agreement between Pace and Countryside provides insurance

coverage, that leasing agreement provides that Pace shall provide coverage for claims of

“bodily injury, death, or property damage arising directly out of the provision of

Transportation Services provided with Pace vehicles as described in this agreement” except

that “ any claims, actions, damages arising as the result of *** reckless *** conduct of

[Countryside], [or] its *** employees” are excluded from coverage.

¶ 35 The facts of the underlying claim against Countryside, which can be found in the record

and which were never disputed by Philadelphia, indicate that Gottardo transported Gomez to

the Countryside facility in a Pace vehicle and left her in the vehicle for five hours on a

90-degree day. Before leaving, Gottardo indicated that he had checked the van and that it was

empty and informed other Countryside employees that Gomez was a “no-show.” When

Gottardo came back later that afternoon, he saw Gomez in the back of the van but did not check

on her, call for medical assistance, or tell anyone that he had abandoned her in the van all day.

Based on the above facts, Gottardo was charged with, and pleaded guilty to, reckless conduct.

¶ 36 Pace contends that because Gottardo pleaded guilty to felony reckless conduct,

Philadelphia should be collaterally estopped from arguing that his conduct was anything less

than reckless. Philadelphia disagrees and argues that because Gottardo entered a negotiated

plea of guilty, collateral estoppel should not apply. See Talarico v. Dunlap, 177 Ill. 2d 185, 195

(1997) (“Ordinarily, when a fact has been admitted by a litigant, it is reasonable to presume

that the fact is established and that the fact should not be subject to relitigation. We do not

believe, however, that the same may be said in every case of a negotiated guilty plea.”).

¶ 37 However, even without resorting to the doctrine of collateral estoppel, we find no question

of material fact regarding whether Gomez’s injuries were caused by the reckless actions of

Gottardo, a Countryside employee. The term “reckless” has a particular legal meaning, and is

defined in our Criminal Code as follows:

“A person is reckless or acts recklessly when that person consciously disregards a

substantial and unjustifiable risk that circumstances exist or that a result will follow,

described by the statute defining the offense, and that disregard constitutes a gross

deviation from the standard of care that a reasonable person would exercise in the

situation. An act performed recklessly is performed wantonly, within the meaning of a

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statute using the term ‘wantonly’, unless the statute clearly requires another meaning.”

720 ILCS 5/4-6 (West 2012).

¶ 38 Similarly, in the civil context, both the legislature and the supreme court have defined

reckless/willful and wanton conduct as conduct committed with “utter indifference” to or

“conscious disregard” for the safety of others. Kirwan v. Lincolnshire-Riverwoods Fire

Protection District, 349 Ill. App. 3d 150, 155 (2004) (citing 745 ILCS 10/1-210 (West 2002),

and Pfister v. Shusta, 167 Ill. 2d 417, 421 (1995)).

¶ 39 The facts of the underlying incident described above can lead only to the conclusion that

Gottardo behaved with “utter indifference” to or “conscious disregard” for “a substantial and

unjustifiable risk” of harm to Gomez, when he left her in a van for five hours on a 90-degree

day, and failed to check on her well-being or seek medical care upon later discovering her in

the van. There is no question that such conduct constituted a “gross deviation from the standard

of care that a reasonable person would exercise in the situation.” Accordingly, Gottardo acted

recklessly, which excludes the resulting claims from coverage under the leasing agreement.

Philadelphia never challenged the account provided in the record or provided any facts

contradicting that account or that would otherwise tend to show that Gottardo’s conduct could

be found to be anything less than reckless.

¶ 40 Because the claim at issue would be excluded under the agreement, equitable subrogation

could not apply. Thus, even assuming Pace was providing an insurance policy, we could not

say that Pace would be the insurance carrier who was “primarily liable to the insured for [the]

loss,” since it was explicitly excluded under the leasing agreement. Chicago Hospital Risk

Pooling Program, 397 Ill. App. 3d at 525.

¶ 41 Philadelphia disagrees and contends that the reckless conduct exclusion in the Pace leasing

agreement does not apply. It initially “submits” that an exclusion based on reckless conduct is

“void and unenforceable as a matter of Illinois public policy” because “the public policy of

Illinois for automobile liability coverage has always been focused toward protecting people.”

