American Family Mut. Ins. Co. v. Enright, No. 2-01-0630
Citation | 269 Ill.Dec. 597,781 N.E.2d 394,334 Ill. App.3d 1026 |
Decision Date | 01 November 2002 |
Docket Number | No. 2-01-0653., No. 2-01-0630 |
Parties | AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Plaintiff-Appellant, v. Roberta ENRIGHT, Indiv. and as Mother and Next Friend of Jane Doe, a Minor; North Shore Ultrasound, Inc.; Ace Property and Casualty Insurance Company, f/k/a Cigna Insurance Company, Defendants-Appellees (Matthew S. Burnett and Midwestern Regional Medical Center, Inc., Defendants). American Family Mutual Insurance Company, Plaintiff and Counterdefendant-Appellee, v. Ace American Insurance Company, f/k/a Cigna Insurance Company, Defendant and Counterplaintiff-Appellant (Roberta Enright, Indiv. and as Mother and Next Friend of Jane Doe, a Minor; and North Shore Ultrasound, Inc., Defendants and Counterdefendants-Appellees; Midwestern Regional Medical Center, Inc., and Matthew C. Burnett, Defendants and Counterdefendants). |
Court | United States Appellate Court of Illinois |
Eileen P. Lenhardt, of James M. Hoffman & Associates, of Vernon Hills, and Maria Dimeas Jensen, of James M. Hoffman & Associates, of Schaumburg, and Robert Marc Chemers, and Scott L. Howie, of Pretzel & Stouffer, of Chicago, for American Family Mutual Insurance Company.
Fritz K. Huszagh, Terrence P. McAvoy, and Christine L. Olson, all of Hinshaw & Culbertson, of Chicago, for appellee Ace American Insurance Company.
John A. Kornak and Patrick Jennetten, both of Salvi, Schostok & Pritchard, P.C., of Waukegan, for appellee Roberta Enright.
James J. DeSanto and Vernon E. Morgan, both of DeSanto, Morgan & Mittelman, of Libertyville, for appellee North Shore Ultrasound, Inc.
These consolidated appeals involve multiple declaratory judgment actions arising from an underlying complaint in which Roberta Enright, as mother and next friend of the minor, Jane Doe, sued Matthew C. Burnett and his employer, North Shore Ultrasound, Inc. (NSU), alleging that Burnett sexually assaulted Jane Doe while performing an ultrasound procedure. The trial court found that both American Family Insurance Company (American) and Ace American Insurance Company (Ace) owe a duty to defend NSU, but American's policy is primary, and that Ace owes a duty to defend Burnett. Midwestern Regional Medical Center, Inc. (Midwestern), and Burnett are not parties to the appeals. We affirm in part and reverse in part.
NSU provides technical support for the performance of ultrasound procedures by furnishing agents and employees to facilities, including Midwestern. Burnett was employed by NSU as a licensed ultrasound technician. On July 11, 1998, while performing ultrasound procedures on Jane Doe, Burnett sexually assaulted Jane Doe by placing his finger in her vagina against her will.
Enright filed a five-count complaint against NSU, Midwestern, and Burnett on December 2, 1999, for injuries incurred by Jane Doe. Count I alleges a cause of action for negligent hiring against NSU; counts II, III, and IV are directed against NSU and Midwestern and are not at issue on appeal; and count V alleges a cause of action for battery against Burnett. On June 30, 1999, Burnett pleaded guilty to aggravated criminal sexual abuse and thereafter was sentenced.
NSU tendered the defense of the lawsuit to its insurance companies. American issued to NSU a business owner's policy that provides general exposure liability coverage for business practices or activities of the firm. The Ace policy essentially provides coverage for professional malpractice claims. Both insurers denied coverage and filed declaratory judgment actions seeking a determination as to whether they owed a duty to defend NSU or Burnett. The insurers also filed several motions for summary judgment. Enright and NSU also filed motions for summary judgment.
After considering the summary judgment motions, the trial court found that American owes no duty to defend or indemnify Burnett; that American and Ace owe a duty to defend NSU, but American's policy is primary and Ace's policy is excess; and that Ace owes a duty to defend Burnett. Both American and Ace filed separate appeals from the trial court's judgments against them. We consolidated their appeals.
In determining whether an insurer has a duty to defend its insured in an underlying lawsuit, the court must look to the allegations in the underlying complaint and compare these allegations to the relevant coverage provisions of the insurance policy. Crum & Forster, 156 Ill.2d at 393, 189 Ill.Dec. 756, 620 N.E.2d 1073. If the facts alleged in the underlying complaint fall within, or potentially within, the policy's coverage provisions, then the insurer has a duty to defend the insured in the underlying action. Crum & Forster, 156 Ill.2d at 393, 189 Ill.Dec. 756, 620 N.E.2d 1073. If the insurer owes no duty to defend, then it owes no duty to indemnify because the duty to defend is broader than the duty to indemnify. Crum & Forster, 156 Ill.2d at 398, 189 Ill.Dec. 756, 620 N.E.2d 1073. Where the language of an insurance policy is clear and unambiguous, it must be given its plain and ordinary meaning. State Farm Fire & Casualty Co. v. Hatherley, 250 Ill.App.3d 333, 337, 190 Ill.Dec. 170, 621 N.E.2d 39 (1993).
