Plaintiff insurer filed declaratory judgment action. Plaintiff's attempt, after the collision which is the subject of the underlying action, to rescind coverage due to Defendant insured's failure to disclose to insurer that he was on occasion using his vehicle for ridesharing, was untimely under section 154 of Illinois Insurance Code and similar policy language. (Insured was not using vehicle for ridesharing at time of collision.) Policy exclusions barring certain coverages for an insured vehicle “while used as a public livery or conveyance” were inapplicable to the underlying claim for uninsured motorist coverage, because record does not show that Defendants sought coverage under those parts of the policy. Court properly granted summary judgment for Defendants and dismissed Plaintiff's declaratory judgment action. (COGHLAN and WALKER, concurring.)
Plaintiff insurer filed declaratory judgment seeking declaration that it had no duty to defend an additional insured in connection with several lawsuit filed on behalf of minors, who were allegedly molested and/or abused by employee of school district and Boys & Girls Clubs which rented the district premises for after-school programs. Underlying complaints alleged willful and wanton hiring and retention and supervision against the district. Court properly found that insurer had a duty to defend the district under policy's physical abuse and sexual molestation liability endorsement, and that the district was not required to provide notice of an occurrence. In addition to alleging willful and wanton misconduct, allegations potentially also allege ordinary negligence.(HUTCHINSON and SCHOSTOK, concurring.)
Rental apartment sustained severe fire damage after tenant turned on the stove and stove burst into flames. Landlord had fire insurance policy on apartment, and lease explicitly states that landlord shall maintain fire and other hazard insurance. Reasonable expectations of parties to the lease were that the landlord would look to the policy for fire damage to the premises. Policy declarations listed landlord and his wife as the only named insureds. An insurer's duty to defend does extend to the tenants of the insured property against a 3rd-party negligence contribution claim when tenants are not identified as persons insured under the policy. (HOLDRIDGE, specially concurring; McDADE, dissenting.)
This case presents question as to whether Department of Insurance (DOI) lacked authority to issue its final order in instant dispute over payment of additional workers compensation premiums in amount of $127,305, based on claims that said premiums were owed because certain subcontractors hired by plaintiff did not have individual workers’ compensation coverage, and thus exposed defendant to additional workers’ compensation liability. Appellate Court, in vacating trial court’s order that affirmed DOI’s finding that plaintiff owed said premiums, found that DOI lacked jurisdiction over parties’ dispute regarding amount of premiums owed, since: (1) underlying claim concerned employment status dispute as to whether plaintiffs’ subcontractors, who had no workers’ compensation coverage, had employees that would trigger additional premiums under plaintiffs’ workers’ compensation policy; and (2) under CAT Express, 2019 IL App. (1st) 181851, DOI did not have express or implied statutory authority under Insurance Code to resolve instant private employment status dispute, as it did not directly or indirectly involve DOI’s or its Director’s authority to administer insurance laws.
Dist. Ct. did not err in dismissing plaintiff’s action, alleging that defendants-insurance broker and brokerage negligently procured wrong insurance policy, where plaintiff wanted same occupational disability coverage that was included in his original insurance policy that insured his income as orthopedic surgeon, if he were no longer able to be orthopedic surgeon, but was otherwise able to be employed, where defendants did not obtain same coverage in new insurance policy. Dist. Ct. did not err, in applying Indiana choice-of-law principles, in finding that Alabama law applied to case, where: (1) there was material difference between Alabama law and Indiana law when applied to facts of case; and (2) Alabama law applied to facts of case, since plaintiff earned his income in Alabama and sustained his economic losses there. Moreover, plaintiff conceded that if Alabama law applied to case, he would lose his negligent procurement case, since Alabama law recognized that plaintiff’s contributory negligence would preclude his case where plaintiff had failed to read terms of new policy. Also, Dist. Ct. properly entered summary judgment on plaintiff’s breach of contract claim, alleging that defendants failed to pay correct amount of benefits, where plaintiff had failed to submit required written proof of financial losses for each month of lost income.
In action by plaintiff-insurance company seeking declaration that it did not owe coverage in underlying Title IX action by two female students alleging that defendant-insured/School District failed to prevent and inappropriately responded to sexual misconduct by male student, Dist. Ct. erred in granting defendant’s motion for judgment on pleadings, after finding that policy’s errors and omissions provisions provided coverage for underlying lawsuit. Record showed that errors and admissions’ provisions contained sexual misconduct exclusion that Dist. Ct. viewed as ambiguous, and that Dist. Ct. found that exclusion applied only to sexual misconduct by school employees and that it might not bar coverage for defendant’s reactions to student’s sexual misconduct. Ct. of Appeals, though, found that reasonable reading of exclusion indicated that exclusion applied to “any” sexual misconduct or molestation of “any person,” such that it would exclude coverage for claim based directly on male student’s misconduct. Moreover, Ct. of Appeals alternatively noted that if, as Dist. Ct. found, sexual misconduct exclusion barred only coverage for defendant’s employees’ actions, exclusion would still apply to underlying Title IX lawsuit, since: (1) defendant could be liable for discrimination in cases of student-on-student sexual misconduct under Title IX only if defendant had notice of said misconduct and was deliberately indifferent to said misconduct; and (2) liability for violation of Title IX depended on actions of defendant’s employees, and thus exclusion would apply under Dist. Ct.'s reading of sexual misconduct exclusion.
