Jimenez et al v. Kiefer et al

Filing 43

MEMORANDUM Opinion and Order signed by the Honorable Elaine E. Bucklo on 1/18/2023. Mailed notice. (mgh, )

Case: 1:22-cv-02924 Document #: 43 Filed: 01/18/23 Page 1 of 17 PageID #:626

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
Maria Jimenez and Jose
Jimenez,
Plaintiffs,

v.
Stephen Kiefer,
Defendant
and
Travelers Commercial
Insurance Company,
Citation Respondent.

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No. 22 C 2924

Memorandum Opinion and Order
This action originated in the Circuit Court of Cook County,
where

plaintiffs

Maria

and

Jose

Jimenez

served

Travelers

Commercial Insurance Company with a Citation to Discover Assets to
Third Party pursuant to 735 ILCS 5/2-1402. The assets in question
related

to

a

Consent

Judgment

plaintiffs

obtained

against

Travelers’ insured, Stephen Kiefer, and potential claims Kiefer
may have against Travelers arising out of its handling of the law
suit that culminated in that judgment. Before me is Travelers’
motion for summary judgment, which seeks dismissal of the citation

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with prejudice. In addition, Travelers seeks a determination that
it possesses no assets or property belonging to Kiefer that can be
used

to

satisfy

plaintiffs’

judgment

against

him,

and

that

plaintiffs, as Kiefer’s assignees, have neither a right to enforce
the judgment against Travelers, nor any rights or claims against
it under § 155 of the Illinois Insurance Code. For the reasons
that follow, the motion is granted.
I.
The following facts are undisputed unless otherwise noted. In
the underlying state lawsuit, Maria Jimenez and Jose Jimenez v.
Stephen

Kiefer

Case

No.

21

L

002676

(the

“Jimenez

case”),

plaintiffs sued Kiefer for personal injury and loss of consortium
after the vehicle Kiefer was driving struck a Pace bus in which
Maria was a passenger. At the time of the accident, Kiefer was
insured under a policy issued by Travelers, which limited liability
for bodily injury to $100,000 per person.
Upon receiving notice that plaintiffs were represented by an
attorney, Travelers’ claims professional, Dan Vogley, contacted
their attorney seeking Maria’s medical bills and records, wage
loss information, and other materials needed to investigate the
nature and extent of Maria’s alleged injuries.1

In addition,

For ease of reference, I generally describe the correspondence
between
Travelers’
agents
and
plaintiffs’
attorney
as
communication between “Travelers” (or one of its agents) and
“plaintiffs.” In each instance, however, it is plaintiffs’
1

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Travelers provided plaintiffs with forms seeking disclosure of
Maria’s medical providers and authorization to release her medical
records. The following day, plaintiffs told Mr. Vogley that as a
result of the accident, Maria had “shoulder issues,” specifically,
that she had sustained a tear of the supraspinatus and had incurred
medical bills of $15,194. Plaintiffs substantiated this assertion
with medical records that included findings from an MRI of Maria’s
right shoulder and medicals bills for her hospital treatment on
the day of the accident; radiology services rendered during July
of 2020; the MRI procedure performed August 3, 2020, and physical
therapy treatments during August and September of 2020.
Plaintiffs

sought

disclosure

of

the

limits

of

Kiefer’s

liability under Travelers’ insurance policy and learned that it
had a $100,000 “per person” limit. On January 12, 2021, plaintiffs
sent Mr. Vogley a non-negotiable settlement demand for the $100,000
policy limit, stating that the demand would expire on March 12,
2021 at 5:00 p.m., and that “any counter for less than the policy
limits will be considered a rejection of this demand.” Def.’s L.R.
56.1 Stmt., ECF 28, at ¶ 15. Plaintiffs suggested that the medical
bills and records they provided to Travelers substantiated their

