Illinois Tort Law Update 2014 Case Summaries

Transcription

1 Illinois Tort Law Update 2014 Case Summaries Peoria County Bar Association CLE Spalding Pastoral Center February 7, 2015 Jeffrey R. Bach 110 SW Jefferson, Suite 410 Peoria, Illinois T: F:

2 TABLE OF CONTENTS PART I - SUBSTANTIVE LAW I. Damages 3 II. Governmental Liability 5 III. Insurance 12 IV. Malpractice 20 V. Negligence 26 VI. Product Liability 38 VII. Miscellaneous Actions 39 PART II PROCEDURAL LAW I. General Procedure 41 II. Appeals 42 III. Evidence 43 IV. Limitations 49 V. Pleadings 52 VI. Trial Issues 52 VII. Miscellaneous 54 Copyright All rights reserved.

3 SUBSTANTIVE LAW I. DAMAGES a. Goldfine v. Barack, Ferrazzano, Kirschbaum, & Perlman, et. al., 2014 IL : Plaintiffs alleged that the Defendants committed legal malpractice when they failed to preserve a cause of action under the Illinois Securities Law against an investment firm. Plaintiffs further alleged that the lawyers failed to file a rescission claim in a timely fashion causing it to be barred under the statute of limitations. The main issue in the appeal before the Illinois Supreme Court was section 13(A) of the Illinois Securities Law, 815 ILCS 5/13(A), which provides for interest of 10% if damages are proven. Defendants argued that the imposition of the 10% interest was unfair and that Section 13(A) did not apply to lawyers in legal malpractice actions. The Supreme Court rejected that argument, explaining, that the damage award in a legal malpractice action compensates plaintiffs for the actual amount plaintiffs would have recovered had they been successful in the Illinois Securities Law claim. The Supreme Court also rejected an argument that Section 13(A) damages were punitive in nature because they were statutory damages. The court wrote that Section 13(A) is a civil remedy designed to compensate investors for their lost return and to make the investor whole. The case was remanded to the trial court to allow it to recalculate the proper amount of interest. In closing, the court noted that the client is entitled to be placed in the same position that he would have been in had the lawyer met the standard of care. Here, the breach of the standard of care led to a large damage award. b. Rogers v. Imeri, 2013 IL : As you may recall from last year, this matter involved the application of the statutory dram shop cap to a plaintiff s recovery. Plaintiff s son sustained fatal injuries in an automobile accident with an intoxicated driver. Plaintiff first sued the driver and recovered approximately $26,000.00; Plaintiff then proceeded against its own automobile insurance under the underinsured motorist provision and recovered an additional $80, At this point, Plaintiff s total recovery was $106, and the dram shop cap at the time was $130, in a fatal accident. At the time of the accident, the tavern where the driver was allegedly overserved had dram shop insurance, but the insurance company was subsequently 3

4 declared insolvent and liquidated. The Illinois Insurance Guaranty Fund ( Fund ) then took over the defense of the litigation. In the trial court, the Fund filed a motion arguing that the amount of money the Plaintiffs had already recovered should be applied to the statutory dram shop cap of $130,000.00, reducing the Funds liability to approximately $24, Plaintiff filed a motion arguing that the jury should be allowed to reach a verdict before any setoffs were applied. The Appellate Court held that if it adopted the Fund s reasoning it would infringe upon the role of the jury as the finder of fact, and determined that the Dram Shop Act (235 ILCS 5/6-21) requires the following procedure where setoffs are involved: First, the jury determines the total damages sustained. Next, the jury s award is then offset by other recoveries. Finally, if the remainder is above the statutory limit, it is reduced to that limit. On appeal, the Supreme Court reversed the Appellate Court s findings and determined that the proper way to handle this was to offset the other recoveries against the statutory maximum under the Dram Shop Act and not against the potential jury verdict. c. Williams v. Rosner, 2014 Ill. App. (1 st ) : Plaintiffs were husband and wife who each carried a sickle cell trait. Plaintiffs subsequently had a son who was born with sickle cell disease. The wife decided to undergo a tubal ligation to prevent further pregnancies. This was performed by Defendant doctor in In 2009, Plaintiff learned she was pregnant. She subsequently gave birth to a daughter who also carried the sickle cell trait. After the birth of the daughter, Plaintiffs filed a complaint against Defendant and his clinic alleging medical negligence and wrongful pregnancy. They also asked for what they termed extraordinary expenses related to raising their daughter with sickle cell disease. Defendants filed a Motion to Dismiss arguing that Plaintiffs were only entitled to damages for the costs of the unsuccessful operation, pain and suffering, any medical complications caused by the pregnancy, the costs of the child s delivery, lost wages and loss of consortium under a wrongful pregnancy theory. The Circuit Court denied Defendant s Motion to Dismiss, but certified the question of whether Plaintiffs could recover extraordinary expenses to the Appellate Court. The Appellate Court held that Plaintiffs could recover extraordinary expenses because, where the parents desire to avoid contraception has been communicated to the doctor performing the procedure, it was a reasonably foreseeable consequence of negligently performing a sterilization procedure. 4

