Insurance Law

Declaratory judgment action brought by plaintiff insurance company seeking a finding that it had no duty to defend, indemnify, or otherwise provide coverage relating to an automobile collision on the basis that the at-fault driver did not have a reasonable belief that he was entitled to operate the vehicle when he was driving in violation of the restrictions placed on his graduated driver’s license. The trial court entered summary judgment in favor of the insurance company. Defendant appealed arguing that driving outside the parameters of a graduated driver’s license was not the same as driving without a license and that the reasonable belief exclusion is unenforceable because it is against Illinois public policy. The appellate court affirmed, finding that the driver was not legally entitled to operate the vehicle at the time of the collision because it is a limited license that only grants the right to drive under statutorily defined conditions. (GORDON and ELLIS, concurring)

Insurance coverage dispute as to whether alleged emissions of ethylene oxide gas at a medical instrument sterilization facility in Waukegan were a single “pollution condition,” as that term was defined by the relevant insurance policy, and, as a result, occurred prior to the retroactive date of the policy or whether each alleged incident was a discrete omission, resulting in pollution conditions that occurred both prior to and after the retroactive date of the policy. The trial court held that the insurer had no duty to defend or to indemnify under the policy. The appellate court affirmed, finding that the plaintiff was required to allege that the pollution condition first commenced, in its entirety, after the retroactive date, and it did not do so. (BRIDGES and HUTCHINSON, concurring)

Plaintiff filed suit against homeowners, their insurance company, and an independent adjuster, to enforce a contract to perform fire reconstruction work at a residential property. Defendants filed a motion to dismiss, which was granted by the trial court, arguing that the contract was void and barred under the Insurance Code because the plaintiff was not a licensed public adjuster, but held itself out as being in the business of claims adjusting and performed claims adjusting activities as defined by the Public Adjusters Law. The appellate court affirmed finding that the plaintiff improperly acted as a public adjuster by applying the circumstances of the loss to the language of the homeowner’s insurance policy and, as such, that the contract was void. (BIRKETT and BRENNAN, concurring)

Insurance coverage dispute involving the question of whether the assignment of a master service agreement (MSA) was sufficient for the assignee to be considered an “additional insured” of the non-assigning party to the original MSA. The appellate court found that the assignment of the MSA satisfied the written agreement requirement between the insured and the assignee for the assignee to be considered an additional insured under the policy, which obligated the insurance company to provide a defense in a personal injury lawsuit. The appellate court reversed the trial court order to the contrary. (WALKER and COGHLAN, concurring)

Insurance coverage matter arising out of an automobile collision. The insured’s vehicle was hit by a city ambulance that was found to be immune under the Local Government and Governmental Tort Immunity Act. The insured subsequently filed an uninsured motorist claim and the insurance company filed a declaratory judgment complaint on the basis that the city, a self-insured entity, did not meet the policy’s definition of an uninsured motorist. The circuit court found in favor of the insurer and the appellate court affirmed, finding that because the city vehicle was self-insured it did not meet the definition of an uninsured vehicle under the policy. The appellate court further found the insured’s argument that the vehicle was an underinsured vehicle was waived because it was raised for the first time on appeal. (DELORT and CUNNINGHAM, concurring)

Insurance coverage dispute arising out of a personal injury claim involving a rental property. The plaintiff denied coverage pursuant to a homeowner’s insurance policy based on two policy exclusions and sought declaratory judgment stating it did not have a duty to defend. The trial court granted plaintiff’s motion for judgment on the pleadings and defendants appealed. The appellate court affirmed finding coverage was precluded under both the resident exclusion and the rental property exclusion contained in the homeowner’s policy. The court further found that defendants’ estoppel argument and counterclaim were properly denied by the trial court. (KNECHT and STEGIMANN, concurring)

Plaintiff filed complaint against her auto insurer related to its handling of her underinsured motorist claim, raising breach of contract claim and claim for statutory damages under section 155 of Insurance Code. After parties arbitrated the underinsured motorist claim, Plaintiff filed a an amended and then a 2nd amended complaint, both seeking only section 155 damages. As Plaintiff's section 155 claim was dependent on a successful breach of contract action and she did not pursue that cause of action, court properly dismissed the 2nd amended complaint. Arbitration was on the initial underinsured motorist claim, not on whether insurer breached the insurance policy.(DeARMOND and CAVANAGH, concurring.)