Philadelphia cites no authority in support of this “public policy” argument, and we find that

Philadelphia has waived consideration of it in this appeal. Ill. S. Ct. R. 341(h)(7) (eff. Feb. 6,

2013); Pepper Construction Co. v. Palmolive Tower Condominiums, LLC, 2016 IL App (1st)

142754, ¶ 98.

¶ 42 Philadelphia additionally argues that Gomez’s draft complaint contains allegations of

negligence, which Philadelphia claims causes the loss at issue to be covered under the leasing

agreement. In support, Philadelphia cites case law regarding an insurer’s “duty to

defend”—that “if several theories of recovery are alleged in the underlying complaint against

the insured, the insurer’s duty to defend arises even if only one of several theories is within the

potential coverage of the policy.” General Agents Insurance Co. of America, Inc. v. Midwest

Sporting Goods Co., 215 Ill. 2d 146, 155 (2005). However, even assuming that the leasing

agreement provided insurance coverage, an insurer’s duty to defend only arises when a lawsuit

is filed. The question of whether an insurer has a duty to defend its insured against a lawsuit is

answered by comparing the allegations of that suit, liberally construed in favor of the insured,

with the language of the insurance policy. Fremont Casualty Insurance Co. v. Ace-Chicago

Great Dane Corp., 317 Ill. App. 3d 67, 73 (2000) (citing Outboard Marine Corp. v. Liberty

Mutual Insurance Co., 154 Ill. 2d 90, 125 (1992)). Here, Philadelphia chose to settle Gomez’s

claim before a complaint was ever filed. In such circumstances, the duty to defend was never

triggered. Id.

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¶ 43 Moreover, Philadelphia’s argument regarding claims of negligence also fails for another

reason. As described previously, equitable subrogation is a device used to place the entire

burden for a loss on the party ultimately liable or responsible for it and by whom it should have

been discharged. Home Insurance Co., 213 Ill. 2d at 316. Because we have found that Gomez’s

claims arose out of the reckless conduct of Gottardo, Philadelphia cannot simply point to

various other claims of negligence to contend that Pace should be responsible for paying for

those claims under equitable subrogation. Equitable subrogation is different from equitable

contribution, under which a court may apportion a loss between multiple insurers so that each

pays their equitable share. Id. We thus conclude that the circuit court properly dismissed

Philadelphia’s equitable subrogation claim.

¶ 44 Philadelphia next argues that the circuit court erred in finding that it is not entitled to

equitable contribution from Pace. Philadelphia pleaded this claim as an alternative to its

equitable subrogation claim, in the event that the trial court found that Pace and Philadelphia

shared responsibility for the claims equally. “The doctrine of equitable contribution permits an

insurer that has paid the entire loss to be reimbursed by other insurers that are also liable for the

loss.” Liberty Mutual Insurance Co. v. Westfield Insurance Co., 301 Ill. App. 3d 49, 52 (1998).

The doctrine of equitable contribution “arises from a right which is independent from the rights

of the insured, to recover from a co-obligor who shares the same liability as the party seeking

contribution.” Argonaut Insurance Co. v. Safway Steel Products, Inc., 355 Ill. App. 3d 1, 10-11

(2004). The doctrine may arise where the insurance policies at issue “cover a risk on the same

basis and there is an identity between the policies as to parties and insurable interests and

risks.” Home Indemnity Co. v. General Accident Insurance Co. of America, 213 Ill. App. 3d

319, 321 (1991). In order for an insurer to recover under a theory of equitable contribution, the

insurer seeking contribution must prove (1) all facts necessary to the claimant’s recovery

against the insured, (2) the reasonableness of the amount paid to the insured, and (3) an identity

between the policies as to parties and insurable interests and risks. Schal Bovis, Inc. v. Casualty

Insurance Co., 315 Ill. App. 3d 353, 362 (2000) (citing Royal Globe Insurance Co. v. Aetna

Insurance Co., 82 Ill. App. 3d 1003, 1005 (1980)).

¶ 45 Philadelphia relies on essentially the same reasoning to argue that the trial court erred in

concluding that equitable contribution did not apply to Pace, as a self-insured municipality.

However, as we have previously found that the loss at issue was not covered under the leasing

agreement, Philadelphia is unable to succeed on a claim of equitable contribution.

