MONTHLY QUIZ: Passenger, who is legally blind, hires Livery Service, who provides nonemergency medical transportation to the public, to transport him from his home to a medical appointment. As Livery Service's Driver is escorting Passenger to the hospital entrance, Driver allegedly causes Passenger to walk into a cement pillar. Passenger files suit and alleges that Driver owes him a duty of ordinary care in transporting and escorting him and breached that duty so that he was injured. Livery Service tenders the suit to Insurer under a business-specific automobile policy and Insurer denies the claim because Passenger's injuries were not caused by an accident "resulting from the ownership, maintenance or use of a covered 'auto'" as provided in the policy. Are these events potentially covered even though the events did not take place in the vehicle? Does Insurer have a duty to defend Livery Service and Driver? Does it matter whether it is a business policy specifically for livery vehicles? Who is right? You be the judge. (Answer below).
WAIVER OF DEAD MAN'S ACT, AND ADMISSION OF DISCOVERY DEPOSITION WARRANT REVERSAL OF SUMMARY JUDGMENT: Suit was filed following a motor vehicle accident. During the pendency of the case, but after he had been deposed, the defendant driver died, and a special representative was appointed and substituted as party defendant. Defendant moved for summary judgment, arguing that plaintiff could not establish that the decedent was negligent because decedent and plaintiff were the only witnesses to the accident, that plaintiff was barred from testifying about the facts of the accident and his conversations with decedent under the Dead Man's Act (735 ILCS 5/8-201), and that decedent's deposition transcript could not be admitted as evidence pursuant to Supreme Court Rule 212(a)(5). In support of the motion, defendant attached decedent's deposition and an affidavit from the responding officer. The trial court granted summary judgment, and plaintiff appealed. On appeal, the Fifth District Appellate Court reversed and remanded the case. First, the Court held that the defendant had waived the protections of the Dead Man's Act by attaching the deposition transcript to the Motion for Summary Judgment and offering it as evidence. Second, the Court also held that the trial court should have permitted decedent's deposition to be admitted as substantive evidence under Supreme Court Rule 212(a)(5). Specifically, the Court noted that Rule 212(a)(5) permitted the use of a discovery deposition as evidence at trial where the deponent is not a controlled expert witness, an evidence deposition has not been taken, and the deponent is unable to attend or testify because of death or infirmity, and if the court finds such evidence at trial will do substantial justice. Although the committee comments indicate that the discovery deposition of a party should only be used as evidence in "rare, but compelling circumstances", the plain language of the Rule itself sufficiently permits its use in this case. Eyster v. Conrad, 2020 IL App (5th) 180261 (Jan. 9, 2020).
INSURANCE COVERAGE - HOUSING ORDINANCE IS NOT AN EXCLUDED CONSUMER PROTECTION LAW: Insured was named as a defendant in a class action lawsuit brought by tenants of a rental property managed by the insured pursuant to a local Residential Landlord Tenant Ordinance ("Housing Ordinance"). The insurer initially denied the insured's tender of defense based on an exclusion in the insurer's professional liability insurance policy for "unfair or deceptive business practices" including "violations of any local...consumer protection laws." The insured then brought suit against its insurer seeking a declaration as to coverage. The parties filed cross-motions for summary judgment in the declaratory judgment action, and the trial court found a duty to defend, in part, because the exclusion did not apply to claims arising out of the Housing Ordinance. Following the trial court's grant of summary judgment in the insured's favor, the insurer appealed to the Illinois Court of Appeals. On appeal, the Court affirmed the trial court's ruling that the insurer had a duty to defend. Despite acknowledging that Illinois courts have historically considered tenants to be "consumers", and that there were "certainly parallels between the [Housing Ordinance] and consumer protection statutes," the Court reasoned that the purpose of the Housing Ordinance was to balance the rights and obligations of both tenants and landlords, whereas consumer protection laws are exclusively enacted as a one-way street protecting only the consumer. Moreover, because the Housing Ordinance could be violated through innocent inaction or oversight, even a broader reading of the exclusion to include unfair or deceptive business practices generally did not change the outcome. The case further demonstrates that the application of a policy exclusion must be "clear and unequivocal" in jurisdictions where policy exclusions are to be construed narrowly against the insurer. Evergreen Real Estate Services, LLC v. Hanover Ins. Co., 2019 IL App. (1st) 181867 (Ill. Ct. App. Nov. 4, 2019).
INSURANCE COVERAGE - ILLINOIS SUPREME COURT HOLDS THAT COVERAGE FOR A MALICIOUS PROSECUTION CLAIM IS TRIGGERED WHEN THE MALICIOUS PROSECUTION SUIT IS FILED: City procured primary and excess liability insurance policies from insurers, with policy periods from Nov. 2011 through November 2014. The coverage part of the Policy provided coverage for claims "first arising out of an Occurrence happening during the Policy Period ... for ... Personal Injury", which was defined as "offenses [including] .... [f]alse arrest, false imprisonment, wrongful detention or malicious prosecution." In 1994, Claimant was wrongfully charged, prosecuted and convicted of murder based on doctored evidence submitted by City's Police Department. After roughly 20 years in prison, Claimant was released but retried. Following a third retrial (2013), Claimant was acquitted and amended his pending federal civil rights action against City to include a count for malicious prosecution. When Insurers denied City's tender of defense, contending that the malicious prosecution did not fall within the 2011 - 2014 policy periods, City filed a declaratory judgment action. The trial court granted Insurers' motion to dismiss, holding that the filing of the underlying malicious prosecution suit was the occurrence causing personal injury under the insurance policy. On appeal, a split panel reversed, with the majority finding that the plain and ordinary meaning of the term "offense", which was not defined under the policy, referred to both "the legal cause of action that arises out of wrongful conduct, not just the wrongful conduct itself." On further appeal, the Illinois Supreme Court reversed, holding that coverage for the malicious prosecution claim was triggered when the claimant was maliciously prosecuted in 1994. The Court considered both the meaning of the word offense and the contractual requirement that the offense must both happen and take place during the policy period. That the policy at issue was occurrence-based was also a strong factor in the Court's decision. "If we were to deem exoneration the trigger for coverage of a malicious prosecution insurance claim, liability could be shifted to a policy period in which none of the acts or omissions giving rise to the claim occurred. That would violate the intent of the parties to an occurrence-based policy." Separately, the Court concluded that Claimant's 2013 and 2014 retrials were not separate occurrences that triggered coverage, because the Police Department's conduct was the single cause of action of all three trials, and therefore, a single occurrence under the Policy. Rodell Sanders, et al. v. Illinois Union Ins. Co., 2019 IL 12465 (Nov. 21, 2019).
ANSWER TO QUIZ: Insurer owes Livery Service a duty to defend. In this case, the fact that the policy was specific to livery vehicles, was of critical importance on appeal. According to the appellate court, livery companies routinely perform tasks other than driving, such as carrying luggage, or as here, assisting Passenger to the door. Additionally, Insurer's policy employed the phrase "use of a covered auto." Had Insurer wished for a narrow interpretation, the court concluded, it should have limited to coverages to the "operation of a covered auto." First Chicago Ins. Co. v. My Personal Taxi and Livery, LLC, et al., 2019 IL App (1st) 181867 (Oct.11, 2019).