5 II. GOVERNMENTAL LIABILITY a. Betts v. City of Chicago, 2013 Ill. App. (1st) : Plaintiff brought a complaint for negligence against Defendant police officer for backing into her vehicle. At the time of the accident, it was undisputed that Defendant was operating his vehicle as an agent, servant, and employee of the Defendant. Defendants filed a motion to dismiss pursuant to 2-619(a)(9) of the Code of Civil Procedure. 735 ILCS 5/2-619(a)(9). The motion to dismiss was based on a provision of the Local Governmental and Governmental Employees Tort Immunity Act, 745 ILCS 10/2-202, which states that a public employee is not liable for his act or omission in the execution or enforcement of any law unless such act or omission constitutes willful and wanton conduct. Defendants attached the affidavit of the officer whose car hit Plaintiff, in which he stated that he was on duty with the Chicago Police Department and acted within his scope of duties at the time of the accident. Plaintiff filed a response to the motion to dismiss, contending that at the time of the accident the officer had not yet begun to execute or enforce any law, but was merely on his way to take over for the team engaged in an investigation, and thus Defendants were not entitled to immunity under the Tort Immunity Act. The trial court granted the Defendant s motion to dismiss. On appeal, the Appellate Court found that it was premature to grant a motion to dismiss when there was a factual dispute as to whether or the officer was executing or enforcing the law at the time of the collision. b. Robles v. City of Chicago, 2014 Ill. App. (1 st ) : Decedent s estate brought an action against Defendant alleging that a police officer committed willful and wanton misconduct when he shot and killed decedent. Defendant moved for summary judgment on the basis that the Local Governmental and Governmental Employees Tort Immunity Act, 745 ILCS 10/2-202, prevented the estate from recovering damages because the officer was enforcing the law. The Trial Court granted the motion for summary judgment, finding that even if willful and wanton conduct was committed, it made no difference because Section of the Tort Immunity Act precluded liability. The Appellate Court reversed and held that whether a person is guilty of willful and wanton conduct within the meaning of the Tort Immunity Act is a fact question for a jury and should rarely be ruled on as a matter of law. It also held that under Section 2/202 of the Act, the estate could recover damages from the 5

6 Defendant if its officers acted willfully and wantonly when they shot the decedent in the course of enforcing the law. c. Abrams v. Oak Lawn-Hometown Middle School, 2014 Ill. App. (1 st ) : Plaintiff was a student who was injured while on school property after hours to attend a National Junior Honors Society induction. As Plaintiff was lining up in the cafetorium, a combined auditorium/cafeteria space, she fell and was injured. Plaintiff filed a complaint against the school and the school district, as she attributed her accident to a dark, non-illuminated, elevated unmarked and uneven surface. Evidence showed that the room was used both as a cafeteria and as an auditorium. It was also regularly used for practices and performances of the school band, the chorus and drama programs. Evidence further showed that the cafetorium s tiered floor made the room unsuitable for athletics and that no sporting events had ever been held in the room. The trial court sent the Appellate Court a certified question which read as follows: Where an injury occurs on an area of public property which has both recreational and non-recreational purposes, should Section immunity apply when said area is located within a public school where the primary character of the area and overall facility is educational and non-recreational? (745 ILCS 10/3-106). The Appellate Court noted that the character and nature of the property as a whole determines whether the section of the Local Governmental and Governmental Employees Tort Immunity Act applies which immunizes public entities from liability for negligence arising on public property used for recreational purposes. They specifically rejected a test which would determine what the injured party s use of the property was or her activity was at the time of the injury. The Appellate Court also noted that courts are to consider whether the property has been used for recreation in the past or whether recreation has been encouraged there. In this case, the Appellate Court found that the middle school s cafetorium was not intended or permitted to be used for recreational purposes and thus the section of the Tort Immunity Act immunizing public entities from liability for negligence arising on public property intended or permitted to be used for recreational purposes did not apply to bar Plaintiff s clam. d. Abruzzo v. City of Park Ridge, 2013 Ill. App. (1 st ) : The estate of a patient who died from a drug overdose brought a wrongful death action against the City arising from the city s response to request for emergency services. The decedent s father called the paramedics after the decedent was non-responsive. 6

