Insurance Law

(Court opinion corrected 4/17/18.) Declaratory judgment action; in underlying action, Plaintiff sued for injuries sustained when she was struck by insured's vehicle which was driven by a different person. Court erred in granting summary judgment for insurer, finding it had no duty to defendant or indemnify driver or owner. Plaintiff claimed negligent entrustment, alleging that owner knew that driver was intoxicated. Plain language of policy provides that insurer will pay compensatory damages for accidents resulting in bodily injury that arise out of owner's use or ownership of vehicle. Underlying complaint alleges that accident arose out of ownership, maintenance, or use of insured vehicle, and her negligent entrustment of vehicle was a proximate cause of Plaintiff's injuries. (HARRIS and MIKVA, concurring.)

Plaintiff insurer filed declaratory judgment action as to homeowner's insurance policy. Court properly granted summary judgment for mortgagee, finding that policy's standard mortgage clause created a separate and distinct contract, under which mortgagee was entitled to coverage. The fact that homeowner is not the mortgagor doses not provide a basis for insurer to deny coverage to mortgagee. Standard mortgage clause protects mortgagee even if there is no coverage for named insured and policy is void as to the named insured, including in situations where conditions precedent to coverage under policy have not been met by named insured. (PIERCE and SIMON, concurring.)

After bench trial, court entered judgment for Plaintiff, as successor interest to First Chicago Bank & Trust, on its breach of contract claim on a $1.8 million loan agreement. Defendant failed to present a prima facie case that Plaintiff lacked standing at time it filed suit. Plaintiff showed that it became owner of loan through purchase and assumption agreement. Court did not abuse its discretion in awarding attorney fees to Plaintiff. Fee-shifting provision  included definition of "attorneys' fees", which includes allocated costs of Bank's in-house counsel. Plaintiff sought fees and costs related to 4 separate foreclosure suits, which fall within provisions of agreement. Plaintiff provided detailed account of attorneys' services. Evidentiary hearing on fee petition was not required.(HALL and ROCHFORD, concurring.)

Plaintiff sought underinsured motorist coverage (UIM) from her insurer, stemming from auto accident that occurred while she was a passenger in vehicle owned, operated, and insured (with different insurer) by Evans. Insurer denied claim based on driver exclusion endorsement in Plaintiff's auto liability insurance policies, which named Evans as an excluded driver. Because underinsured motorist coverage was mandated by statute, insurer's driver exclusion endorsement could not exclude that coverage through a contractual provision. Application of driver exclusion to bar Plaintiff, the named insured, from recovering UIM coverage pursuant to her policies with insurer violates Section 143a-2(4) and, therefore, public policy. Named driver exclusion did not prevent Evans from driving his own, separately insured vehicle.(KARMEIER, FREEMAN, KILBRIDE, GARMAN, BURKE, and THEIS, concurring.)

(Court opinion corrected 3/14/18.) Dispute over insurance coverage, after a woman was killed and a man was injured in a shooting in parking lot outside Dominick's on northwest side of Chicago. Dominick's was sued by decedent's estate and tendered its defense for 2 other insurers, and later sought indemnification. Those 2 insurers denied coverage, and Dominick's filed suit for declaration of coverage and damages for insurers' alleged bad-faith conduct. Netherlands Insurance (CGL insurer of shopping plaza where Dominick's was located) owed Dominick's a duty to defend and indemnify under relevant language of policy. Court properly granted summary judgment in favor of Netherlands on bad faith claims, as their position was not unreasonable, and a bona fide dispute over coverage existed. Complaint alleged that Dominick's failed to keep its premises safe for its patrons and invitees. Case law does not require a defect in the premises before a suit can be interpreted as alleging liability arising out of the premises.(BURKE and McBRIDE, concurring.)

A fire rendered the home of Plaintiffs a total loss, but Plaintiffs and their insurer could not agree on loss valuation. Policy provided for an appraisal process in the event of disagreement as to amount of loss. Insurer failed to notify Plaintiffs of its appraiser, and parties did not select a neutral appraisal umpire. Plaintiffs then filed petition for judicial appointment of appraisal umpire in circuit court, which court granted on same date petition was filed, and without notice of or service upon insurer. Order appointing appraisal umpire is vacated, as insurer was entitled to notice and an opportunity to be heard prior to court ruling on petition. (WELCH and MOORE, concurring.)

Plaintiff driver was killed by speeding hit-and-run driver. Antistacking provision in Plaintiff’s policy is not ambiguous. The “other vehicle insurance with us” provision applies where 2 or more vehicles belonging to same insured are covered by policies issued by Plaintiff’s insurer, and “other insurance” provision refers only to a situation where a different policy issued by a different company applies. Thus, court erred in granting summary judgment for Plaintiff.  (CATES, concurring; GOLDENHERSH, dissenting.)