                             Illinois Official Reports

                                     Appellate Court



             American Access Casualty Co. v. Alassouli, 2015 IL App (1st) 141413



Appellate Court         AMERICAN ACCESS CASUALTY COMPANY, Plaintiff-
Caption                 Appellant, v. FARID ALASSOULI and EILEEN BENSON,
                        Defendants-Appellees.



District & No.          First District, Third Division
                        Docket No. 1-14-1413



Filed                   April 29, 2015



Decision Under          Appeal from the Circuit Court of Cook County, No. 12-CH-43714; the
Review                  Hon. LeRoy Martin, Judge, presiding.



Judgment                Affirmed.



Counsel on              Brianne M. Connell, of James P. Newman & Associates, Inc., of St.
Appeal                  Charles, for appellant.

                        Dean Haritos and Cynthia Ramirez, both of Morse Bolduc & Dinos,
                        LLC, of Chicago, for appellees.



Panel                   JUSTICE HYMAN delivered the judgment of the court, with opinion.
                        Presiding Justice Pucinski and Justice Lavin concurred in the
                        judgment and opinion.
                                              OPINION

¶1       Farid Alassouli made a left turn in front of Eileen Benson as she was driving through an
     intersection. To avoid hitting Alassouli’s car, Benson made an evasive maneuver and struck
     the front end of another car. Benson made a claim against Alassouli’s insurer, American
     Access Casualty Company (AACC). AACC tried to obtain information about the accident
     from Alassouli by leaving phone messages, which were not returned, and conducting a skip
     trace. When AACC could not locate Alassouli, it filed this declaratory judgment action seeking
     adjudication that it owes no duty to defend or indemnify Alassouli or Benson because
     Alassouli breached the insurance policy’s cooperation clause. The trial court granted Benson’s
     motion for summary judgment on the basis that AACC had not established substantial
     prejudice by Alassouli’s breach of the cooperation clause.
¶2       We affirm. AACC failed to present evidence that: (i) it acted with reasonable diligence to
     secure Alassouli’s cooperation in its investigation; (ii) Alassouli’s failure to cooperate was
     willful; or (iii) Alassouli’s breach of the cooperation clause substantially prejudiced it.

¶3                                          BACKGROUND
¶4       On May 1, 2011, Farid Alassouli turned left from 79th Street onto Roberts Road in
     Bridgeview, Illinois, just in front of Eileen Benson’s car as she passed through the intersection.
     To avoid striking Alassouli’s car, Benson swerved, but then struck the front end of a car driven
     by Jacek Sader. Police cited Alassouli for failing to yield to oncoming traffic.
¶5       After the accident, Benson made a claim against Alassouli’s AACC insurance policy for
     damages. An AACC claims adjuster, Cary Loseau, called Alassouli to clarify the facts
     surrounding the accident and obtain necessary information regarding the events leading up to
     the accident. Alassouli answered the call and identified himself. But once Loseau told
     Alassouli that AACC would be recording his statements, Alassouli hung up. Loseau
     immediately placed another call that went to voicemail, left a “detailed message regarding the
     need for additional information and informed Alassouli of the importance of returning the
     call.” Five days later, AACC called Alassouli at the same number, leaving a message with his
     roommate, who promised that he would have Alassouli return the call. Alassouli never called
     back. AACC made two more phone calls, leaving messages, but again, no response from
     Alassouli. AACC then conducted a skip trace that revealed nothing about Alassouli’s
     whereabouts. In total, AACC’s efforts spanned 13 days and included 5 phone calls and a skip
     trace.
¶6       On December 10, 2012, AACC filed a declaratory action against Alassouli and Benson
     seeking an adjudication that it owes no duty to defend or indemnify Alassouli for any claim
     arising out of the accident. AACC maintains that it has no duty to defend or indemnify because
     Alassouli breached the insurance policy’s cooperation clause when he failed to communicate
     with AACC after the numerous phone calls and messages. Benson appeared and filed an
     answer; Alassouli failed to appear or answer, and the trial court entered a default order against
     him. (Benson also filed a separate personal injury complaint against Alassouli in the circuit
     court of Cook County.)
¶7       AACC’s cooperation clause provides:



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                     “The insured shall cooperate with the Company and, upon the Company’s request
                or through attorneys selected by the Company to represent the insured must *** (b)
                assist in making settlements, securing and giving evidence, obtaining the attendance of
                witnesses and in the conduct of any legal proceedings in connection with the subject
                matter of this insurance *** (i) allow the Company to take signed and recorded
                statements and answer all questions we may ask when and as often as we may require;
                (j) submit to examinations under oath as often as the Company requires, outside the
                presence of any other insured or person to be examined under oath ***. The company
                has no duty to provide coverage under this policy unless there has been full compliance
                with these responsibilities ***.”
¶8          On June 5, 2013, AACC filed a motion for summary judgment, arguing it owes no duty to
       defend or indemnify Alassouli because he breached the cooperation clause. The trial court
       denied the motion. A few months later, Benson filed a motion for summary judgment against
       AACC, arguing that Alassouli did not breach the insurance policy, as a matter of law, because
       AACC neither showed that it had been substantially prejudiced by the breach nor exercised
       due diligence in attempting to contact Alassouli. In support, Benson attached affidavits of
       Sader and Jose De Anda.
¶9          Sader, in his affidavit, stated he saw Alassouli attempt to make a left turn in front of
       Benson without properly yielding, causing Benson to make an evasive maneuver to avoid
       hitting Alassouli. In evading Alassouli’s car, Sader stated, Benson collided with the front end
       of Sader’s car. De Anda, an independent witness, reported that he saw a “medium sized sedan”
       make a left turn directly in front of a sport utility vehicle (SUV), and the SUV had to make an
       evasive maneuver to avoid contact with the sedan. While the SUV successfully avoided the
       sedan, it struck another car that was stopped at a red light. De Anda’s affidavit does not
       identify the drivers.
¶ 10        AACC responded to Benson’s motion for summary judgment and filed a cross-motion for
       summary judgment. AACC argued that Alassouli’s breach of the cooperation clause was
       willful and, therefore, prejudice is presumed. AACC attached affidavits from AACC claims
       adjuster Cary Loseau and Gunther Polak, a private investigator retained to locate Alassouli
       about two years after the incident. Loseau recounted the efforts he made to contact Alassouli
       via five telephone calls and the skip trace. Polak stated that he went to Alassouli’s known
       address in Justice, Illinois, but a new tenant lived in the apartment and had no knowledge of its
       former occupants. Polak talked to neighbors in the apartment building who also were unable to
       provide any information. Polak obtained no additional or updated information from the vehicle
       registration or driver’s license. Polak stated that a skip trace showed a post office box address
       in Bedford Park, Illinois, as well as a “very recent mid-year 2013” address in San Diego,
       California. But Polak was unable to verify the information and no telephone number, published
       or unpublished, was at the California address in Alassouli’s name. Finally, the post office box
       in Bedford Park was closed and a forwarding address led to another apartment building in
       Justice. Polak visited the new apartment building but did not find any trace of Alassouli at that
       location or elsewhere. (Polak’s affidavit is dated January 10, 2014, and the record suggests that
       his investigation occurred in the latter half of 2013.)
¶ 11        Following the hearing on the cross-motions for summary judgment, the trial court entered
       judgment in favor of Benson because AACC failed to show Alassouli’s failure to cooperate


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       substantially prejudiced it.

¶ 12                                    STANDARD OF REVIEW
¶ 13       “Summary judgment is appropriate where the pleadings, depositions, admissions, and
       affidavits show that there is no genuine issue of material fact and that the moving party is
       entitled to judgment as a matter of law.” Direct Auto Insurance Co. v. Beltran, 2013 IL App
       (1st) 121128, ¶ 43. A triable issue of fact exists “where there is a dispute as to material facts, or
       where, the material facts being undisputed, reasonable persons might draw different inferences
       from the facts.” (Internal quotation marks omitted.) Wolfram Partnership, Ltd. v. LaSalle
       National Bank, 328 Ill. App. 3d 207, 215 (2001). An appellate court reviews a disposition of
       summary judgment de novo. Beltran, 2013 IL App (1st) 121128, ¶ 43.