¶ 46 Moreover, Philadelphia’s equitable contribution claim also fails because the leasing

agreement does not cover the same risks as the Philadelphia policy. Equitable contribution

applies to multiple, concurrent insurance situations and is only available where the concurrent

policies insure the same entities, the same interests, and the same risks. Home Insurance Co.,

213 Ill. 2d at 316. These elements must be met before the insurance can be considered

concurrent or double; accordingly, there can be no claim of equitable contribution when two

insurers cover separate and distinct risks. Id.

¶ 47 In this case, even if we were to consider the leasing agreement a policy of insurance, the

leasing agreement applies only to claims “arising directly out of the provision of

Transportation Services provided with Pace vehicles” and specifically excludes damages

“arising” from the “reckless *** conduct *** of” Countryside or its employees. The

Philadelphia policy, by contrast, provides coverage for “covered autos”—including owned,

hired, and non-owned autos—and does not contain an equivalent exclusion. Accordingly, the

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policies are not “concurrent” because they do not insure the same risks, and Philadelphia’s

claim of equitable contribution must fail.

¶ 48 Philadelphia next argues that the court erred in dismissing its unjust enrichment claim.

Pace responds that Philadelphia’s claim fails because its payment of the Gomez settlement was

“not a benefit to Pace” since Pace, as a self-insured municipality, “had no duty to pay the

settlement from public funds.”

¶ 49 To state an action for unjust enrichment, “a plaintiff must allege that the defendant has

unjustly retained a benefit to the plaintiff’s detriment, and that defendant’s retention of the

benefit violates the fundamental principles of justice, equity, and good conscience.” HPI

Health Care Services, Inc. v. Mt. Vernon Hospital, Inc., 131 Ill. 2d 145, 160 (1989). For a

cause of action based on a theory of unjust enrichment to exist, there must be an independent

basis that establishes a duty on the part of the defendant to act and the defendant must have

failed to abide by that duty. Martis v. Grinnell Mutual Reinsurance Co., 388 Ill. App. 3d 1017,

1025 (2009) (citing Lewis v. Lead Industries Ass’n, 342 Ill. App. 3d 95, 105 (2003)).

¶ 50 As we have previously found that Pace had no obligation to contribute to the Gomez

settlement, Philadelphia cannot establish that Pace has unjustly retained a benefit. Similarly,

there is no question that the claim was covered under the Philadelphia policy or that its

insureds (Countryside, and specifically, Gottardo as a Countryside employee) were

responsible for the acts that caused Gomez’s injuries. As a result, Philadelphia cannot prove

that paying the Gomez claim was a detriment to it. Finally, Philadelphia cannot establish that

not requiring Pace to contribute to the claim violates the fundamental principles of justice,

equity, and good conscience, in light of the public policy considerations described above.

Accordingly, Philadelphia’s unjust enrichment claim necessarily fails.

¶ 51 Finally, Philadelphia claims that it is entitled to reimbursement for Pace pursuant to an

assignment of Countryside’s rights. We initially note that Philadelphia’s argument on this

point is one sentence long, contains no citation of authority, and merely states that Pace

challenged this claim based on the use of public funds and that the claim was excluded under

their policy. Accordingly, we find that Philadelphia has waived consideration of this argument.

Ill. S. Ct. R. 341(h)(7) (eff. Feb. 6, 2013); Pepper Construction Co., 2016 IL App (1st) 142754,

¶ 98.

¶ 52 Nonetheless, even if we were to address Philadelphia’s claim, we would conclude that it

fails. Assuming a valid assignment, Philadelphia can only have the rights, claims, and causes

of action that Countryside may have against Pace related to the Gomez settlement. See

Cameron v. Illinois Steel Co., 162 Ill. App. 461, 465 (1911) (“Of course, if there was no cause

of action, Cameron could acquire nothing by the assignment to him.”). Because the previously

discussed claims are not meritorious and because the leasing agreement excludes the Gomez

settlement, Countryside would not be able to recover against Pace. Accordingly, Philadelphia

cannot maintain an action pursuant to an assignment from Countryside.

¶ 53 For the foregoing reasons, the judgment of the circuit court of Cook County is affirmed.

¶ 54 Affirmed.

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