The opinion of the court was delivered by: Michael M. Mihm United States District Judge
Before the Court is St. Paul Mercury Insurance Company's ("St. Paul") Motion for Summary Judgment on the Complaint and Counterclaim and Farmers Automobile Insurance Association's ("Farmers") Motion for Partial Summary Judgment. For the reasons set forth below, St. Paul's Motion [#12] is GRANTED and Farmers' Motion [#13] is DENIED.
Plaintiff Farmers is an Illinois corporation with its principal place of business in Illinois. St. Paul is a Minnesota corporation with its principal place of business in Minnesota. The amount in controversy in this matter exceeds $75,000. Accordingly, jurisdiction is proper under 28 U.S.C. § 1332.
This is a declaratory judgment action brought by Farmers against St. Paul. Farmers seeks a declaration from this Court that St. Paul has a duty to reimburse Farmers for defense expenses for loss attributable to a lawsuit brought against it in state court. St. Paul, on the other hand, contends that it has no duty to defend or indemnify Farmers. Specifically, this case arises out of a Directors & Officers Company Liability Policy that Farmers purchased from St. Paul, effective September 30, 2003, through September 30, 2004, (the "Policy"). In general, the Policy was meant to provide Farmers with coverage for losses incurred as a result of wrongful employment practices.
On October 23, 2003, Christopher Loesche, a former employee of Farmers, filed a lawsuit in the Circuit Court of the Third Judicial Circuit, Madison County, Illinois, seeking recovery for overtime wages that he claims he is owed from Farmers according to the Illinois Minimum Wage Law. Loesche later amended his complaint adding class claims against Farmers. Loesche alleges that, during his employment as a claims adjuster for Farmers, he was paid an hourly rate but was never paid for the hours he was required to work in excess of forty hours per week despite the fact that he was regularly required to do so. Loesche alleges that he is owed back wages in excess of $50,000. Loesche also alleges a cause of action for unjust enrichment claiming that Farmers was unjustly enriched when it received the benefit of his overtime labor and services without paying for them and therefore he is entitled to equitable reimbursement for his services.
Pursuant to the Policy, Farmers requested that St. Paul pay the costs of defending Farmers and indemnify Farmers for any potential losses resulting from the Loesche litigation. St. Paul declined Farmers' request advising Farmers that the Policy does not provide coverage for the claims set forth in the Loesche litigation. Accordingly, Farmers filed the instant cause of action asking this Court to issue a declaratory judgment stating that St. Paul has a duty to indemnify and to pay Farmers' defense expenses. Farmers also alleges that St. Paul acted in bad faith in violation of Section 155 of the Illinois Insurance Code when St. Paul wrongfully denied coverage to Farmers. St. Paul denied that Farmers' claims are covered by the Policy and filed a counterclaim seeking a declaration from this Court that it does not have an obligation to pay defense expenses or indemnify Farmers with respect to the Loesche litigation. Additionally, St. Paul denies that it acted in bad faith.
Farmers filed a Motion for Partial Summary Judgment asking this Court to issue a declaratory judgment stating that St. Paul has a duty to pay the defense expenses and indemnify Farmers for any losses incurred in the Loesche case. Farmers does not request summary judgment on its claim that St. Paul violated Section 155 of the Illinois Insurance Code preferring to address this issue after the declaratory judgment count is decided.
St. Paul filed a cross Motion for Summary Judgment asking this Court to declare that it does not owe any duty to advance defense costs or indemnify Farmers for the Loesche litigation because these claims are not covered under the Policy. Additionally, St. Paul argues that this Court should grant summary judgment in St. Paul's favor on Farmers' Section 155 claim because it did not act in bad faith in denying Farmers' claim.
As both motions are fully briefed, this Order follows.
A motion for summary judgment will be granted where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The moving party has the responsibility of informing the Court of portions of the record or affidavits that demonstrate the absence of a triable issue. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The moving party may meet its burden of showing an absence of material facts by demonstrating "that there is an absence of evidence to support the nonmoving party's case." Id. at 325. Any doubt as to the existence of a genuine issue for trial is resolved against the moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Cain v. Lane, 857 F.2d 1139, 1142 (7th Cir. 1988).
If the moving party meets its burden, the nonmoving party then has the burden of presenting specific facts to show that there is a genuine issue of material fact. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). Federal Rule of Civil Procedure 56(e) requires the nonmoving party to go beyond the pleadings and produce evidence of a genuine issue for trial. Celotex Corp., 106 S.Ct. at 2553. This Court must then determine whether there is a need for trial - whether, in other words, there are any genuine factual issues that can properly be resolved only by a finder of fact because they may be reasonably resolved in favor of either party. Anderson, 447 U.S. at 249; Hedberg v. Indiana Bell Tel. Co., 47 F.3d 928, 931 (7th Cir. 1995). Finally, "[w]here a party bears the burden of proof on an ...