Insurance Law

Insurance coverage dispute arising out of automobile collision. The insured sought to pursue a claim under an uninsured motorist policy, but sent the notice of claim to an old address for the insurance company. As a result, the insurance company did not receive actual notice of the claim until 23 months after the collision. The insurance company filed a declaratory judgment action arguing that it did not owe the insured coverage as a result of the late notice. The trial court held that the insurance company did not suffer any prejudice as a result of the delay and entered judgment in favor of the insured. The insurance company appealed and the appellate court affirmed, finding that the insurance company could not prove prejudice where it failed to investigate the collision after receiving actual notice of the claim. (McBRIDE and REYES, concurring)

In an insurance coverage dispute, the court considered whether an insurer’s duty to defend or indemnify extended to the tenants of an insured property against a third-party negligence contribution claim where the tenants were not identified as persons insured under the policy. The court found that the tenants were not covered insureds under the policy and reversed the appellate court and affirmed the judgment of the circuit court, which had held that the insurer did not owe a duty to defend or indemnify the tenants of the insured property against a third-party contribution claim. (THEIS, ANNE M. BURKE, NEVILLE, MICHAEL J. BURKE, OVERSTREET, and CARTER, concurring)

The appellate court considered whether the statute governing the effect of a judgment for dissolution of marriage on a life insurance policy should be applied retroactively where the judgment for dissolution of marriage was silent regarding a life insurance policy and where Illinois subsequently enacted a statute providing that a dissolution judgment generally operated to revoke an ex-spouse’s status as a beneficiary under a previously issued life insurance policy. The circuit court found that the ex-spouse was entitled to the proceeds of the life insurance policy. The appellate court affirmed, finding that the operative act triggering the application of the statute was the date of the dissolution of the marriage and not the date of death and, since the date of the dissolution judgment preceded the effective date of the statute, the statute did not apply. (GORDON and BURKE, concurring)

Two consolidated appeals involving a single issue: whether a provision in an automobile policy that limits uninsured motorist coverage to insureds occupying an “insured automobile” violates section 143a of the Illinois Insurance Code and, thus, is unenforceable as against public policy. The appellate court found it lacked jurisdiction to hear one of the appeals and dismissed it. In the second appeal, the appellate court reversed the judgment in favor of the insurance company finding that the insured had met the “heavy burden” required to invalidate an insurance policy provision as being against public policy. (McBRIDE, concurring and GORDON, specially concurring)

Appeal arising out of a declaratory judgment filed by the plaintiff insurance company seeking a declaration that defendant was not an “additional insured” under a commercial general liability policy and that plaintiff did not have a duty to defend or indemnify defendant in an underlying personal injury lawsuit. The parties filed cross-motions for summary judgment. The trial court found that the defendant was an additional insured and that the insurance company had a duty to defend. The trial court did not make any decision on the issue of indemnification by finding that it was not yet ripe for decision. Plaintiff appealed and defendant moved to dismiss the appeal, arguing that the trial court order was non-appealable because it did not dispose of all claims against all parties and there had been no SCR 304(a) finding. The motion was denied by the appellate court, but defendant raised the issue again in its brief. In its written opinion, the appellate court, which was not bound by the court's prior denial of the motion to dismiss, agreed that the order was not final and appealable and dismissed the appeal. (GORDON and BURKE, concurring)

In an insurance coverage matter, the circuit court found that the insurer did not have a duty to defend the insured in an underlying lawsuit stemming from damages caused by the allegedly defective construction work of a subcontractor because that case did not allege “property damage caused by an occurrence.” The appellate court reversed and remanded to the trial court to enter summary judgment for the insured by finding that the underlying complaint’s reference to “other property” was sufficiently broad to potentially encompass property covered by the provisions of the policy. (ODEN JOHNSON and MITCHELL, concurring)