Wausau Insurance v. All Chicagoland Moving & Storage Co.
333 Ill. App. 3d 1116, 777 N.E.2d 1062, 268 Ill. Dec. 139 (2002)
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Rule of Law:
When a bailor establishes a prima facie case of bailment by showing property was delivered in good condition and returned damaged, a rebuttable presumption of negligence arises against the bailee, which, if unrebutted, is sufficient to grant summary judgment on liability.
Facts:
- The McCrone Group, Inc. (McCrone) decided to replace an electron microscope and arranged for its manufacturer, JEOL, to handle its resale.
- JEOL contacted McDonald Moving & Storage, which in turn retained All Chicagoland Moving & Storage Company (Chicagoland) to retrieve the microscope from McCrone's facility.
- On June 26, 1997, Chicagoland was hired to transport the microscope to its warehouse and store it until further notice.
- On June 30, 1997, an independent contractor for Chicagoland transported the microscope to the warehouse without incident.
- A few days later, while repackaging the microscope inside the warehouse, Chicagoland's warehouse manager dropped and damaged it.
- Prior to the incident, McCrone had purchased an insurance policy covering the microscope from Wausau Insurance Company (Wausau).
- After the damage occurred, Wausau paid McCrone $90,250 on its insurance claim for the microscope.
Procedural Posture:
- Wausau Insurance Company (Wausau) filed a subrogation action against All Chicagoland Moving & Storage Company (Chicagoland) in a state trial court.
- Wausau's amended complaint alleged negligence and breach of a bailment agreement.
- The trial court barred several of Chicagoland's discovery requests concerning the issue of damages.
- The trial court granted summary judgment in favor of Wausau on its claim.
- The trial court awarded Wausau $90,500 in damages.
- Chicagoland, as the appellant, appealed the trial court's summary judgment order and damages award to the intermediate appellate court.
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Issue:
Does a bailee's admission that property was in 'apparent good order' upon receipt, combined with the undisputed fact it was damaged while in the bailee's possession, establish a prima facie case of bailment and create an unrebutted presumption of negligence sufficient for summary judgment on liability?
Opinions:
Majority - Justice Byrne
Yes. A bailee's admission that property was in apparent good order upon receipt and was subsequently damaged while in its care establishes a prima facie case of bailment, creating a presumption of negligence that supports summary judgment if the bailee fails to present evidence to rebut it. The court found that Wausau established all four elements of bailment: (1) an agreement existed, (2) the microscope was delivered in good condition, as Chicagoland admitted in its pleadings it was in 'apparent good order', (3) Chicagoland accepted the property, and (4) it was damaged before being returned. This created a presumption of negligence. Chicagoland failed to rebut this presumption, as its employee's affidavit merely offered conclusory statements about industry customs and admitted he failed to follow the manufacturer's moving instructions. The court also rejected Chicagoland's arguments that an insurance policy exclusion for 'stock' applied or that a liability limitation in the bill of lading controlled, finding the microscope was equipment, not stock, and that the damage occurred during a separate storage agreement, not during transit under the bill of lading. However, the court reversed the damages award, finding it was based on affidavits lacking personal knowledge, which is inadmissible hearsay, and remanded for a proper determination of damages.
Analysis:
This case solidifies the power of the bailment presumption in summary judgment proceedings, demonstrating that a plaintiff can win on liability without a trial if the defendant cannot produce concrete evidence to rebut the presumption of negligence. It highlights the critical role of judicial admissions in pleadings, which can prevent a party from later contradicting facts essential to the opposing party's case. The decision also provides a clear distinction between contracts for carriage (a bill of lading) and subsequent contracts for storage, clarifying that liability limitations in one may not extend to the other. Finally, it reinforces the strict evidentiary requirement under Rule 191(a) that affidavits supporting summary judgment must be based on personal knowledge, particularly when establishing the value of damaged property.
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