Insurance Law

Dist. Ct. did not err in finding that policies of defendants-insurance companies providing coverage for property damage to plaintiffs’ home for period between October 1994 to October 2005 covered water damage to plaintiffs’ home that was discovered in 2010, but had occurred throughout time that said policies had been issued. Dist. Ct. could properly find that “continuous” trigger theory applied, where language of policy provided coverage for “all risk of physical loss” that occurred within policy period, with continuous exposure being considered one occurrence, and where damage initially occurred within relevant time period and continued after each rain until time of discovery. Ct. rejected defendants’ contention that manifestation trigger theory always applied to instant first-party property insurance policies so that policy in effect at time that damage is discovered is applicable policy for providing coverage.

In action by plaintiff-excess general liability insurance company seeking declaration that defendant-title insurance company had duty to defend insured on all claims in underlying action under circumstances where title insurance policy provided limited coverage for claims involving defects in title or lien priority and/or other claims adverse to insured’s title, and where underlying lawsuit alleged actions that were and were not covered by title insurance policy, Dist. Ct. erred in finding that defendant had duty to defend entire lawsuit under “complete defense” rule. Complete defense rule does not apply to title insurance policies, which seek to insure only limited range of losses related to defects in title. Moreover, Ct. observed that Ill. Supreme Ct. had only applied complete defense rule in context of general liability insurance policies.

In instant interpleader action to determine ownership of life insurance proceeds between sister of deceased and alleged son of deceased, Dist. Ct. did not err in awarding said proceeds to son, even though sister asserted that deceased, who died intestate and did not name beneficiary in policy, was homosexual and was therefore not father to said son. While sister argued that Dist. Ct. had erred in failing to require alleged son to take paternity test, Ill. Parentage Act created presumption that deceased was natural father to alleged son, where deceased and son’s mother had signed acknowledgement of paternity. Moreover, sister lacked standing under Parentage Act to challenge parentage order, and instant claim by sister was in essence claim under Parentage Act. Also, sister’s allegations regarding homosexuality of deceased was not conclusive evidence that deceased could not have been father of alleged son.

Dist. Ct. did not err in granting defendant-insurance company’s motion for summary judgment in action seeking declaration that defendant’s policy providing underinsured motorist coverage required that defendant pay plaintiff for entire $310,000 net loss that plaintiff incurred in work-related traffic accident. Defendant was entitled to subtract $100,000 from $310,000 loss figure, since: (1) plaintiff had received workers’ compensation lien waiver in that amount, when insurance company for at-fault driver paid plaintiff’s employer $100,000 to partially satisfy employer’s workers’ compensation lien; and (2) terms of defendant’s policy allowed it to subtract from loss amount, money that was paid on plaintiff’s behalf to satisfy workers’ compensation lien. Ct. further observed that contrary result would have given plaintiff windfall to extent that she would have received full amount of her damages and her workers’ compensation benefits. Fact that insurance company for at-fault driver paid $100,000 directly to plaintiff’s employer as opposed to plaintiff did not require different result.

Dist. Ct. erred in granting plaintiff-insurance company’s request for declaration that it had no duty to indemnify defendant-insured in underlying state court personal injury action, where Dist. Ct. found that state court lacked jurisdiction to entertain underlying tort action, where plaintiff in underlying action was employee of insured, and where said employee’s only remedy was administrative action under state’s workers compensation act. Record showed that plaintiff had previously litigated workers compensation jurisdiction issue in Indiana state court system, which awarded employee $4 million judgment, and plaintiff could not file instant federal action on ground that state court had misconceived its jurisdiction over case.