On April 21, 2015, we wrote about the Illinois Appellate Court Second District’s decision in Indian Harbor Insurance Co. v. City of Waukegan, 2015 IL App (2d) 140293 (Mar. 6, 2015). There, the Appellate Court followed its decision in St. Paul Fire & Marine Insurance Co. v. City of Zion, 2014 IL App (2d) 131312, which held that only the date of conviction triggers malicious prosecution coverage. As we noted, this constituted a rejection of the Illinois Supreme Court precedent, Security Mutual Casualty Co. v. Harbor Insurance Co., 65 Ill. App. 3d 98 (1978), the case on which the Seventh Circuit’s entire line of cases on the issue is based. This trend continues with County of McLean v. States Self-Insurers Risk Retention Group, Inc., 2015 IL App (4th) 140628.
As background, Alan Beaman was arrested for murder in 1993, convicted in 1995, and sentenced to 50 years in prison. However, his conviction was reversed in May 2008, and all charges against him were dismissed in January 2009. Beaman then filed suit against McLean County and several individuals involved in his conviction, alleging, among other things, malicious prosecution. The defendants-insureds sought a declaratory judgment that stated Self-Insurers Risk Retention Group, Inc. was obligated to defend them because the subject policy was in place when Beaman was exonerated. The defendants-insureds asserted that the dismissal of the charges against Beaman in January 2009 constituted the date of the occurrence that resulted in his personal injury within the meaning of the insurance policy, as opposed to his arrest or prosecution in the 1990s, well before the policy was in place.
The Fourth District, citing both City of Zion and City of Waukegan, held that the occurrence of malicious prosecution was the claimant’s arrest and prosecution as opposed to his exoneration. The court reasoned, “[T]he event that triggers coverage is the actual injury suffered by the prosecuted party, not the accrual of the tort of malicious prosecution. In this case, Beaman’s injury obviously did not occur during the March 2008 to March 2009 policy period. … To say that Beamn suffered his ‘injury’ when he was exonerated would be to ignore the plain and ordinary meaning of the term ‘injury.’” Notably, nowhere in the opinion did the court even reference Security Mutual Casualty Co. Accordingly, the Appellate Court reversed the trial court’s judgment and remanded the case for further proceedings.
County of McLean is yet another case in a continuing trend of decisions by Illinois state courts flatly rejecting the Seventh Circuit’s entire well-developed line of cases about the trigger of coverage applicable to malicious prosecution claims. County of McLean is especially significant because it reveals that the trend is spreading from the Second District to other districts within the Appellate Court. Given that the conflict between the Illinois state courts and Seventh Circuit is not only not going away, but is now spreading, the Illinois Supreme Court may be compelled to weigh in on the issue to provide some degree of clarity.