2015 IL App (2d) 140293
Nos. 2-14-0293 & 2-14-0315 cons.
Opinion filed March 6, 2015
______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
SECOND DISTRICT
______________________________________________________________________________
INDIAN HARBOR INSURANCE COMPANY,) Appeal from the Circuit Court
) of Lake County.
Plaintiff-Appellee, )
)
v. ) No. 13-MR-425
)
THE CITY OF WAUKEGAN; )
LUCIAN TESSMAN; DONALD )
MEADIE; FERNANDO SHIPLEY; )
HOWARD PRATT; RICHARD DAVIS; )
PHILLIP STEVENSON; and JUAN A. )
RIVERA, JR., ) Honorable
) Jorge L. Ortiz,
Defendants-Appellants. ) Judge, Presiding.
______________________________________________________________________________
JUSTICE BURKE delivered the judgment of the court, with opinion.
Justices Zenoff and Spence concurred in the judgment and opinion.
OPINION
¶1 Defendants, Juan A. Rivera, Jr., the City of Waukegan (City), and former Waukegan
police officers Lucian Tessman, Donald Meadie, Fernando Shipley, Howard Pratt, Richard
Davis, and Phillip Stevenson, appeal from the order granting the motion of plaintiff, Indian
Harbor Insurance Company, for judgment on the pleadings, pursuant to section 2-615(e) of the
Code of Civil Procedure (Code) (735 ILCS 5/2-615(e) (West 2012)). Defendants raise several
issues, but the crux of the case concerns when coverage for a malicious-prosecution claim is
triggered under the language of the law enforcement liability insurance policies that plaintiff
2015 IL App (2d) 140293
issued to the City. Plaintiff contends that coverage is triggered at the commencement of the
alleged malicious prosecution, as that is defined as the “wrongful conduct” under the policies.
Defendants contend that coverage is triggered at the termination of the prosecution in favor of
the accused. The trial court agreed with plaintiff and found that, under the plain language of
plaintiff’s policies, the policies were occurrence-based and coverage was triggered at the
commencement of the prosecution. We affirm, for the following reasons.
¶2 I. BACKGROUND
¶3 Rivera was wrongfully convicted in November 1993 of rape and murder and was
imprisoned for 20 years. After DNA evidence excluded Rivera as the perpetrator, he was
exonerated of all wrongdoing. On December 9, 2011, Rivera’s conviction was reversed and he
was acquitted. On January 6, 2012, Rivera was released from prison. On October 30, 2012,
Rivera filed a federal action against numerous defendants, including the City and the six former
police officers. In his first amended complaint, Rivera alleged that the City and the police
officers were responsible for denying him a fair trial and for the loss of liberty that resulted from
his wrongful conviction. He alleged a number of claims, including state claims for malicious
prosecution and false imprisonment and due-process claims pursuant to 42 U.S.C. § 1983. The
complaint alleged that the police officers repeatedly and continually concealed exculpatory
evidence. Rivera also alleged conspiracy, failure to intervene, intentional infliction of
emotional distress, and defamation by Officer Tessman. The City and the officers claimed that
Rivera’s lawsuit was covered by the law enforcement liability insurance policies issued by
plaintiff for the years November 1, 2011, to November 1, 2013.
¶4 In the policies, which contain identical language, plaintiff agreed to pay “on behalf of the
insured(s) all damages resulting from a wrongful act(s), which arise out of *** law enforcement
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activities. The wrongful act(s) must occur during the policy period and within the policy
territory.” A “wrongful act” is defined, in part, as a “personal injury,” and a “personal injury”
is defined, in part, as a “malicious prosecution.”
¶5 After Rivera initiated the federal action, plaintiff filed this declaratory judgment action
against defendants in the circuit court of Lake County. In count I of its complaint, plaintiff
stated that the “wrongful acts” alleged in Rivera’s lawsuit “occurred entirely or primarily in
1992, and ceased in all respects prior to the [inception date of either policy].” Plaintiff alleged
that none of Rivera’s claims was covered by its policies, because no “wrongful acts” occurred
within the policy periods. Plaintiff filed a motion for judgment on the pleadings, pursuant to
section 2-615(e) of the Code.
