Insurance Law

Plaintiff's counsel filed suit after rejecting offer to settle with other driver's insurer for her injuries from auto accident, but failed to inform either insurer of suit. Default judgment was entered, but adverse insurer denied coverage based on lack of notice of suit, and then Plaintiff's own insurer refused payment under uninsured motorist coverage, contending that the only reason adverse driver was "uninsured" was counsel's lack of notice. Court properly denied Plaintiff's claim for vexatious and unreasonable delay per Section 155 of Insurance Code. Delay in resolution was attributable to Plaintiff's rejection of the arbitration award, not to actions of insurer, and it was reasonable for insurer to assert lack of notice while following arbitration procedure. (McDADE and O'BRIEN, concurring.)

Widow filed wrongful death and survival action against owners and manager of shopping mall, alleging their negligence caused death of her husband, an HVAC technician dispatched by his employer to service the air conditioning equipment for a tenant of the mall. Decedent fell to the concrete floor 10 feet below, allegedly due to 28-inch gap between roof hatch and top rung of affixed ladder. Ohio substantive law applies to interpretation of tenant's CGL insurance policy, as tenant company was domiciled and headquartered in Ohio, and policy was personally delivered in Ohio; thus, Ohio has most significant contacts with the policy. Decedent was performing HVAC work, rather than work related to the tenant's retail business; thus, tenant's policy did not encompass incident and its insurer was not required to defend the mall. (CAHILL and R. GORDON, concurring.)

Village police officer filed declaratory judgment action for reformation of policy issued by defendant IMLRMA to Village to include underinsured motorist coverage. Officer was injured when struck by carjacker driving vehicle insured by State Farm, which denied coverage because carjacker was not a permissive user. Court found that vehicle was not uninsured, and because this was a declaratory judgment which fixed absolutely the rights on claim for uninsured motorist coverage, it was final within its own language and appealable within 30 days. Village, as a self-insurer, and IMLRMA, as a municipal risk management pool for such municipal self-insurers, are not required to provide underinsured motorist coverage, and are not subject to punitive damages and attorney fees under Section 155 of Insurance Code. (FITZGERALD SMITH and HOWSE, concurring.)

Insurer filed declaratory judgment action as to whether it owed coverage under homeowner's insurance policy issued to Defendant, who was found to have intentionally set fire to his home on day after he lost his job as truck driver after DUI conviction. Court erred in granting other insurer's motion for summary judgment, finding that his insurer owed coverage for fire damage to surrounding homes. Policy language ios unambiguous that coverage is only applicable to accidents, and exclusion applies to damages resulting from intentional acts, even if that damage was different than that which insured expected or intended. (LYTTON and CARTER, concurring.)

Breach of insurance cooperation clause is a valid defense which is "other affirmative matter" barring a claim per Section 2-619(a)(9) of Code of Civil Procedure. Insured filed a claim with insurer that his motorcycle, customized for over $60,000, had been stolen. Court properly granted insurer's motion to dismiss based on policy's cooperation clause, relying on its adjustor's affidavit that insured failed to respond to insurer's request for statement under oath and for financial status documents and credit report authorization, to determine whether financial motive to file false claim. Insurer presented adequate proof of substantial prejudice by insured's negligible cooperation and by insurer being thereby hampered in its defense. Documents incorporated into affidavit were not hearsay, as they were offered to show notice rather than for truth of matter asserted. FITZGERALD SMITH and HOWSE, concurring.)

Court properly granted summary judgment to insurer on its claim that its insured driver, who was in a two-car collision, breached assistance and cooperation clause of his policy, and thus insurer was relieved of any duty to defend or indemnify driver from litigation and $11,000 judgment. Insurer used reasonable efforts and diligence in its search for insured; it had sent letter inquiry to his son who denied contact with him for more than a decade and speculated that he might be in jail. Insurer used sources likely to disclose his whereabouts, its search was sufficiently broad and produced leads which it then pursued and exhausted. Insurer's defense was plainly and substantially prejudiced by the absence of insured, who was the only known witness to the collision. (CAHILL and R. GORDON, concurring.)

Court properly dismissed insurer's suit in equitable subrogation action against builder and architect for water damage to insured's residence, as its homeowner's policy contains express provision for subrogation, and contract terms, rather than common law or equitable principles control. Insurer failed to perfect its rights of subrogation under the terms of the policy by failing to have insured assign his rights of recovery to insurer. (HALL and LAMPKIN, concurring.)