Skolnik v. Allied Property & Casualty Insurance Co.
45 N.E.3d 1161
Ill. App. Ct.2016Background
- 21-year-old Haley Johnson died at defendant Joshua Skolnik’s bedroom; autopsy listed methadone intoxication and detected GHB and Rohypnol; manner of death undetermined.
- Allied insured the Skolniks under a homeowners and an umbrella liability policy that exclude injury “arising out of the use” of controlled substances but carve out “legitimate use of prescription drugs by a person following the orders of a licensed physician.”
- William Johnson (father) sued the Skolniks alleging wrongful death, survival claims, false imprisonment, civil conspiracy, and battery (alleging Skolnik put date-rape drugs in her drink and had nonconsensual sex).
- Count I alleges negligent storage/delivery of methadone and, separately, negligent failure to summon emergency assistance and refusal to allow friends to render aid after Johnson became incapacitated.
- Allied sought declaratory judgment that the controlled-substances exclusion relieved it of any duty to defend; the trial court granted summary judgment for Allied.
- The appellate court reversed, finding the complaint alleged potentially covered independent negligence (failure to summon aid/refusal to allow friends access), so Allied owes a duty to defend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the controlled-substance exclusion bars Allied’s duty to defend | Allied: Johnson’s death arose from use of controlled substances so the exclusion removes duty to defend | Skolnik: complaint also alleges independent negligent omissions (failure to summon aid, refusal to allow friends) that do not "arise out of" drug use and could be covered | The complaint alleges potentially covered independent negligence; duty to defend exists |
| Whether the “legitimate use” exception applies to prescribed methadone | Allied: exception inapplicable because pill was prescribed only to Skolnik and Johnson’s intake was not a legitimate use | Skolnik: methadone was prescribed to him and negligent storage/delivery could bring the exception into play | Court did not need to resolve exception; focused on potential independent negligent acts giving rise to duty to defend |
| Whether proximate cause is exclusively the drug ingestion (foreclosing coverage) | Allied: autopsy shows methadone intoxication so drug use is the proximate and sole cause | Skolnik: multiple possible contributing causes (GHB/Rohypnol, delay in aid) mean causation is triable | Causation is fact-bound and unresolved; possibility that negligent omissions were an independent proximate cause precludes summary judgment for insurer |
| Whether declaratory judgment was premature (deciding facts of underlying case) | Allied: court can decide coverage on pleadings | Skolnik: declaratory adjudication should not decide factual liability in underlying case | Court: deciding duty to defend from the complaint is proper and does not determine ultimate liability; but summary judgment was improper because material factual issues remain |
Key Cases Cited
- Flomerfelt v. Cardiello, 997 A.2d 991 (N.J. 2010) (insurer must defend when complaint pleads potentially concurrent causes, some of which may be covered)
- Westfield Nat’l Ins. Co. v. Long, 348 Ill. App. 3d 987 (Ill. App. 2004) (discusses interpretation of "arising out of" language in exclusions)
- United States Fidelity & Guaranty Co. v. State Farm Mut. Auto. Ins. Co., 152 Ill. App. 3d 46 (Ill. App. 1986) (coverage for negligent supervision can exist even where another proximate cause falls within an exclusion)
- Pekin Ins. Co. v. Wilson, 237 Ill. 2d 446 (Ill. 2010) (applies the "eight corners" rule comparing complaint and policy to determine duty to defend)