¶ 14                                            ANALYSIS
¶ 15       AACC argues that the trial court erred in granting summary judgment on the grounds that
       AACC failed to show it was substantially prejudiced by Alassouli’s breach of the cooperation
       clause. Specifically, AACC contends it need not establish prejudice, but, in any event, it did
       show prejudice by Alassouli’s breach of the cooperation clause.
¶ 16       General principles of contract law govern insurance contracts. Waste Management, Inc. v.
       International Surplus Lines Insurance Co., 144 Ill. 2d 178, 191 (1991). The terms of the
       contract define and control the scope of duties imposed on an insurer and the insured. Id.
       Courts should enforce clear and unambiguous provisions of insurance contracts according to
       their plain meaning. Id. at 191-92.
¶ 17       A cooperation clause prevents collusion between the insured and injured and enables an
       insurer to prepare its defense to a claim. M.F.A. Mutual Insurance Co. v. Cheek, 66 Ill. 2d 492,
       496 (1977). “Any condition in the policy requiring cooperation on the part of the insured is one
       of great importance [citation], and its purpose should be observed [citation].” Waste
       Management, 144 Ill. 2d at 191. The insurer usually has little or no knowledge of the facts
       surrounding a claim, while the insured has knowledge of the facts. Id. at 204. Thus, the insurer
       depends on the insured for fair disclosure. Id. The insured has no duty to assist the insurer in
       any effort to defeat a proper claim, but the “cooperation clause does obligate the insured to
       disclose all of the facts within his [or her] knowledge and otherwise to aid the insurer in its
       determination of coverage under the policy.” Id. To establish a breach of the cooperation
       clause, the insurance company must show that it exercised a reasonable degree of diligence in
       seeking the insured’s participation and the insured’s failure to participate was due to a refusal
       to cooperate. Mazzuca v. Eatmon, 45 Ill. App. 3d 929, 932 (1977). These determinations
       depend on the facts and circumstances of the particular case. Id.
¶ 18       Automobile insurance policies represent more than private agreements between the insured
       and the insurer. Cheek, 66 Ill. 2d at 500-01. Public policy considerations underlying insurance
       contracts seek to afford protection to members of the public, generally innocent third parties.
       Id. Accordingly, to be relieved of its contractual obligations under the policy, an insurer must
       show that the insured’s refusal to cooperate in its investigation caused it substantial prejudice.
       Id. “ ‘Such relief, absent a showing of prejudice, would be tantamount to a questionable
       windfall for the insurer at the expense of the public.’ ” Id. at 501 (quoting Oregon Automobile
       Insurance Co. v. Salzberg, 535 P.2d 816, 819 (Wash. 1975)). To establish substantial
       prejudice, the insurer needs to show the insured’s violation of the cooperation clause hampered

