John T. Doyle Trust v. Country Mut. Ins. Co.
| Decision Date | 26 March 2014 |
| Docket Number | No. 2–12–1238.,2–12–1238. |
| Parties | The JOHN T. DOYLE TRUST, Kevin C. Doyle, Michael W. Doyle, and Pamela Doyle, Plaintiffs and Counterdefendants–Appellees and Cross–Appellants, v. COUNTRY MUTUAL INSURANCE COMPANY, Defendant and Counterplaintiff–Appellant and Cross–Appellee (Christian K. Narkiewicz–Lane, Defendant and Counterdefendant). |
| Court | United States Appellate Court of Illinois |
OPINION TEXT STARTS HERE
Keith G. Carlson, Carlson Law Offices, Chicago, for appellant.
Thomas F. Lucas, Kelly E. Parkey, McKenna Storer, Chicago, for appellees.
¶ 1 In 2004, plaintiffs, the John T. Doyle Trust, Kevin C. Doyle, Michael W. Doyle, and Pamela Doyle (collectively, the Doyles), leased space to defendant Christian K. Narkiewicz–Lane. During the lease term, the Doyles sold the leased premises and in the process, removed Christian's personal items. As a result, Christian filed a lawsuit against the Doyles in federal district court (the federal lawsuit). The Doyles requested that defendant Country Mutual Insurance Company defend and indemnify, pursuant to their insurance policy. Country Mutual denied having an obligation to defend or indemnify.
¶ 2 Thereafter, the Doyles brought a complaint in the circuit court of Jo Daviess County for a declaratory judgment against Country Mutual. The trial court granted the Doyles' motion for a judgment on the pleadings, finding that Country Mutual had a duty to defend the Doyles in the federal lawsuit. The trial court subsequently denied the Doyles' motion for summary judgment with respect to whether Country Mutual should be sanctioned pursuant to section 155 of the Illinois Insurance Code (the Insurance Code) (see 215 ILCS 5/155 (West 2010)). Pursuant to Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010), Country Mutual appeals the trial court's grant of the Doyles' motion for a judgment on the pleadings, contending that the trial court erred in determining that it had a duty to defend the Doyles in the federal lawsuit. The Doyles cross-appeal, contending that the trial court erred in denying their motion for sanctions against Country Mutual. We affirm.
¶ 4 The record reflects that the John T. Doyle Trust owns a building located at 125 South Main Street in Galena (the premises). Kevin C. Doyle and Michael W. Doyle are cotrustees and beneficiaries of the trust. Pamela Doyle shares responsibility for managing the trust. Country Mutual is a company authorized to issue insurance policies in Illinois. Christian is an architect, painter, and sculptor who maintains residences in Galena, Chicago, and Greece.
¶ 5 In 2004, Christian leased the property from the Doyles to use as a rent storage and work space. The leased property was located on the second floor of a two-story brick building. In 2010, the Doyles sold the premises and, on July 20, 2010, removed Christian's personal items from the premises without his permission, placing those items either in a garbage dump or in storage. The items included artwork that Christian had created over his lifetime.
¶ 6 Thereafter, Christian filed the federal lawsuit, claiming a violation of the Visual Artists Rights Act of 1990 (17 U.S.C. § 106A (2006)), conversion, and a violation of the Illinois Forcible Entry and Detainer Act (735 ILCS 5/9–101 et seq. (West 2010)). Among other allegations, Christian alleged that the Doyles knew that he had a valid lease to rent the property but evicted him in July 2010 without providing written notice or filing an eviction complaint pursuant to the Forcible Entry and Detainer Act. Christian alleged that the Doyles destroyed his personal items when evicting him and had failed to compensate him for the value of those items. After the federal lawsuit commenced, the Doyles notified Country Mutual of Christian's claims and requested that it defend and indemnify pursuant to their insurance policy. That policy provided in relevant part:
“Section II—Liability
A. Coverages
1. Business Liability
a. We will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’, ‘property damage’, or ‘personal and advertising injury’ to which this insurance applies. We will have the right and duty to defend the insured against any ‘suit’ seeking those damages. However, we will have no duty to defend the insured against any ‘suit’ seeking damages for ‘bodily injury’, ‘property damage’, or ‘personal and advertising injury’, to which this insurance does not apply. We may at our discretion, investigate any ‘occurrence’ and settle any claim or ‘suit’ that may result.”
