Case Title: Sanders v. Illinois Union Insurance Co.

Citation: 2019 IL 124565

Docket Number: 124565

State: illinois

Court: Illinois Supreme Court

Date: 2019-11-21T00:00:00Z

Document:
Illinois Official Reports 
 
Supreme Court 
 
 
Sanders v. Illinois Union Insurance Co., 2019 IL 124565 
 
 
 
Caption in Supreme 
Court: 
 
RODELL SANDERS et al., Appellees, v. ILLINOIS UNION 
INSURANCE COMPANY et al., Appellants. 
 
 
 
Docket No. 
 
124565 
 
 
 
Filed 
 
 
November 21, 2019 
 
 
 
Decision Under  
Review 
 
Appeal from the Appellate Court for the First District; heard in that 
court on appeal from the Circuit Court of Cook County, the Hon. Celia 
Gamrath, Judge, presiding. 
 
 
 
Judgment 
 
Appellate court judgment reversed. 
Circuit court judgment affirmed. 
Counsel on 
Appeal 
Christopher A. Wadley, of Walker Wilcox Matousek LLP, of Chicago, 
for appellant Illinois Union Insurance Company. 
 
Agelo L. Reppas and Adam H. Fleischer, of BatesCarey LLP, of 
Chicago, for appellant Starr Indemnity & Liability Company. 
 
Michael Kanovitz, Russell Ainsworth, and Ruth Brown, of Loevy & 
Loevy, of Chicago, for appellee Rodell Sanders. 
 
 
Digitally signed 
by Reporter of 
Decisions 
Reason: I attest 
to the accuracy 
and integrity of 
this document 
Date: 2020.12.01 
11:51:14 -06'00'
 
- 2 - 
 
Paulette A. Petretti and Darcee C. Williams, of Scariano, Himes and 
Petrarca, Chtrd., of Chicago, for appellee City of Chicago Heights. 
 
 
 
Justices 
 
JUSTICE THEIS delivered the judgment of the court, with opinion. 
Chief Justice Burke and Justices Thomas, Kilbride, Garman, and 
Karmeier concurred in the judgment and opinion. 
Justice Neville took no part in the decision. 
 
 
 
OPINION 
 
¶ 1 
 
In 1994, based on doctored evidence from the City of Chicago Heights Police Department, 
Rodell Sanders was charged with murder, attempted murder, and armed robbery. Sanders was 
wrongfully convicted and imprisoned for approximately 20 years before being exonerated in 
2014. From November 2011 to November 2014, the City of Chicago Heights obtained primary 
liability insurance from Illinois Union Insurance Company (Illinois Union) and excess liability 
insurance from Starr Indemnity & Liability Company (Starr). The primary insurance policy 
indemnified Chicago Heights for, among other things, damages arising out of the “offense” of 
“malicious prosecution.” At issue is whether the offense of malicious prosecution occurred 
during the policy period, thereby triggering the insurers’ obligation to provide coverage. Based 
on the policy’s terms, we conclude that coverage was triggered when Sanders was prosecuted 
in 1994. 
 
¶ 2 
 
 
 
 
BACKGROUND 
¶ 3 
 
On December 15, 1993, at around 2 a.m., two people were seated inside of a parked car 
when a group of men attacked them. The offenders robbed and shot both victims. One victim 
died. The survivor later provided Chicago Heights police officers with a description of two of 
the assailants. Officers arrested Sanders in January 1994. Sanders did not match either physical 
description provided by the surviving victim, and he had an alibi that was confirmed by alibi 
witnesses. Nonetheless, officers manipulated the evidence to ensure his conviction.1  
¶ 4 
 
For example, after the surviving victim described one of the assailants as tall and skinny, 
officers altered Sanders’s photograph to make him appear taller and thinner. Then, officers 
included that image in a photographic lineup so that the surviving victim would identify him 
as one of the culprits. According to Sanders, officers engaged in this conduct because they bore 
a grudge against him and sought to protect the real murderer, who was an important witness 
 
 
1 Although municipalities may not prosecute felonies, a person or entity can be liable for 
commencing or continuing a malicious prosecution even if they do not ultimately wield prosecutorial 
power. Under Illinois law, liability for malicious prosecution “extends to all persons who played a 
significant role in causing the prosecution of the plaintiff, provided all of the elements of the tort are 
present.” Beaman v. Freesmeyer, 2019 IL 122654, ¶ 43. That Chicago Heights is liable for malicious 
prosecution under these principles based on the misconduct of its police officers is undisputed. 
 
