Skolnik v. Allied Prop. & Cas. Ins. Co., No. 1–14–2438.

• Court: United States Appellate Court of Illinois
• Writing for the Court: Justice HYMAN delivered the judgment of the court, with opinion.
• Citation: 45 N.E.3d 1161
• Parties: Jacob SKOLNIK, Elizabeth Skolnik, Joshua Skolnik, and William Johnson, Individually and as the Special Administrator of the Estate of Haley Ellen Johnson, Defendants–Appellants, v. ALLIED PROPERTY AND CASUALTY INSURANCE COMPANY, Plaintiff–Appellee.
• Docket Number: No. 1–14–2438.
• Decision Date: 22 December 2015

45 N.E.3d 1161

Jacob SKOLNIK, Elizabeth Skolnik, Joshua Skolnik, and William Johnson, Individually and as the Special Administrator of the Estate of Haley Ellen Johnson, Defendants–Appellants
v.
ALLIED PROPERTY AND CASUALTY INSURANCE COMPANY, Plaintiff–Appellee.

No. 1–14–2438.

Appellate Court of Illinois, First District, Second Division.

Filed Dec. 22, 2015.
Modified Opinion Filed Jan. 26, 2016.
Rehearing Denied Jan. 27, 2016.

45 N.E.3d 1162

Edward Sedlacek, of Huck Bouma PC, Wheaton, for appellants.

45 N.E.3d 1163

Joseph P. Postel, of Lindsay, Rappaport & Postel, LLC, Chicago, for appellee.

OPINION

Justice HYMAN delivered the judgment of the court, with opinion.

¶ 1 The day after an evening out with friends, 21–year–old Haley Johnson died of methadone intoxication in the bedroom of defendant Joshua Skolnik, who lived at his parents' home.

¶ 2 Plaintiff Allied Property and Casualty Insurance Company insured the home under homeowners' and an umbrella personal liability policy. Both policies exclude liability for bodily injury “arising out of the use” of controlled substances; however, both policies also contain an exception clause that carves out “the legitimate use of prescription drugs by a person following the orders of a licensed physician.” Skolnik's prescribed methadone was found in the bedroom where Johnson died. Allied brought suit for a declaratory judgment regarding whether it had a duty to defend the Skolniks in a wrongful death lawsuit filed by Johnson's father.

¶ 3 The crux of this case involves whether the complaint alleges an independent injury. If the complaint alleges an injury not “arising out of” the “use of” a controlled substance, Allied has a duty to defend. We hold that the underlying complaint contains allegations within, or potentially within, the coverage of both the homeowners' and umbrella policies. Specifically, the complaint alleges Skolnik (“Skolnik” refers to Joshua) failed to request emergency medical assistance for Johnson within a reasonable period of time after knowing that she was physically incapacitated, unresponsive, or unconscious; and knowing or discovering she ingested or unknowingly consumed methadone or other illegal substances in the Skolnik home. Further, count I alleges that Skolnik refused to allow Johnson's two friends to check on, talk to, see, or render aid to Johnson on their request. These allegations of negligence, if proven, potentially could be covered under the insurance policies and, therefore, Allied has a duty to defend Skolnik in the underlying lawsuit.

¶ 4 BACKGROUND

¶ 5 The complaint contains the following factual allegations. During the evening of May 18, 2012, Johnson along with some friends gathered at a pub in Palatine. Around 11:30 p.m., Johnson and her friends met Skolnik, who bought them all drinks. Johnson's friends left the pub around 1:30 a.m., and Johnson remained with Skolnik. After Johnson had another drink that Skolnik provided, she told him that she thought “something” had been put into it, and needed assistance to walk. Skolnik took Johnson to his parents' home where they had sex in his bedroom. Skolnik had abused drugs in the past and used methadone; Skolnik's parents knew of his drug history and of the methadone in the house. Skolnik's parents heard voices in his bedroom at 4 a.m. Around 9 a.m., Skolnik's mother checked on Skolnik and he told her that Johnson passed out in the bedroom. Between 11:30 a.m. and 1 p.m., two of Johnson's friends came to the Skolniks' home to check on her but Skolnik did not let them see her, telling them that Johnson was passed out naked in his bedroom. At 3:30 p.m., Skolnik told his parents Johnson was unconscious. Three hours later, his parents left for dinner and another six-and-a-half hours later, Skolnik pulled Johnson off his bed and called his parents who had not yet returned. He told them Johnson felt cold to the touch. The Skolniks instructed their son to dress Johnson and call 911. At 10:11 p.m., Skolnik called 911. When the police arrived at 10:14 p.m., Johnson was not breathing. She was pronounced dead at the Skolniks' home at 11:31 p.m.