7 Further, when father called the paramedics, decedent looked blue and was gasping for breath. By the time the paramedics arrived, the decedent was able to sit up and tell the paramedics and his father that it s these pills that I m taking, they make me tired. The paramedics failed to follow their standard operating procedure for checking on a patient with the decedent s condition. The matter was tried before a jury, and the jury returned a verdict in favor of the estate. On appeal, the City argued that the paramedics did not act willfully and wantonly in responding to the decedent s emergency, which is a requirement to remove immunity from a city under the Emergency Medical Services Act (210 ILCS 50/1). The Appellate Court disagreed, finding that the question of whether or not the City was wanton and willful was a fact question properly left to the jury. It also affirmed the damages award. e. Brooks v. McLean County Unit District No. 5, 2014 Ill. App. (4 th ) : Plaintiff was a special administrator of the estate of a student who died while playing a game called Body Shots. This game involved students voluntarily punching each other with closed fists as hard as they could in the abdomen, chest, and ribs. After participating in this game, decedent collapsed in the hallway and later died. The special administrator filed a three-count complaint seeking medical expenses under the Family Expense Act, 750 ILCS 65/15, recovery under the Illinois Wrongful Death Act, 740 ILCS 180/1, and damages pursuant to the Illinois Survival Act, 755 ILCS 5/27-6. The allegations included that the school district administrators and teachers were aware that students played the game, students had been injured playing the game, and that the administrators failed to control the behavior of the students and punish known dangerous behavior to prevent injury. Plaintiff further alleged willful and wanton conduct on the part of the school district for failing to monitor the bathrooms, educate students, and allowing the students to play the game. Defendant filed a combined motion to dismiss, alleging that the special administrator did not have authority to bring any claim other than that for wrongful death without opening a probate estate, that the school district did not have a duty to protect individual students from tortious acts of others under the public-duty rule, that the special administrator failed to allege a special-duty exception to the public-duty rule, and assuming that the school district owed a duty, the complaint was still barred by the Local Governmental and Governmental Employees Tort Immunity Act (745 ILCS 10/4-102, 2-201, 2-109). The trial court granted the motion to dismiss. 7

8 The Appellate Court held that the administrator lacked the standing to bring claims outside of the Wrongful Death Statute. It further held that the public-duty rule did not apply, and that the school district owed a duty to supervise the students. However, the Tort Immunity Act precluded recovery. It went on to find that the school district did not engage in willful and wanton conduct so as to defeat the liability bar of the Tort Immunity Act. The court stated that the publicduty rule, which states that a governmental entity and its employees owe no duty of care to individual members of the general public to provide governmental services, did not apply in this case; rather, traditional duty analysis applied. The court further found that the school district did not engage in willful and wanton conduct because Plaintiff did not plead facts establishing a course of action showing a deliberate intention by the district to harm the decedent, nor did Plaintiff s complaint allege sufficient facts establishing utter indifference to or conscious disregard for the decedent s safety. f. Richter v. College of DuPage, 2013 Ill. App (2 nd ) : Plaintiff was injured when she tripped on a raised portion of the sidewalk near a revolving door on campus property, causing her to fall forward against the door. Deposition testimony showed that the area where Plaintiff fell was approximately 1 to 1 ½ inches higher than the surrounding area and was painted yellow, indicating that there was a raise. Evidence showed that the maintenance person employed by Defendant had discretion to decide which repairs were made. Defendant filed an answer and raised three affirmative defenses to Plaintiff s Complaint. First, Defendant argued that the height differential between the slabs of concrete and the sidewalk was de minims. Second, Defendant argued that it was immune from liability under Section of the Local Governmental and Governmental Employees Tort Immunity Act because it maintained its premises and did not have any actual or constructive knowledge that the sidewalk was unreasonably safe. Third, Defendant argued that the risk was open and obvious to the Plaintiff. Defendant later moved for summary judgment on the basis that it was entitled to discretionary immunity under Sections ( [a] local public entity is not liable for an injury resulting from an act or omission of its employee where the employee is not liable ) and ( [a] public employee is not liable for a discretionary act ) of the Tort Immunity Act. 745 ILCS 10/2-109, 10/2-201, 10/ The Trial Court granted the motion, as it found that the supervisor of maintenance made a discretionary decision as to how to repair the sidewalk. In distinguishing between ministerial and discretionary acts, the trial court noted that there was no law stating that a sidewalk deviation that was 1 inch or above must be repaired. 8

9 The Appellate Court found that the Defendant s decision not to repair the sidewalk was made pursuant to a policy such that it was entitled to immunity because the college had adopted a wait and see approach to repairing deviations in the sidewalk and made each decision on a case by case basis given the uncertainties of the winter. The Appellate Court also found that the repair of the uneven sidewalk was a discretionary decision because the supervisor of maintenance made the determination of whether to repair a sidewalk slab, and there was no set of rules or regulations that he was bound to follow. It also noted, that in differentiating the concept of ministerial and discretionary, discretionary acts involve the exercise of personal deliberation in judgment in deciding whether to perform a particular act or how and in what manner that act should be performed, whereas ministerial acts are those which a person performs on a given state of facts and in a prescribed manner, in obedience to the mandate of legal authority, and without reference to the official discretion as to the propriety of the act. g. Harden v. City of Chicago, 2013 Ill. App. (1 st ) : Plaintiff sued Defendant after she was injured when her foot got caught on a metal plate as she was crossing the street. The evidence tended to show during depositions that Plaintiff was crossing the street slightly outside of the marked cross-walk and there was a small amount of snow on the ground at the time the accident occurred. As Plaintiff was about to step onto the curb and continue, her foot became caught in the metal plate and she was injured. Defendant filed a motion for summary judgment, alleging that by crossing outside of the cross-walk, the Plaintiff was not an intended user of the property. The trial court granted the Defendant s motion. The Appellate Court noted that there was only a limited exception to the general rule that municipalities do not owe a duty of reasonable care to pedestrians who attempt to cross the street outside the cross-walk, and that exception is for those who are entering a vehicle. The court was not persuaded by Plaintiff s contention that she was not able to see where the cross-walk began and ended because there was snow on the ground. h. Suchy v. City of Geneva, 2014 Ill. App. (2d) : Decedent s estate brought wrongful death and survival actions against the Defendant city. Decedent was in a city park that contained a river. Decedent jumped in to save a child from drowning, and in the process sustained injuries that eventually led to his death. Plaintiff alleged that city was under the obligation to warn of the dangers of the 9

