Insurance Law

Insurance policy mistakenly listed Cavalier car, although insurer and insured both intended for a different car, a Dodge Durango, to be listed and insured. Equitable contribution cannot be imposed on insurer because the insurance contract between the insureds and insurer did not provide coverage for the Cavalier at the time of accident in which insured was driving the Cavalier. Prior to accident, the insureds had obtained insurance on the Cavalier through a different insurer. Equitable contribution inapplicable because the two policies at issue did not cover the same property owned by the insureds, and the mutual mistake of fact does not give other insurer the right to stand in the shoes of insured to seek enforcement of policy. (McBRIDE and R. GORDON, concurring.)

Plaintiff pedestrian was on a public sidewalk when struck by vehicle, and then filed declaratory judgment action seeking determination that insurer was not entitled to a setoff on underinsured motorist coverage with monies paid to her for automobile medical payments coverage. The policy unambiguously permitted the setoff. Double recovery from two or more tortfeasors is not at issue; and setoff provision in policy is in accordance with public policy behind underinsured motorist statute, to fill gap between amount recovered from underinsured driver's insurance and the amount of coverage provided in insured policy. The setoff provision in this policy did not nullify plaintiff's UIM coverage or MP coverage. (J. GORDON and McBRIDE, concurring.)

Bank settled defamation suit for $1.75 million, but CGL insurer denied coverage on basis of untimely notice of suit by bank to insurer. Under the circumstances, bank's written notice of the suit to its insurer was within a reasonable time and did not violate notice provision in policy. Bank president mentioned suit in passing to insurance agent who had placed the policy for the bank, and suit was discussed during several bank board meetings when insurance agent, who was a member of bank's board, was present. These events placed insurer on notice that bank was a defendant in a suit that was potentially covered under the policy, as insurer had sufficient information to "locate and defend" the defamation suit. (FITZGERALD, THOMAS, KILBRIDE, GARMAN, and KARMEIER, concurring.)

Insureds filed declaratory judgment action for coverage for injuries sustained in auto accident while insured was a passenger in vehicle driven by another person, whose policy limits were exhausted. Court properly granted summary judgment for insurer, as policy had expired prior to date of accident, and insured failed to pay premium until nine days past the 20-day grace period. Facts support expiration of policy rather than cancellation; thus, whether cancellation notice and extended renewal provisions of policy were ambiguous is inapplicable. Court properly denied insurer's motion for sanctions, as insureds' claims set forth a coverage argument which was not unreasonable. (HOLDRIDGE and McDADE, concurring.)

Insurer filed declaratory judgment action as to its coverage; general contracctor had tendered its defense to insurer, which had issued policy to sewer subcontractor which named general contractor as additional insured. Injuries sustained by Commonwealth Edison worker who was injured when he fell into unguarded sewer manhole at home construction site. Sewer subcontractor could be found solely liable to worker for his injuries, and thus any liability attributed to general contractor would arise solely as a result of the acts or omissions of the named insured, and in that case the general contractor would be an additional insured under the terms of the endorsement to the insurance policy. To determine parties' intent, court looked to language of subcontract agreement and insurance policy. (MURPHY and STEELE, concurring.)

Roofing company filed declaratory judgment action, claiming that mandatory arbitration clause its workers' compensation insurer was relying upon was unenforceable due to insurer's conduct at time of contracting. Employer was bound by the program agreements it executed for two policy years, and disputes arising from those policy years are subject to the mandatory arbitration clause. Employer failed to identify material issues as to insurer's alleged deceptive practices or procedural unconscionability. Rating agreements were only six pages long, with arbitration and choice-of-law language prominent. However, as to two other policy years, employer never ratified those program agreements, by refusing to sign them; and both parties consistently demonstrated their understanding that the agreements needed to be signed to become effective; thus, employer was not bound by mandatory arbitration clause of those two policy years. (CAHILL and R.E. GORDON, concurring.)

Court properly determined that insurance policy unambiguously barred stacking or aggregation of UIM coverage because declarations page of insurance policy listed UIM coverage only once, in a single line with a single identification of a single amount of UIM coverage. (GOLDENHERSH and WEXSTTEN, concurring.)