Insurance Law

House Bill 3518

Topic: 
Product liability and confidentiality orders
(Martwick, D-Chicago) defines these terms. If good cause is shown, a party required to respond to discovery in a product liability action may obtain a confidentiality order. If the court finds that such a confidentiality order is appropriate, the order shall be narrowly drafted and may permit the subsequent designation of specific confidential materials. If a party objects to a designation that limits disclosure or dissemination of materials under a confidentiality order, the party seeking to limit disclosure or dissemination under a claim of confidentiality must demonstrate, by a preponderance of the evidence, a specific, serious, and substantial interest in confidentiality that outweighs the adverse effect of confidentiality upon the general public health or safety. These new provisions do not preclude the use of confidentiality orders to protect trade secrets; apply to laws or regulations safeguarding the confidentiality of medical records; or apply to healthcare services. Scheduled for hearing this Wednesday in House Judiciary Committee (Civil).
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House Bill 2456

Topic: 
Attorney's fees
(Kay, R-Glen Carbon) Authorizes the Illinois Supreme Court to adopt rules to promote the prompt, efficient, and cost-effective resolution of civil actions in which the amount in controversy is more than $10,000 but does not exceed $100,000. If a circuit court grants or denies, in whole or in part, a motion to dismiss because of the absence of a basis in law or fact for the action, then the court may award costs and reasonable and necessary attorney’s fees to the prevailing party in amounts that the court determines are equitable and just. Authorizes reasonable deposition fees to be recovered as costs. Scheduled for hearing this Wednesday in House Judiciary Committee (Civil).
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BB Syndication Services, Inc. v. First American Title Co.

Federal 7th Circuit Court
BB Syndication Services, Inc. v. First American Title Co.
Civil Court
Insurance
Citation
Case Number: 
No. 13-2785
Decision Date: 
March 12, 2015
Federal District: 
W.D. Wisc.
Holding: 
Affirmed
Dist. Ct. did not err in granting defendant-title insurance company’s motion for summary judgment in action by plaintiff-insured seeking indemnity for insured’s payments of contractors’ liens on failed commercial development, where liens were generated after insured-lender on said development refused to lend developer additional loan proceeds because development had become “out of balance” due to certain cost overruns. Terms of relevant title insurance policy did not generally protect liens that arose after issuance of policy, and provision in instant policy that excluded coverage for liens that are “created or suffered” by plaintiff applied, where instant liens arose from insufficient project funds, which was risk of loss that plaintiff-lender, as opposed to defendant, had authority and responsibility to discover, monitor and prevent.

Senate Bill 1447

Topic: 
Administrative Review Law
(Kotowski, D-Park Ridge) provides that “parties of record” does not include a private citizen who was not acting in an official capacity or whose participation in the agency proceedings was limited to his or her attendance or testimony at a public hearing. Scheduled for hearing next Tuesday in Senate Judiciary Committee.
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Senate Bill 1296

Topic: 
Insured’s Independent Counsel Act
(Mulroe, D-Chicago) applies if an insurer has a duty to defend an insured under a policy of insurance and a significant and actual conflict of interest arises that imposes a duty on the insurer to provide independent counsel to the insured. It requires the insurer to provide independent counsel to the insured unless the insured waives the right to independent counsel in writing. Defines the phrase “significant and actual conflict of interest” to exclude these circumstances: (1) claims or facts in a civil action for which the insurer denies coverage; (2) the mere issuance of a reservation of rights letter by the insurer; (3) a claim of damages in excess of the policy limits; (4) a claim of punitive damages; or (5) any other conflict that is not significant and actual. Scheduled for hearing next Tuesday in Senate Judiciary Committee.
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Indian Harbor Insurance Company v. The City of Waukegan

Indian Harbor Insurance Company v. The City of Waukegan
Illinois Appellate Court
Civil Court
Insurance
Citation
Case Number: 
2015 IL App (2d) 140293
Decision Date: 
Friday, March 6, 2015
District: 
2d Dist.
Division/County: 
Lake Co.
Holding: 
Affirmed.
Justice: 
BURKE
Plaintiff was wrongfully convicted of rape and murder and imprisoned for 20 years, and was released after exonerated by DNA evidence. Plaintiff filed malicious prosecution claim against City and police officers. Plaintiff's malicious prosecution claim did not trigger coverage under insurance policies issued to City, because prosecution was commenced before inception of policies. Coverage for Plaintiff's other allegations also was not triggered under policies, and policies do not provide illusory coverage, as malicious prosecution did not occur during policy periods. (ZENOFF and SPENCE, concurring.)

Illinois State Bar Association Mutual Insurance Company v. Law Office of Tuzzolino and Terpinas

Illinois State Bar Association Mutual Insurance Company v. Law Office of Tuzzolino and Terpinas
Illinois Supreme Court
Civil Court
Legal Malpractice
Citation
Case Number: 
2015 IL 117096
Decision Date: 
Friday, February 20, 2015
District: 
1st Dist.
Division/County: 
Cook Co.
Holding: 
Appellate court reversed; circuit court affirmed.
Justice: 
FREEMAN
Two attorneys practiced together in one firm; one attorney was disbarred on consent. Two years prior, on behalf of firm, that attorney had completed and signed form for renewal of legal malpractice coverage, and answered "no" to question whether any member of firm was aware of circumstances which might give rise to claim not yet reported.Section 154 of Illinois Insurance Code allows complete rescission of an insurance policy in its entirety for a material misrepresentation on the written application, where misrepresentation materially affects the acceptance of risk by insurer and thus goes to contract formation. "Innocent insured" doctrine is not applicable in this case, and Insurance Code governs as an expression of public policy. (GARMAN, THOMAS, KARMEIER, BURKE, and THEIS, concurring; KILBRIDE, dissenting.)

Shrinking the Target: New Developments in “Targeted Tender”

By Richard J. VanSwol
March
2015
Article
, Page 30
"Targeted tender" allows an insured with multiple policies covering the same risk to choose which insurers must defend first. But recent decisions have limited the scope of the doctrine.

Lodholtz v. York Risk Services Group, Inc.

Federal 7th Circuit Court
Lodholtz v. York Risk Services Group, Inc.
Civil Court
Insurance
Citation
Case Number: 
No. 14-2571
Decision Date: 
February 11, 2015
Federal District: 
N.D. Ind., S. Bend Div.
Holding: 
Affirmed
Dist. Ct. did not err in granting defendant-insurance adjuster’s motion for judgment on pleadings in action by plaintiff (individual who obtained rights of insured) alleging that defendant was negligent in handling underlying state-court complaint filed against insured by employee of insured who sought damages for personal injuries that were sustained in insured’s workplace where: (1) according to insured, said negligence allowed employee to obtain $3.8 million default judgment against insured; and (2) insured’s insurance company, which had hired defendant to handle said complaint, ultimately denied coverage for employee’s injuries under terms of insurance policy. Defendant, as insurance adjuster, had no relationship to insured, and thus, under Indiana law, although defendant owed duty to insurance company, it owed no legal duty to insured. Moreover, record showed that defendant had not specifically and deliberately undertaken task that, according to insured, defendant had performed negligently.

Senate Bill 804

Topic: 
Court-services fee
(Haine, D-Alton) lifts the ceiling for the court-services fee that is now at $25. It can be increased to more than $25 if accompanied by an acceptable cost study per statute. The court-services fee is dedicated to the the county sheriff for court security and applies to civil pleadings and criminal convictions. Just introduced and referred to the Senate Committee on Assignments.
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