In First Mercury Insurance Company v. Ciolino, the Illinois Appellate Court, First District waded into the sea-change concerning the trigger of coverage for malicious prosecution offenses under a liability policy. The First District joined the other districts to consider the issue, departed from the Seventh Circuit’s Erie prediction, and reasoned that the trigger date for malicious prosecution coverage will be similar under law enforcement liability and commercial general liability policies.
The facts giving rise to the coverage dispute stem from a lawsuit filed by Alstory Simon against Northwestern University (Northwestern), Davis Protess, Paul J. Ciolino, and Jack P. Rimland. Simon generally alleged that the defendants conspired to frame him for a 1982 double murder in order to secure the release of the real killer. Notably, Ciolino acted as a private investigator. Simon alleged Ciolino intentionally manufactured false witness statements and used deceitful techniques to coerce a false confession from Simon. As a result of the manufactured evidence, Simon was convicted in 1999 of murder of one victim and voluntary manslaughter of the other. However, in October 2014, Simon was released after the Cook County State’s Attorney’s office requested the charges be vacated. In his complaint, Simon included counts for malicious prosecution and conspiracy against Ciolino.
Shortly after Simon filed suit, First Mercury Insurance Company (First Mercury) initiated a declaratory judgment action against Ciolino and two entities controlled by Ciolino. It was undisputed that First Mercury was not Ciolino’s insurer at the time of Simon’s 1999 guilty plea and conviction. Rather, it was Ciolino’s insurer at the time of Simon’s exoneration in 2014. Accordingly, First Mercury contended it owed no duties under “Coverage B – Personal and Advertising Injury Liability” since the alleged “offense” took place outside of the policy period. For his part, Ciolino argued coverage was triggered because the relevant event was the date of exoneration since it was the final legal element needed for a malicious prosecution claim. The trial court agreed with First Mercury and, in pertinent part, granted summary judgment in its favor.
On appeal, Ciolino focused on the term “offense” in order to distinguish several recent malicious prosecution coverage cases involving law enforcement liability policies where the commencement of the prosecution was deemed the trigger of coverage, as opposed to the date of exoneration. Ciolino argued the First Mercury Policy’s use of the term “offense” was outcome-determinative since the “offense,” i.e., malicious prosecution, needed to be completed to trigger coverage.
The Appellate Court disagreed, reasoning that a more straightforward interpretation of the term “offense” indicates that coverage depends upon whether the insured’s offensive conduct was committed during the policy period. Indeed, the Appellate Court warned that adopting Ciolino’s approach would “distort the common, popular understanding of what is meant by an ‘offense.’” Therefore, since the “offense” occurred in 1999, years before the inception of the First Mercury policy, there was no coverage available to Ciolino.
This is a significant decision because not only does it further solidify the Illinois jurisprudence about the trigger date for malicious prosecution cases, but it continues to cut the legs out from the minority approach to the trigger of malicious prosecution coverage.