- 3 - 
 
for the prosecution in other cases. Upon his conviction in January 1995, Sanders was sentenced 
to 80 years’ imprisonment.  
¶ 5 
 
Sanders filed a postconviction petition, and in January 2011 the Cook County circuit court 
overturned the conviction and vacated his sentence. The appellate court affirmed its judgment 
in May 2012. Meanwhile, at some point in 2012, Chicago Heights provided Illinois Union and 
Starr with a notice of claim based on their policies from November 1, 2011, through November 
1, 2014.2 
¶ 6 
 
The prosecution retried Sanders in August 2013, asking the jury to convict him on an 
additional theory of accountability. The second trial resulted in a mistrial. The prosecution 
retried Sanders again in July 2014, and the jury acquitted him. Sanders had filed a federal civil 
rights action against Chicago Heights in January 2013. After the jury acquitted him, Sanders 
amended the civil rights complaint to add claims of malicious prosecution. 
¶ 7 
 
Illinois Union responded to Chicago Heights’ notice of claim in December 2014. At that 
time, it notified the city that it was declining to provide coverage because no covered events 
occurred during the policy periods. One year later, Starr similarly sent a declination, claiming 
that the malicious prosecution did not fall within the policy periods. Chicago Heights asked 
the insurers to reconsider their decisions, arguing that the date of Sanders’s exoneration and 
his trials in August 2013 and July 2014 were discrete dates of loss.  
¶ 8 
 
The “general liability coverage part” of the insurance policy provides:  
“The Insurer will indemnify the Insured for Damages and Claim Expenses in excess 
of the Retained Limit for which the Insured becomes legally obligated to pay because 
of a Claim first arising out of an Occurrence happening during the Policy Period in the 
Coverage Territory for Bodily Injury, Personal Injury, Advertising Injury, or Property 
Damage taking place during the Policy Period.” (Emphases in original.)  
“With respect to Personal Injury,” occurrence was defined as “only those offenses specified 
in the Personal Injury Definition.” (Emphases in original.)  
¶ 9 
 
“Personal injury” was defined as “one or more of the following offenses *** [f]alse arrest, 
false imprisonment, wrongful detention or malicious prosecution *** wrongful eviction from, 
wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or 
premises that a person occupies by or on behalf of the owner, landlord or lessor.” (Emphasis 
in original.) The policy provided that “[a]ll damages arising out of substantially the same 
Personal Injury regardless of frequency, repetition, the number or kind of offenses, or number 
of claimants, will be considered as arising out of one Occurrence.” (Emphases in original.) 
 
¶ 10 
 
 
 
 
Circuit Court Proceedings 
¶ 11 
 
In February 2016, Chicago Heights filed a complaint for declaratory judgment, legal relief, 
and monetary damages against Illinois Union and Starr. The city sought a declaration that it 
was entitled to coverage under the insurance policy, thereby requiring the insurers to indemnify 
it for attorney fees and costs that were paid in excess of the retained limit. Without waiving its 
right to reassert claims under earlier policies, Chicago Heights focused its claims for coverage 
on the policies from 2012-13 and 2013-14.  
 
 
2Illinois Union was the primary insurer. Starr’s policy was a “follow form excess liability policy,” 
and thus, its policy relied on the provisions set forth in Illinois Union’s policy. 
 
- 4 - 
 
¶ 12 
 
In September 2016, a consent judgment was entered in Sanders’s favor in the federal civil 
rights action for $15 million. Chicago Heights agreed to contribute $2 million, and United 
National Insurance Company (Chicago Heights’ insurer from 1994) agreed to contribute $3 
million toward the judgment. Additionally, Chicago Heights assigned its rights against Illinois 
Union and Starr to Sanders in exchange for his agreement not to seek the remaining $10 million 
from the city.  
¶ 13 
 
Thereafter, Chicago Heights moved the circuit court to voluntarily dismiss its declaratory 
judgment action without prejudice. In late October 2016, the circuit court granted the city’s 
dismissal motion, rendering all pending motions and outstanding discovery moot.  
¶ 14 
 
In November 2016, under section 2-1008(a) of the Code of Civil Procedure (735 ILCS 5/2-
1008(a) (West 2016)), the circuit court substituted Sanders as a plaintiff in this action. Based 
on the policy provisions quoted above, Sanders argued that the insurers’ denial of coverage to 
Chicago Heights was “wrongful, unreasonable, and vexatious.” Because the city had assigned 
its rights to him, Sanders asserted that Illinois Union and Starr were required to pay him at 
least the $10 million that was outstanding from the settlement. 
¶ 15 
 
