Insurance Law

Petitioner insurer filed subpoena in Cook County circuit court, seeking to have it served upon Respondent insurer in dispute over coverage for damage caused in course of repairs done by a New York domiciled company to compete repairs to a New York residence. Under the Uniform Interstate Depositions and Discovery Act, the choice-of-law principles of Illinois should apply to the question of whether Illinois or New York substantive law should apply to Respondent insurer's motion to quash Petitioner insurer's subpoena.Petitioner failed to meet its initial burden to show that a different result would be obtained under New York law than under Illinois law, such that any further choice-of-law analysis would be required. Court thus properly applied substantive law of Illinois to resolve Respondent's claims of privilege as to its claims file and subrogation file. (DELORT and HOFFMAN, concurring.)

(Court opinion corrected 1/21/21.) Plaintiff filed suit against its insurance companies, involving 2 underlying suits in which Plaintiff was sued and tendered defense of suit to Travelers. Plaintiff alleged in 1st underlying suit that Travelers breached its duty to defend it in a suit in federal court in Oklahoma, and sought relief under Section 155 of the Insurance Code. In 2nd underlying suit (filed in Cook County Circuit Court), Plaintiff alleged breach of contract, violation of 155 of Insurance Code, and violation of Consumer Fraud Act by Travelers.  The fact that there was for some time a dispute about the insurers' respective obligations is not a breach of contract by Travelers. Court properly dismissed count alleging breach of contract. Section 155 of Insurance Code does not apply, as Travelers had no contractual duty to tender its policy limits to other insurer prior to appeal, and thus it cannot be punished for vexatious and unreasonable delay in doing so.  Thus, court properly dismissed Section 155 count. As no conflict of interest existed between Travelers and Plaintiff, any alleged misrepresentation or omission by Travelers to Plaintiff as to the existence of a conflict of interest cannot be a deceptive act or practice under Consumer Fraud Act. Court properly dismissed Consumer Fraud Act count. (LAVIN and PUCINSKI, concurring.)

Plaintiffs purchased casualty insurance policy from Defendant insurer, to insure their warehouse building and its contents from accidental loss. Water pipes burst and flooded the building when weather was below freezing. Insurer refused to cover the damages. Court properly entered judgment for insurer, finding that policy exclusion applied and that there was no coverage for the building's water damage under the policy. Under plain language of policy exclusion, insurer agreed to cover a loss due to frozen water pipes but only if the insureds maintained proper heating in the building. Court properly found that Plaintiffs failed to make reasonable efforts to maintain heat in the building, and made no effort to remedy the known problem with the building's heating system. (CATES and MOORE, concurring.)

Defendant was injured while unloading grain from a truck owned by his father. He stepped onto the auger when attempting to open the truck's gate to let grain into the auger. Because the auger's protective shield had been removed, his foot was exposed to the turning shaft; his right leg was amputated above the knee as a result of the injury. The "mechanical device" exclusion in the auto policy covering the grain truck is unambiguous and enforceable, and is not against public policy. The auger was a machine or tool designed to move grain from one place to another, and was a device "operated by a machine or tool", and thus the exclusion applied and precluded coverage for the injury. (A. BURKE, GARMAN, KARMEIER, THEIS, and NEVILLE, concurring.)

Plaintiffs sought uninsured motorist coverage from insurer, stemming from an auto accident where Plaintiff's minor son was a passenger in a vehicle being driven by an uninsured motorist. Insurer denied Plaintiffs' claim, claiming that minor was not an insured under his father's policy, as it was a nonowner's policy that did not afford coverage to father's family members. Under family expense statute, the minor child's father was legally obligated to pay the medical expenses of his minor son. Although the injury was to the minor, the submitted claim was for father's own economic loss. As there was some question of fact as to whether minor was included as an insured under father's policy, court erred in granting judgment on the pleadings in favor of insurer. (CATES and WHARTON, concurring.)