¶6 Defendants argued, inter alia, that insurance coverage for malicious prosecution is
triggered by the termination of the prosecution in the accused’s favor. Defendants noted that
Rivera’s prosecution continued until his conviction was reversed on December 9, 2011, a date
that fell within the first policy period. The City noted that Rivera alleged wrongful acts,
“including, but not limited to, malicious prosecution, defamation, conspiracy, intentional
infliction of emotional distress and failure to intervene,” that fell within the policy periods and
triggered coverage. The City contended that plaintiff’s duty to defend was triggered because
Rivera’s suit contained allegations of continuing injury. Additionally, the City argued that
granting judgment for plaintiff would be premature because the trial court should determine
whether any of Rivera’s claims, not just malicious prosecution, trigger plaintiff’s duty to defend,
and any doubts as to potential coverage must be construed in favor of the insured.
¶7 Rivera adopted the City’s response to plaintiff’s motion and made three additional
arguments. Rivera contended that plaintiff’s motion was premature because a declaratory
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judgment concerning an insurer’s duty to indemnify was not ripened until the underlying
litigation was completed. Rivera also argued that his federal malicious-prosecution claim under
42 U.S.C. § 1983, which the federal court dismissed, might still be viable, if the remedy provided
by state law is inadequate, and that federal malicious-prosecution claims “indisputably accrue
when the state dismisses all charges against the plaintiff.” Rivera contended that plaintiff could
be liable on the federal claim even if the federal court accepts plaintiff’s interpretation regarding
the accrual of state malicious-prosecution claims. Rivera further argued that the policies
covered injury from false imprisonment and that, even if the policies did not cover malicious
prosecution, plaintiff might be responsible for covering his false-imprisonment claim.
¶8 The trial court granted plaintiff’s motion for judgment on the pleadings. Based on its
findings, the trial court decided that the remaining counts of plaintiff’s declaratory judgment
complaint were rendered moot.
¶9 Rivera filed a notice of appeal (No. 2-14-0315) and the other defendants filed a separate
notice of appeal (No. 2-14-0293). We granted Rivera’s motion to consolidate the appeals.
¶ 10 II. ANALYSIS
¶ 11 A. Standard of Review
¶ 12 A motion for judgment on the pleadings is similar to a motion for summary judgment, but
it is limited to the pleadings. Pekin Insurance Co. v. Wilson, 237 Ill. 2d 446, 462 (2010).
Judgment on the pleadings is properly granted only if the pleadings disclose that there is no
genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Id.
In ruling on a motion for judgment on the pleadings, the court will consider only those facts
apparent from the face of the pleadings, matters subject to judicial notice, and judicial
admissions in the record. Gillen v. State Farm Mutual Automobile Insurance Co., 215 Ill. 2d
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381, 385 (2005). To resolve the motion, the court must consider as admitted all well-pleaded
facts set forth in the pleadings of the nonmoving party, and the fair inferences drawn therefrom.
Wilson, 237 Ill. 2d at 455. The court, however, must disregard all surplusage and conclusory
allegations. Teeple v. Hunziker, 118 Ill. App. 3d 492, 497 (1983). Since the trial court rules
as a matter of law when deciding a motion for judgment on the pleadings, our review of the
judgment is de novo. Rico Industries, Inc. v. TLC Group, Inc., 2014 IL App (1st) 131522, ¶ 14.
¶ 13 B. Trigger of Coverage for Malicious Prosecution
¶ 14 Defendants argue that the policies promise coverage for the tort of “malicious
prosecution.” The tort requires: (1) the commencement of judicial proceedings by the
defendant; (2) a lack of probable cause for the proceedings; (3) malice in instituting the
proceedings; (4) termination of the prosecution in the plaintiff’s favor; and (5) damage or injury
to the plaintiff. Cult Awareness Network v. Church of Scientology International, 177 Ill. 2d
267, 272 (1997). Defendants maintain that coverage is triggered at the time of termination,
because that is the final element for the accrual of the tort, and that therefore plaintiff has a duty
to defend.
¶ 15 Defendants rely on Security Mutual Casualty Co. v. Harbor Insurance Co., 65 Ill. App.
3d 198 (1978), rev’d, 77 Ill. 2d 446 (1979) (Security Mutual II), for the proposition that in
Illinois coverage is triggered at the time of termination of the underlying prosecution.
