Dist. Ct. did not err in granting defendant-insurance company’s motion for summary judgment in plaintiff-insured’s action seeking to recover its defense costs in underlying lawsuit under terms of policy issued by defendant. Record showed that: (1) underlying lawsuit, which was filed in 2003, asserted that plaintiff had breached contract, committed conversion and breached fiduciary duty; (2) instant claims-made policy provided that defendant would defend and indemnify plaintiff against “claims” “first made” in 2014-to-2017 period; (3) during 2016 trial in underlying lawsuit, plaintiff in underlying lawsuit asserted for first time in damages phase of case that instant plaintiff had failed to timely notify it of default of another entity; and (4) instant plaintiff thereafter informed defendant about damages argument and contended that said argument constituted new claim under policy. Under terms of policy, “claim” taking form of civil proceeding commenced by service of complaint spans entire action and not just legal theories in complaint that commenced action. As such, instant damages argument first presented in 2016 was part of civil action that began in 2003, and thus was not separate claim. Accordingly, defendant had no duty to defend damages argument, because operative claim was made in 2003.
Federal 7th Circuit Court
Civil Court
Insurance