Court of Appeals of Illinois, First District, First Division
HILCO TRADING, LLC; HILCO, INC.; HILCO APPRAISAL SERVICES, LLC; HILCO ENTERPRISE VALUATION SERVICES, LLC; MARK A. SMILEY; ARNOLD H. DRATT; and JEFFREY LINSTROM, Plaintiffs-Appellants,
LIBERTY SURPLUS INSURANCE CORPORATION, ACE AMERICAN INSURANCE COMPANY, and CONTINENTAL CASUALTY COMPANY, Defendants-Appellees
Appeal from the Circuit Court of Cook County. No. 12 CH 1580. Honorable Mary Anne Mason, Judge Presiding.
Affirmed in part and reversed in part; cause remanded with directions.
In an action by several related corporations involved in appraisal and valuation services seeking to require their malpractice insurer to provide a defense in underlying actions alleging that plaintiffs breached their obligations relating to appraisals prepared in connection with asset-based loans plaintiffs made, the trial court erred in granting the insurer's motion for summary judgment and dismissing plaintiffs' motion for summary judgment, since the language used in the policies issued by defendant triggered defendant's duty to defend, even though the appraisals at issue were used by corporations within plaintiffs' family of related corporations to support the loans made by other corporations within plaintiffs' family.
For Appellants: Adam S. Ziffer, pro hac vice, Kasowitz, Benson, Torres & Friedman, LLP, New York, NY; J. David Duffy, Emily L. Peel, of counsel, Thompson, Coburn, LLP, Chicago, IL.
For Liberty Surplus, Appellee: Joseph J. Borders, Neil E. Holmen, James W. Kienzle, of counsel, Walker, Wilcox, Matousek, LLP, Chicago, IL.
For Illinois Union, Appellee: Matthew T. Walsh, Cozen O'Connor, Chicago, IL; Angelo Savino, Cozen O'Connor. New York, NY.
JUSTICE CUNNINGHAM delivered the judgment of the court, with opinion. Presiding Justice Connors and Justice Hoffman concurred in the judgment and opinion.
[¶1] This appeal arises from an October 9, 2012 order entered by the circuit court of Cook County which granted the motion to dismiss filed by defendant-appellee Continental Casualty Company (Continental) and which dismissed with prejudice the complaint against Continental; granted the motion for summary judgment filed by defendant-appellee Liberty Surplus Insurance Corporation (Liberty) and dismissed with prejudice the complaint against Liberty; dismissed with prejudice the complaint against defendants-appellees ACE American Insurance Company (ACE) and Illinois Union Insurance Company (Illinois Union) and denied the cross-motion for partial summary judgment filed by plaintiffs-appellants Hilco Trading, LLC (Hilco Trading); Hilco, Inc. (Hilco); Hilco Appraisal Services, LLC (Hilco Appraisal); Hilco Enterprise Valuation Services, LLC (Hilco Valuation); Mark A. Smiley; Arnold H. Dratt; and Jeffrey Linstrom (collectively, the plaintiffs). On appeal, Hilco Appraisal and Hilco Valuation (collectively, Hilco Appraisal and Valuation) argue that the trial court erred in granting Liberty's motion for summary judgment, dismissing the complaint against Liberty and Illinois Union, and denying their cross-motion for partial summary judgment. For the following reasons, we affirm the judgment of the circuit court of Cook County as to Continental and ACE, and we reverse the judgment of the circuit court as to Liberty, Illinois Union, and the plaintiffs. We remand the matter for further proceedings.
[¶3] Hilco is a corporation organized under the laws of Illinois and has its principal
place of business in Northbrook, Illinois. Hilco Trading is a limited liability company organized under the laws of Delaware and has its principal place of business in Northbrook, Illinois. Hilco Appraisal is a limited liability company organized under the laws of Delaware and has its principal place of business in Northbrook, Illinois. Hilco Appraisal is a majority-owned subsidiary of Hilco Trading. Hilco Valuation is a limited liability company organized under the laws of Delaware and has its principal place of business in Northbrook, Illinois. Hilco Valuation is an indirect, majority-owned subsidiary of Hilco Trading. The record suggests that Hilco Appraisal and Valuation are in the business of providing expert professional services consisting of the valuation of various types of assets. The record suggests that Hilco Financial, LLC (Hilco Financial), was a limited liability company organized under the laws of Delaware and was owned and controlled by Hilco Trading. Hilco Financial was in the business of making loans to other companies through asset-based lending.
[¶4] Hilco Trading purchased a primary professional liability insurance policy from Liberty (the Liberty policy), which covered claims against Hilco Trading, Hilco Appraisal, Hilco Valuation and other Hilco entities for errors in rendering professional services. The Liberty policy covered the period from April 23, 2008 to April 23, 2009 and provided a limit of $10 million in excess of a $250,000 deductible. The Liberty policy stated that Liberty had the duty to defend any " claim" made against the " Insured." The Liberty policy provided definitions for the following terms, which are at issue in this case:
" (A) 'Claim' means receipt of a civil action *** naming the Insured seeking Damages *** arising out of a Wrongful Act by the Insured or any Entity for whom the Insured is legally liable.
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(H) 'Insured' means only the following:
The Named Insured [Hilco Trading] ***.
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(O) 'Professional Services' means those services specified in Item 7 of the Declarations which are provided by the Insured to a ...