Defendants additionally rely on Seventh Circuit cases adopting Security Mutual’s reasoning.
The rationale is that coverage is not triggered until there is a complete tort and that the tort of
malicious prosecution does not exist until the person prosecuted has been exonerated of
wrongdoing. Security Mutual, 65 Ill. App. 3d at 206. Thus, defendants argue, because Rivera
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was exonerated on December 9, 2011, which was during the first policy period, plaintiff has a
duty to defend.
¶ 16 The problem with defendants’ reliance on those cases is that Security Mutual was
reversed by the supreme court in Security Mutual II. In addition, this court recently noted in St.
Paul Fire & Marine Insurance Co. v. City of Zion, 2014 IL App (2d) 131312, ¶ 18 (citing
Wilson, 237 Ill. 2d at 455), that Security Mutual provides no guidance on construing an insurance
policy, because it is well settled that a court construing an insurance policy must ascertain the
parties’ intent from the policy’s language, and the appellate court’s analysis in Security Mutual
focused on the elements of a malicious-prosecution action instead of the policy’s language.
¶ 17 Our recent decision in St. Paul, which was issued after briefing was completed in this
case, is on point. We held that, under the unambiguous language of the plaintiff’s policy, the
commencement of the alleged malicious prosecution was the occurrence triggering coverage,
which occurrence took place outside the policy period. Id. ¶ 1. In doing so, we followed the
rationale of the majority of jurisdictions that had considered this issue.
¶ 18 In St. Paul, Hobbs initiated a federal action against the City of Zion after murder charges
against him had been dismissed. Among other claims, Hobbs alleged malicious prosecution
under Illinois law. Id. ¶ 3. The insurer, St. Paul, sought a declaration that the allegations of
Hobbs’s federal complaint did not trigger coverage under one of its policies because coverage of
the malicious-prosecution claim was triggered by the commencement of the wrongful
prosecution, not its termination in favor of the accused. Id. ¶ 4. All of the defendants took the
position that coverage was triggered when all the elements of the tort of malicious prosecution,
including termination in the accused’s favor, were “ ‘in place.’ ” Id. ¶ 13.
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¶ 19 The law enforcement liability section of the policy provided that St. Paul would pay
amounts that any protected person is legally required to pay as damages for covered injury or
damage that (1) “results from law enforcement activities or operations by or for you,” (2)
“happens while this agreement is in effect,” and (3) “is caused by a wrongful act that is
committed while conducting law enforcement activities or operations.” (Internal quotation
marks omitted.) Id. ¶ 12. The policy defined injury or damage as bodily injury, personal
injury, or property damage. It defined personal injury, in pertinent part, as injury caused by
malicious prosecution. It defined a wrongful act as any act, error, or omission. Id.
¶ 20 In construing the language of the policy, we held that the law enforcement liability
section did not require that the offense of malicious prosecution be committed while the policy
was in effect. Rather, that section provided coverage if the injury caused by the malicious
prosecution happened while the policy was in effect. Id. ¶ 14. We thus concluded that, in
order to determine whether a malicious-prosecution claim triggered coverage under the law
enforcement liability section, we needed to determine when the injury resulting from the
malicious prosecution happened, not when the offense was committed. Id.
¶ 21 We set forth the elements of a malicious-prosecution claim under Illinois law and noted
that the majority of courts that had addressed the issue had held that the commencement of a
malicious prosecution is the event that triggers insurance coverage. Id. ¶ 19 (and cases cited
therein).
¶ 22 We found instructive Muller Fuel Oil Co. v. Insurance Co. of North America, 232 A.2d
168 (N.J. Super. Ct. App. Div. 1967), the first case to adopt what would become the majority
position. There, the insurance policy at issue provided that the insurer would pay “ ‘all sums
which the insured shall become Legally obligated to pay as damages.’ ” Id. at 174. The
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insured argued that coverage was triggered because it could not become legally obligated to pay
damages until the cause of action against it “fully ripen[ed],” which was when the alleged
malicious prosecution was favorably terminated. Id. The insurer argued that coverage could
not reasonably be expected as to tortious conduct, injury, and damage that had antedated the
issuance of the policy, even though a suit for malicious prosecution could not be and was not
instituted until after the issuance of the policy. Id.
