ILLINOIS OFFICIAL REPORTS
Appellate Court
Illinois Farmers Insurance Co. v. Keyser, 2011 IL App (3d) 090484
Appellate Court ILLINOIS FARMERS INSURANCE COMPANY, Plaintiff-Appellant,
Caption v. CHARLES W. KEYSER, JR., and CINDY R. STUKEL, Defendants-
Appellees.
District & No. Third District
Docket No. 3-09-0484
Filed August 22, 2011
Held The trial court properly ruled that plaintiff insurer was required to defend
(Note: This syllabus and indemnify defendant against a claim of malicious prosecution under
constitutes no part of her homeowner’s policy, which generally excluded coverage of
the opinion of the court intentional conduct but explicitly provided coverage for malicious
but has been prepared prosecution.
by the Reporter of
Decisions for the
convenience of the
reader.)
Decision Under Appeal from the Circuit Court of Will County, No. 08-MR-676; the Hon.
Review Barbara Petrungaro, Judge, presiding.
Judgment Affirmed.
Counsel on Zacarias R. Chacon and Danny L. Worker (argued), both of Lewis,
Appeal Brisbois, Bisgaard & Smith, LLP, of Chicago, for appellant.
Zachary B. Pollack (argued), of Sabuco, Beck, Hansen & Schrock, P.C.,
of Joliet, for appellee.
Panel JUSTICE LYTTON delivered the judgment of the court, with opinion.
Justices McDade and O’Brien concurred in the judgment and opinion.
OPINION
¶1 Plaintiff Illinois Farmers Insurance Company (Illinois Farmers) filed an action against
insured Cindy Stukel seeking a declaration that it was not obligated to defend Stukel in a
malicious prosecution lawsuit filed against her by Charles Keyser, Jr. The trial court ruled
that the insurance company was required to provide a defense and granted defendants’
motion for summary judgment. We affirm.
¶2 In May of 2007, Cindy Stukel filed criminal trespass charges against Charles Keyser, Jr.
In pursing the charges, Stukel allegedly advised Joliet police officers that Keyser entered her
property after receiving verbal notice from her that such entry was forbidden. Keyser was
arrested, but the criminal proceedings against him were later dismissed. Keyser then filed a
civil complaint for malicious prosecution against Stukel, in which he alleged that Stukel’s
verbal and written statements to police were false and that Stukel knew they were false when
she made them.
¶3 During this time, Stukel was insured under a homeowners policy issued by Illinois
Farmers. That policy obligated Illinois Farmers to defend and indemnify Stukel against
damages caused by “bodily injury, property damage or personal injury resulting from an
occurrence” to which coverage applies. The policy definition of “personal injury” included
injury arising from “malicious prosecution.” The policy defined an “occurrence” as “an
accident” resulting in injury. The policy also excluded coverage of bodily injury or personal
injury intentionally caused by the insured.
¶4 Illinois Farmers filed a declaratory judgment action, seeking a judgment declaring that
Stukel’s policy did not afford her coverage in the underlying lawsuit because her acts were
intentional. It claimed that such intentional acts were excluded under the policy and moved
for summary judgment. Stukel and Keyser filed a cross-motion for summary judgment,
arguing that the underlying complaint alleged a civil tort of malicious prosecution that was
specifically covered by the insurance policy.
¶5 The trial court ruled that the policy’s inconsistent provisions created an ambiguity that
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should be construed in favor of the insured and granted defendants’ motion.
¶6 Summary judgment is proper when the pleadings, affidavits, depositions and admissions
of record, construed strictly against the moving party, show that there is no genuine issue as
to any material fact and that the moving party is entitled to judgment as a matter of law.