Dist. Ct. did not err in granting defendant-general contractor/additional insured’s motion for summary judgment in action by plaintiff-insurance company seeking declaration that it did not owe duty to defend defendant in underlying lawsuit filed by injured worker who was employed by insured-subcontractor at construction site. Relevant policy provided additional insured such as defendant with liability coverage, but only with respect to defendant’s liability for bodily injuries that may be imputed to defendant arising out of insured’s acts or omissions. Moreover, underlying lawsuit against defendant contained allegations of both direct liability and imputed liability for bodily injuries arising out of subcontractor’s actions. As such, defendant remained potentially liable under allegations of underlying lawsuit so as to require plaintiff to defend defendant in underlying lawsuit. Ct. rejected plaintiff’s reasoning that there was no duty to defend, where Illinois law would not impose liability on defendant for imputed liability in underlying lawsuit, since Ct. found that insurer’s duty to defend applies, where underlying complaint contained allegations that potentially fell within scope of coverage, and where duty to defend applied even to hopeless lawsuits, whether they are unfounded, false or fraudulent. However, duty to defend defendant ended when plaintiff settled with injured worker in underlying lawsuit on behalf of insured-subcontractor, where settlement extinguished any imputed liability of defendant. (Dissent filed.)
Declaratory judgment action by Plaintiff insurer arising out of a 2013 motor vehicle collision, seeking a declaration that Defendant was covered by another insurer, Direct Auto, at time of incident so that Plaintiff's insured had no uninsured motorist claim. Direct Auto had previously filed suit to determine its obligations under its policy with Defendant, and court found that it did not owe Defendant coverage for the 2013 collision. Plaintiff's interest in that suit was contingent, and it was not a necessary party to that suit. Circuit court in the present case properly found that Plaintiff was in privity with a party to the first action (its insured), as their interests were aligned. Thus, Plaintiff is collaterally estopped by the judgment in the first action from claiming that Defendant was insured by Direct Auto at time of incident. (CONNORS and ODEN JOHNSON, concurring.)
Dist. Ct. did not err in entering judgment on pleadings in favor of plaintiff-insurance company on action seeking declaration that terms of workers’ compensation and employer’s liability policies it issued to insured-subcontractor, which performed services at construction site, obligated plaintiff to pay nothing more for workplace injury than amounts Ill. workers’ compensation law required subcontractor to pay its injured employee. Record showed that under Ill. Workers’ Compensation Act, subcontractor’s liability to one defendant-employee’s estate was $5,993.91 and its liability to second defendant-employee was $25,229.15, but that subcontractor waived instant Kotecki caps, where subcontractor, in separate agreement with general contractor, agreed to indemnify general contractor and hold it harmless for any injuries arising out of subcontractor’s work at construction site. However, policy issued by plaintiff contained exclusion that provided that insurance did not cover subcontractor’s instant waiver of right to limit its liability for contribution to amounts of benefits payable under Workers’ Compensation Act. As such, policy did not cover general contractor’s contribution claim against subcontractor, even though general contractor had settled for amount in excess of $75,000 with injured employees, and thus plaintiff was only required to pay amounts set forth under Workers’ Compensation Act. Fact that subcontractor’s agreement with general contractor called for subcontractor to perform work in workmanlike manner did not require different result, since general contractor’s contribution claim was based on subcontractor’s pro rata share of liability in tort (as opposed to liability based on breach of warranty) for instant workplace accident.
Dist. Ct. erred in granting plaintiff-insurance company’s motion for summary judgment in plaintiff’s action seeking declaration that it had no duty to defend or indemnify its insured in defendant’s underlying negligence action, alleging that insured’s employee ran over defendant with insured’s golf cart during horse trail event that took place off insured’s premises and was hosted by insured. Applicable policy was ambiguous as to whether policy could properly be viewed as CGL or farmland policy, and that: (1) policy contained clause providing for payment of benefits for bodily injuries caused by occurrence that arose out of operations that were necessary or incidental to insured’s premises; and (2) policy contemplated that it would cover insured’s equestrian events that took place off insured’s premises. Also, exclusion that provided that there would be no coverage for incidents arising out of recreational use of golf cart did not apply. As such, plaintiff had duty to defend insured in defendant’s underlying lawsuit. Too, Dist. Ct. improperly resolved issue regarding plaintiff’s duty to indemnify insured, where merits of duty to indemnify claim could not be resolved until insured had incurred liability in underlying lawsuit.