attorney, Peter Bustamonte, who communicated with Travelers on
plaintiffs’ behalf, and who continues to represent plaintiffs in
these proceedings.
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demand, describing the findings of the August 3, 2020, MRI study
of Maria’s shoulder as follows:
Maria Jimenez has (1) a 3 mm full thickness, partial
width tear of the supraspinatus tendon at the anterior
edge, (2) a partial thickness articular sided tear at
the critical zone involving approximately 50% of the
tendon thickness, (3) a 4 mm full thickness partial width
tear at the critical zone, (4) there is sever underlying
supraspinatus
tendinosis,
(5)
there
is
severe
infraspinatus
tendinosis
with
high-grade
partial
thickness (50-75% of thickness) articular sided tearing
at the critical zone measuring 3 mm, (6) severe
subscapularis tendinosis is noted without fluid-filled
tear.
Vogley Decl., Def.’s L.R. 56.1 Stmt., Exh. 1, ECF 28-1, at 18.
Travelers asked whether plaintiffs intended to provide additional
medical support for their $100,000 demand, indicating that the
materials presented to date reflected only about $15,000 in medical
expenses. Plaintiffs responded that Maria was beginning a new round
of physical therapy, and that their demand reflected the value of
her injuries, rather than her bills or treatment. Mr. Vogley
indicated that he was not convinced her injuries were caused by
the accident and requested five years of Maria’s previous medical
records as well as the films from her MRI study for review by
another radiologist. Plaintiffs stated that they would not provide
these materials prior to the March 12, 2021, expiration of their
$100,000 demand.
Travelers and plaintiffs continued to communicate during the
month of February. Travelers acknowledged Kiefer’s liability but

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reiterated that additional medical information was necessary to
“evaluate

the

case

properly”

and

to

assess

Maria’s

claimed

injuries. Plaintiffs refused to provide additional information or
to accept any amount less than the $100,000 policy limit to resolve
their claims. Plaintiffs also provided a “courtesy copy” of the
complaint they intended to file against Kiefer in state court.
Travelers did not offer to settle for the policy limit prior
to the expiration of plaintiffs’ demand. According to Mr. Vogley,
plaintiffs’ refusal to provide additional medical records:
precluded evaluation of whether her alleged injuries
were caused by the accident, whether they were actually
conditions that pre-existed the accident and/or whether
the accident aggravated those conditions and, if so, to
what degree. ... Ms. Jimenez’s medical records and bills
that were provided to me reflected that she was afflicted
with significant pre-existing conditions in her shoulder
and had undergone only limited, non-invasive medical
treatment as an alleged consequence of the accident. The
claim file materials reflected that, at the time of the
accident, she was traveling as a passenger on a bus that
sustained little or no physical damage and further
reflected that the accident caused only moderate damage
to the Volvo. Based on these considerations, I did not
believe her claim had a value approaching, let alone
exceeding, $100,000 and questioned whether she had
actually been injured in the accident and, if so, to
what degree. My suspicion that the claimed injury was
not caused by the accident, in whole or in part, was
heightened by [plaintiffs’] refusal to provide the
additional information that I had requested.
Vogley Decl., ECF 28-1 at 35.2

In response to Travelers’ factual statements grounded in this
portion of Mr. Vogley’s declaration, plaintiffs broadly “deny as
to what Vogley believes” and “deny that non-visible (sic) property
damage is indicative of a person’s injuries” but do not otherwise
2

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On March 15, 2021, plaintiffs sued Kiefer in the Circuit Court
of Cook County, seeking damages for injuries Maria allegedly
sustained

in

the

accident

and

for

Jose’s

alleged

loss

of

consortium. Travelers appointed attorneys to defend Kiefer at its
sole expense without a reservation of rights. In May of 2021,
Kiefer’s claim file was reassigned to another claims professional,
Michael Maystadt, who contacted plaintiffs to inform them of the
reassignment and to request any additional medical records they
may have concerning their claim. Upon learning that Maria expected
to undergo additional shoulder surgery, Mr. Maystadt requested
“records/surgical

recommendation

from

ortho

once

you

receive

them.” Def.’s L.R. 56.1 Stmt., ¶ 50.
In August of 2021, plaintiffs provided an operative report
reflecting Maria’s arthroscopic surgery on August 13, 2021. Id. at
¶ 51. Mr. Maystadt considered this surgery to be a material change
in the circumstances of Maria’s claim that warranted reevaluation
for settlement purposes. Maystadt Decl., Def.’s L.R. 56.1 Stmt.,
Exh. 3, ECF 28-3 at ¶ 15. Plaintiffs did not provide medical bills
for the August 2021, surgery, so Mr. Maystadt “estimated the costs
associated with the surgery, including the facility fee, the fees
of the surgeon and anesthesiologist, and the cost of post-surgical
physical

therapy,

at

$75,000.”

