2019 IL App (1st) 180158
Ill. App. Ct.2019Background
- Rodell Sanders was criminally charged in 1994, convicted, later vacated, retried twice, and finally acquitted in July 2014; he settled a federal malicious-prosecution suit against the City of Chicago Heights for $15 million, with the City paying $2 million and assigning its insurer-recovery rights to Sanders.
- Plaintiffs (Sanders and the City) sued Illinois Union (primary) and Starr (excess), alleging breach of contract and bad-faith claims for denying coverage for the underlying malicious-prosecution claim and settlement; the disputed policy periods mainly span Nov. 1, 2012–Nov. 1, 2014.
- Illinois Union’s policy covers "Claims first arising out of an Occurrence happening during the Policy Period" and defines "Occurrence" for personal injury as the listed "offenses" (including "malicious prosecution"). Starr follows the primary wording for excess coverage.
- Defendants moved to dismiss under 735 ILCS 5/2-619(a)(9), arguing coverage was triggered by the initiation of the criminal prosecution (1994), which predated their policies; retrials during the policy period were, they argued, continuations of the original prosecution and not new triggers.
- Plaintiffs argued the policy’s reference to an "offense" means the completed tort of malicious prosecution (i.e., all elements satisfied), which did not occur until Sanders’s exoneration in 2014; alternatively, plaintiffs said the retrials were additional triggers.
- The trial court dismissed the complaint; the appellate majority reversed, holding the policy’s term "offense" refers to the completed tort and thus coverage was triggered by exoneration in 2014.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does an insurer’s coverage for "malicious prosecution" "offense"/"occurrence" trigger: at initiation of prosecution or upon completion/exoneration? | "Offense" means the completed tort of malicious prosecution; coverage triggers when all elements are met (exoneration in 2014). | "Offense" denotes the wrongful act (charging/prosecuting without probable cause); trigger is initiation in 1994, before policy. | Held for plaintiffs: "offense" in context means the completed cause of action; coverage triggered upon exoneration in 2014. |
| Do retrials during the policy period constitute separate triggering occurrences? | Retrials can be additional triggers because wrongful acts occurred while policies were in effect. | Retrials are continuations of the same prosecution and not separate occurrences. | Court did not decide retrials issue (unnecessary after finding exoneration triggered coverage). |
| How to interpret undefined policy term "offense"? (method of construction) | Use plain/ordinary meaning in context; when coupled with legal cause-of-action names, "offense" refers to the completed cause of action. | "Offense" commonly means wrongful act or crime; context supports initiation as trigger. | Court gives "offense" its plain meaning in context—coupled with named causes of action, it refers to the completed legal claim. |
| Are prior cases requiring initiation as the trigger controlling? | Prior cases are distinguishable based on policy wording; some used "injury" or "committed" language. | Cited authorities holding initiation triggers coverage; argue majority conflicts with precedent. | Court distinguishes those cases on policy text ("happen" vs. "commit", and definition structure) and declines to follow them here. |
Key Cases Cited
- Founders Ins. Co. v. Munoz, 237 Ill. 2d 424 (2010) (rules for interpreting insurance contracts; unambiguous policy language governs)
- Ferguson v. City of Chicago, 213 Ill. 2d 94 (2004) (malicious-prosecution cause of action accrues only upon favorable termination)
- Van Meter v. Darien Park Dist., 207 Ill. 2d 359 (2003) (standard of review for 2-619 motions; movant admits complaint’s legal sufficiency but raises affirmative matter)
- Miller v. Rosenberg, 196 Ill. 2d 50 (2001) (malicious-prosecution element focuses on institution without probable cause and malice)
- Milwaukee Guardian Ins., Inc. v. Taraska, 236 Ill. App. 3d 973 (1992) (insurance-policy provisions must be read as an integrated whole)