Insurance Law

Dist. Ct. did not err in granting plaintiff-insured’s motion for summary judgment in action seeking declaration that defendant’s policy covered excess losses resulting from liability imposed on plaintiff for losses under “Workers’ Compensation or Employers’ Liability laws,” where plaintiff was sued in underlying common law action alleging negligence that resulted in death of insured’s employee, who had contracted mesothelioma. Underlying lawsuit fell within “Employers’ Liability Laws” language of policy since it pertained to alleged workplace injury or disease, and fact that plaintiff had available affirmative defense to said lawsuit under Ill. Workers’ Occupational Disease Act did not affect coverage under policy. Dist. Ct. also did not err in denying plaintiff’s motion for sanctions under section 155 of Illinois Insurance Code, where defendant took reasonable position on unsettled issue of law.

Dist. Ct. did not err in granting motion for summary judgment by wife of decedent in instant interpleader action seeking to determine ownership of life insurance proceeds, where wife was beneficiary by default since decedent had not designated any beneficiary of said policy. While children of decedent argued that they were entitled to said proceeds where decedent had named them as beneficiaries on form provided by insurance company 15 months prior to decedent’s death, decedent failed to notify insurance company that he had named children as beneficiaries, as required by policy language, and Ct. found that said failure precluded finding that decedent had substantially complied with policy so as to effectuate change in beneficiaries from wife to children.

Dist. Ct. did not err in finding that plaintiff-insurance company owed entire $3.15 million in attorney fees awarded in underlying lawsuit challenging defendant-insured’s proxy statement used to seek shareholder approval of proposed merger with another company, where plaintiff’s insurance policy contained clause covering as part of defendant’s “loss” not only what insured paid its own lawyers in underlying litigation, but also what shareholders paid to their attorneys. Record showed that court had awarded fees in terms of $630,000 lodestar that was multiplied by five to reflect risk of nonpayment, as well as good result for shareholders. While plaintiff conceded that policy covered lodestar figure, it further asserted that multiplier was not covered, where policy provided that loss would not include “multiplied portion of multiplied damages.” Ct., though, found that entire fee award was covered where nothing in policy defined “damages” in instant exclusion to include attorney fees. Moreover, context of instant exclusion did not pertain to fee awards, but rather pertained to category of losses that insurers exclude on grounds of moral hazard.