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American Family Mutual Insurance Co. v. Savickas

October 20, 1998


The opinion of the court was delivered by: Justice McNULTY

Appeal from the Circuit Court of Cook County

Honorable Dorothy Kinnaird, Judge Presiding

American Family Mutual Insurance Company sued for a judgment declaring that it had no duty to defend or indemnify its insured, Michael Savickas, in a lawsuit Elizabeth Vinicky brought against him. The trial court granted summary judgment for American Family. Savickas appeals in docket number 1-97-0026 and Vinicky appeals in docket number 1-96-4428. We consolidated the appeals.

After a jury found Savickas guilty of the murder of Thomas Vinicky, Elizabeth Vinicky, administrator of Thomas' estate, sued Savickas for wrongfully causing the death. Savickas tendered defense to American Family. Due to a conflict of interests, American Family refused to defend, but it agreed to reimburse Savickas for defense costs. American Family then brought this suit for a declaratory judgment. Its policy excluded coverage for any bodily injury "which is expected or intended" by the insured.

American Family supported its motion for summary judgment with Vinicky's complaint against Savickas and excerpts from Savickas' testimony in the criminal trial. In the first two counts of her complaint, Vinicky alleged that Savickas intentionally shot and killed Thomas Vinicky. But in the last two counts she alleged that Savickas "[n]egligently shot" Thomas, and Savickas "[n]egligently assessed a need for self defense." In granting summary judgment, the trial court relied primarily on Savickas' testimony and the appellate court's decision affirming the criminal conviction. See People v. Savickas, 230 Ill. App. 3d 322, 594 N.E.2d 1233 (1992).

Our supreme court restated the principles for determining an insurer's duty to defend in Maryland Casualty Co. v. Peppers, 64 Ill. 2d 187, 355 N.E.2d 24 (1976), and Thornton v. Paul, 74 Ill. 2d 132, 384 N.E.2d 335 (1978). In Peppers, Mims sued Peppers, alleging that Peppers shot him intentionally or negligently. Peppers' insurer sued for a judgment declaring that it had no duty to defend or indemnify Peppers. In support the insurer presented undisputed evidence that Peppers intentionally shot at Mims to protect his property from burglary. The trial court found a duty to defend based on the allegations of the complaint, but no duty to indemnify. Our supreme court agreed that the insurer had a duty to defend (Peppers, 64 Ill. 2d at 194), and vacated the judgment regarding indemnity because

"the finding in the declaratory judgment action that the injury was intentionally inflicted could possibly establish the allegations of the assault count in the complaint and might preclude Mims' right to recover under the other theories alleged. [Citations.] In a case quite similar to ours the appellate court held that the ruling and judgment of the trial court in a declaratory judgment action under such circumstances were 'premature' and should be reversed. [Citation.] We agree with that holding. The finding of the trial court in our case that the injury was intentional was not proper in this declaratory judgment action."

Peppers, 64 Ill. 2d at 197.

In Thornton, after a court found Paul guilty of criminal battery on Thornton, Thornton filed a civil suit alleging that Paul negligently struck him in the head. Paul's insurer expressly excluded battery from coverage. The court held:

"As a general rule, the duty of an insurer to defend an action brought against the insured is to be determined solely from the allegations of the complaint. If the complaint alleges facts within or potentially within policy coverage, the insurer is obliged to defend even if the allegations are groundless, false, or fraudulent. [Citations.] In addition, in Illinois the duty is not annulled by the knowledge of the insurer that the allegations are untrue.

*** With the exception of the amended complaint, all the facts, depositions and pleadings in the present case clearly indicate that the claim was based on an intentional battery by Ben Paul, not on negligence. It is equally clear that the plaintiff's attorney was well aware that the defendant's act was a battery and that he filed the amended complaint charging negligence solely for the purpose of bringing the action within potential insurance coverage, thereby intending to obligate the insurer to defend after the insurance company had investigated, learned that the conduct was a battery, and refused. There is no explanation for the procedures followed other than the desire of plaintiff's counsel to maneuver the insurer into a position where it would be obligated to pay the judgment and estopped from raising the defense of noncoverage." Thornton, 74 Ill. 2d at 144-46.

Based on the unsupported allegation of negligence in the amended complaint, and in the face of the uncontested evidence of intentional battery, the court held that the insurer "was obligated to provide a defense of the amended complaint to the insureds and that this obligation must be satisfied by reimbursing the insureds for the costs thereof." Thornton, 74 Ill. 2d at 162. The court explained that, due to their conflicting interests, "the insurer should not be *** permitted to participate in the defense of the case. Its obligation to provide a defense should be satisfied by reimbursing the insured for the costs of the defense." Thornton, 74 Ill. 2d at 152. In the suit to determine the duty to indemnify, to begin after Conclusion of the underlying civil suit, the criminal conviction would constitute prima facie evidence that Paul committed a battery.

Here, as in Thornton, the court had reason to believe that Vinicky alleged negligence solely to bring her suit within the ambit of Savickas' insurance coverage. Here, too, the defendant had a criminal conviction and all depositions and other testimony showed he expected injury to result from his intentional acts. Under Thornton, these facts cannot relieve the insurer of the duty to defend. As the court said in Management Support Associates v. Union Indemnity Insurance Co., 129 Ill. App. 3d 1089, 1096, 473 N.E.2d 405 (1984), "the insurer can safely and justifiably refuse to defend only when the allegations clearly show on their face that the claim is beyond policy coverage." The allegation of negligence in Vinicky's complaint, like the allegation in Thornton, triggered the duty to defend, and the complaint on its face does not here allege conflicting facts sufficient to relieve the insurer of that duty. Under Peppers, the court should not yet decide the duty to indemnify.

The trial court relied on Allstate Insurance Co. v. Carioto, 194 Ill. App. 3d 767, 551 N.E.2d 382 (1990), in finding no duty to defend or indemnify. In that case the court said that Peppers and Thornton "recognize that in instances where bona fide controversies arise over the issue of negligence versus intentional conduct, declaratory judgment actions are generally inappropriate." Carioto, 194 Ill. App. 3d at 774. The court then found that all of the evidence, including depositions and a criminal conviction, showed that the insured acted intentionally, and only the complaint against the insured alleged negligence. Because the court found no bona fide controversy concerning intent, it affirmed the trial court's decision to grant Allstate a judgment declaring it had no duty to defend its insured.

Our supreme court did not limit the application of Thornton to cases involving bona fide controversies over issues needed to determine coverage. In Thornton itself the court recognized the parties had no bona fide dispute, and the plaintiff alleged negligence solely to bring the cause of action within the insurance coverage. The court stressed that all of the evidence, including depositions and the criminal conviction, showed the insured acted ...

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