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       its investigation. Cheek, 66 Ill. 2d at 499. Courts do not presume prejudice when the insurer
       invokes a breach of the cooperation clause. Id. “This is the test to be employed in our courts in
       cases where the issue is a breach of the cooperation clause. This is not a tyranny of labels but a
       direct statement of the criterion to be employed where the cooperation clause is in issue.” Id.
¶ 19        AACC relies on Gallaway v. Schied, 73 Ill. App. 2d 116 (1966), Safeco Insurance Co. of
       Illinois v. Treinis, 238 Ill. App. 3d 541 (1992), and American Country Insurance Co. v. Bruhn,
       289 Ill. App. 3d 241 (1997), for arguing that it need not show prejudice. None of these cases
       help AACC. To begin, the Cheek court rejected the Gallaway reasoning that “ ‘[i]f there is a
       substantial or material lack of cooperation found as a matter of fact, the insurer is not required
       to establish prejudice or detriment thereby in order to disclaim liability.’ ” Cheek, 66 Ill. 2d at
       499 (quoting Gallaway, 73 Ill. App. 2d at 125). As for Treinis, the court did not make any
       reference to, or explain, the insurer’s burden of proving substantial prejudice. The court there
       found a violation of the cooperation clause after the insured notified the insurer of an
       automobile accident but never communicated with it again. Treinis, 238 Ill. App. 3d at 549.
       The court considered the insured’s violation of the cooperation provision “beyond cavil”
       where “the total lack of contact between [the insured and permissive driver] and the insurer
       shows noncooperation.” Id. The court concluded, “no contact with [the insurer] without any
       extenuating circumstances leads only to the conclusion that there was a breach of the
       cooperation clause.” Id. We decline to follow Treinis because of our supreme court’s explicit
       instruction that an insurer must prove substantial prejudice, which will not be presumed. See
       Cheek, 66 Ill. 2d at 498-99; see also United Automobile Insurance Co. v. Buckley, 2011 IL App
       (1st) 103666, ¶ 28 (“A presumption of prejudice does not exist when an insurer raises a breach
       of the cooperation clause.”).
¶ 20        In Bruhn, the insured struck and killed two pedestrians while driving his automobile.
       Bruhn, 289 Ill. App. 3d at 243. The insured denied and concealed his involvement in the
       accident for about three years, but eventually admitted his involvement to the police. Id. The
       defendant filed suit against the insured for negligence, wrongful death, and intentional
       infliction of emotional distress. Id. The insured provided the insurer notice of the accident and
       lawsuit. Id. The insurer’s claim representative testified that the insured called it to give notice
       of the accident and lawsuit, but he refused to provide a recorded statement to the insurer for
       purposes of liability assessment, and the insurer recorded the insured’s refusal to provide the
       recorded statement. Id. at 245. The insurer then filed a declaratory judgment action seeking to
       deny coverage based on the insured’s breach of the policy’s cooperation and notice clauses. Id.
       at 244. The trial judge stayed the declaratory judgment action until the underlying lawsuit was
       resolved. Id. The parties in the underlying lawsuit then entered into a stipulated judgment
       against the insured for $25,000, “provided that the award could only be collected from
       whatever rights [the insured] had in his insurance policy and not from [his] personal assets.” Id.
       The trial judge in the declaratory judgment entered a judgment against the insurer because
       notice was sufficient and the insured did not refuse to cooperate. Id. at 246.
¶ 21        The appellate court reversed the trial court’s judgment, holding that the insured breached
       the notice and cooperation clauses. Id. at 249. The court found that the insurer established a
       “prima facie case of breach of the cooperation provision” when he refused to provide a
       statement about the accident and “then entered into a stipulated judgment, which admitted
       liability but provided that damages could only be collected from the [insurer].” Id. As to the
       insurer needing to establish prejudice to deny coverage, under the facts, based on a lack of


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       cooperation, the court reasoned that the insurer could only prove prejudice by knowing what
       the insured’s statement would have revealed, but because he refused to provide a statement, the
       insurer couldn’t know how it was prejudiced. Id. at 250. Thus, explained the court, “[w]hen an
       insured completely fails to communicate with the insurer regarding an accident, ‘[a] violation
       of [the cooperation] provision is patent.’ ” Id. (quoting Treinis, 238 Ill. App. 3d at 549).
       Finally, the court determined that the public policy considerations underlying automobile
       insurance policies “militate strongly against coverage in this case” because the insurer
       stipulated to a judgment requiring the insurer to pay. Id. at 250-51. “We know of no public
       policy that promotes subterfuge and allows an individual to profit from the concealment of a
       crime, nor do we deem it appropriate to create one.” Id. at 251.
¶ 22       Benson made a claim against AACC, AACC then called Alassouli, and Alassouli hung up
       the phone after AACC told him it would be recording his statements. Alassouli failed to return
       any of AACC’s four additional phone calls. The facts in Bruhn are strikingly different. Unlike
       Bruhn, Alassouli did not explicitly refuse to give a statement to AACC, nor was his refusal
       recorded. Instead, Alassouli hung up the phone and failed to return the calls. Also unlike
       Bruhn, Alassouli did not conceal his involvement in an accident, nor thereafter enter into a
       stipulated judgment requiring indemnification. The insured in Bruhn essentially colluded with
       the injured party by refusing to cooperate and then entered into a judgment whereby he
       admitted liability but provided that damages could only be collected from his insurance
       company. Bruhn, 289 Ill. App. 3d at 249. Nothing like this occurred between Alassouli and
       Benson. Because Bruhn involved unusual facts and collusion, it has no bearing on AACC’s
       requirement to prove substantial prejudice.
¶ 23       Thus, contrary to AACC’s contention, it must show substantial prejudice in its
       investigation of the claim due to Alassouli’s refusal to cooperate; it also must show it exercised
       a reasonable degree of diligence in seeking Alassouli’s participation and that Alassouli
       willfully refused to cooperate.

