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January 5, 2015 Professional Liability

Illinois Appellate Court Rejects Professional Liability Coverage for Junk Fax Claim

In Margulis v. BCS Insurance Co., 2014 IL App (1st) 140286, the Illinois Appellate Court affirmed a circuit court’s grant of summary judgment in favor of BCS Insurance Company (BCS), finding that it was not obligated to defend or indemnify its insured, Bradford & Associates (Bradford), under an insurance agents and brokers professional liability policy. The Appellate Court concluded that Bradford’s alleged conduct did not arise out of Bradford’s business in “rendering service for others” as an insurance agent.

The underlying lawsuit arose out …

November 24, 2014 Directors and Officers

Drafting History or Purpose Does Not Undermine Plain Language: Illinois Federal Court Enforces Insured-Versus-Insured Exclusion

In Travelers Casualty & Surety Co. of America v. Bernhardt, 2014 U.S. Dist. LEXIS 152416 (N.D. Ill. Oct. 28, 2014), the Northern District of Illinois granted summary judgment in favor of Travelers Casualty and Surety Company of America (Travelers), finding it had no duty to defend or indemnify Andrew Bernhardt in a breach of fiduciary duty and negligence lawsuit brought by Town Center Bank (TCB). The underlying complaint involved several claims by TCB against Bernhardt originating from Bernhardt’s issuance of 26 questionable, high risk, …

November 5, 2014 Professional Liability

Illinois Federal District Court Concludes Prior Knowledge Exclusion Precludes Coverage for Legal Malpractice Suit

In Cardenas v. Twin City Fire Insurance Company, No. 13 C 8236, 2014 U.S. Dist. LEXIS 132420 (N.D. Ill. Sept. 19, 2014), Judge Virginia Kendall of the Northern District of Illinois determined that the Prior Knowledge Exclusion in the subject legal malpractice insurance policies barred the insurer’s duty to defend.

The dispute between Twin City Fire Insurance Company (Twin City) and Maria Cardenas arose when Cardenas’ attorney, John Ambrose of Ambrose & Associates, unsuccessfully represented Cardenas in a civil rights action against the City …

October 30, 2014 Emerging Issues

Illinois Federal Court Finds Advertising Injury Coverage Not Implicated by Business Competition and Intellectual Property Claims

In Lemko Corp. v. Federal Insurance Co., No. 12 C 03283, 2014 U.S. Dist. LEXIS 138667 (N.D. Ill. Sept. 30, 2014), the Northern District of Illinois granted summary judgment in favor of Federal Insurance Company (Federal) and Cincinnati Insurance Company (Cincinnati), finding that they had no duty to defend Lemko Corporation in a business competition and intellectual property infringement lawsuit brought by Motorola. The underlying complaint involved several claims by Motorola against Lemko originating from Lemko accessing “Motorola computers without authorization, or in excess …

October 29, 2014 Disclaimers and Reservations of Rights

Illinois Appellate Court Applies Broad and Harsh Interpretation of Estoppel Doctrine

In Mt. Hawley Insurance Co v. Certain Underwriters at Lloyd’s, London, 2014 IL App (1st) 133931 (Sept. 9, 2014), the Illinois Appellate Court broadly applied the estoppel doctrine against Underwriters. The trial court had entered summary judgment against Underwriters, finding that it had breached its duty to defend the putative additional insureds. Underwriters did not challenge that finding on appeal. Instead, Underwriters appealed the finding that it was estopped from asserting certain defenses to indemnification because it was conclusively established in the underlying action …

May 30, 2014 Emerging Issues

Mo’ Conflict, More Problems: Illinois Choice-of-Law Analysis Now Less Favorable for Insurers

Choice-of-law analyses are extremely significant when it comes to coverage disputes, especially those involving underlying blast fax suits brought under the Telephone Consumer Protection Act (47 U.S.C. §227, et. seq.), as the question of which state’s law applies will often be determinative of whether there is insurance coverage for the TCPA claim. The classic example involves a class representative strategically filing suit in Illinois, an historically coverage-friendly jurisdiction for TCPA lawsuits, with an eye on obtaining insurance coverage. This strategy just got easier for …

March 27, 2013 Policy Conditions, Considerations, Construction, and Formation

Illinois Court Protects Insurers from Unripe Coverage Disputes

Byer Clinic & Chiropractic, Ltd. v. State Farm Fire & Cas. Co.
(Illinois Appellate Court Mar. 12, 2013)

An Illinois Appellate Court recently held that an insurer’s defense obligation is not ripe for adjudication if that insurer is defending its insured in an underlying court action, even if subject to a reservation of rights.

The plaintiff filed a class-action complaint against the insured, Kapraun, P.C., and Dr. Michael Kapraun, alleging a violation of the Telephone Consumer Protection Act of 1991 (TCPA). Thereafter, the plaintiff filed …

November 22, 2011 Reinsurance

Illinois Court Dismissed Captive Reinsurer’s 14-Count Complaint against AIG and Affiliates

Mount Mansfield Ins. Group, Inc. v. American Int’l Group, Inc. (App. Ct. Ill., Nov. 15, 2011)

Mount Mansfield, a captive insurance company, filed suit against numerous AIG entities and affiliates alleging the defendants created Mount Mansfield to reduce their insurance risk, then mismanaged it to a point of near-insolvency. The complaint alleged further that AIG retaliated against Mount Mansfield by altering its records, reporting it to the Vermont Department of Insurance, and forcing it into a protracted rehabilitation, from which the court later released Mount …

October 1, 2019 CCPA

Part 3: Coverage Considerations Under CGL Policies for CCPA Violations

This blog post is our third in a multi-part series addressing what insurers need to know about the California Consumer Privacy Act (CCPA).

Imagine this: You own a successful string of sporting goods stores across California. Not only do you sell goods directly, but you also finance large purchases to well-qualified buyers and have a generous rewards program.

When customers log in to your website, you gather personal information (e.g., name, email address, cell number, etc.). In order to participate in the rewards …

September 10, 2019 Commercial General Liability

No Defense Owed to Insured for Mediation Involving Environmental Contamination

The Illinois Appellate Court recently held that the term “suit” in a commercial general liability policy does not include a pre-suit mediation between the insured and others over the allocation of costs incurred to remediate environmental contamination. As a result, the court ruled that the insurers had no obligation to reimburse the insured for its legal fees incurred in the mediation.[1]

The insured operated a manufacturing facility on a property that was eventually declared a Superfund site by the U.S. EPA. To avoid litigation …