Morris v. Margulis, 197 Ill. 2d 28, 35 (2001). While this relief has been called a “drastic
measure,” it is an appropriate tool to employ in determining questions of law such as the
rights and obligations under an insurance policy. See Outboard Marine Corp. v. Liberty
Mutual Insurance Co., 154 Ill. 2d 90 (1992); Bohner v. Ace American Insurance Co., 359
Ill. App. 3d 621 (2005). We conduct a de novo review of the trial court’s order granting
summary judgment in favor of the defendants. Outboard Marine Corp., 154 Ill. 2d at 102.
¶7 I
¶8 Illinois Farmers claims that it owes no duty to defend or indemnify Stukel in the
underlying complaint. It argues that the policy defines an “occurrence” as an “accident” and
excludes coverage of intentional conduct; thus, an intentional tort such as malicious
prosecution is not covered.
¶9 The construction of insurance policy provisions is a question of law. Outboard Marine
Corp., 154 Ill. 2d at 108. In construing a policy, our primary function is to ascertain and
enforce the parties’ intent as expressed in the written agreement. Allstate Insurance Co. v.
Greer, 396 Ill. App. 3d 1037 (2009). To ascertain the meaning of a policy, the court must
construe it as a whole, taking into account the risk undertaken, the subject matter that is
insured and the purposes of the entire contract. Outboard Marine Corp., 154 Ill. 2d at 108.
A court must afford the policy language its plain and ordinary meaning if the words are
unambiguous. However, if the words are susceptible to more than one interpretation, they
are ambiguous and must be construed in favor of the insured and against the insurer who
drafted the policy. Id. at 108-09.
¶ 10 To determine whether an insurer has a duty to defend its insured, we must compare the
allegations of the underlying complaint to the coverage provisions of the insurance policy.
Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384 (1993). If the
underlying complaint alleges facts within or potentially within the policy’s coverage
provisions, the insurer is obligated to defend even if the allegations are meritless. Crum &
Forster Managers Corp., 156 Ill. 2d 384.
¶ 11 Here, a comparison of the allegations in the underlying complaint to the terms of the
insurance policy demonstrates that Illinois Farmers is obligated to defend Stukel. In the
underlying complaint, the cause of action is entitled “Complaint at Law; Malicious
Prosecution,” and the complaint alleges facts and seeks damages for the common law tort of
malicious prosecution. Thus, Keyser’s complaint alleges injury arising from malicious
prosecution.
¶ 12 The terms of the Illinois Farmers policy cover “personal injury resulting from an
occurrence to which this coverage applies.” The policy defines “personal injury” as:
“any injury arising from:
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(1) false arrest, imprisonment, malicious prosecution and detention.”
An “occurrence” is defined in the policy as “an accident including exposure to conditions
which results during the policy period in bodily injury or property damage.” The policy also
contains an exclusionary provision, which states “[w]e do not cover bodily injury, property
damage, or personal injury *** caused intentionally by or at the direction of an insured.”
¶ 13 The policy covers personal injury from both accidental conduct and certain enumerated
intentional acts, including malicious prosecution. See Johnson v. Target Stores, Inc., 341 Ill.
App. 3d 56 (2003) (“malice” defined as “the intent” to commit a wrongful act). Where
Illinois Farmers expressly undertook coverage of malicious prosecution in the policy, it
assumed a duty to defend Stukel in the underlying case.
¶ 14 Were we to accept Illinois Farmers’ position, coverage for certain named intentional torts
would be included under the definition of “personal injury” and then removed under the
meaning of “occurrence.” This would render the provision defining personal injury
superfluous and would create an ambiguity where none exists. As the trial court aptly noted:
“If Farmers’ argument were taken to its logical conclusion, then the policy would not
make any sense, and would be providing coverage in one sentence and then taking it
away.”
¶ 15 We decline to adopt an interpretation that would lead to illusory coverage. See State
Farm Fire & Casualty Co. v. Trousdale, 285 Ill. App. 3d 566 (1996).1
¶ 16 II
¶ 17 Illinois Farmers also argues that, if a defense of the underlying complaint is covered
under the policy, it would violate public policy because it insures against intentional
misconduct.