¶ 24                    Reasonable Degree of Diligence and Refusal to Cooperate
¶ 25       Whether the insured breached the cooperation clause requires the insurer show an exercise
       of a reasonable degree of diligence in seeking the insured’s participation and that the insured’s
       lack of participation represented a willful refusal to cooperate. Mazzuca, 45 Ill. App. 3d at 932;
       United Automobile Insurance Co. v. Buckley, 2011 IL App (1st) 103666, ¶ 27. The insurer has
       to act in good faith to secure the insured’s cooperation. Wallace v. Woolfolk, 312 Ill. App. 3d
       1178, 1180 (2000). “Good faith is evaluated not only in terms of what the insurer did to secure
       cooperation, but also in terms of what the insured failed to do.” Id. An insurer’s exercise of
       reasonable diligence and the insured’s failure to participate by refusing to cooperate both
       involve questions of fact that must be shown by a preponderance of the evidence. Id.
¶ 26       AACC argues it exercised reasonable diligence by calling Alassouli five times, leaving
       detailed messages, conducting a skip trace, and, much later, hiring a private investigator to
       locate the insured. AACC claims that Alassouli “simply did not wish to cooperate, even after
       AACC continued to try to contact him.” AACC explains that it had a known “verified” phone
       number for Alassouli and Alassouli “willfully and intentionally” refused to cooperate. Indeed,
       AACC argues it went further than required by running a skip trace and hiring a private
       investigator.