10 river, or in the alternative that this situation fell into the deliberate encounter exception, providing that harm may be foreseeable when a land owner has reason to expect that the invitee would proceed to encounter the obvious danger because doing so would outweigh the apparent risk. The trial court dismissed Plaintiff s complaints, finding that Defendants had no duty to warn or otherwise protect the decedent against the danger the river presented because it was open and obvious. The Appellate Court agreed with the trial court that the danger was open and obvious, and analyzed whether the deliberate encounter exception to the open and obvious rule would apply. The Appellate Court found that for the deliberate encounter exception to apply, a legally recognized compulsion or impetus must be present; otherwise, the deliberate encounter exception would not apply. In this case, since there is no legal duty to rescue, the court found that there was no impetus or compulsion, thus the trial court s ruling was upheld. i. O Toole v. Chicago Zoological Association, 2014 Ill. App. (1 st ) : Plaintiff alleged she was injured while visiting the Brookfield Zoo, which Defendant owned and operated. She filed her complaint for personal injuries more than one year but less than two years after her injury. Defendant moved to dismiss the claim pursuant to Section of the Code of Civil Procedure, arguing that the Local Governmental and Governmental Employees Tort Immunity Act one-year statute of limitations applied, 745 ILCS 10/8-101(a), because Defendant was a not-for-profit organization or organized for the purpose of conducting public business. In support of its argument that it conducted public business, Defendant further alleged that it was organized for the purpose of maintaining the zoo and the land owned by the Forest Preserve District of Cook County ( District ) and pursued an activity that benefited the entire community without limitation. Defendant also argued that an agreement between the Defendant and the District in 1986 gave the District control over Defendant s operation and maintenance of the zoo. In response, Plaintiff disputed that the Defendant constituted a local public entity to which the Tort Immunity Act s one year statute of limitations applied because Defendant did not conduct public business. Plaintiff relied on Defendant s responses to Plaintiff s Requests to Admit Facts, specifically that Defendant admitted that it was not a department of any government and was not created by a government entity but it did not operate entirely separate from the District, which reviewed Defendant s annual budget. Plaintiff also presented evidence that although Defendant s Board of Trustees had a role in development of certain unidentified polices pertaining to the Zoo s operation, over 90% of Defendant s Board of Trustees and governing members 10

11 were neither employees or elected officials of the District. Plaintiff further presented evidence that the Defendant received less than 50% of its revenue from tax funds raised by the District. The trial court held that the Defendant was a public entity for the purposes of determining the statute of limitations and dismissed the case. On appeal, the Appellate Court held that the Defendant did not conduct public business because the contract between the zoo and the District gave the Zoological Society the entire control and management of the zoo, including control over daily operations, maintenance of zoo buildings and collections, over 90% of the Zoological Society s Board of Trustees and governing members were neither employees nor elected officials of the District. It further found that zoo employees were not entitled to a state pension or state workers compensation. For these reasons, it reversed the trial court and held that the two-year statute of limitations for personal injury applied in this case. j. Payne v. City of Chicago, 2014 Ill. App. (1 st ) : Police responded to a call for assistance by Plaintiff s relatives because Plaintiff was high on crack cocaine, suffering hallucinations, physically swinging around him, had broken furniture and a window, and was injured and bleeding. When the police arrived, a responding sergeant used a taser to subdue Plaintiff. Plaintiff then either fell or jumped out of the second floor window and became a paraplegic as a result of the fall. Plaintiff filed a complaint alleging that the police committed willful and wanton conduct in the execution or enforcement of the law. Under the Illinois Local Governmental and Governmental Employees Tort Immunity Act, 745 ILCS 10/2-202, there is an exception that allows an individual to sue governmental entities for willful and wanton conduct. Defendant claimed that instead the police were providing protection or a service pursuant to 745 ILCS 10/4-102, which provides absolute immunity. The trial court agreed and ruled that the police were providing a service. The Appellate Court affirmed that the police were providing a service and that absolute immunity applied on the basis that they were not engaged in the execution or enforcement of any law at the time of the incident. 11