Id.

at

¶ 16.

Based

on

this

dispute the facts asserted or point to evidence in the record to
controvert them.
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assessment, Travelers concluded that there was the possibility of
a judgment against Kiefer in excess of the $100,000 policy limit
and authorized Kiefer’s defense counsel to offer plaintiffs the
$100,000 policy limit in exchange for a full and complete release
of Kiefer. Def.’s L.R. 56.1 Stmt., ECF 28 at ¶ 57. Plaintiffs
refused the offer by email of October 8, 2021. Id. at ¶ 61.
Four days later, plaintiffs sent Kiefer’s defense attorney a
proposed “Stipulation, Order and Assignment and Covenant Not to
Execute”

(the

“Stipulation”),

pursuant

to

which

Kiefer

would

consent to entry of a $600,000 judgment against himself and assign
his rights against Travelers to the Plaintiffs. In exchange,
plaintiffs would covenant not to execute the judgment against him
personally but would seek to enforce it instead against Travelers.
Kiefer notified Travelers of his intent to agree to the Stipulation
and

signed

it

without

objection

from

Travelers.

The

Consent

Judgment was entered shortly thereafter.
These proceedings followed. Plaintiffs issued the Third Party
Citation under 735 ILCS 5/2-1402, which authorizes a judgment
creditor

“to

prosecute

citations

to

discover

assets

for

the

purposes of examining the judgment debtor or any other person to
discover assets or income of the debtor not exempt from the
enforcement of the judgment.” The Third Party Citation included
interrogatories seeking information about any assets of Kiefer’s
held

by

Travelers

and

was

accompanied
7

by

a

request

for

the

Case: 1:22-cv-02924 Document #: 43 Filed: 01/18/23 Page 8 of 17 PageID #:633

production of documents concerning the policy Travelers issued to
Kiefer

and

its

handling

of

plaintiffs’

claim.

See

ECF

2-1.

Travelers removed the proceedings to this court, and I denied
plaintiffs’ motion to remand, concluding that the parties’ dispute
satisfied the jurisdictional requirements of 28 U.S.C. § 1332 and
was

statutorily

eligible

for

removal

because

it

presents

a

controversy separate and independent from the underlying case.
Jimenez v. Kiefer, ---F. Supp. 3d.---, No. 22 C 2924, 2022 WL
3586151, at *1 (N.D. Ill. Aug. 22, 2022) (“Kiefer”). Shortly
thereafter, Travelers filed the summary judgment motion now before
me.
II.
Rule 69 of the Federal Rules of Civil Procedure “governs
collection proceedings in the federal courts and adopts whatever
procedures are followed by the state courts in which the collection
is sought, ... unless there is an applicable federal statute
expressly regulating the execution of judgments.” Star Ins. Co. v.
Risk Mktg. Grp. Inc., 561 F.3d 656, 661 (7th Cir. 2009) (citation
omitted). As no federal statute applies here, I look to Section 2–
1402(a) of the Illinois Code of Civil Procedure and Illinois
Supreme Court Rule 277(a), which allow a judgment creditor to bring
a supplemental proceeding against any party to “(a) question that
party under oath about the whereabouts of assets that can be used
to

satisfy

the

judgment,

and

(b)
8

compel

application

of

any

Case: 1:22-cv-02924 Document #: 43 Filed: 01/18/23 Page 9 of 17 PageID #:634

discovered assets towards satisfaction of the judgment.” Bank of
Montreal v. SK Foods, LLC, No. 09 C 3479, 2011 WL 4578357, at *2
(N.D. Ill. Sept. 30, 2011). Although Fed. R. Civ. P. 56 does not
technically

apply

to

such

proceedings,

summary

judgment

is

appropriate where the Rule’s requirements—and due process—are
satisfied. Resolution Trust Corp. v. Ruggiero, 994 F.2d 1221, 1227
(7th Cir. 1993).
Travelers argues that is entitled to summary judgment of no
liability because undisputed evidence establishes that it fully
discharged its duties to Kiefer as its insured. Accordingly,
Travelers contends, its liability to plaintiffs for the consent
judgment can be no greater than Kiefer’s own liability, which is
zero pursuant to the Stipulation. Additionally, Travelers argues
that summary judgment is warranted for the independent reason that
the “no action” provision in Kiefer’s policy bars recovery of a
settlement or judgment against Travelers unless: 1) Travelers
agrees in writing to the settlement; or 2) the insured’s liability
was

