United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
L. Alonso, Judge
Twin City Fire Insurance Company (“Twin City”)
seeks declaratory judgment that it does not have a duty to
defend its insured, Permatron Corporation
(“Permatron”), in an action involving a former
employee of Permatron, Hector Villalobos
(“Villalobos”). Before the Court is
plaintiff's motion for summary judgment. For the reasons
set forth below, plaintiff's motion  is granted.
City is an insurance provider that executed two Employment
Practices Liability Policies with Permatron. (Compl. ¶
10, ECF No. 1.) Permatron is an Illinois company that
formerly employed Hector Villalobos. (Id.
¶¶ 1, 3.) Villalobos joined this suit solely as an
interested party to be bound by the judgment herein.
(Id. ¶ 4.)
August 27, 2014, Permatron terminated Villalobos's
employment. (Compl, Exhibit A, ¶ 16, ECF No. 1-1.) On
September 3, 2014, Villalobos filed a charge of
discrimination against Permatron with the Equal Employment
Opportunity Commission (“EEOC”) and the Illinois
Department of Human Rights (“IDHR”) and provided
notice of the charge to the president of Permatron, Leslye
Sandberg. (Def's LR 56.1(b)(3)(a)(b) Stmt ¶¶
7-8, ECF No. 28; Compl. ¶¶ 12- 13, ECF No. 1.)
Sandberg responded in writing to Villalobos's IDHR charge
on September 10, 2014. (Def's LR 56.1(b)(3)(a)(b) Stmt
¶ 9, ECF No. 28.)
March 12, 2015, Villalobos filed amended charges of
discrimination against Permatron with the EEOC and IDHR,
alleging discrimination based on age and national origin and
unlawful conduct by his employer. (Compl., Exhibit G, ECF No.
1-7.) The unlawful conduct allegation involved Villalobos
exercising his rights under the Workers Compensation Act and
being terminated as a result. (Id.) On April 22,
2015, Villalobos received his Notice of Rights to Sue letter
from the EEOC. (Id. ¶¶ 10-11.)
29, 2015, Villalobos filed a lawsuit, Villalobos v.
Permatron Corp., No. 15-cv-05748 (N.D. Ill. July 20,
2016) (the “Villalobos suit”), asserting
claims of age discrimination, national origin discrimination,
and retaliatory discharge. (Id. ¶ 6; Compl.,
Ex. A, ECF No. 1-1.) On July 8, 2015, Permatron requested
coverage for the Villalobos suit; Twin City received
the request on or about July 9, 2015. (Pl's LR 56.1(a)
Stmt, Ex. A, ECF No. 22-2 at 1-3.) On August 11, 2015, Twin
City denied Permatron's request for coverage for the
Villalobos suit, citing a lack of notice and Section
X of the policy, which bars coverage for Interrelated
Wrongful Acts. (Id. ¶ 14; Pl's LR 56.1(a)
Stmt, Ex. A, ECF No. 22-3.)
November 12, 2015, Permatron learned that Villalobos intended
to file an additional charge of retaliation against it.
(Id. ¶ 16; Pl's LR 56.1(a) Stmt, Ex. D, ECF
No. 22-5.) The additional charge involved Sandberg's
alleged refusal to answer questions from prospective
employers about Villalobos's employment with Permatron.
(Id.) On November 16, 2015, Permatron requested
coverage for the additional retaliation charge from Twin
City. (Def's LR 56.1(b)(3)(a)(b) Stmt ¶ 17.) On
November 23, 2015, Twin City denied the request, stating that
Villalobos's additional retaliation charge was an
Interrelated Wrongful Act that was not timely reported.
(Id. ¶ 18; Pl's LR 56.1(a) Stmt, Ex. E, ECF
January 14, 2016, Villalobos filed another charge of
retaliation against Permatron with the IDHR and EEOC,
alleging that Permatron refused to answer questions from
potential employers about Villalobos's employment with
Permatron. (Id. ¶ 21.) On February 9, 2016,
Permatron requested coverage from Twin City for the
additional charge of retaliation. (Id. ¶ 22;
Pl's LR 56.1(a) Stmt, Ex. F, ECF No. 22-7.) On March 10,
2016, Twin City again denied Permatron coverage for the same
reasons it had cited in its August 2015 letter. (Id.
¶ 23; Pl's LR 56.1(a) Stmt, Ex. G, ECF No. 22-8.)
had two insurance policies with Twin City to cover
liabilities arising from employment practices: one policy was
effective from March 17, 2014 through March 17, 2015, and the
other policy was effective from March 17, 2015 through March
17, 2016 (collectively referred to as “the Twin City
policies” or “the policies”). (Compl., Ex.
B-C, ECF No. 1.) Section II of the policies defines an
“Employment Practices Claim” as any:
(1) written demand for monetary damages or other civil relief
commenced by the receipt of such demand, including, without
limitation, a written demand for employment reinstatement;
(2) civil proceeding, including an arbitration or other
alternative dispute resolution proceeding, commenced by the
service of a complaint, filing of a demand for arbitration,
or similar pleading; or
(3) formal administrative or regular proceeding, including,
without limitation, a proceeding before the Equal Employment
Opportunity Commission or similar governmental agency,
commenced by the filing of a notice of charges, formal
investigative order or similar document.
by or on behalf of an Employee, and applicant for employment
with an Insured Entity, or an ...