The insurers filed an amended motion to dismiss the complaint with prejudice. Illinois 
Union and Starr noted that Sanders “was maliciously prosecuted in 1994 resulting in his 
conviction and incarceration for a crime he did not commit.” In their view, his injury predated 
the effective dates of their policies. Illinois Union and Starr therefore argued that they were 
neither required to provide coverage for Chicago Heights nor obligated to contribute to its 
settlement with Sanders. 
¶ 16 
 
In January 2018, the circuit court granted the insurers’ amended motion to dismiss. The 
court observed that, under the policy, Illinois Union and Starr had to provide coverage to 
Chicago Heights for damages for personal injury first arising out of an occurrence during the 
policy period. The court determined that the policy focused on a requisite act and injury during 
the policy period, rather than the accrual of a completed cause of action. The court 
acknowledged that, to prevail on a tort claim of malicious prosecution, a plaintiff must 
establish, among other things, that the prior proceeding terminated in his favor. But it also 
noted that the vast majority of courts to consider the issue have ruled that the filing of the 
underlying malicious suit was the occurrence causing personal injury under an insurance 
policy. Sanders and Chicago Heights appealed.  
 
¶ 17 
 
 
 
 
The Appellate Court’s Decision 
¶ 18 
 
On appeal, a split panel reversed. The appellate court majority confirmed that the dispute 
centered on when the “offense” of malicious prosecution was deemed to occur under the 
policy. 2019 IL App (1st) 180158, ¶ 17. Offense was not defined in the policy; therefore, 
relying on Black’s Law Dictionary (10th ed. 2014), the majority concluded that the term 
referred “to the legal cause of action that arises out of wrongful conduct, not just the wrongful 
conduct itself.” 2019 IL App (1st) 180158, ¶ 18. Further, it observed that the list of offenses 
contained in the policy referred exclusively to legal causes of action by their proper legal 
names, rather than to the underlying wrongful acts. Id. ¶ 19. Accordingly, the majority ruled 
that the plain and ordinary meaning of the term offense, as used in relation to the phrase 
malicious prosecution, referred to the completed cause of action. Id.  
 
- 5 - 
 
¶ 19 
 
The dissent argued that, “[u]nder the clear and unambiguous language of the Illinois 
Union/Starr policies, the malicious prosecution of Sanders happened in 1994 when he was 
wrongfully charged with murder; it did not happen in either 2013, when he was retried, or in 
2014, when after his third trial, he was acquitted.” Id. ¶ 37 (Mason, P.J., dissenting). In the 
dissent’s view, “an ‘offense’ is the wrongful conduct or unlawful act,” and that occurred when 
false charges were brought against Sanders. Id. ¶ 40. It also found “[t]he majority’s attempt to 
distinguish relevant Illinois authority based on minor differences in policy language *** 
unpersuasive.” Id. ¶ 44. Finally, the dissent rejected Sanders’s claim that his retrials constituted 
additional triggers for coverage, noting that his initial prosecution and the retrials all arose out 
of the same false charges against him. Id. ¶ 49. 
¶ 20 
 
This court granted Illinois Union and Starr’s petition for leave to appeal. Ill. S. Ct. R. 315 
(eff. July 1, 2018). 
 
¶ 21 
 
 
 
 
ANALYSIS 
¶ 22 
 
The question before us is whether the offense of malicious prosecution occurred during the 
policy period, such that Illinois Union and Starr were required to provide coverage to Chicago 
Heights. The proper construction of provisions of an insurance policy is a question of law that 
we review de novo. Valley Forge Insurance Co. v. Swiderski Electronics, Inc., 223 Ill. 2d 352, 
360 (2006). Because an insurance policy is a contract, the rules applicable to contract 
interpretation govern. Thounsavath v. State Farm Mutual Automobile Insurance Co., 2018 IL 
122558, ¶ 17. Our “primary function is to ascertain and give effect to the intention of the 
parties, as expressed in the policy language.” Id.  
¶ 23 
 
When the terms of a policy are clear and unambiguous, we will ascribe to them their plain 
and ordinary meaning. Pekin Insurance Co. v. Wilson, 237 Ill. 2d 446, 455-56 (2010). And as 
we have previously observed, the fact that a term is undefined does not render it ambiguous. 
Nicor, Inc. v. Associated Electric & Gas Insurance Services Ltd., 223 Ill. 2d 407, 417 (2006). 
Rather, ambiguity exists only if a term is susceptible to more than one reasonable 
interpretation. Id. As with any contract, we construe an insurance policy as a whole, giving 
effect to each provision where possible because we must assume that it was intended to serve 
a purpose. Valley Forge, 223 Ill. 2d at 362. 
¶ 24 
 
