Insurance Law

Two lawsuits were filed against Defendants alleging fraud in selling certain technology. Defendants tendered the defense of their suits to their insurer, but insurer denied the tender and filed declaratory judgment action. Claims arise out of the claims for wrongful acts in connection with the efficacy or performance of services, products, or technologies sold by Defendants. Policy's products and services liability exclusion bars coverage for claims in underlying litigation. Court properly found that insurer did not have a duty to defend Defendants. (LAMPKIN and BURKE, concurring.)

Defendant was injured when she was a passenger in a vehicle driven by Motley which struck another vehicle while attempting to cross an intersection.  Motley was an uninsured motorist and at fault. Defendant filed a claim for uninsured-motorist coverage under her own auto insurance policy, but her vehicle was not involved in the collision. The 1995 amendment to 143a of the Insurance Code allows insurers to exclude vehicles that are owned by the insured or their resident spouse or resident relative and that are not specified in the policy. There is no statutory basis to deny uninsured-motorist coverage to Defendant as she occupied an unowned vehicle that was not furnished or available for her regular use, and Motley was an uninsured motorist. To deny uninsured-motorist coverage to Defendant because she did not occupy her insured auto at time of accident would contravene public policy. (SCHOSTOK and BRENNAN, concurring.)

Plaintiffs filed complaint for breach of contract and conversion stemming from Defendant's construction work on Plaintiffs' property. Plaintiffs alleged that Defendant took hundreds of planks of knotty pine wood and other items belonging to Plaintiffs without their consent. Based on clear and unambiguous allegations of intentional conduct by Defendant in underlying claim for conversion, no accident or "occurrence" as defined by policy triggered insurer's duty to defend. Underlying complaint is clearly predicated on an intentional act, and insurer is under no duty to defend an insured when nature of conduct alleged shoed that insured expected or intended to injure the plaintiff. (BIRKETT and SCHOSTOK, concurring.)

Plaintiff was injured by hit-and-run driver while bicycling, and made a claim under his mother’s auto insurance policy for uninsured motorist coverage. Insurer improperly denied coverage, finding that Plaintiff’s having filed police report 11 days after the accident was not “within 24 hours or as soon as practicable” as policy required. Plaintiff did not initially realized the severity of his injuries, there were no witnesses, he could not identify the vehicle or driver, and he was in shock and did not know what to do and did not realize that his claim could be filed under his mother’s auto policy Under the circumstances, the elapsed time of 11 days was not unreasonable.  (BURKE, concurring; GORDON, concurring in part and dissenting in part.)

 Plaintiff insurer sought a declaration that it did not owe a duty to defend its insured, a nightclub, for an incident that occurred in the nightclub parking lot that resulted in the death of one patron and the injury of another patron who were attacked by patrons who had been removed from the nightclub and returned with handguns. Policy endorsements are unambiguous in exclusion of coverage for any claim arising out of an assault and battery or any claim arising out of use or misuse of a firearm. Insurer had no duty to defend because allegations in complaint do not even potentially fall within the policy’s coverage. Although estoppel may bar insurer from relying on policy defenses such as an insured’s late notice of the claim, it cannot create coverage where no coverage would otherwise exist. (CUNNINGHAM and HARRIS, concurring.)

Restaurant manager falsified time records for herself and her 4 relatives who worked at the restaurants, resulting in overpayments to them of more than $66,000. Employee's wage theft is not covered under the terms of the employer's business insurance policy. Unearned salary payments are nonetheless salary and excluded from coverage. The policy was not designed to cover all conceivable employee criminal conduct, and wage theft is one form of indirect employee theft that is excluded from coverage. (McLAREN and BRIDGES, concurring.)

Plaintiff filed putative class action complaint alleging that insurer improperly depreciated labor costs when it calculated "actual cash value" of covered losses and that insurer concealed this practice from policyholders. Where Illinois's insurance regulations provide that the "actual cash value" of an insured, damaged structure is determined as "replacement cost of property at time of loss less depreciation, if any, and the policy does not itself define actual cash value, only the property structure and materials are subject to a reasonable deduction for depreciation, and depreciation may not be applied to the intangible labor component.(MOORE and BARBERIS, concurring.)