“determined

by

judgment

after

trial,”

neither

of

which

contingencies occurred here.
Plaintiffs devote much of their response to arguing that the
issues Travelers asks me to resolve are not properly before me on
the Third Party Citation, which facially seeks only to discover
assets

of

Kiefer’s

held

by

Travelers,

not

a

turnover

order

directing Travelers to convey to them any such assets. There is no
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merit to this argument. Under Illinois law, rights under an
insurance policy may be adjudicated in citation proceedings, and
“the citation defendant may litigate any proper defense to recovery
under the policy.” Second New Haven Bank v. Kobrite, Inc., 408
N.E.2d 369, 370 (Ill. App. 1980). I previously rejected plaintiffs’
argument that the Third Party Citation and Certified Answer are
insufficient grounds on which to litigate the issue of Travelers’
liability to plaintiffs as Kiefer’s assignees. See Kiefer, 2022 WL
3586151,

at

*3-*4

(observing

that

“Illinois

law

expressly

contemplates that an insurer and third-party citation respondent
may litigate any proper defense to recovery under the policy in
the context of citation proceedings” and noting that plaintiffs’
argument “ignore[d] the reality of who the parties are, what
plaintiffs are seeking in these proceedings, and the history of
their prior dealings.”) (cleaned up). Nothing in plaintiffs’ most
recent

submissions

persuades

me

that

the

parties’

respective

rights and obligations, if any, under the insurance policy and the
Consent Judgment cannot be resolved on these pleadings.
Nor is there merit to plaintiffs’ argument that summary
judgment is premature on the present record. “Proceedings to
enforce judgments are meant to be swift, cheap, informal,” and the
procedural rules governing them give judges substantial latitude
to resolve them in any way that satisfies the requirements of due
process. Ruggiero, 994 F.2d at 1226-27. In Ruggiero, the Seventh
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Circuit concluded that the lower court’s summary disposition,
without a trial or evidentiary hearing, of a third party’s claim
to a judgment debtor’s assets satisfied both due process and Fed.
Rule Civ. P. 56. The court observed that the third-party petition
requested specific relief and was supported by uncontroverted
evidentiary

materials

to

which

the

judgment

debtor

had

an

opportunity to respond; nothing further was required. Id. at 1227.
These proceedings present a similar scenario, and summary judgment
is appropriate for similar reasons.
In the Certified Answer Travelers filed on July 1, 2022,
Travelers spelled out the nature of its defenses to any claims
plaintiffs

might

seek

to

assert

as

Kiefer’s

assignees

and

explicitly put plaintiffs on notice of its intent to “promptly
move for entry of summary judgment in its favor.” Cert. Ans., ECF
13 at 4.3 Travelers later provided affidavits of each of the claims

The Certified Answer states: “Travelers fully defended Stephen
in the Plaintiffs’ lawsuit, at Travelers (sic) sole cost, without
any reservation of its rights raised at any time. As of the date
of this answer, Stephen is entitled to no proceeds under the
Travelers policy because the Plaintiffs’ suit against Stephen was
dismissed with prejudice and the Plaintiffs provided Stephen with
a covenant not to execute the Consent Judgment entered in their
suit against him personally. Therefore he is not legally
responsible for their alleged damages as stated in the Consent
Judgment. Travelers has fully discharged all of its duties owed to
Stephen under the Travelers policy with respect to the Plaintiffs’
suit and owes him nothing further in regard to the suit or the
Consent Judgment. Plaintiffs, as Stephen’s assignees, are entitled
to no greater rights under the Travelers policy than is Stephen
and therefore Plaintiffs have no right to enforce the Consent
3