¶ 23 The superior court reasoned that four of the five elements of the tort of malicious
prosecution occur when a prosecution is initiated. Id. The court held that the “essence” of the
tort of malicious prosecution is the wrongful conduct in making the criminal charge. Id. The
court stated that “[i]t would be unreasonable to hold” that the parties intended the policy to
provide coverage for a malicious-prosecution claim when “four of the five essential ingredients”
of the claim preceded the effective date of the policy. Id. at 175.
¶ 24 While the language of the policy in Muller Fuel differed from the law enforcement
liability section of the St. Paul policy, the analysis aided this court in resolving the issue of when
the “injury” resulting from malicious prosecution “happens.” St. Paul, 2014 IL App (2d)
131312, ¶ 23. According to the Muller Fuel court, the injury “ ‘flows immediately from the
tortious act’ ” of filing a criminal complaint with malice and without probable cause. Id.
(quoting Muller Fuel, 232 A.2d at 174). We agreed with this conclusion “because the favorable
termination of a malicious prosecution marks the ‘beginning of the judicial system’s
remediation’ of the wrong committed, not the commencement of the injury or damage.” Id.
(quoting Town of Newfane v. General Star National Insurance Co., 784 N.Y.S.2d 787, 792 (N.Y.
App. Div. 2004)). We found it difficult to see how a criminal defendant’s release from prison
could be described as an injury in any sense of the word. Id. (citing Gulf Underwriters
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Insurance Co. v. City of Council Bluffs, 755 F. Supp. 2d 988, 1008 (S.D. Iowa 2010)); see also
Billings v. Commerce Insurance Co., 936 N.E.2d 408, 413 (Mass. 2010) (noting that favorable
termination of a prosecution “is not an event that causes harm”).
¶ 25 In construing the language of the law enforcement liability section of the St. Paul policy,
we reached the same result as in Muller Fuel. The law enforcement liability section provided,
in relevant part, that St. Paul would “pay amounts any protected person is legally required to pay
as damages for covered injury or damage” that “happens while this agreement is in effect.”
(Internal quotation marks omitted.) Id. ¶ 12. The policy defined “[i]njury or damage” as
including “personal injury” and defined “[p]ersonal injury” as including “injury *** caused by
*** [m]alicious prosecution.” (Internal quotation marks omitted.) Id. Reading the pertinent
provisions together, we concluded that, in essence, the policy provided that St. Paul would pay
damages for injury that happens while the agreement is in effect and that is caused by a
malicious prosecution. Id. ¶ 25. “Because injury results upon the commencement of a
malicious prosecution, it is the commencement of the prosecution that triggers insurance
coverage under the policy.” Id.
¶ 26 Like defendants in the present case, the defendants in St. Paul argued that “ ‘technically
there is no injury until favorable termination.’ ” Id. ¶ 26. The defendants believed that a
person does not suffer an injury until the prosecution is malicious, which is not determined until
the person is exonerated. Id. We found this argument unpersuasive because the defendants
cited no authority to support it and, as a number of courts had correctly reasoned, “a maliciously
prosecuted criminal defendant suffers injury and damage immediately upon being prosecuted.”
Id. (citing Gulf Underwriters Insurance, 755 F. Supp. 2d at 1008 and Harbor Insurance Co. v.
Central National Insurance Co., 211 Cal. Rptr. 902, 907 (Cal. Ct. App. 1985)). “When a
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prosecution is commenced, the accused ‘is arrested, required to post bail to secure his liberty
pending trial, and his reputation is adversely affected.’ Id. (quoting Muller Fuel, 232 A.2d at
174). “ ‘At that point the tortfeasor has invoked the judicial process against the victim
maliciously and without probable cause, and the victim has thereby suffered damage.’ ” Id.
(quoting Harbor Insurance, 211 Cal. Rptr. at 907). “ ‘[T]he initial wrong and consequent harm
have been committed upon commencement of the action and initial impact thereof on the
defendant.’ ” Id. (quoting Harbor Insurance, 211 Cal. Rptr. at 907).
¶ 27 As the court in Genesis Insurance Co. v. City of Council Bluffs, 677 F.3d 806 (8th Cir.