With respect to coverage exclusions, the policy provided:
“Exclusions
1. Applicable To Business Liability Coverage
This insurance does not apply to:
a. Expected or Intended Injury
‘Bodily injury’ or ‘property damage’ expected or intended from the standpoint of the insured. This exclusion does not apply to ‘bodily injury’ resulting from the use of reasonable force to protect persons or property.
* * *
k. Damage To Property
* * *
(2) Premises you sell, give away, or abandon, if the ‘property damage’ arises out of any part of those premises;
* * *
(4) Personal property in the care, custody or control of the insured;
‘Personal and advertising injury’:
(1) Caused by or at the direction of the insured with the knowledge that the act would violate the rights of another and would inflict ‘personal advertising injury’;
* * *
(6) Arising out of a breach of contract, except an implied contract to use another's advertising idea in your ‘advertisement.’ ”
The policy contained the following definitions:
“F. Liability and Medical Expenses Definitions
* * *
(14) ‘Personal and advertising injury’ means injury, including consequential ‘bodily injury’, arising out of one or more of the following offenses:
* * *
c. the wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor;
* * *
(17) Property damage means:
a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the ‘occurrence’ that caused it.”
Country Mutual denied coverage and, as a result, the Doyles retained counsel in the federal lawsuit, incurring attorney fees and costs.
¶ 7 On August 26, 2011, the Doyles brought the current matter in state court. Count I of their complaint alleged that Country Mutual breached its duty to defend or indemnify pursuant to the insurance policy. The Doyles sought a declaratory judgment that Country Mutual had a duty to defend or indemnify the Doyles in the federal lawsuit and must reimburse them for the attorney fees and costs they incurred and pay any judgment or settlement resulting from that lawsuit. Count II alleged that Country Mutual was estopped from raising coverage defenses. Count III alleged that Country Mutual “wrongfully, unreasonably, and vexatiously” refused to defend the Doyles in the federal lawsuit, warranting sanctions pursuant to section 155 of the Insurance Code.
¶ 8 On September 19, 2011, Country Mutual filed a counterclaim for declaratory judgment, requesting a finding that the Doyles did not qualify as insureds pursuant to the insurance policy. On October 27, 2011, the Doyles filed a motion for a judgment on the pleadings pursuant to section 2–615(e) of the Code of Civil Procedure (Code) (735 ILCS 5/2–615(e) (West 2010)). On December 12, 2011, Country Mutual filed its response to the Doyles' motion for a judgment on the pleadings and also filed a motion for summary judgment. On June 4, 2012, following a hearing, the trial court entered an order granting the Doyles' motion for a judgment on the pleadings on their duty-to-defend count, finding that Country Mutual had a duty to defend the Doyles in the federal lawsuit. The trial court denied Country Mutual's motion for summary judgment.
¶ 9 On July 17, 2012, the Doyles filed a motion for summary judgment with respect to count III of their complaint. On October 2, 2012, the trial court entered an order denying the motion. The trial court granted the Doyles' motion to voluntarily dismiss count II of their complaint without prejudice and further found that there was “no just reason to delay enforcement or appeal of this order and the order of June 4, 2012.” See Ill. S.Ct. R. 304(a) (eff. Feb. 26, 2010). Country Mutual filed its notice of appeal on November 2, 2012, and the Doyles filed a cross-appeal on November 6, 2012.
¶ 12 The first issue on appeal is whether the trial court erred in granting the Doyles' motion for a judgment on the pleadings and concluding that Country Mutual had a duty to defend the Doyles in the federal lawsuit. Country Mutual argues that the federal lawsuit did not contain any allegations of bodily injury, property damage, personal injury, or advertising damage. Country Mutual further argues that, even if the policy covered property damage resulting from a wrongful eviction, the policy's exclusions apply. Countering, the Doyles argue that Country Mutual had a duty to defend them in the federal lawsuit pursuant to the policy's plain language. The Doyles emphasize that the policy provided liability coverage for “personal and advertising injury,” which the policy defined in part as “the wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling, or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor.” The Doyles maintain that the policy phrase ...
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