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¶ 27       Case law undermines AACC’s argument that it met the standard of reasonable diligence.
       For instance, Founders Insurance Co. v. Shaikh, 405 Ill. App. 3d 367 (2010), indicates the
       extent of efforts an insurer must take to satisfy the element of reasonable diligence. In Shaikh,
       the defendant-insured, after an automobile accident, eventually was served with summons and
       a complaint regarding the accident. Shaikh, 405 Ill. App. 3d at 368-69. The defendant then
       telephoned the insurer, notified it of the lawsuit, and faxed the materials along with his current
       phone number and address. Id. at 369. About a week later, the defendant again telephoned the
       insurer inquiring into the lawsuit. Id. Eventually, correspondence sent to the defendant was
       returned as undeliverable and his phone number had been disconnected. Id. In an attempt to
       locate the defendant, an agent of the insurer personally visited the defendant’s last two known
       addresses. Id. at 370. The insurer then hired an investigation firm, which visited an additional
       address, talked to the defendant’s family members, and revisited the defendant’s listed
       addresses. Id. The insurer continued to send letters to the three addresses associated with the
       defendant, and all came back as undeliverable. Id. The insurer also pursued a lead from the
       postal service by sending a letter by regular and certified mail and personally visiting the
       property. Id. at 370-71. The insurer telephoned the defendant’s family members, and it pursued
       leads that the defendant may have been incarcerated. Id. at 371. After an arbitration award was
       entered against the defendant in the underlying action, the insurer filed a declaratory action
       against the defendant. Id. The insurer attempted to serve the defendant through a deputy
       sheriff, but the defendant’s ex-wife informed the sheriff that she divorced the defendant 16
       years earlier and did not know where he could be located. Id. Then, the investigation firm
       visited the defendant’s address listed on his Illinois driver’s license, but the defendant’s name
       was not on any mailbox and tenants in different apartments all indicated they did not know the
       defendant. Id. at 371-72. Eventually, the insurer was granted leave to serve the defendant
       through the Secretary of State and by publication, but the trial court ultimately entered a
       default against the insured for failing to appear. Id. at 372.
¶ 28       The Shaikh court found the insurer used reasonable efforts and diligently pursued the
       insured to secure cooperation with its investigation and defense. Id. at 378. The court reasoned
       that the insurer used sources that were likely to disclose the defendant’s whereabouts. Id. The
       court noted that the insurer’s search was “sufficiently broad and successful at producing leads,
       and it pursued and exhausted every lead it generated.” Id. The insurer began an investigation
       “[w]ithin mere days of being alerted to a potential problem” and it kept an active search–both
       itself and through the use of independent investigators–for nearly a year. Id. Despite the
       efforts, “[t]he investigation went cold *** because none of these efforts led to [the defendant]
       or generated any further leads.” Id. Hence, the insurer used reasonable diligence in finding the
       insured. Id.
¶ 29       Contrast Shaikh’s dynamic efforts with AACC’s mere five phone calls to Alassouli’s
       known phone number and a skip trace. After Alassouli heard that his statement about the
       accident would be recorded, he hung up. But, all AACC could muster at the critical time,
       around first learning about the incident, was to make over a few days four more phone calls,
       leaving messages with Alassouli’s roommate and on voicemail and to conduct a skip trace.
       Much later, after two years elapsed and in connection with filing the declaratory action, AACC
       hired a private investigator who, considering the long passage of time, came up empty.
¶ 30       AACC argues the due diligence standard set forth in Shaikh, where the insured has gone
       missing, does not apply where the insured simply refuses to cooperate. AACC argues that


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       because Alassouli was not missing but simply refused to speak, Shaikh “has no bearing.” We
       find AACC’s argument unpersuasive. True, Alassouli disconnected the initial phone call,
       failed to answer an immediate return call, and never returned the three additional calls. But, as
       a matter of law, five attempted phone calls and a skip trace in the matter of less than two weeks
       and nothing more until a declaratory judgment petition is on the line does not suffice to claim
       an insurer used reasonable diligence to secure the insured’s cooperation. Unlike Shaikh,
       AACC made no attempt to visit Alassouli’s known address or send any letters via mail or
       conduct an ongoing effort to talk to or find Alassouli. Also unlike Shaikh, AACC’s attempt to
       seek Alassouli’s cooperation was slight, and cannot be characterized as having gone “cold.” Id.
       Instead, AACC summarily concluded that Alassouli refused to cooperate after not returning
       phone calls after a lapse of 13 days. Moreover, if AACC’s skip trace revealed no new phone
       numbers or addresses, why would not AACC have then visited the known address or send
       letters seeking his cooperation? In sum, AACC’s efforts were wanting and deficient.
¶ 31       AACC’s efforts to locate Alassouli more closely resemble those of the insurer in Mazzuca
       v. Eatmon, 45 Ill. App. 3d 929 (1977), which were found to be inadequate. In Mazzuca, the
       insurer, after receiving notice of an accident and pending lawsuit from the plaintiff’s attorney,
       had an investigator attempt to locate the insured. Id. at 930. The investigator went to the
       insured’s known address, could not find him in the apartment building, and did not gather
       information from third persons at local establishments. Id. The investigator contacted the post
       office for a forwarding address and went to the insured’s place of employment, where he left a
       business card. Id. at 930-31. The investigator returned to the place of employment after the
       insured had been discharged, but he obtained another phone number that he failed to call, two
       addresses he failed to visit, and a post office box. Id. at 931. He also failed to look up driver’s
       license records, determine the insured’s social security information, pursue any credit reports,
       locate any relatives, or place an ad in the newspaper. Id. In total he spent 5.25 hours attempting
       to locate the insured. Id. A year later, the insurer sent a letter to the insured’s address and place
       of employment; both were returned. Id. Two years later, the insurer hired a new investigator
       who attempted to find the insured by talking to relatives and following a fraudulent credit card
       lead. Id.
¶ 32        Despite these efforts, the court found that the insurer did not establish reasonable diligence
       and the insured refused to cooperate. Id. at 934. The court ultimately concluded that the two
       investigations were not pursued and the “efforts can scarcely be said to establish the exercise of
       a reasonable degree of diligence necessary to invoke the affirmative defense of
       noncooperation.” Id.
¶ 33       In addition, Alassouli’s failure to return phone calls serves as constructive notice that a
       problem existed. See Johnson v. Wade, 47 Ill. App. 3d 610, 615 (1977) (finding that insured’s
       nonresponse to letters within a reasonable time “served as constructive notice that a problem
       existed”). Although he hung up the first phone call, AACC made little effort (four more phone
       calls and a skip trace) to secure Alassouli’s cooperation. AACC expended minimal effort to
       contact Alassouli personally and much more could and should have been undertaken to
       procure his cooperation. See Lappo v. Thompson, 87 Ill. App. 3d 253, 255 (1980) (reasoning
       that when insurer had constructive notice that problem existed, “much more could and should
       have been done to secure [insured’s] cooperation”). Despite Alassouli’s failure to return the
       phone calls, any number of reasons exist for his failure to do so. See Mazzuca, 45 Ill. App. 3d at
       934 (efforts “little more than a cursory, pro forma procedure”). AACC did not mail Alassouli