12 III. INSURANCE a. Bridgeview Healthcare Center Ltd. v. State Farm Fire and Casualty Company, 2014 IL : Plaintiff was sued by the recipients of unwanted facsimiles under the Telephone Consumer Protection Act (47 U.S.C. 227). Plaintiff had a policy of general liability insurance with Defendant, but there was a dispute as to whether Illinois or Indiana law would control in this matter. The records showed that Indiana law might conflict with Illinois law on the basis of two unreported federal decisions from Indiana which predicted how the Indiana Supreme Court would rule. Parties filed cross motions for summary judgment on the matter of which jurisdiction governed. The Circuit Court granted Plaintiff s motion for partial summary judgment, finding that Pekin Insurance Co. v. Xdata Solutions Inc., 2011 Ill. App. (1 st ) , 354 Ill. Dec. 654, 58 N.E. 2d 397 (2011) controlled. In Pekin Insurance, the First District Appellate Court held that a federal district court decision which merely predicts what state law would be does not in itself constitute state law and further, when there is not state case law in question there can be no conflict. The Appellate Court reversed, opting not to follow the Pekin Insurance decision. It found that the judgment of the federal district court did constitute state law. The Supreme Court reinstated the circuit court judgment finding that the party seeking the choice of law determination bears the burden of demonstrating that a conflict does exist. It also held that Federal District Court decisions which predicted a conflict of law could not trigger a choice of law analysis, overruling Sterling Finance Management, L.P. v. UBS PaineWebber Inc., 336 Ill. App. 3d 442, 270 Il. Dec. 336, 782 N.E.2d 895, which held that a choice of law determination was required when the movant demonstrated a potential conflict between state laws. b. American Access Casualty Company v. Ana Reyes, 2013 IL : Defendant motorist obtained a policy of liability insurance from the Plaintiff and was subsequently involved in an automobile accident. In the insurance policy, the Defendant was identified as driver number one but where the driver s license number was to be included; the policy stated TITLE HOLDER EXCLUDE. One of the Defendant s friends was listed as driver number two and identified as the primary driver. On the Declarations sheet, the Defendant was identified as the named insured and listed as an operator, but the notation EXCLUDED appeared next to the Defendant s name. Thus, the Defendant was the named insured but also an excluded driver. 12

13 Plaintiff insurance company filed a declaratory judgment action stating that it did not owe coverage to the Defendant. The trial court granted the Plaintiff s request for declaratory judgment. On appeal, the Appellate Court reversed and remanded, holding that a blanket exclusion in an insurance policy, which precludes all liability coverage for the only named insured, violated public policy. The Supreme Court accepted the appeal and used the Illinois Safety and Family Financial Responsibility Law, 625 ILCS 5/7-601(a), to determine if the language of the insurance policy violated public policy. The Court noted that the Act requires liability insurance coverage for all motor vehicles and that it mandates that a liability policy shall insure the person named therein and any other person using or responsible for the use of such motor vehicle or vehicles with the express or implied permission of the insured. The Court found that the principal purpose of the Act s requirement that every motorist have liability insurance is to protect the public by securing payment of damages. The Court noted that the rule is that when liability coverage is mandated by statute, a contractual provision in an insurance policy which conflicts with the statute will be deemed void. The Court affirmed the judgment of the Appellate Court, finding that exclusion of named drivers for motor vehicle liability insurance policy coverage is permitted, but the exclusion of a vehicle owner who is also the only named insured is a violation of public policy as it conflicts with the plain language of the Act. Justice Kilbride filed a dissent, arguing that sole named insureds should be allowed to exclude themselves from liability coverage as drivers, while still enabling themselves to obtain coverage on permissive drivers of their vehicles. He believed that this would allow virtually all car owners to register and license their vehicles by complying with mandatory insurance provisions. c. Interstate Bankers Casualty Company v. Hernandez, 2013 Ill. App. (1 st ) : Automobile accident case. Plaintiff sustained property damage to his vehicle and turned in a claim to his own insurance. Subsequently, Plaintiff and his insurance company filed suit against Defendant for the property damage. Defendants filed a motion to dismiss pursuant to of the Illinois Code for Civil Procedure, arguing that the claim should be dismissed because it is barred by Section (d) of the Illinois Insurance Code, 215 ILCS 5/143.24(d), which states that all claims for physical damage subrogation between insurers where the amount in controversy is less than $2, must be arbitrated. Plaintiff filed a 13

