Insurance Law

Dist. Ct. did not err in granting defendant-insurance company's motion for summary judgment in action by plaintiff-insured seeking declaration that defendant's insurance policy covered $8.5 million settlement plaintiff was required to pay in underlying action alleging that plaintiff fraudulently concealed material facts to induce third-party to purchase one of plaintiff's subsidiaries. Underlying claim for restitution was not insurable interest that could be covered by any insurance contract since: (1) underlying action was attempt to obtain from insured profits from sale of subsidiary that did not belong to insured; and (2) any finding that defendant was liable to insured would improperly allow insured to keep profits associated with its alleged fraud in underlying sale of subsidiary. Fact that defendant asserted different rationale for denying coverage prior to insured filing instant lawsuit was not circumstance that would justify plaintiff's invocation of "mend the hold" doctrine so as to require different result.

Dist. Ct. did not err in granting plaintiff-insurance company's motion for summary judgment in action seeking declaration that insurance bond issued by plaintiff did not cover loss sustained by defendant under circumstances where defendant loaned money to third-party based in part on third-party's submission of fake certificate of origin that purported to authenticate third-party's ownership of expensive motor home that third-party used as collateral to obtain loan. Record showed that third-party's fake certificate of origin did not meet bond's definition of "counterfeit" since fake certificate of origin was not imitation or duplicate of actual certificate of origin issued by manufacturer of motor home with third-party's VIN, but rather was document that purported to be something that never was in existence.

Dist. Ct. did not err in granting defendant-insurance company's motion for summary judgment in action by plaintiffs-insureds alleging that defendant breached terms of insurance policy by failing to pay losses associated with house fire and for bad faith conduct in processing plaintiffs' insurance claim. Record supported defendant's contention that instant fire had suspicious origin, and that plaintiffs had failed to comply with their contractual obligation to provide defendant with requested documentation to support their insurance claim. Fact that plaintiffs provided some documents was irrelevant since: (1) plaintiffs were under duty to provide all requested documents or explain why they could not do so; (2) plaintiffs failed to provide many requested documents and further failed to complete requested sworn statement seeking information about said documents; and (3) plaintiffs cannot impose reasonableness limit on nature and extent of relevant information sought by defendant.

Dist. Ct. did not err in finding that insurance policy issued by plaintiff provided coverage in successful section 1983 action alleging malicious prosecution against defendant-insured where Dist. Ct. found that relevant date for purpose of coverage was 2002 when underlying plaintiff in section 1983 action was exonerated from criminal charges that formed basis of malicious prosecution claim. While instant plaintiff argued that coverage under other third-party insurance policy was operative since that policy was in effect in 1989 and 1990 when actual prosecution occurred, Ct. found that "occurrence" for purposes of coverage was date of exoneration since exoneration formed final element of malicious prosecution claim. Moreover, Dist. Ct. did not err in imposing under 215 ILCS 5/155 damages against plaintiff as part of defendant's counterclaim for vexatious refusal to defend defendant in underlying section 1983 action or to seek declaration as to coverage prior to trial in said action.

Dist. Ct. did not err in granting plaintiff-insurance company's motion for summary judgment in action seeking declaration that pollution exclusion in subject general liability policy precluded coverage in underlying tort lawsuits against defendant-City insured, where said lawsuits alleged personal injuries arising out of perc contamination of water well owned by defendant and used to supply water to residents. Text of policy provided for exclusion of personal injury lawsuits arising out of wrongful release of pollutants, and fact that third-party was responsible for release of perc, or that amount of perc was below maximum level allowed by environmental regulations was irrelevant.

Dist. Ct. did not err in granting defendant's motion for summary judgment in action seeking declaration that defendant's insurance policy was responsible for providing insurance coverage for fatal accident under circumstances where, at time of accident, defendant's employee was driving plaintiff's vehicle to defendant's garage to provide repair services. While plaintiff's and defendant's insurance policies provided coverage for instant accident, plaintiff's insurance policy provided primary coverage where plaintiff was owner of vehicle. Ct. rejected plaintiff's argument that Illinois tow-truck insurance statute provided exception to Ill. rule making vehicle owner's policy primary over vehicle operator's policy, where Ct. held that said statute only required tow-truck operators to insure their own vehicles, as opposed to customer vehicles.