¶ 18 Generally, a contract of insurance that indemnifies a person for damages resulting from
his own intentional misconduct is void as against public policy, and courts will not enforce
it. Dixon Distributing Co. v. Hanover Insurance Co., 161 Ill. 2d 433 (1994). However, it is
also a fundamental policy in Illinois that when an insured pays a premium and an insurance
company accepts it and promises coverage based on the premium paid, the insurer should be
required to fulfill its obligation. University of Illinois v. Continental Casualty Co., 234 Ill.
App. 3d 340 (1992). Whether a particular contract of insurance violates public policy
depends on the nature of the risk against which insurance is sought. Dixon Distributing Co.,
161 Ill. 2d at 447.
¶ 19 Applying these public policy principles, Illinois courts have approved personal injury
coverage of certain intentional torts such as retaliatory discharge and defamation. See Dixon
Distributing Co., 161 Ill. 2d 433 (personal injury liability included coverage of retaliatory
discharge); Cincinnati Insurance Co. v. American Hardware Manufacturers Ass’n, 387 Ill.
1
At most, Illinois Farmers’ interpretation of the policy creates an ambiguity that we must
interpret in Stukel’s favor. See Cincinnati Insurance Co. v. American Hardware Manufacturers
Ass’n, 387 Ill. App. 3d 85 (2008).
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App. 3d 85 (2008) (coverage provision specifically listed defamation and libel); University
of Illinois, 234 Ill. App. 3d 340 (intentional misconduct covered racial and sexual
discrimination). On the other hand, they have excluded coverage of intentional torts that are
also serious crimes. See Lincoln Logan Mutual Insurance Co. v. Fornshell, 309 Ill. App. 3d
479 (1999) (murder); West American Insurance Co. v. Vago, 197 Ill. App. 3d 131 (1990)
(sexual assault; battery).
¶ 20 The distinction is apparent. For example, in Lincoln Logan Mutual Insurance, the insurer
brought a declaratory judgment against a convicted murderer and the victim’s parents
seeking a declaration that it had no duty to defend against a wrongful death claim under the
personal liability provision of its policy. The court decided that the policy’s provision must
be read in conjunction with the insured’s reasonable expectations and the coverage intended
by the insurance policy, neither of which intended coverage for the criminal act of murder.
See Lincoln Logan Mutual Insurance, 309 Ill. App. 3d at 483-85.
¶ 21 Here, Stukel contracted to insure against the risk of loss resulting from the intentional
civil tort of malicious prosecution, and Illinois Farmers promised coverage when it accepted
her premium payments. While generally excluding coverage of intentional conduct, the
policy explicitly provided coverage for damages caused by malicious prosecution, and the
insured could reasonably anticipate that the policy protections would apply. Public policy
requires Illinois Farmers to fulfill its contractual obligation to defend and indemnify.
¶ 22 Moreover, public policy favors affording compensation to victims. Lincoln Logan Mutual
Insurance, 309 Ill. App. 3d at 483. Thus, there is nothing inherently unreasonable or
inconsistent with Illinois public policy in allowing an individual to insure himself against
damages caused by certain intentional acts, except to the extent that the insured wrongdoer
may not be the person who recovers the policy proceeds. See Dixon Distributing Co., 161
Ill. 2d at 446-47. “Indemnity against intentional misconduct may be tolerated where it
provides benefits to the victim, but not where it compensates the wrongdoer.” Lincoln Logan
Mutual Insurance, 309 Ill. App. 3d at 483. In this case, indemnity against Stukel’s intentional
conduct may provide benefits to Keyser but will not compensate Stukel for her wrongdoing.
The Illinois Farmers insurance policy provides coverage against a claim of malicious
prosecution and does not violate Illinois public policy.
¶ 23 III
¶ 24 The judgment of the circuit court of Will County is affirmed.
¶ 25 Affirmed.
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