2012), observed:
“[A]lmost all of the courts that have considered the matter have accepted the insurer’s
argument, even in the face of policy language that offered stronger support for
appellant’s position than does that contained in the policy relevant here…. We note,
too, that we think it improbable that the term ‘personal injury’ is used in a technical sense
to speak of a time when a cause of action has fully matured. It is more likely intended to
describe the time when harm begins to ensue, when injury occurs to the person, that is, in
this case when the relevant lawsuit is filed.” (Emphases in original.) Id. at 813-14.
¶ 28 As in St. Paul, our holding in the present case is limited to construing the relevant
language of the policies providing coverage for malicious prosecution. St. Paul, 2014 IL App
(2d) 131312, ¶ 34. Our task in construing an insurance policy is to ascertain the parties’ intent
from the language of the policy. Id. Courts construe a policy as a whole, with due regard to
the risk undertaken, the subject matter that is insured, and the purpose of the entire policy.
Wilson, 237 Ill. 2d at 456. If terms in a policy are unambiguous, courts afford them their plain,
ordinary, and popular meaning. Id. at 455-56. If terms are ambiguous, they will be strictly
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construed against the insurer. Id. at 456; see also American Safety Casualty Insurance Co. v.
City of Waukegan, 678 F.3d 475, 480 (7th Cir. 2012) (“insurers can adjust their exposure by
changing the language in their policies, defining the ‘occurrence’ as the misconduct rather than
the completed tort”).
¶ 29 The two law enforcement liability policies issued by plaintiff to the City are identical.
The insuring agreement of the policies provides that plaintiff will pay on behalf of the insured all
damages “resulting from a wrongful act(s) which arise out of the law enforcement activities. The
wrongful act(s) must occur during the policy period and within the policy territory.” A “wrongful
act” “means an actual or alleged error or omission, negligent act, neglect or breach of duty by an
insured while conducting law enforcement activities, which result in:” (1) personal injury, or (2)
bodily injury, or (3) property damage, caused by an occurrence. “Personal injury” means:
“a. assault and/or battery;
b. false arrest, detention or imprisonment, or malicious prosecution;
c. false or improper service of process;
d. humiliation or mental distress;
e. the publication or utterance of libel or slander or other defamatory or disparaging
material, or a publication or utterance in violation of an individual’s right to privacy;
except publications or utterances in the course of or related to advertising, broadcasting or
telecasting by or on behalf of the named insured;
f. violation of civil rights or discrimination protected under 42 USC 1981 et
sequntia or State Law.”
¶ 30 “Occurrence” means “an event, including continuous or repeated exposure to substantially
the same general harmful conditions. All claims arising out of the following events constitute one
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occurrence”: (1) “a riot of insurrection”; (2) “a civil disturbance resulting in an official
proclamation of state of emergency”; (3) “a temporary curfew”; or (4) “martial law.” Thus, as
paraphrased and condensed, in relevant part, plaintiff’s policies provide that plaintiff will pay
damages if an insured’s wrongful act occurs during the policy period and results in injury, which
includes malicious prosecution. Accordingly, the initiation of the allegedly malicious
prosecution is the triggering event for coverage of a malicious-prosecution claim. Based on the
rationale in St. Paul, the wrongful act is the filing of the malicious prosecution, not its favorable
termination.
¶ 31 The City argues that we should read into the policies the language that “personal injury”
means “injury arising out of” malicious prosecution. The problem with this argument is that
plaintiff’s policies focus not on the tort of malicious prosecution, but on wrongful acts “which
result in” personal injury, as the triggering event. Even though the policy language here differs
from that in St. Paul¸ the policies in both cases focus on wrongful acts resulting in injury as the
triggering event. In plaintiff’s policies, the specific definition of a wrongful act does not include
malicious prosecution. Furthermore, defendants’ interpretation ignores that the wrongful act
must occur within the policy period. Simply put, the policies do not equate a wrongful act with a
completed cause of action.
¶ 32 The gist of defendants’ argument appears to be based on a claims-made policy. The
trial court found, and it is undisputed, that the policies were occurrence-based. In an
occurrence-based policy, coverage is triggered by an act or injury that occurs during the policy
period. Unlike an occurrence-based policy, the discovery clause in a claims-made policy
provides that coverage exists when an act or omission is discovered and brought to the attention
of the insurer during the policy period, regardless of when the act or injury occurred. Landry v.
