Insurance Law

Employee of landscaping company was injured at construction site and sued construction company for construction negligence. Insurer filed declaratory judgment action claiming it had no duty to defend construction company as an additional insured under policy of landscaping company. Factual allegations in amended complaint state vicarious liability claim that falls within coverage of policy, and thus, injured worker's amended complaint was not an improper or unsupported attempt to plead into coverage. Court may consider amended complaint in its duty to defend determination, but must not consider construction company's 3rd-party complaint in that determination. Declaratory judgment action can proceed to resolution prior to conclusion of underlying suit. (CARTER and O'BRIEN, concurring.)

(Court opinion corrected 7/10/17.) Plaintiff filed a complaint for declaratory judgment against Defendant, State Farm Mutual Automobile Insurance Company. Plaintiff sought a declaration that, as applied to her, the driver exclusion endorsement in the automobile liability policies issued to her by State Farm violated the Illinois Insurance Code and the public policy of Illinois. Court granted summary judgment for Plaintiff and Defendant appealed. In general, named driver exclusions in automobile liability insurance policies are permitted in Illinois. A named driver exclusion in an insured’s policy that bars liability, uninsured or underinsured coverage for the named insured, however, violates Illinois’s mandatory insurance requirements and Illinois public policy. Therefore, the named driver exclusion endorsement in the Plaintiff’s automobile liability policies was not enforceable against the Plaintiff, as the named insured, and summary judgment was proper.

TimCal, Inc., an insurance agent, received a letter from Fidelity National Property & Casualty Insurance Company charging it with breach of its duties as an insurance agent and informing it that Fidelity would seek to recover damages. TimCal did not inform its professional liability insurer, James River Insurance Company, about the claim until almost a year later. James River filed a complaint against TimCal and Fidelity, seeking a judgment declaring that it had no duty to defend or indemnify TimCal because TimCal failed to provide notice of Fidelity’s claim to James River within the 60-day period provided by their contract. Court granted James River’s motion for summary judgment. On appeal, Fidelity argued, in part, that James River policies define a claim as “a written demand for monetary damages,” and that Fidelity’s letter did not satisfy this definition because it did not demand a specific dollar amount. Court properly granted Plaintiff’s motion for summary judgment. The term “claim” unambiguously applied to the letter, because Fidelity demanded payment of monetary damages, even though it did not specify a settlement amount or its total damages.

Plaintiffs filed a complaint against Defendant, their insurance company, alleging breach of contract in bad faith when Defendant would not pay their claims from an accident involving an uninsured motorist. Plaintiffs then filed a motion for summary judgment which Court granted. On appeal, Defendant argued that Court erred, because the policy required Plaintiffs to unequivocally demand arbitration and appoint an arbitrator within two years of the accident, which Plaintiffs did not do. Court erred in granting Plaintiff’s motion. The arbitration provision in the policy stated that disagreements concerning uninsured motorist coverage and damages “shall be submitted to arbitration” within two years. A party sufficiently commences arbitration if their request for arbitration is unequivocal and made according to the terms of the policy. Plaintiff’s letters stating “[w]e hereby make demand for arbitration if this claim is not resolved within two years after the accident” was a contingent demand, and thus did not commence arbitration.

Insurer filed declaratory judgment action as to its duties to defend and indemnify its insured against a suit filed by Wheaton College. Interlocutory appeal from order denying Defendant's motion to stay action pending resolution of underlying litigation. There is an actual controversy between the parties, because there is a concrete dispute admitting of an immediate and definitive determination of the parties' respective rights. Sanctions and default judgment entered against Defendant in underlying case are interlocutory, so that issue of his liability has not been "settled" or "established"Adjudicating insurer's amended complaint would improperly require trial court to decide issues of ultimate that could bind parties to underlying litigation. Staying all proceedings pending resolution of underlying litigation is appropriate given circumstances of case. (McLAREN and BURKE, concurring.)