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Scottsdale Insurance Co. v. Village of Dixmoor

United States District Court, N.D. Illinois, Eastern Division

April 8, 2014



JAMES B. ZAGEL, District Judge.

Plaintiff Scottsdale Insurance Company ("Plaintiff") has filed a complaint against Village of Dixmoor ("Dixmoor" or the "Village"), Joseph Falica, Jr., Michael R. Morgan (collectively referred to as the "Dixmoor Insureds"), Jonathan Barr, Robert Taylor, James Harden, Robert Veal, Shainne Sharp ("Civil Rights Plaintiffs"), Nicholas Graves, Tasso J. Kachiroubas, John Meduga, Willie Davis, James Kizart, Jesse Garcia, and Richard Packert ("Illinois State Police" or "ISP") (collectively referred to as the "Defendants") seeking declaratory judgment. Currently before the court is Defendant Dixmoor Insureds' motion to dismiss Counts III through VIII and Defendant Civil Rights Plaintiffs' motion to dismiss the Complaint in its entirety, pursuant to Fed.R.Civ.P. 12(b)(6) and 12(b)(1). For the following reasons, the motion is granted in part and denied in part.


Dixmoor purchased insurance policies from Scottsdale Insurance Company ("Scottsdale"), an insurance corporation authorized to transact and conduct insurance business in the State of Illinois. Scottsdale then issued policies, including law enforcement liability policies, public entity policies ("Public Entity Policies"), and commercial liability umbrella policies ("Umbrella Policies"), to Dixmoor. Scottsdale insured Dixmoor for multiple years, including from October 1991 through October 1993 and October 2004 through April 2007. See Compl. at 3-4 (Docket No. 1).

In November 1991, an investigation was led by the Dixmoor Police Department of the rape and murder of a 14-year-old girl, Cateresa Matthews. This investigation continued until the above-named Dixmoor and ISP officers arrested each of the Civil Rights Plaintiffs, allegedly subjecting them to coercive interrogations and extracting their false confessions in October 1992. Id. Subsequently, Civil Rights Plaintiffs were convicted as teenagers for the rape and murder of Cateresa Matthews, spending 75 collective years imprisoned for this crime.

Between November 2011 and January 2012, the Civil Rights Plaintiffs were all exonerated in post-conviction proceedings in the Circuit Court of Cook County, based in part on new DNA testing and secured Certificates of Innocence. On or about September 9, 2013, the Civil Rights Plaintiffs each filed lawsuits against Dixmoor, as well as Dixmoor and Illinois State Police officers, alleging improper detention and interrogation in October 1992 and seeking damages for their wrongful convictions and incarceration. Specifically, the complaints in the underlying proceedings allege a variety of federal and state law claims, including violations of due process, coercive interrogation, conspiracy to deprive the plaintiffs of their constitutional rights, civil conspiracy, malicious prosecution, intentional infliction of emotional distress, respondeat superior, failure to intervene, and indemnification claims against Dixmoor.

Dixmoor Insureds claim coverage from Scottsdale as insureds or protected persons for the aforementioned lawsuits filed and currently pending in this district. In response to Dixmoor Insureds' coverage request, Plaintiff Scottsdale filed a Complaint in this district seeking a declaration from this Court that it owes no obligation under the subject policies of insurance to Defendants regarding the underlying lawsuits.

Now, Defendants Civil Rights Plaintiffs and Dixmoor Insureds move to dismiss Plaintiff Scottsdale's Complaint seeking declaratory judgment. First, Dixmoor Insureds move to dismiss Counts III through VIII of Plaintiff's Complaint for Declaratory Judgment, pursuant to Fed. R. Civ. P 12(b)(6). Second, Civil Rights Plaintiffs move to dismiss Plaintiff's Complaint in its entirety, pursuant to Fed. R. Civ.P. 12(b)(1) and 12(b)(6), arguing that Plaintiff's motion is premature as there has not yet been a determination of Defendant's liability in the underlying litigation. Civil Rights Plaintiffs contend that any finding regarding Plaintiff's potential obligation to indemnify Dixmoor Insureds requires a determination as to the ultimate facts in the underlying lawsuits against Plaintiff.


Dismissal under Federal Rule of Civil Procedure 12(b)(1)

Under Article III of the United States Constitution, a party seeking to invoke federal court jurisdiction must present an actual case or controversy. See Flast v. Cohen, 392 U.S. 83, 95, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968). For a case or controversy to be ripe for decision, the injury in question must be "actual or imminent, not conjectural or hypothetical." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). Allegations of merely possible future injury do not satisfy the requirements of Article III. Whitmore v. Arkansas, 495 U.S. 149, 158, 110 S.Ct. 1717, 109 L.Ed.2d 135 (1990) (internal quotations and citations omitted). Therefore, to be justiciable, a question must demonstrate a live controversy ripe for resolution by the federal courts. Renne v. Geary, 501 U.S. 312, 326, 111 S.Ct. 2331, 2341 (1991). The requirement that a question be justiciable also applies to suits seeking declaratory relief. See Deveraux v. City of Chicago, 14 F.3d 328, 330 (7thCir.1994); 28 U.S.C. ยง 2201. Where there is no justiciable question before the court, the court has no subject-matter jurisdiction and the claim must be dismissed pursuant to Fed. R. Civ. P 12(b)(1).

Dismissal under Federal Rule of Civil Procedure 12(b)(6)

The Court may dismiss claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure where the plaintiff fails "to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). In considering a motion to dismiss, the Court accepts as true all well-pleaded factual allegations and draws all reasonable inferences in the plaintiff's favor. McCullah v. Gadert, 344 F.3d 655, 657 (7th Cir. 2003). On a motion to dismiss, the "issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Cole v. U.S. Capital, Inc., 389 F.3d 719, 724 (7th Cir.2004)(quoting Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974)).

The parties agree that Illinois substantive law applies. I first address Counts III through IX, and ...

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