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Intermed Insurance Co., 292 S.W.3d 352, 355-56 (Mo. Ct. App. 2009); see also Black’s Law
Dictionary 809 (7th ed. 1999) (a claims-made policy is “[a]n agreement to indemnify against all
claims made during a specified period, regardless of when the incidents that gave rise to the claims
occurred”).
¶ 33 A typical occurrence-based policy, containing multiple references to coverage for
occurrences or offenses happening during the term of the policy, reflects the intent to insure only
for the insured’s acts or omissions that happen during a policy period. If favorable termination is
considered as the trigger for a malicious-prosecution claim, liability could be shifted to a policy
period in which the insured committed none of the acts or omissions that give rise to the claim.
This would change an occurrence-based policy into something similar to a claims-made policy; the
policy would cover prior acts or omissions that merely happen to accrue as a cause of action while
the policy is in effect, just as a claims-made policy covers claims filed during a policy period,
regardless of when the underlying acts or omissions occurred. The majority position is more
consistent with the intent of the parties to an occurrence-based policy.
¶ 34 Defendants rely on the minority position taken in American Safety, 678 F.3d 475, and
National Casualty Co. v. McFatridge, 604 F.3d 335 (7th Cir. 2010). As stated, neither case is
persuasive given their reliance on Security Mutual. Furthermore, in American Safety, the policy
identified as the “occurrence” the tort of malicious prosecution instead of the misconduct giving
rise to the tort. American Safety, 678 F.3d at 479. In the present case, plaintiff’s policies,
unlike American Safety’s policy, define the injury as including malicious prosecution emanating
from wrongful acts. See St. Paul, 2014 IL App (2d) 131312, ¶ 32 (“the section of the insurance
policy at issue defines as the occurrence the injury caused by malicious prosecution, not the tort
of malicious prosecution”). In McFatridge, the court never analyzed the policy language in the
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context of the offense of malicious prosecution, as it relied on Security Mutual in concluding that
the offense depends upon the invalidation of the underlying conviction. McFatridge, 604 F.3d
at 344-45.
¶ 35 Defendants note that the policies do not state that all enumerated causes of action related
to a wrongful conviction should be considered as one occurrence that dates back to the initiation
of the malicious prosecution. The policies’ definition of “occurrence” provides an exhaustive
list of certain events that constitute one occurrence, and that list does not include malicious
prosecution. Thus, defendants argue, Rivera’s malicious-prosecution and other claims should
not be considered as a single occurrence and are entitled to separate analyses of when coverage
was triggered.
¶ 36 Indeed, the policies do not require that all of Rivera’s claims arise from a single
occurrence and must have the same trigger date as his malicious-prosecution claim. But the
occurrence language is irrelevant to determining whether there is one or more trigger date in this
case. As the trial court pointed out, “the occurrence definition becomes significant when the
issue is the limits of liability,” as “[t]he policies provide that liability for a single occurrence is
limited to one million dollars, with a two million dollar aggregate policy limit.” Thus, the
“occurrence” language comes into play only if a number of the claims trigger coverage.
Because we determine that coverage for malicious prosecution was not triggered during the
policy periods, we must determine only if any of the other allegations trigger coverage.
¶ 37 C. Trigger of Coverage for Other Allegations
¶ 38 Defendants argue that coverage for other allegations in Rivera’s complaint, such as
conspiracy, failure to intervene, intentional infliction of emotional distress, and defamation, was
triggered during the first policy period. Under the policies, “personal injury” includes false
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arrest, detention, or imprisonment, and those claims have the same trigger date as the malicious-
prosecution claim. Additionally, Rivera’s defamation claim alleges that the defamatory
remarks were made by Officer Tessman during an interview. But the problem with that claim
is that the remarks did not involve law enforcement activities. Furthermore, Rivera did not
allege that the officer defamed him while conducting law enforcement activities, which takes that
claim outside of the terms of the policies.
