On October 8, 2015, in DeShaw Nelson v. Donald Artley, the Illinois Supreme Court overturned a ruling by the First District Appellate Court that ordered a car rental company to pay an accident victim $600,000 as a result of damages allegedly sustained in an automobile accident involving a car owned by the rental company and driven by an operator without his own insurance. At issue in DeShawn was the extent of financial liability that a self-insuring rental car company faces where a default judgment …
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Illinois Court Finds No Breach in Insurance Company’s Decision Not to Defend
Last week, the Illinois Appellate Court affirmed the lower court’s ruling in Illinois Emcasco Insurance Company v. Nationwide Mutual Insurance that Emcasco did not breach its duty to defend a construction contractor against a personal injury suit. This appellate court panel did, however, reverse the lower court’s ruling that Nationwide Mutual Insurance Company breached its duty to settle this personal injury suit within its policy limits.
The underlying injury lawsuit stemmed from a 1998 construction accident filed against Triumph Development Corporation, the project’s general contractor, …
Continue ReadingA Continuing Trend of Illinois State Courts Finding Trigger for Malicious Prosecution is Initiation of Prosecution — Not Termination of Proceedings
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 …
Continue ReadingIllinois Appellate Court Determines Unsigned Agreement Can Still Constitute a Written Contract and Trigger Additional Insured Coverage
In West Bend Mutual Insurance Co. v. DJW-Ridgeway Building Consultants, Inc., 2015 IL App (2d) 140441 (May 19, 2015), the Illinois Appellate Court, Second District affirmed a trial court decision and held that West Bend Mutual Insurance Co. had the duty to defend DJW-Ridgeway Building Consultants, Inc. (Ridgeway) as an additional insured.
The underlying dispute arose out of any injury suffered by a construction worker at a worksite where Ridgeway was the general contractor. Ridgeway subcontracted with Jason the Mason, Inc. to provide masonry …
Continue ReadingIllinois Appellate Court Extends Bridgeview on Choice of Law and Finds No Duty To Defend Against Blast Fax Suit
After vacating its prior decision pursuant to an order by the Illinois Supreme Court, the Appellate Court of Illinois, Second District, in G.M. Sign, Inc. v. Pennswood Partners, Inc. 2015 IL App (2d) 121276-B, determined that the insurers, Maryland Casualty Company and Assurance Company of America (collectively “Zurich”), had no duty to defend or indemnify Pennswood Partners, Inc., with respect to a blast fax case filed by G.M. Sign, Inc. The crux of the Appellate Court’s decision was how to properly analyze a …
Continue ReadingIllinois Appellate Court Finds No Duty to Defend Copyright Infringement Suit
In Erie Insurance Exchange v. Compeve Corp., 2015 IL App (1st) 142508, the Illinois Appellate Court held that Erie Insurance Exchange had no duty to defend Compeve Corporation and Slava Packovskis in a copyright infringement lawsuit filed by Microsoft Corporation. Microsoft specifically alleged copyright infringement as a result of the defendants selling computers with unauthorized copies of Windows XP installed.
Erie filed a declaratory judgment action. The Erie Policy contained standard CGL Coverage B language. The coverage dispute centered on the Infringement Offense, and …
Continue ReadingNorthern District of Illinois Draws Line Between Trademark Infringement and Trade Dress Infringement
In AU Electronics, Inc. v. Harleysville Group, Inc., No. 13 C 5947, 2015 U.S. Dist. LEXIS 2887 (N.D. Ill. Mar. 10, 2015) the U.S. District Court for the Northern District of Illinois granted summary judgment in favor of Harleysville Group, Inc. and Harleysville Lake States Insurance Co. (collectively Harleysville), finding, in pertinent part, that the underlying complaint did not allege “personal or advertising injury.”
AU Electronics, Inc. was sued by Sprint and T-Mobile for allegedly buying cellphones in bulk, unlocking the phones, and reselling …
Continue ReadingIllinois Appellate Court Continues To Rollback Seventh Circuit Rulings on Trigger of Coverage for Wrongful Conviction Claims
In yet another decision eviscerating the line of cases from the Seventh Circuit holding that the trigger of coverage for a wrongful conviction claim is the date of favorable termination, and not the date of conviction, the Illinois Appellate Court, Second District in Indian Harbor Insurance Co. v. City of Waukegan, 2015 IL App (2d) 140293 (Mar. 6, 2015), sided with the majority of courts to have addressed this issue, holding that only the date of conviction triggers malicious prosecution coverage.
As background, Juan …
Continue ReadingIllinois Appellate Court Penalizes Insurer for Not Re-Asking Questions in Renewal Application the Insured Already Answered Incorrectly in Prior Application
In Illinois State Bar Association Mutual Insurance Co. v. Brooks, Adams & Tarulis, 2014 IL App (1st) 132608, the Illinois Appellate Court held, in relevant part, that the Illinois State Bar Association Mutual Insurance Company (“ISBA”) could not rescind a renewal policy based on a misrepresentation in the initial policy application when there was no incorporation of the initial application of insurance into the renewal policy.
As background, Douglas Tibble learned of a claim by Tango Music, LLC (“Tango”) in November 2002. In December …
Continue ReadingIllinois Federal District Court Refuses To Consider Extrinsic Evidence In Evaluating Insurer’s Duty To Defend
In American Alternative Insurance Corp. v. Metro Paramedic Services, 2014 U.S. Dist. LEXIS 171841 (N.D. Ill. Dec. 12, 2014), the United States District Court for the Northern District of Illinois held that American Alternative Insurance Corporation (“AAIC”) had a duty to defend Metro Paramedic Services, Inc. (“Metro”). The claimants had filed suit against Metro and Antioch Rescue Squad (“ARS”) alleging sexual harassment and discrimination, negligent supervision and retention, assault and battery, and retaliation, while serving as joint employees of ARS and Metro.
Metro contended …
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