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Illinois Farmers Insurance Company v. Charles W. Keyser

August 22, 2011


Appeal from the Circuit Court of the 12th Judicial Circuit, Will County, Illinois, Circuit No. 08-MR-676 Honorable Barbara Petrungaro, Judge, Presiding.

The opinion of the court was delivered by: Justice Lytton

JUSTICE LYTTON delivered the judgment of the court, with opinion.

Justices McDade and O'Brien concurred in the judgment and opinion.


¶ 1 Plaintiff Illinois Farmers Insurance Company (Illinois Farmers) filed an action against insured Cindy Stukel seeking a declaration that it was not obligated to defend Stukel in a malicious prosecution lawsuit filed against her by Charles Keyser, Jr. The trial court ruled that the insurance company was required to provide a defense and granted defendants' motion for summary judgment. We affirm.

¶ 2 In May of 2007, Cindy Stukel filed criminal trespass charges against Charles Keyser, Jr. In pursing the charges, Stukel allegedly advised Joliet police officers that Keyser entered her property after receiving verbal notice from her that such entry was forbidden. Keyser was arrested, but the criminal proceedings against him were later dismissed. Keyser then filed a civil complaint for malicious prosecution against Stukel, in which he alleged that Stukel's verbal and written statements to police were false and that Stukel knew they were false when she made them.

¶ 3 During this time, Stukel was insured under a homeowners policy issued by Illinois Farmers. That policy obligated Illinois Farmers to defend and indemnify Stukel against damages caused by "bodily injury, property damage or personal injury resulting from an occurrence" to which coverage applies. The policy definition of "personal injury" included injury arising from "malicious prosecution." The policy defined an "occurrence" as "an accident" resulting in jury. The policy also excluded coverage of bodily injury or personal injury intentionally caused by the insured.

¶ 4 Illinois Farmers filed a declaratory judgment action, seeking a judgment declaring that Stukel's policy did not afford her coverage in the underlying lawsuit because her acts were intentional. It claimed that such intentional acts were excluded under the policy and moved for summary judgment. Stukel and Keyser filed a cross-motion for summary judgment, arguing that the underlying complaint alleged a civil tort of malicious prosecution that was specifically covered by the insurance policy.

¶ 5 The trial court ruled that the policy's inconsistent provisions created an ambiguity that should be construed in favor of the insured and granted defendants' motion.

¶ 6 Summary judgment is proper when the pleadings, affidavits, depositions and admissions of record, construed strictly against the moving party, 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. Morris v. Margulis, 197 Ill. 2d 28, 35 (2001). While this relief has been called a "drastic measure," it is an appropriate tool to employ in determining questions of law such as the rights and obligations under an insurance policy. See Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90 (1992); Bohner v. Ace American Insurance Co., 359 Ill. App. 3d 621 (2005). We conduct a de novo review of the trial court's order granting summary judgment in favor of the defendants. Outboard Marine Corp., 154 Ill. 2d at 102.

¶ 7 I

¶ 8 Illinois Farmers claims that it owes no duty to defend or indemnify Stukel in the underlying complaint. It argues that the policy defines an "occurrence" as an "accident" and excludes coverage of intentional conduct; thus, an intentional tort such as malicious prosecution is not covered.

¶ 9 The construction of insurance policy provisions is a question of law. Outboard Marine Corp., 154 Ill. 2d at 108. In construing a policy, our primary function is to ascertain and enforce the parties' intent as expressed in the written agreement. Allstate Insurance Co. v. Greer, 396 Ill. App. 3d 1037 (2009). To ascertain the meaning of a policy, the court must construe it as a whole, taking into account the risk undertaken, the subject matter that is insured and the purposes of the entire contract. Outboard Marine Corp., 154 Ill. 2d at 108. A court must afford the policy language its plain and ordinary meaning if the words are unambiguous. However, if the words are susceptible to more than one interpretation, they are ambiguous and must be construed in favor of the insured and against the insurer who drafted the policy. Id. at 108-09.

¶ 10 To determine whether an insurer has a duty to defend its insured, we must compare the allegations of the underlying complaint to the coverage provisions of the insurance policy. Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384 (1993). If the underlying complaint alleges facts within or potentially within the policy's coverage provisions, the insurer is ...

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