                                                     -8-
       any letters, did not attempt to personally visit his known address, nor did it pursue any
       alternative methods of talking to Alassouli. While it cannot be stated with any certainty that
       those efforts would have proven fruitful, their absence demonstrates a cursory investigation.
       Id.
¶ 34       We are mindful that AACC preemptively filed this declaratory action based on Alassouli’s
       noncooperation before Benson filed an underlying lawsuit. But this fact only exacerbates
       AACC’s shortcomings. To explain, AACC made a cursory attempt to secure Alassouli’s
       cooperation. It presents no evidence that it attempted to inform Alassouli of the consequences
       of his noncooperation. AACC left a “detailed message regarding the need for additional
       information and informed Alassouli of the importance of returning the call.” It does not argue
       that it explained the need for his cooperation or that his noncooperation could potentially result
       in personal liability for any money damages arising out of the accident. Thus, his failure to
       cooperate can as easily be attributed to lack of notice as to what was expected. Mazzuca, 45 Ill.
       App. 3d at 933-34 (finding it reasonable to assume that insured did not know of contractual
       obligation to cooperate). What the court observed in Mazzuca applies with equal effect here,
       “[t]here is no evidence that [the insured] ever became aware of any such obligation, and then
       willfuly refused to comply. His failure to cooperate can as easily be attributed to lack of notice
       as to what was expected from him.” Id. at 934.
¶ 35       Moreover, AACC’s retention of a private investigator to locate Alassouli does not militate
       against its shortcomings. AACC hired Polak after it filed the declaratory action seeking to
       relieve itself of liability and some two years after the accident. Polak’s investigation, though
       more active, does nothing to absolve AACC of its duty. Id. As the saying goes, it is too little,
       too late.
¶ 36       Because AACC’s efforts to gain Alassouli’s cooperation were cursory, AACC did not
       prove beyond a reasonable doubt that it exercised reasonable diligence and Alassouli’s failure
       to cooperate was willful.