14 response to the motion, arguing that he had a constitutional right to a jury trial and that this section of the insurance code violated his constitutional rights. The trial court granted the motion to dismiss. The Appellate Court reversed the trial court s decision. The Appellate Court noted that the Illinois State Constitution was passed in 1970 and Article I, Section 13 contains a provision that states the right of trial by jury as heretofore enjoyed shall remain inviolate. The court found that since subrogation was a claim for which jury trial was available, that this part of the insurance code was unconstitutional because it took away the right for a jury trial. d. Country Mutual Insurance Co. v. Hilltop View, LLC., 2013 Ill. App. (4 th ) : This was a declaratory judgment action to determine if a hog farm had coverage under its umbrella policy when its neighbors filed a nuisance and negligence lawsuit predicated on the alleged odors associated with the operation of the hog farm. The umbrella policy that was in effect at the time the complaint was filed contained an exclusion for pollution. Each party filed a motion for summary judgment in the trial court and the court granted the insureds motion, finding that there was coverage. The Appellate Court affirmed on the basis that the pollution exclusion clause did not bar coverage for the lawsuit because the hogs, their manure, and smells associated with them did not constitute traditional environmental pollution. The matter was remanded to the trial court to determine if the other coverage defenses that the insurance company asserted were valid. e. American Access Casualty Co. v. Griffin, 2014 Ill. App. (1 st ) : Defendant was Plaintiff s insured who was involved in an automobile accident while driving a car that was insured through her mother. Plaintiff had issued a non-owners insurance policy to Defendant, providing that the automobile that Defendant drove was not regularly used by her and was not covered under the insurance policy. Plaintiff sought a declaration of rights, and attempted to serve Defendant and her mother, but was initially unable to secure service. Subsequently, the Secretary of State was appointed to accept service for Defendant. Plaintiff filed a motion for summary judgment based on conversations held with Defendant after the accident, alleging that Defendant was the primary driver of the vehicle that was involved in the accident for which the third-party Defendants sought damages. The trial court granted Plaintiff s motion for summary judgment, finding that there was no genuine issue of material fact. The Appellate Court held that there was not enough information to enter summary judgment, since genuine issues of material fact existed as to whether Defendant had to ask her 14

15 mother for permission to use the car, the nature of the permission that was granted, whether Defendant was the regular or primary driver of the car, and whether any policy exclusions applied under the circumstances. f. Justin Time Transportation, LLC. v. Harco National Insurance Company, 2014 Ill. App. (5 th ) : Auto accident case where the decedent was struck by a tractor-trailer leased to Plaintiff by leasing company. Plaintiff and leasing company each had primary insurance through Netherlands Insurance Company. The Defendant in this case, HARCO, also had a policy with Plaintiff providing $1 million in liability coverage. The policy had an exception which indicated that for any leased vehicle, the insurance would only apply if the party s primary insurance was uncollectible. Plaintiff and leasing company filed a declaratory judgment asking the court to find that this insurance was primary. Parties filed cross motions for summary judgment. The trial court granted Plaintiff s motion for summary judgment, finding that the endorsement contained ambiguous language rendering the exclusion of coverage void, and finding that Defendant waived its right to raise the endorsement because it did not promptly cite to the endorsement in response to claims made against the policy. The Appellate Court held that the policy provided contingency coverage and that the endorsement was not ambiguous. It further held that the insured did not waive its right to contingent coverage by failing to raise the endorsement, finding that coverage could not be created by a waiver, reversing the trial court. g. Kim v. State Farm Mutual Automobile Insurance Co., 2014 Ill. App. (1st) : Plaintiff was the estate of the decedent who was struck and killed while installing traffic counting devices for his employer. At the time decedent was killed, he had parked his automobile on the side of the road and was in the road installing the devices. His employer had an insurance policy with State Farm which provide up to $1,000, in underinsured motorist benefits. Plaintiff s estate first sued the driver that struck Plaintiff, and recovered full policy limits from him. It then attempted to assert an underinsured motorist claim against State Farm, which denied the claim. The trial court granted summary judgment in favor of Plaintiff, finding that decedent was an insured under the policy because he was using the vehicle with his employer s permission and within the scope of his employment at the time of the accident. State farm appealed. The Appellate Court held that Plaintiff was using his employer s vehicle, which was parked on the shoulder when he was struck by a car in the lane of traffic, and thus he was entitled to underinsured motorist benefits under his employer s policy. 15

