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Westport Ins. Corp. v. City of Waukegan

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

December 11, 2014

WESTPORT INSURANCE CORPORATION, Plaintiff,
v.
CITY OF WAUKEGAN, LUCIAN TESSMAN, DONALD MEADIE, FERNANDO SHIPLEY, HOWARD PRATT, RICHARD DAVIS, PHLLIP STEVENSON, TERRY HOUSE, ROBERT REPP, BURTON SETTERLUND, ESTATE OF DENNIS COBB, and JUAN A. RIVERA, JR., Defendants

For Westport Insurance Corporation, as successor to Coregis Insurance Company, Plaintiff: Richard Patrick Bedell, Jr., BatesCarey LLP, Chicago, IL; Adam Hoyt Fleischer, Bates Carey Nicolaides LLP, Chicago, IL.

For City Of Waukegan, Lucian Tessman, Donald Meadie, Fernando Shipley, Howard Pratt, Richard Davis, Phillip Stevenson, Marcia Lacour, Special Representative for Howard Pratt and Dennis Cobb, Defendant: Paulette A. Petretti, LEAD ATTORNEY, Scariano, Himes & Petrarca Chtd, Chicago, IL; Darcee Corinne Williams, Scariano, Himes and Petrarca, Chicago, IL.

For Juan A. Rivera, Jr., Defendant: J. Samuel Tenenbaum, LEAD ATTORNEY, Bluhm Legal Clinic, Chicago, IL.

For Terry House, Robert Repp, Burton Setterlund, Defendant: Paulette A. Petretti, LEAD ATTORNEY, Scariano, Himes & Petrarca Chtd, Chicago, IL.

For Marcia Lacour, Special Representative for Howard Pratt and Dennis Cobb, Howard Pratt, Lucian Tessman, Richard Davis, City Of Waukegan, Phillip Stevenson, Donald Meadie, Fernando Shipley, Donald Meadie, City Of Waukegan, Richard Davis, Howard Pratt, Robert Repp, Fernando Shipley, Phillip Stevenson, Lucian Tessman, Counter Claimant: Paulette A. Petretti, LEAD ATTORNEY, Scariano, Himes & Petrarca Chtd, Chicago, IL; Darcee Corinne Williams, Scariano, Himes and Petrarca, Chicago, IL.

For Westport Insurance Corporation, as successor to Coregis Insurance Company, Counter Defendant: Richard Patrick Bedell, Jr., BatesCarey LLP, Chicago, IL; Adam Hoyt Fleischer, Bates Carey Nicolaides LLP, Chicago, IL.

For Terry House, Burton Setterlund, Counter Claimant: Paulette A. Petretti, LEAD ATTORNEY, Scariano, Himes & Petrarca Chtd, Chicago, IL.

For Westport Insurance Corporation, as successor to Coregis Insurance Company, Counter Defendant: Richard Patrick Bedell, Jr., BatesCarey LLP, Chicago, IL; Adam Hoyt Fleischer, Bates Carey Nicolaides LLP, Chicago, IL.

Page 822

MEMORANDUM OPINION AND ORDER

JOHN W. DARRAH, United States District Court Judge.

Plaintiff Westport Insurance Corporation (" Westport" ) brought this action against Defendants the City of Waukegan, Lucian Tessman, Donald Meadie, Fernando Shipley, Howard Pratt, Richard Davis, Phillip Stevenson, Terry House, Robert Repp, Burton Setterlund (collectively, the " Waukegan Defendants" ), and Juan A. Rivera, Jr. (" Rivera" ), seeking a declaratory judgment that it has no obligation to provide coverage under two insurance policies issued to the City of Waukegan. Westport filed a Motion for Judgment on the Pleadings, pursuant to Federal Rule of Civil Procedure 12(c). Waukegan Defendants filed a Cross Motion for Judgment on the Pleadings, pursuant to Federal Rule of Civil Procedure 12(c).

Page 823

BACKGROUND

Westport issued two policies to the City of Waukegan: (1) General Liability/Law Enforcement Policy Number 651-006954-9 (" GL/LEL Policy" ), providing a $1 million limit of liability for general liability claims and a $1 million limit of liability for law enforcement liability claims; and (2) Umbrella Liability Policy Number 503-164027-8 (" Umbrella Policy" ), providing a $5 million limit of liability (collectively, the " Westport Policies" ). (Dkt. 48, ¶ ¶ 32, 34; Dkt. 52, ¶ ¶ 32, 34).