¶ 37                                        Substantial Prejudice
¶ 38       AACC claims that it did show substantial prejudice by attaching the affidavit of Cary
       Loseau, in which he stated that AACC cannot determine its coverage for the accident or
       liability due to Alassouli’s failure to communicate.
¶ 39       To be a defense under an insurance policy, the alleged breach of the cooperation clause
       needs to substantially prejudice the insurer in its investigation or in defending an underlying
       action. Cheek, 66 Ill. 2d at 498-99. An insurer must demonstrate that “it was actually
       hampered” in its investigation or defense by the insured’s violation of the cooperation clause.
       Id. at 499. “Nor is there any presumption of prejudice when the insurer attempts to avoid
       responsibility for a breach of the cooperation clause.” Id.
¶ 40       AACC argues it is difficult for “insurers to show prejudice because with a substantial
       failure to cooperate, an insurer would never know precisely what information it could have had
       *** insurers cannot be placed in the position of having to prove what information it could have
       gleaned or what a statement from its insured would have been.” It also claims it has no
       obligation to show the loss falls within the terms of the policy because that is Alassouli’s
       obligation. AACC claims it “cannot even make the determination as to whether coverage is
       available, let alone the liability issues.” And, AACC adds, it need not find information
       concerning the accident from other sources, such as Sader or De Anda, because “[o]nly the

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       insured is a party to the contract at issue ***. Thus, the only individual obliged to cooperate is
       the insured. *** Indeed, even looking at the affidavits provided by Benson does not confirm
       that Alassouli was even in an accident.” AACC also maintains that the affidavit of Cary
       Loseau evinces prejudice due to Alassouli’s refusal to cooperate because as Loseau stated,
       AACC could not determine if there was coverage or if Alassouli was liable for the accident.
¶ 41        Aside from Loseau’s affidavit, AACC presents no evidence of prejudice in its
       investigation, as it was, of the claim. Simply put, AACC cannot prove substantial prejudice in
       its investigation when it failed to even conduct a proper investigation. Instead, the evidence
       suggests AACC’s so-called investigation consisted only of the five phone calls placed to
       Alassouli, a skip trace, and its retention of a private investigator years after the accident to
       locate Alassouli. See State Farm Mutual Automobile Insurance Co. v. McSpadden, 88 Ill. App.
       3d 1135, 1138 (1980) (“While an insurer should be able to rely on the statements of its insured
       in many circumstances, doing so will not always absolve the insurer of its duty to investigate
       an accident.”).
¶ 42        Moreover, AACC failed to present any evidence that might otherwise suggest that
       Alassouli was not involved in the accident or that he was not liable. AACC had notice of the
       accident shortly after it occurred and had access to information about the accident, including
       the police report. AACC correctly notes that police reports are generally inadmissible hearsay.
       People v. Williams, 240 Ill. App. 3d 505, 506 (1992). But the inadmissibility of police reports
       as evidence in court proceedings has no bearing on whether AACC could obtain information
       from it for purposes of investigating its potential liability for the accident. The report contains
       a narrative of the accident, a list of the individuals involved in the accident, license plate
       numbers and vehicle models, any citations or arrests for the accident, and potential witnesses.
       AACC only sought information from Alassouli and summarily denied coverage based on its
       inability to receive information from him, despite the availability of alternative sources of
       information. We see no reason to absolve AACC of its duty to investigate the accident in light
       of the alternatives.
¶ 43        Finally, an automobile insurance policy “is more than a private agreement between the
       insured and the insurer against losses sustained as a result of the negligent operation of a motor
       vehicle.” Cheek, 66 Ill. 2d at 499-500. Such policies “abound with public policy
       considerations” and they should afford affected members of the public–innocent third
       persons–“the maximum protection possible consonant with fairness to the insurer.” (Internal
       quotation marks omitted.) Id. at 501. The evidence in the record strongly suggests Benson to be
       an innocent party in the accident. Thus, AACC should not be awarded a “questionable
       windfall” when it has failed to establish that Alassouli’s nonparticipation substantially
       prejudiced its investigation of the claim. See id.

¶ 44                                           CONCLUSION
¶ 45       AACC has failed to prove it exercised reasonable diligence in obtaining Alassouli’s
       participation or that its investigation of the claim was substantially prejudiced by his refusal to
       cooperate. Thus, we affirm the trial court’s order granting summary judgment in Benson’s
       favor.

¶ 46      Affirmed.


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