45 N.E.3d 1164

¶ 6 The autopsy results indicated methadone intoxication as the cause of death. Lab tests also detected concentrations of GHB and Rohypnol (both are referred to as “date-rape” drugs) in Johnson's blood. The manner of death was “undetermined.”

¶ 7 Insurance Policies

¶ 8 Allied's homeowners' policy provided:

“A. COVERAGE E—Personal Liability

If a claim is made or a suit is brought against an ‘insured’ for damages because of ‘bodily injury’ or ‘property damage’ caused by an ‘occurrence’ to which this coverage applies, we will:

1. [as amended by Endorsement HO 300IL (09–09) ]: Pay up to our limit of liability for the damages for which an insured is legally liable; and

2. Provide a defense at our expense by counsel of our choice, even if the suit is groundless, false or fraudulent.”

¶ 9 The relevant scope of coverage under the homeowners' policy provides:

“E. COVERAGE E—Personal Liability and COVERAGE F—Medical Payments to Others

Coverages E and F do not apply to the following:

1. Expected or Intended Injury

‘Bodily injury’ or ‘property damage’ which is expected or intended by an ‘insured’ even if the resulting ‘bodily injury’ or ‘property damage’:

a. Is of a different kind, quality or degree than initially expected or intended; or

b. Is sustained by a different person, entity, real or personal property, than initially expected or intended.

* * *

8. Controlled Substance

‘Bodily injury’ or ‘property damage’ arising out of the use, sale, manufacture, delivery, transfer or possession by any person of a Controlled Substance as defined by the Federal Food and Drug Law at 21 U.S.C.A. Sections 811 and 812. Controlled Substances include but are not limited to cocaine, LSD, marijuana and all narcotic drugs. However, this exclusion does not apply to the legitimate use of prescription drugs by a person following the orders of a licensed physician.”

The policy defines “Occurrence” as an “accident” which results, during the policy period, in bodily injury. In addition, the policy contains a provision defining “insured” to include relatives who live in the insured's household.

¶ 10 Allied also issued a personal umbrella liability policy, which was in effect on the date of Johnson's death. This policy contains an exclusion for controlled substances:

“A. The coverages provided by this policy do not apply to:

* * *

14. ‘Bodily injury,’ ‘property damage’ or ‘personal injury’ which arises out of:

* * *

c. The use, sale, manufacture, deliver, transfer or possession by any person of a Controlled Substance(s) as defined by the Federal Food and Drug Law at 21 U.S.C.A. Sections 811 and 812. Controlled Substances include but are not limited to cocaine, LSD, marijuana and all narcotic drugs. However, this exclusion does not apply to the legitimate use of prescription drugs by a person following the orders of a licensed physician.”

45 N.E.3d 1165

¶ 11 Underlying Complaint

¶ 12 Johnson's father, William Johnson, sued the Skolniks, parents and son, alleging two counts of wrongful death, two counts of liability under the Survival Statute (755 ILCS 5/27–6 (West 2010) ), one count of false imprisonment, one count of civil conspiracy to restrain Johnson against her will, and one count of battery against only Skolnik for putting a “date-rape” drug in Johnson's drink while at a restaurant-bar and later having sex with her without her consent.

¶ 13 Count I of the first amended complaint alleges wrongful-death negligence in that Skolnik carelessly and improperly stored methadone, a controlled substance, in a manner he knew or should have known to be unsafe and potentially fatal, “notwithstanding the fact that some of the substances may have been legitimately prescribed by a licensed professional; negligently, carelessly, and improperly failed to store methadone in a secured and locked condition as required of authorized methadone users by the Clinic; negligently, carelessly, and improperly failed to remove the methadone when it was not properly stored, and failed to return it to the Clinic.”

¶ 14 Count I also alleges that Skolnik and his parents negligently, carelessly, and improperly failed to request emergency medical assistance for Johnson within a reasonable period of time after knowing she was physically incapacitated or unconscious or both; and knowing or discovering she ingested or unknowingly consumed methadone or other illegal substances in the Skolnik home. Further, count I...