The Westport Policies were issued for the period November 1, 1997 to November 1, 1998, and were renewed for the periods November 1, 1998 to November 1, 1999, and November 1, 1999 to November 1, 2000. (Dkt. 48, ¶ ¶ 32-35; Dkt. 52, ¶ ¶ 32-35.)

Rivera was transferred from Hill Correctional Center, where he was confined, to the Lake County Jail on a writ of habeas corpus ad testificandum on October 27, 1992. (Dkt. 48-1, ¶ 52.) Rivera alleges that after several days of illegal interrogation, he was forced to sign a statement implicating himself in the rape and murder of a young girl. ( Id. at ¶ ¶ 53-73.) Rivera was tried for rape and murder in November 1993. ( Id. ¶ 103.) Rivera was convicted of first-degree murder and sentenced to life in prison without the possibility of parole. ( Id.) Rivera was retried and convicted of first-degree murder in September and October 1998, and was again sentenced to life in prison without the possibility of parole. (Dkt. 52, ¶ 23, 24.) The Illinois Appellate Court Second District reversed Rivera's conviction and entered a judgment of acquittal on December 9, 2012. (Dkt. 48-1 ¶ 113.) Rivera was released from prison on January 6, 2012. (Dkt. 48-1 ¶ 114).

LEGAL STANDARD

A Rule 12(c) motion for judgment on the pleadings permits a party to move for judgment after both the plaintiff's complaint and the defendant's answer have been filed. Fed.R.Civ.P. 12(c). Rule 12(c) motions are reviewed under the same standard as Rule 12(b)(6) motions to dismiss. Pisciotta v. Old Nat'l Bancorp, 499 F.3d 629, 633 (7th Cir. 2007). The court construes the complaint's allegations liberally in favor of the insured. Gen. Agents Ins. Co. of Am. v. Midwest Sporting Goods Co., 215 Ill.2d 146, 828 N.E.2d 1092, 1098, 293 Ill.Dec. 594 (Ill. 2005). " Thus to succeed, the moving party must demonstrate that there are no material issues of fact to be resolved." N. Indiana Gun & Outdoor Shows, Inc. v. City of South Bend, 163 F.3d 449, 452 (7th Cir. 1998).

Illinois law governs this dispute. In construing an insurance policy, a court's primary task is to ascertain the intent of the parties as expressed in their agreement. Pekin Insurance Co. v. Wilson, 237 Ill.2d 446, 930 N.E.2d 1011, 1017, 341 Ill.Dec. 497 (Ill. 2010). Courts construe a policy as a whole by examining the risk undertaken, the subject matter that is insured, and the purpose of the entire policy. Id. If the terms in a policy are unambiguous, they are given their plain and ordinary meaning. Id. Ambiguous terms are strictly construed against the insurer. Id. " The underlying complaints and the insurance policies must be liberally construed in favor of the insured." U.S. Fid. & Guar. Co. v. Wilkin Insulation Co., 144 Ill.2d 64, 578 N.E.2d 926, 930, 161 Ill.Dec. 280 (Ill. 1991).

A court determines whether an insurer has a duty to defend by examining the underlying complaint and the language of the insurance policy. Midwest Sporting Goods, 828 N.E.2d at 1098. " An insurer's duty to defend its

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insured is broader than its duty to indemnify." Nat'l Cas. Co. v. McFatridge, 604 F.3d 335, 338 (7th Cir. 2010). " If the underlying complaint alleges facts within or potentially within the policy's coverage, the insurer's duty to defend arises even if the allegations are groundless, false or fraudulent." United Nat. Ins. Co. v. 200 N. Dearborn P'ship, 2012 IL App. (1st) 100569, ¶ 17, 979 N.E.2d 920, 925, 366 Ill.Dec. 119 (Ill.App.Ct. 2012). However, " once the duty to defend is found to exist with respect to one or some of the theories of recovery advanced in the underlying litigation, the insurer must defend the insured with regard to the remaining theories of recovery as well." Nat'l Union Fire Ins. Co. of Pittsburgh, Pennsylvania v. Glenview Park Dist. ...


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