Illinois 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 Rivera was convicted of rape and murder, and imprisoned for 20 years. His conviction took place in November 1993. His conviction was reversed, and he was acquitted on December 9, 2011. On October 30, 2012, Rivera filed a wrongful conviction action against, in pertinent part, the City of Waukegan and former police officers.

Indian Harbor had issued consecutive policies covering the November 1, 2011 to November 1, 2013 policy period. The Indian Harbor policies required that any covered wrongful acts, including malicious prosecution, occur during the policy period.

In analyzing the trigger of coverage question, the Appellate Court squarely rejected the City’s reliance on Security Mutual Casualty Co. v. Harbor Insurance Co., 65 Ill. App. 3d 98 (1978), the Illinois Supreme Court case on which the entire line of Seventh Circuit cases is based. Instead, the Appellate Court followed the recent contrary decision in St. Paul Fire & Marine Insurance Co. v. City of Zion, 2014 IL App (2d) 131312. Thus, the Appellate Court concluded here that the trigger of coverage for the malicious prosecution is the conviction, not the favorable termination of the proceeding, the reversal of a conviction, or the release from prison, as a wrongful act does not necessarily equate with a completed cause of action. Accordingly, the Appellate Court affirmed judgment on the pleadings in favor of Indian Harbor.

It would stand to reason that the Illinois Supreme Court will ultimately weigh in on this issue, given that Illinois state courts and the Seventh Circuit view the same issue in such starkly different terms. Until then, the split of authority remains. How does your jurisdiction approach the trigger for wrongful conviction coverage? Please share your thoughts about this important issue.