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GRINNELL MUT. REINSURANCE CO. v. SHIERK

January 9, 1998

GRINNELL MUTUAL REINSURANCE COMPANY, Plaintiff,
v.
PHILIP SHIERK and STEPHANIE M. LORD, Defendants.



The opinion of the court was delivered by: STIEHL

 STIEHL, District Judge:

 Before the Court is plaintiff's motion for summary judgment.

 BACKGROUND1

 On January 9, 1994, defendant Philip Shierk discharged a firearm in the direction of his wife, defendant Stephanie M. Lord, while the two were at Shierk's residence. The bullet struck Lord in her face, breaking her jaw, and bruising and cutting her face. Shierk claimed that the shooting was an accident. Nevertheless, Shierk, who was in the Air Force at the time, was court-martialed for shooting Lord, and was convicted of aggravated assault with a dangerous weapon.

 On February 28, 1995, Lord sued Shierk for negligence in the Circuit Court for the Twentieth Judicial Circuit, St. Clair County, Illinois. In her complaint, Lord sought damages in excess of $ 15,000 plus the costs of her lawsuit. Shierk tendered his defense to Grinnell, which had issued him a homeowner's insurance policy Grinnell agreed to defend Shierk, but it expressly reserved the right to later deny coverage. On October 29, 1995, the Illinois state court entered summary judgment against Shierk on the issue of liability; the issue of damages was left to be determined later by a jury.

 Accordingly, on August 22, 1996, Grinnell filed a motion for summary judgment. In response to Grinnell's motion, Lord objects to the Court considering the court-martial because, according to her, the proceeding did not comply with the requirements of Fed. R. Evid. 803(22). Although she cites no authority for her proposition, Lord further argues that, because Shierk was found-guilty of a non-intent crime, the Court should decline to find that Grinnell had no duty to defend Shierk.

 ANALYSIS

 I. SUMMARY JUDGMENT

 Fed. R. Civ. P. 56(c) provides that a district court shall grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." In determining whether a district court properly granted summary judgment, "all factual inferences are to be taken against the moving party and in favor of the opposing party." International Adm'rs, Inc. v. Life Ins. Co. of N. Am., 753 F.2d 1373, 1378 (7th Cir. 1985). In instances in which "inferences contrary to those drawn by the trial court might be permissible," a district court's grant of summary judgment must be reversed. Munson v. Friske, 754 F.2d 683, 690 (7th Cir. 1985). Once a motion for summary judgment has been made and properly supported, however, the nonmovant does have the burden of setting forth specific facts showing the existence of a genuine issue of a material fact for trial. See Rule 56(e); Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.), cert. denied, 464 U.S. 960, 78 L. Ed. 2d 336, 104 S. Ct. 392 (1983), (noting that "a bare contention that an issue of fact exists is insufficient to raise a factual issue"). Although a requisite, the existence of a factual dispute is not, standing alone, sufficient to bar summary judgment. It is well settled that a "factual dispute does not preclude summary judgment unless . . . the disputed fact is outcome determinative under the governing law." Egger v. Phillips, 710 F.2d 292, 296 (7th Cir.), cert. denied, 464 U.S. 918, 78 L. Ed. 2d 262, 104 S. Ct. 284 (1983), cited in Shlay v. Montgomery, 802 F.2d 918, 920 (7th Cir. 1986).

 II. DUTY TO DEFEND OR INDEMNIFY

 In declaratory judgment actions where the Court is sitting in diversity, the Court is obligated to apply the law of the forum state. Orix Credit Alliance, Inc. V. Taylor Machine Works, Inc., 125 F.3d 468(7th Cir. 1997), citing Heller Int'l Corp. v. Sharp, 974 F.2d 850, 856 (7th Cir. 1992). Thus, Illinois law governs this controversy.

 The Illinois Supreme Court in Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384, 620 N.E.2d 1073, 189 Ill. Dec. 756 (Ill. 1993), discussed the standard courts are to apply in duty to defend and indemnity cases. Specifically, the ...


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