11

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professionals

assigned

to

plaintiffs’

claim,

accompanied

by

records reflecting their communications with plaintiffs, Kiefer,
and defense counsel both before and during litigation of the
underlying case. Plaintiffs apparently did not seek to depose any
of these witnesses in the instant proceedings, despite their clear
understanding that they were entitled to discovery to develop their
claims against Travelers as Kiefer’s assignees, including any
claim under Section 155 of the Illinois Insurance Code. See Kiefer,
2022

WL

3586151,

accompanying

at

*3

plaintiffs’

(noting

that

Citation

the

discovery

sought

request

“documents

and

communications ... all regarding Plaintiff’s offer of settlement;
all regarding any commitment by [Travelers] to protect [Kiefer]
from any excess judgment; and all relied upon by [Travelers] to
refuse Plaintiff's offer of settlement within the Policy limits,”
which

I

characterized

plaintiffs

need

to

as

“precisely

establish

a

the

claim

of

kinds

of

materials

bad

faith

against

Travelers.”). If plaintiffs—on notice of the nature of Travelers’
defenses as well as its intent “promptly” to seek summary judgment—
believed that Travelers’ discovery responses were wanting, their
recourse was to file a motion to compel. Having failed to do so,
they cannot now be heard to complain that they lack evidence to
controvert facts Travelers asserts based on the testimony and

Judgment against Travelers and Travelers is entitled to dismissal
of the Plaintiffs’ Citation to Discover Assets with prejudice.”
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documents of its witnesses. Moreover, plaintiffs offer no reason
to

think

that

additional

discovery

is

likely

to

yield

such

evidence. For all of these reasons, I am satisfied that Travelers’
liability is ripe for resolution.
As for the substance of Travelers’ argument, I agree that the
only reasonable conclusion that can be drawn from the record is
that

Travelers

satisfied

its

duty

to

defend

Kiefer

in

the

underlying lawsuit, and that its duty to settle plaintiffs’ claim
was neither triggered nor breached. On the first question, no one
disputes that Travelers defended Kiefer without a reservation of
rights. On the second, Travelers is entitled to judgment as a
matter of law because, as explained below, the record contains
nothing from which a jury could reasonably infer that Travelers
refused to act in good faith in responding to plaintiffs’ nonnegotiable

pre-suit

settlement

demand—their

one

and

only

settlement offer.
“In Illinois, an insurer has a duty to act in good faith
when responding to a settlement offer.” Surgery Ctr. at 900 N.
Michigan Ave., LLC v. Am. Physicians Assurance Corp., Inc., 922
F.3d 778, 784 (7th Cir. 2019) (citing Haddick ex rel. Griffith v.
Valor Ins., 763 N.E.2d 299, 303 (Ill. 2001)). The duty arises “when
a claim has been made against the insured and there is a reasonable
probability of recovery in excess of policy limits and a reasonable
probability

of

a

finding

of

liability
13

against

the

insured.”

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Haddick, 763 N.E.2d at 304. Whether a particular set of facts
triggers the insurer’s duty is a question of law. John Crane, Inc.
v. Admiral Ins. Co., 991 N.E.2d 474, 484 (Ill. App. Ct. 2013).
As the Haddick court noted, insurance policies generally give
the

insurer

the

right

to

investigate

claims

for

settlement

purposes, and indeed, the Travelers policy at issue explicitly
provides that any person seeking coverage must “[c]ooperate with
us in the investigation, settlement or defense of any claim or
suit.” Def.’s L.R. 56.1 Stmt., ECF 28 at ¶ 74. In this connection,
the policy requires such persons to authorize Travelers to obtain
“medical reports” and “other pertinent records.” Id. Plaintiffs
undisputedly refused to comply with these terms during the window
of time their non-negotiable settlement demand was open. Indeed,
plaintiffs stated affirmatively that they would not provide these
materials prior to the expiration of their demand. Id. at ¶¶ 2628. At that point, all agree, the materials plaintiffs had provided
to Travelers showed that Maria had incurred medical bills and
expenses amounting to approximately $15,000 and that her condition
“had substantially improved following physical therapy.” Id. at
¶ 21.