16 h. O Connor v. Country Mutual Insurance Company, 2013 Ill. App. (3 rd ) : Plaintiff sued her insurance company based on the insurance company s conduct during an under insured motorist claim. Plaintiff was injured in an automobile accident and recovered $105, in damages from the tortfeasor s insurers. Plaintiff subsequently made a claim against her underinsured motorist coverage and offered to settle the claim for approximately $100,000.00, her insurance company offered her $40, The case proceeded to arbitration and the arbitrator awarded Plaintiff a net payment of $100, The insurance company promptly paid the arbitration award and Plaintiff deposited the check. She then filed a two-count complaint seeking damages under the Illinois Insurance Code, 215 ILCS 5/155. Specifically, Plaintiff alleged that since the arbitration award was twice more than what her insurance company was willing to offer, it raised the inference that Defendant failed and refused to evaluate and pay Plaintiff s claim. The case proceeded to trial and the trial court held that Plaintiff failed to prove that Defendant acted vexatiously and unreasonably in settling the claim. The Appellate Court agreed and noted that the key question in determining whether an insurer s failure to pay a claim was vexatious and unreasonable is whether the insurer had a bona fide defense to the insured s claim. It held that in this case, Defendant engaged in good faith settlement negotiations and did not delay the arbitration process. i. Powell v. American Service Insurance Company, 2014 Ill. App. (1 st ) : Plaintiff allegedly sustained injuries in an automobile accident involving the Defendant s insured. Insured had policy limits of $20, per person. Prior to this matter proceeding to trial, Plaintiff s counsel made a demand for settlement for the $20, policy limits. Defendant insurance company rejected the settlement offer and the case proceeded to trial. At trial, the jury awarded Plaintiff a net verdict of $47,000.00, plus costs. Defendant motorist assigned her rights under the policy to Plaintiff who then filed a claim for bad faith against the Defendant insurance company. The facts of the accident were in some dispute, and at trial Plaintiff was found forty percent at fault for the accident. Defendant filed a motion to dismiss alleging that Plaintiff failed to plead sufficient facts to show a reasonable probability that Defendant s insured was at least fifty-percent at fault and that Plaintiff failed to plead sufficient facts demonstrating a reasonable probability of damages in excess of the policy limits. 16

17 The circuit court concluded that Plaintiff failed to plead facts showing a reasonable probability of recovery in excess of the policy limits and dismissed the claim. On appeal, the Appellate Court noted that to sustain a cause of action for bad faith against the liability insurer, Plaintiff must allege: 1) duty to settle arose; 2) insurer breached the duty; and 3) the breach caused injury to the insured. The Appellate Court held that Plaintiff failed to plead facts to establish reasonable probability of liability against the insured because the facts of the accident could lead reasonable people to differ as to Plaintiff s or Defendant s liability. j. Allstate Property and Casualty Insurance Co. v. Trujillo, 2014 Ill. App. (1 st ) : Defendant was riding as a passenger in a vehicle driven by Plaintiff s insured when the vehicle was involved in an automobile accident and Defendant was injured. Defendant subsequently settled her claim against the driver of the other vehicle for policy limits of $20, and settled her claim against the driver of the vehicle in which she was riding for policy limits of $100, Defendant then tried to assert a claim for underinsured motorist benefits in the amount of $80,000.00, representing the difference between Plaintiff s insured s policy limits and the policy limits of the other driver involved in the accident. Plaintiff insurance company filed a motion for judgment on the pleadings pursuant to Section 2-615(e) of the Code of Civil Procedure, arguing that the endorsement contained in the policy expressly reduced its underinsured motorist exposure by any payment made under other provisions of the policy. Defendant subsequently filed her own motion for judgment on the pleadings, arguing that Plaintiff s interpretation of its policy was contrary to public policy. The trial Court ruled in favor of the insurance company. The Appellate Court held that the insurance company was not entitled to a setoff except to the extent necessary to prevent a double recovery of the amounts it paid to Defendant under the policy s bodily injury provision. The Appellate Court reasoned that the purpose of underinsured motorist coverage was to place the injured party in the same position he or she would be in if the other party had proper insurance coverage, so it held that Plaintiff was not entitled to set off any amounts paid to the injured party pursuant to the other terms of its policy. In this case, because the driver who caused the collision had policy limits of $20, and its own insured had policy limits of $100,000.00, then the injured party was limited to a recovery of $80, under the underinsured motorist benefits provision of the policy. 17

18 k. Direct Auto Insurance Co. v. Beltran, 2013 Ill. App. (1 st ) : Declaratory judgment entered as a result of an automobile accident. The driver who was allegedly at fault was driving his sister s vehicle at the time of the accident, but was not listed as another driver on the insurance policy even though he lived in the same household as her. That driver s insurance company alleged that the sister s failure to name him as an additional insured was a material misrepresentation that voided the policy, thus there was no coverage for this accident. The policy contained a fraud and misrepresentation provision that denied coverage in the event that any representation contained in the application was false, misleading, or materially affected the acceptance or rating of risk by the company. At the sister s deposition, she testified that she told the individual at the dealership who obtained insurance for her that her brother lived in the house with her, but that the individual at the dealership told her that s okay. The not-at-fault driver s insurance company filed a motion for summary judgment, which the trial court granted, finding that any false representations made by the sister were not material. The Appellate Court affirmed. l. Gaudina v. State Farm Mutual Automobile Insurance Co., 2014 Ill. App. (1 st ) : Plaintiff was injured in an automobile accident and attempted to assert an underinsured motorist claim against his wife s insurance policy. Insurance company denied coverage on the grounds that Plaintiff was not insured because at the time of the accident he was not residing primarily with his wife. One of the definitions of the policy was spouse means your husband or wife who resides primarily with you. At the time of the accident, it was undisputed that wife had asked Plaintiff to move out of the house and husband was renting a room in a townhouse. The evidence showed that Plaintiff left property at the named insured s house, visited once or twice per week, and stated an intention to return there. The trial court granted Defendant insurance company s motion for summary judgment, and the Appellate Court upheld on the basis that the terms of the policy were not ambiguous. m. Rosalind Franklin University of Medicine and Science v. Lexington Insurance Co., 2014 Ill. App. (1 st ) : Plaintiff hospital was sued in a different suit by individuals who were part of a breast cancer vaccine development trial. The hospital reached settlement in that suit, and this case involved the hospital s three insurance policies, and which, if any, provided coverage for the hospital in the suit brought by the breast cancer development plaintiffs. The three policies were as follows: a primary policy which provided coverage for malpractice and other actions involving the treatment of patients, an excess policy which 18

