2019 IL 124565
Ill.2019Background
- In 1994 Chicago Heights police doctored evidence, charged Rodell Sanders with murder, and he was convicted in 1995; he served ~20 years before eventual exoneration in 2014.
- Chicago Heights held a primary liability policy from Illinois Union (Nov. 1, 2011–Nov. 1, 2014) and an excess follow-form policy from Starr during that period; the policy covered "personal injury" including "malicious prosecution" caused by an "offense" happening during the policy period.
- Chicago Heights gave notice of the claim in 2012; insurers denied coverage, arguing the malicious prosecution occurred in 1994 (pre-policy) and thus was not covered.
- Sanders obtained a consent judgment for $15 million in 2016; Chicago Heights assigned its rights against Illinois Union and Starr to Sanders, who sued the insurers for wrongful denial.
- The trial court dismissed the insurers; the appellate court reversed (finding "offense" meant the completed cause of action), and the Illinois Supreme Court granted review.
- The Illinois Supreme Court held the policy is occurrence-based and "offense" refers to the wrongful conduct initiating the prosecution (1994), so coverage was not triggered by the 2011–2014 policies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does the "offense" of malicious prosecution occur for an occurrence-based policy? | "Offense" = completed tort/cause of action (termination in favor/exoneration or acquittal) — so 2013–2014 policies could be triggered. | "Offense" = wrongful conduct that initiated the prosecution (1994) — occurred before policies, so no coverage. | "Offense" means the wrongful conduct initiating the prosecution; trigger is 1994, pre-policy, so no coverage. |
| Do retrials or later acquittal constitute separate occurrences that trigger coverage? | Retrials/acquittal are new triggering events independent of the initial prosecution. | All trials arose from the same fabricated charges; policy treats substantially the same personal injury as one occurrence. | Retrials are part of the same single occurrence; they do not create separate coverage triggers. |
Key Cases Cited
- Valley Forge Ins. Co. v. Swiderski Electronics, Inc., 223 Ill. 2d 352 (contract interpretation rules govern insurance policies)
- Nicor, Inc. v. Associated Electric & Gas Ins. Servs. Ltd., 223 Ill. 2d 407 (an undefined policy term is not ambiguous merely because it is undefined)
- Pekin Ins. Co. v. Wilson, 237 Ill. 2d 446 (plain and ordinary meaning governs clear policy language)
- Mitchinson v. Cross, 58 Ill. 366 (malicious prosecution centers on prosecutor acting without probable cause)
- Spiegel v. Zurich Ins. Co., 293 Ill. App. 3d 129 (malicious prosecution described as bringing a suit known to be groundless)
- Security Mut. Cas. Co. v. Harbor Ins. Co., 65 Ill. App. 3d 198 (older appellate decision influential on contrary holdings)
- Am. Safety Cas. Ins. Co. v. City of Waukegan, 678 F.3d 475 (7th Cir.: treated exoneration as the coverage "occurrence" for malicious prosecution)