¶ 39 Rivera also alleged that the City committed violations of Brady v. Maryland, 373 U.S. 83
(1963), amounting to due-process claims under 42 U.S.C. § 1983. Rivera contends that there is
a duty to disclose exculpatory evidence before, during, and after trial. He asserts that each day
that the City suppressed evidence to keep him in prison constituted an independent Brady
violation and a separate occurrence under the policies. In other words, Rivera argues that the
alleged Brady violations are independent triggering events that occurred across both policy
periods and are separate acts that increased the City’s liability.
¶ 40 We find that all of the acts or omissions alleged to have occurred after the date Rivera
was charged are really continuations of the same alleged harm. The purported ongoing acts of
conspiracy that prolonged Rivera’s incarceration were not new harmful acts. Instead, they were
the continuing effects of Rivera’s arrest and ultimately his convictions of rape and murder.
¶ 41 In Nicor, Inc. v. Associated Electric & Gas Insurance Services Ltd., 223 Ill. 2d 407
(2006), the supreme court considered whether claims for 195 instances of mercury contamination
constituted a single occurrence under the insurance policies issued to Nicor for the relevant time
periods. The contamination occurred over a period of several years, while Nicor gradually
replaced old gas meter regulators that contained mercury with new ones that did not. In some
instances, the premises where the new regulators were installed became contaminated. The
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court stated that the “cause theory” represents the law of Illinois for the purpose of determining
whether multiple injuries or claims constitute one or more occurrences under an
occurrence-based policy. Id. at 419-20. The court observed that the cause theory looks to
whether the damage resulted from the “same conditions and was inflicted as part of an unbroken
and uninterrupted continuum [that] would yield the conclusion that there was only one
occurrence.” Id. at 418-19.
¶ 42 The court found that the mercury contamination did not arise from an inherent defect in
the meters that were replaced or from a system-wide policy or procedure for replacing the
meters. Id. at 433. The court also stated that there was no common cause of the spills that
resulted in the contamination and that the spills occurred under a variety of different
circumstances. Accordingly, the court concluded that the claims arising from the spills could
not be viewed as a single occurrence. Id. at 434.
¶ 43 The court contrasted Nicor with the asbestos case of United States Gypsum Co. v.
Admiral Insurance Co., 268 Ill. App. 3d 598 (1994), where the insured’s liability was not based
on the installation of the products at the various sites involved in the suit. Rather, the operative
cause was “the continuing manufacture and sale of asbestos-containing products.” Id. at 649.
¶ 44 Applying the cause theory as set forth in Nicor to the present case clearly establishes that
this case presented a single cause and therefore a single occurrence. The alleged Brady
violations that contributed to Rivera’s arrest and convictions might have had an ongoing effect
over a period of time, but Rivera’s injury resulted from the “same conditions and was inflicted as
part of an unbroken and uninterrupted continuum.” Nicor, 223 Ill. 2d at 419.
¶ 45 D. Illusory Coverage
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¶ 46 Defendants also assert that the trial court’s holding renders the coverage illusory.
However, that is not the case, where the malicious prosecution did not take place during the
policy periods. If the charges had been filed during a policy period and they were later
determined to be the result of malicious prosecution, plaintiff would be required to provide
coverage.
¶ 47 E. Premature Ruling
¶ 48 Defendants argue that the trial court’s ruling was premature because it could result in
inconsistent opinions from different courts concerning coverage in this case. The City argues
that there could be inconsistent rulings on the triggering issue, leaving the City without coverage
for Rivera’s claims. However, plaintiff is correct that an insurance company that has doubts
about whether it has a duty to defend has the option to defend under a reservation of rights or to
file a declaratory judgment action. Plaintiff was well within its rights and, in fact, was prudent
in seeking a resolution of this issue in a declaratory judgment.
¶ 49 III. CONCLUSION
¶ 50 For the preceding reasons, we conclude that Rivera’s malicious-prosecution claim did not
trigger coverage under the insurance policies that plaintiff issued to the City, because the
prosecution was commenced before the inception of the policies. Coverage for Rivera’s other
allegations also was not triggered under the policies, and the policies do not provide illusory
coverage. Finally, the trial court’s ruling in this case was not premature. Accordingly, we affirm
the order of the circuit court of Lake County granting plaintiff’s motion for judgment on the
pleadings.
¶ 51 Affirmed.
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