Insurance Law

Court did not abuse its discretion in staying consideration of coverage issues where its factual determinations in coverage litigation could have an effect on the ultimate facts at issue in the underlying suits. Court did not abuse its discretion in considering whether allegations of underlying complaints set forth facts that arguably fell within the policies' coverage such that it gave rise to a duty to defend. Court did not abuse its discretion in declining to adjudicate coverage issues on 2 underlying suits that had settled. (HALL and LAMPKIN, concurring.)

Plaintiff, while driving a box truck during course and scope of his employment, was seriously injured in auto accident. Option form is not sufficient evidence that Plaintiff's employer effectively rejected the policy's bodily injury liability limits or effectively selected lower underinsured motorist (UIM) limits. Alleged rejection was not initialed by insured as required by preamended version of Section 143a2 of Insurance Code, and was not, per amended version of that Section, a written request for lower UIM coverage made by insured or applicant as required by statute. No arbitration is required as to Plaintiff's UIM motorist claim. Defendant's denial of UIM claim and delay was not vexatious or unreasonable. Box truck was not a "private passenger automobile" within meaning of Section 143.13a of Insurance Code. Thus, step-down limits of policy do not violate Illinois law or public policy. (CHAPMAN and CATES, concurring.)

Insurance coverage dispute involving personal injury action filed against Defendants. Plaintiff insurer filed initial declaratory action seeking declaration that it owed no duty to defend Defendant AAA in underlying PI suit. Another insurer intervened in declaratory action and filed counterclaim seeking declaration that other insurer has a duty to defend  AAA, and that it owed it reimbursement for costs it incurred in defending AAA.  Underlying complaint, when read in conjunction with Plaintiff insurer's claim note and terms of Subcontract, create possibility that  AAA could be found liable for injuries based on named insured's negligence. Thus, Plaintiff insurer's duty to defend AAA under additional insured endorsement was triggered. (GORDON and LAMPKIN, concurring.)

Insurer filed declaratory judgment complaint seeking declaration that insureds were not entitled to coverage. Insureds filed counterclaim against insurer and a 3rd-party complaint against its agent. Defendants' counterclaim and 3rd-party complaint were not time barred, as cause of action accrued upon denial of coverage. When an insurance agent owes a fiduciary duty to an insured, a cause of action for breach of that duty accrues at the time of the breach, but statute of limitations is subject to tolling by application of the discovery rule. Insureds knew or reasonably should have known of their injury on the date when coverage was denied. (FITZGERALD SMITH and LAVIN, concurring.)

Insurer filed declaratory judgment action seeking declaration that it had no duty to provide coverage for its insured involved in auto accident because its insured breached cooperation clause in insurance policy. Insured failed to appear at a mandatory arbitration hearing in underlying personal injury and subrogation litigation, resulting in order debarring her from rejecting unfavorable arbitration award. Court properly found that although insurer had made a prima facie showing that insured had willfully refused to cooperate, insurer failed to present sufficient evidence to make a prima facie case that it suffered substantial prejudice as a result of breach of cooperation clause. Substantial prejudice to insurer does not automatically flow from issuance of a debarring order preventing insured from rejecting unfavorable arbitration award.(CONNORS and SIMON, concurring.)

Plaintiff, an Indiana resident, was injured when he attempted to enter a taxi in Chicago. After jury trial, verdict for $69,611 Defendant taxi’s insurer became insolvent 29 months after occurrence. Plaintiff’s own auto insurance policy is not “other insurance” providing coverage for Plaintiff’s claim within meaning of Indiana law, and this interpretation does not conflict with policies underlying creation of Guaranty Fund. Recovery from Guaranty Fund would not be a duplicative recovery. (CONNORS and SIMON, concurring.)