Insurance Law

Dist. Ct. erred in granting defendant-insurance company’s motion for summary judgment in action by plaintiffs-insured homeowners seeking declaration that insurance policy issued by defendant covered fire damage to plaintiffs’ house, even though defendant denied coverage on ground that plaintiffs did not reside at time of fire in “residence premises” as that term was used in policy, but rather resided in nearby trailer. Plaintiffs were entitled to coverage where term “residence premises” in policy was ambiguous since: (1) policy’s definition of said term did not pertain to any particular address, but rather pertained to particular “location” that could have multiple buildings; and (2) plaintiff’s trailer was located on same parcel of land as house covered by policy. Moreover, while Dist. Ct. believed that insureds’ residency in trailer precluded house’s coverage under policy because trailer had different mailing address than house, which in turn meant that plaintiffs could not satisfy residency requirement in policy, policy did not define “residence premises” in terms of mailing address.

Dist. Ct. erred in granting plaintiff’s motion to remand to state court plaintiff’s action seeking declaration that defendant-insurance company owed insured duty to defend and indemnify in underlying class action lawsuit that assessed $18 million judgment against insured in claim under Telephone Consumer Protection Act, where instant declaratory judgment action had been removed to federal court. Although plaintiff, which was class representative in underlying action, alleged in instant action that it was suing defendant on its own behalf, plaintiff had standing to pursue instant declaratory judgment action only in its capacity as class representative. Thus, instant action was in substance class action that was otherwise eligible for removal under Class Action Fairness Act. Ct. further noted that, due to plaintiff’s status as class representative in underlying action, it still owed continuing fiduciary obligation to class regardless of whether it sued defendant in its individual or representative capacity.

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.