Insurance Law

Dist. Ct. did not err in granting defendant-insurance company’s motion to dismiss plaintiff-insured’s action seeking specific performance to “adjust [plaintiff’s] claim” submitted to defendant as insured under policy issued by defendant to third-party. Plaintiff wanted defendant to either admit or deny liability with respect to her claim and to state amount of compensatory damages to which she is entitled, as well as to provide factual basis for said figure. While plaintiff asserted that defendant did not timely process her claim for benefits under policy, there was no provision in policy that required defendant to process plaintiff’s claim within certain timeframe. Moreover, Dist. Ct. could properly find that plaintiff’s lawsuit was premised on certain provisions of Illinois Insurance Code, and that said provisions did not provide plaintiff with private right of action to bring instant lawsuit. As such, plaintiff’s only recourse was to submit complaint to Dept. of Insurance to enforce Insurance Code.

Dist. Ct. did not err in granting plaintiff-insurance company’s motion for judgment on pleadings in action seeking declaration that it owed no duty to defend or indemnify its insured (fireworks company) in underlying action by two individuals who incurred injuries when fireworks manufactured by insured prematurely ignited while said individuals were volunteering for July 4th fireworks displays. Record showed that policy in question excluded coverage for injuries sustained by fireworks shooters hired to perform fireworks displays or other persons assisting or aiding in displays of fireworks regardless of whether said individuals are employed by insured, any shooter or assistant. Ct. of Appeals, in affirming Dist. Ct., found that said exclusion applied to all volunteers and rejected insured’s argument that exclusion did not apply to instant individuals because there were no hired persons at either fireworks event.

Dist. Ct. did not err in granting plaintiff-insurance company’s motion for summary judgment in plaintiff’s action seeking declaration that its policy issued to defendant-insured for coverage on workers’ compensation claims did not cover work-related injuries sustained by one of defendant’s employees at job site located in Kentucky, where policy provided coverage for injuries at work sites located in Indiana, as well as other states subject to certain notice requirements. Defendant did not inform plaintiff that it was performing work in Kentucky at any time prior to date of employee’s accident, and terms of policy required that defendant notify plaintiff prior to employee’s accident that it performed work in Kentucky or notify plaintiff that it had work in Kentucky within thirty days after policy had gone into effect. Ct. rejected defendant’s argument that notice of its work in Kentucky was not required under terms of policy. Fact that insurance broker who facilitated purchase of policy was aware that defendant had performed work in Kentucky did not require different result, where broker was not agent of plaintiff.

Dist. Ct. did not err in granting defendant-insurance company’s motion for summary judgment in plaintiff-insured’s action, alleging that defendant breached terms of policy on plaintiff’s show horse by withholding consent for horse’s authorized humane destruction, and that defendant’s continued care and control over plaintiff’s horse long after policy had terminated constituted conversion and theft. Plaintiff’s contention that defendant breached policy by failing to provide mortality coverage was not supported by record, where: (1) although horse had serious foot injury, horse did not die, and no veterinarian rendered opinion that horse’s immediate destruction was imperative for humane reasons, as required under terms of policy; and (2) nothing in policy required defendant to agree to euthanize horse. Also, plaintiff could not establish conversion claim, where plaintiff failed to demand return of horse after defendant took control of horse to give treatment for horse’s leg. Moreover, plaintiff could not establish theft claim, where there was no evidence for jury to determine that defendant knowingly or intentionally exercised unauthorized control over horse, especially where plaintiff’s counsel conceded that defendant could keep horse.

Dist. Ct. did not err in finding that $5 million life insurance policy issued by plaintiff-insurance company was void ab initio, since record showed that policy was essentially illegal wagering contract, where, although insured nominally procured policy on his own behalf, $300,000 yearly policy premiums were loaned to insured by third-party with expectation that at end of term of loan insured would assign rights to policy to third-party, which in turn sold policy to other entities having no insurable interest in life of insured. Record also showed that: (1) insured, who essentially paid nothing for instant policy, could not afford policy premiums; (2) financing of premiums had been concealed from plaintiff; and (3) there was no serious risk that insured would sell rights to policy to entity not associated with scheme or would retain rights to policy for himself at end of loan term. Dist. Ct. erred, though, in finding that plaintiff could not retain all premiums paid on policy, but rather found that last entity to hold interest in policy could receive $13,000 refund on premiums that it paid because last entity was unaware of instant deceptive scheme to obtain rights to policy. Ct. of Appeals found that last entity was not innocent purchaser of policy so as to qualify for refund, but rather was sophisticated buyer that purchased rights to policy knowing risk that court could find policy void ab initio.

Dist. Ct. did not err in dismissing plaintiff-insured’s action for failure to state viable claim under Indiana law, where plaintiff alleged that defendant-insurance company wrongfully denied plaintiff benefits for loss of business income arising out of State of Indiana’s issuance of COVID-19 restrictions that greatly impacted its hotel business. Dist. Ct. could properly find that denial of benefits was consistent with language of policy that required that plaintiff establish that it incurred “direct physical loss or damages,” and that plaintiff’s allegations did not establish a direct physical loss or damages arising out of COVID-19 virus. Ct. rejected plaintiff’s claim that its allegation that virus particles had attached to hotel property was sufficient to qualify as direct physical loss or damage. Ct. further noted that plaintiff’s hotel had status as essential business during pandemic that allowed it to remain open to provide lodging and carryout food service. As such, COVID-19 restrictions did not render hotel completely uninhabitable.