We first address American's contention that the trial court erred in determining that American owes a duty to defend the underlying claim brought against NSU for negligent hiring. The Enright complaint alleges that NSU has a duty to exercise reasonable care in the hiring and retention of Burnett. It further alleges that NSU breached that duty in that it (1) failed to investigate and inquire about Burnett's prior criminal history; (2) knew or should have known at the time of hiring Burnett that he had pleaded guilty to the offense of disorderly conduct and had an active warrant for his arrest; (3) knew or should have known that Burnett was unfit for the position of sonographer because it allowed for unsupervised contact with minors; and (4) failed to adopt administrative review and to conduct adequate preemployment screening and reference verification before hiring Burnett.
The business owner's package policy issued by American to NSU states, in pertinent part, that American "will pay those sums that the insured becomes legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies." The policy excludes coverage for intentional injury "(1) expected or intended from the standpoint of the insured" or "(2) arising out of sexual molestation * * * inflicted upon any person by or at the direction of an insured." The policy also excludes coverage for the following:
First, the premise that the act of hiring is intentional is inconsistent with Illinois law, which holds that negligent hiring is a tort separate from the employee's intentional conduct. See, e.g., State Security Insurance Co. v. Globe Auto Recycling Corp., 141 Ill.App.3d 133, 136, 95 Ill.Dec. 539, 490 N.E.2d 12 (1986)
(intentional tort of employer not covered; negligent hiring potentially covered).
Second, Illinois courts have focused on whether the injury is expected in determining whether an occurrence is an "accident." Country Mutual Insurance Co. v. Hagan, 298 Ill.App.3d 495, 507, 232 Ill. Dec. 433, 698 N.E.2d 271 (1998). "[A]n occurrence which is defined as an accident involves the consideration of whether the injury was expected or intended from the standpoint of the insured." (Emphasis added.) State Farm Fire & Casualty Co. v. Watters, 268 Ill.App.3d 501, 506, 205 Ill.Dec. 936, 644 N.E.2d 492 (1994). In Illinois, therefore, if an injury is not expected or intended by the insured, it is considered an accident. Hagan, 298 Ill. App.3d at 508, 232 Ill.Dec. 433, 698 N.E.2d 271. There are no allegations in the underlying complaint that NSU intended to injure Jane Doe. Rather, Enright alleges that NSU was negligent in not adopting proper preemployment screening, reference investigating, and administrative review. American seems to focus on the employer's final decision to hire an individual, an act that is intentional, rather than on the processes involved before and after the individual is hired, acts that could be handled negligently. Third, American also predicates its argument on the assumption that Burnett's intentional act is not a separate and distinct act from NSU's alleged negligent act. We find the case of United States Fidelity & Guaranty Co. v. Open Sesame Child Care Center, 819...
To continue reading
Request your trial-
Country Mut. Ins. Co. v. Dahms
...If an injury is not expected or intended by the insured, it is considered an accident. American Family Mutual Insurance Co. v. Enright, 334 Ill.App.3d 1026, 1031, 269 Ill.Dec. 597, 781 N.E.2d 394 (2002). Generally speaking, an injury caused by an assault and battery is not considered to be ......
-
Westfield Nat. Ins. Co. v. CONTINENTAL COMMUNITY BK. AND TRUST CO.
...... American Family Mutual Insurance Co. v. Chiczewski, 298 Ill.App.3d 1092, 1094, 233 ... American Family Mutual Insurance Co. v. Enright, 334 Ill.App.3d 1026, 1029, 269 Ill.Dec. 597, 781 N.E.2d 394 (2002), ......
-
Rosalind Franklin Univ. of Med. & Sci. v. Lexington Ins. Co.
...Hartford v. Kilfoy, 375 Ill.App.3d 530, 314 Ill.Dec. 286, 874 N.E.2d 196 (2007), and American Family Mutual Insurance Co. v. Enright, 334 Ill.App.3d 1026, 269 Ill.Dec. 597, 781 N.E.2d 394 (2002), both of which involved allegations of negligent hiring in a health care context. In Enright, an......
-
Lyons v. State Farm Fire and Cas. Co.
......216, 776 N.E.2d 588, 595 (2002) ; American Family Mutual Insurance Co. v. Enright, 334 Ill.App.3d ......