While

insurers

have

a

duty

to

“faithfully

consider”

settlement offers within policy limits, they “need not submit to
extortion.” LaRotunda v. Royal Globe Ins. Co., 408 N.E.2d 928, 935
(Ill. App. Ct. 1980). The only reasonable inference that can be
drawn from the record is that plaintiffs refused to comply with
14

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Travelers’

investigation

settlement

demand

was

during

open,

the

thwarting

period

in

Travelers’

which

their

ability

to

investigate—as both the policy and the law entitle it to do—the
extent to which Maria’s claimed injuries were caused or exacerbated
by the accident. Accordingly, plaintiffs did not demonstrate a
reasonable probability of recovery in excess of the $100,000 policy
limit while their settlement demand was open. Travelers thus had
no duty to settle at that time. See Haddick, 763 N.E.2d at 304.
And because plaintiffs cannot show that Travelers breached
any duty it owed its insured, their theory that the Consent
Judgment is enforceable against Travelers under Guillen ex rel.
Guillen v. Potomac Ins. Co. of Illinois, 785 N.E.2d 1 (Ill. 2003),
crumbles. As a general rule, a judgment creditor seeking to collect
under a policy of insurance “is entitled to no more than that to
which the judgment debtor itself would be entitled under the
insurance policy.” Jacobs v. Yellow Cab Affiliation, Inc., 189
N.E.3d 10, 17 (Ill. App. Ct. 2020). Here, because Kiefer released
any claim he may have against Travelers in the Stipulation, he is
entitled to nothing under the insurance policy. Guillen stands for
the proposition that “a settlement agreement consisting of a
stipulated judgment, an assignment and a covenant not to execute,”
i.e., agreements such as the Stipulation, do not extinguish the
insurer’s legal obligation to pay “once the insurer has breached
its duty to defend.” Guillen 785 N.E.2d at 13 (emphasis added).
15

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The court reasoned that an insurer in breach of the duty to defend
“is in no position to demand that the insured be held to a strict
accounting under the policy language. Fairness requires that the
insured, having been wrongfully abandoned by the insurer, be
afforded a liberal construction of the ‘legally obligated to pay’
language.” Id. Guillen does not, however, disturb “the general
rule which holds that, in the absence of a breach of the duty to
defend, an insured must obtain the consent of the insurer before
settling

with

an

injured

plaintiff,”

id.

at

6,

nor

does

it

authorize a judgment creditor to enforce claims against an insurer
that the judgment debtor has released.
Because

the

foregoing

grounds

are

sufficient

to

warrant

summary judgment in Travelers’ favor, I need not devote extensive
discussion

to

Travelers’

remaining

arguments.

Nevertheless,

plaintiffs’ response to Travelers’ invocation of the “No Action”
policy

provision

bears

brief

comment.

The

relevant

provision

states that no legal action can be brought against Travelers until:
“1. We agree in writing that the insured has an obligation to pay;
or 2. The amount of that obligation has been finally determined by
judgment after trial.” Plaintiffs argue that the first condition
was satisfied because Travelers offered in writing to settle for
the policy limit after Maria’s August 2020 surgery, and entry of
the Consent Judgment satisfied the second. Neither argument is
persuasive.
16

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While

it

is

true

that

Travelers

acknowledged

Kiefer’s

liability for the accident, it never agreed that it was obligated
to pay any specific amount of damages, and plaintiffs cite no
authority suggesting that Travelers’ offer of settlement amounts
to such an agreement. Indeed, the court’s construction of “legal
obligation” in Alliance Syndicate, Inc. v. Parsec, Inc., 741 N.E.2d
1039, 1046 (Ill. App. Ct. 2000) (settlement amount “was not a legal
obligation to which the insurance policy applied”) suggests the
contrary. And if there is any authority to support plaintiffs’
argument

that

obligation

entry

“finally

of

the

Consent

determined

by

Judgment

amounts

judgment

after

to

an

trial,”

plaintiffs have not cited it.
III.
For the foregoing reasons, defendant’s motion for summary
judgment is granted.

ENTER ORDER:

_____________________________
Elaine E. Bucklo
United States District Judge
Dated: January 18, 2023

17