Insurance Law

(Court opinion corrected 5/30/18.) Plaintiff malpractice insurer filed declaratory judgment action, contending it had no duty to defend insured against complaint, because insured's actions constituted intentional conduct and was excluded from coverage.  Court erred in granting judgment for insured. Conduct of insured, as alleged in underlying complaint (alleging self-dealing, breach of good faith and fair dealing, and breach of trust for failure to administer a trust), is intentional misconduct, which is excluded from coverage. (DeARMOND and TURNER, concurring.)

Plaintiff filed declaratory judgment, seeking determination of cab company's insurance coverage in an underlying suit for damages from collision between cab and motorcycle. Date that coverage under policy issued by Ullico (which later went into liquidation) was transferred from taxi involved in collision to the replacement vehicle was prior to date of collision, and thus taxi involved was not covered at time of accident.Ullico and cab company plainly agreed that coverage for taxi in question would transfer on certain date, which was prior to accident. (HOWSE and LAVIN, concurring.)

Insurer filed declaratory judgment action against its insured, a private investigator for Northwestern who was sued for malicious prosecution in connection with investigative journalism class. Plaintiff in underlying suit alleged that investigator and others "framed" him for a 1982 double murder, of which he was convicted in 1999, but exonerated in 2014. Investigator filed a 6-count counterclaim. Court properly dismissed 5 counts of counterclaim and later granted summary judgment for insurer, including as to remaining count of counterclaim, as each count of counterclaim was defective .Alleged "offense" was misconduct allegedly committed by investigator leading to 1999 plea and conviction, which predated policy, so that insurer did not owe coverage. (HOFFMAN and DELORT, concurring.)

(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.)