19 provided coverage along the same terms, and an officers and director s policy which covered wrongful acts of the corporation s officers and directors. The hospital alleged that the primary and excess insurer failed to provide proper notice that it was defending the previous case under a reservation of rights. The trial court determined that the primary and excess insurer appointed counsel to defend the hospital in the prior suit and that the insurance companies failure to inform the hospital that it was defending under reservation of rights caused the insurance company to forfeit the defense that it was defending the suit under a reservation of rights. The Appellate Court noted that the primary question in determining whether an insurer is estopped from asserting defense of non-coverage is whether the insured suffered prejudice based on the insurer s actions. In this case, it found that it did not. This case also discussed the distinction between damages that were allocated in the first trial, specifically whether they were awarded for medical malpractice or for other reasons. n. Huizenga v. Auto Owners Insurance, 2014 Ill. App. (3d) : Plaintiffs were injured in an automobile accident. Their damages exceeded $500,000. At the time of the accident, Plaintiffs were beneficiaries of an underlying automobile insurance policy with coverage for bodily injury and uninsured and underinsured motorist of $500,000 per person and per occurrence. They also owned an umbrella policy with limits that were higher than their auto policy. The individual who caused Plaintiff s injuries was underinsured, so Plaintiffs asserted they were entitled to use their umbrella policy as additional underinsured/uninsured motorist coverage. The policy contained language which stated we do not cover personal injury to you or a relative. We will cover such injury to the extent that insurance is provided by an underlying policy. The insurance company filed a motion for summary judgment citing this exclusion, which was granted in the trial court. The Appellate Court noted that no Illinois court had been called upon to render an opinion regarding this language, but that the Wisconsin Supreme Court had indicated in a case with identical language that the umbrella policy did not afford first party motorist coverage. The Appellate Court held that the language in the policy was unambiguous and that the finding that the insureds were not allowed to make a claim under their umbrella policy was consistent with Illinois law and public policy. 19

20 o. Mei Pang v. Farmer s Insurance Group, 2014 Ill. App. (1 st ) : Plaintiff was riding in a vehicle driven by the insured when a collision occurred with another vehicle operated by an underinsured motorist. The underinsured motorist paid policy limits to settle Plaintiff s claim. At the time of the collision, the insured and her husband were the named insureds on a special umbrella policy issued to them by Defendant. Plaintiff filed a complaint for underinsured motorist benefit coverage under both the umbrella policy issued by Defendant and a primary auto insurance policy issued to the insured driver by another insurer. The other insurer promptly settled Plaintiff s claim, but the umbrella policy insurer filed an answer denying Plaintiff coverage under the umbrella policy because Plaintiff did not fall within the umbrella policy s definition. The umbrella policy explicitly defined insured to cover: 1) the named insureds; 2) the named insured s relatives by blood, marriage, or adoption; or 3) any person under the age of 21 in the care of the named insureds. This case was more complicated because the umbrella policy itself could not be produced, rather the policy was reconstructed based on the Defendant s records, a common practice in insurance disputes. The trial court granted Defendant s motion for summary judgment. The Appellate Court upheld the dismissal, finding that Plaintiff was not entitled to underinsured motorist benefits under the umbrella policy and that she was not entitled to additional discovery of the underwriting file, policy forms and underwriting manuals. p. Illinois State Bar Association Mutual Insurance Company v. Law Office of Tuzzolino and Terpinas, 2013 Ill. App. (1 st ) : This case arose because one partner failed to disclose a malpractice claim on the partnership s malpractice insurance application. When the ISBA discovered the law firm s failure to disclose the malpractice claim, it filed a complaint for rescission and declaratory relief finding that ISBA had no duty or obligation to defend the law firm in connection with the malpractice claim. The other partner in the law firm filed a counterclaim seeking a declaratory judgment that the insurance company covered him with respect to the other partner s malpractice suit. The trial court granted the ISBA s motion for summary judgment, rescinding the contract and finding that the ISBA had no duty or obligation to defend the law firm in the malpractice claim. The Appellate Court held that the ISBA could not rescind the policy as to the innocent partner under the common law Innocent Insured doctrine and that the severability clause allowed it to be partially rescinded. 20