Applying Illinois law, the United States District Court for the Central District of Illinois has held that an insurer had no duty to cover defense costs for affirmative claims that involved, but were not brought by, its insured. Marquis Energy LLC v. Federal Ins. Co., 2020 WL 853503 (C.D. Ill. Feb. 20, 2020).
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The United States District Court for the Northern District of Illinois, applying Illinois law, has held that there is no coverage under a D&O policy where the insured did not timely report a declaratory judgment lawsuit and instead sought coverage only after an amended complaint was filed in the successive policy period. Hanover Ins. Co. v. R.W. Dunteman Co., 2020 WL 1275002 (N.D. Ill. Mar. 17, 2020). The court held that the complaints were part of a single “claim” and not separate “claims” even though the amended complaint added insured defendants and theories of liability.
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An Illinois intermediate appellate court, applying Illinois law, has held that an insurer must defend an attorney against a malpractice claim seeking damages for alleged negligence in the amount of fees paid to the attorney, concluding that the “legal fees” exclusion in the policy did not apply because the injury suffered by the claimant was not a consequence of the lawyer’s fees. Illinois State Bar Ass’n Mut. Ins. Co. v. Canulli, No. 1-19-0142 (Ill. App. Ct. March 13, 2020).
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Applying Illinois Law, the United States District Court for the Northern District of Illinois has held that an insurer had no duty to defend a claim reported more than nine months after the end of the policy period. Wesco Ins. Co. v. Elements Architectural Grp., Inc., 2019 WL 5725440 (N.D. Ill. Nov. 5, 2019).
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This article was originally published in Law360.
In Sanders v. Illinois Union Insurance Company, the Supreme Court of the State of Illinois resolved a split in state and federal decisions applying Illinois law on trigger of coverage in the context of wrongful incarceration.[1]
According to the Illinois Supreme Court, the City of Chicago Heights’ insurers had no coverage obligation under policies in effect when the claimant was retried for murder and exonerated, two decades after the initiation of the prosecution. As a result, Illinois law on trigger of coverage for wrongful incarceration lawsuits is now on all fours with decisions by courts nationwide.
An Illinois intermediate appellate court has held that an exclusion for claims arising from “unfair or deceptive business practices” including “violations of any local, state or federal consumer protection laws” did not bar coverage against an insured property manager for alleged violations of a city residential landlord-tenant ordinance. Evergreen Real Estate Servs., LLC v. Hanover Ins. Co., 2019 WL 5704599 (Ill. App. Ct. Nov. 4, 2019).
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Applying Illinois law, a federal district court has held that a policy’s sexual misconduct exclusion did not apply to preclude coverage for an underlying lawsuit against a school district involving a student’s acts of sexual misconduct, where the applicability of the exclusion in that context was not “clear and free from doubt.” Netherlands Ins. Co. v. Macomb Cmty. Unit Sch. Dist., 2019 WL 5417144 (C.D. Ill. Aug 6, 2019).
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The United States District Court for the Northern District of Illinois, applying Illinois law, has held that there is no coverage under a professional liability policy where the claim arose out of the same set of facts upon which a separate lawsuit against the insured was filed before the policy incepted. Arch Ins. Co. v. PCH Healthcare Holdings, 2019 WL 3554062 (N.D. Ill. Aug. 5, 2019). The court further held that the plain language of an exclusion for “healthcare services” precluded coverage for the claim.
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An Illinois appeals court has held that an insured had the right to select independent counsel under a duty to defend policy where the insured faced a substantial, uncovered punitive damages award. See Xtreme Prot. Servs., LLC v. Steadfast Ins. Co., 2019 WL 1976482 (Ill. App. Ct. May 3, 2019).
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Applying Illinois law, a federal district court has held that a cooperation clause in an excess insurer’s policy did not entitle the excess insurer to compel production of the insured’s settlement agreement with a primary carrier. Homeland Ins. Co. of N.Y. v. Health Care Serv. Corp., 2019 WL 1499300 (N.D. Ill. Apr. 3, 2019).
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