The policy in this case provides that Illinois Union and Starr will indemnify Chicago 
Heights for damages for which Chicago Heights becomes legally obligated to pay because of 
a claim arising out of the offense of malicious prosecution, happening during the policy period, 
and taking place during the policy period. Thus, to resolve when the malicious prosecution 
occurred, our interpretation of the word “offense” becomes central. The parties have proffered 
different meanings of the term. For example, citing Merriam-Webster’s Online Dictionary, 
Illinois Union contends that “the term is primarily used to mean something that outrages the 
moral or physical senses.” For its part, Chicago Heights refers us to Black’s Law Dictionary 
(10th ed. 2014), which provides that an “offense” is a “violation of the law; a crime, often a 
minor one.”  
¶ 25 
 
Considering the various proposals, we conclude—as another panel of the appellate court 
recently did under substantially similar circumstances—that the most “straightforward reading 
of this term [(offense)] indicates that coverage depends upon whether the insured’s offensive 
 
- 6 - 
 
conduct was committed during the policy period.” (Emphasis omitted.) First Mercury 
Insurance Co. v. Ciolino, 2018 IL App (1st) 171532, ¶ 30.  
¶ 26 
 
In that case, the question was whether an insurance company was required to provide 
coverage for its insured in an underlying lawsuit for malicious prosecution. Id. ¶ 3. When the 
wrongfully convicted defendant was framed in 1999, the company was not the insurer; 
however, it was when he was exonerated in 2014. Id. ¶ 7. Under the policy, the company would 
cover a “ ‘ “[p]ersonal injury” caused by an offense arising out of your business *** but only 
if the offense was committed *** during the policy period.’ ” Id. ¶ 8. Personal injury was 
defined to include malicious prosecution; the term offense was undefined. Id. ¶ 9. The trial 
court granted summary judgment in favor of the insurer. On appeal, the court was “not 
convinced that the policy’s use of the word ‘offense’ indicate[d] the parties’ intent that 
coverage would only be triggered upon fulfillment of all elements of a tort claim under Illinois 
law.” Id. ¶ 30. Observing that no language in the policy indicated an “intent to limit the 
meaning of ‘offense’ by requiring the completion of tort law elements,” the appellate court 
declined to “assume that the policy incorporate[d] tort law.” Id. ¶ 31. 
¶ 27 
 
Here, too, we conclude that the word offense in the insurance policy refers to the wrongful 
conduct underlying the malicious prosecution. In so ruling, we consider both the meaning of 
the word offense and the contractual requirement that the offense must both happen and take 
place during the policy period. A malicious prosecution neither happens nor takes place upon 
exoneration. See, e.g., Mitchinson v. Cross, 58 Ill. 366, 370 (1871) (“The gist of the action for 
malicious prosecution is, that the prosecutor acted without probable cause.”); Spiegel v. Zurich 
Insurance Co., 293 Ill. App. 3d 129, 134 (1997) (“ ‘Malicious prosecution’ is the bringing of 
a suit known to be groundless ***.”). Further, courts have found that the “ ‘personal injury’ of 
‘malicious prosecution’ ” in the context of an insurance policy differs from “the common-law 
elements of the tort of malicious prosecution.” County of McLean v. States Self-Insurers Risk 
Retention Group, Inc., 2015 IL App (4th) 140628, ¶ 33; see also City of Lee’s Summit v. 
Missouri Public Entity Risk Management, 390 S.W.3d 214, 220 (Mo. Ct. App. 2012) (“[I]n the 
context of insurance, malicious prosecution occurs upon the institution of the underlying 
action.”). 
¶ 28 
 
That this is an occurrence-based policy also weighs heavily into our decision. “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.” Indian Harbor Insurance Co. 
v. City of Waukegan, 2015 IL App (2d) 140293, ¶ 33. If we were to deem exoneration the 
trigger for coverage of a malicious prosecution insurance claim, liability could be shifted to a 
policy period in which none of the acts or omissions giving rise to the claim occurred. That 
would violate the intent of the parties to an occurrence-based policy.  
¶ 29 
 
Emphasizing that malicious prosecution is a tort, Chicago Heights and Sanders urge us to 
find that the policy must have intended for all elements of the tort to be satisfied before finding 
that the offense has occurred. But as in First Mercury, here, the language of the policy does 
not require that the elements of the tort be satisfied. Accordingly, we cannot read into it the 
requirements of a tort claim for malicious prosecution. See St. Paul Fire & Marine Insurance 
Co. v. City of Zion, 2014 IL App (2d) 131312, ¶ 22 (observing that “the ‘occurrence’ triggering 
 
- 7 - 
 
insurance coverage of a malicious-prosecution claim may precede the accrual of the cause of 
action”).3  
¶ 30 
 
Sanders and Chicago Heights also highlight decisions from the United States Court of 
Appeals for the Seventh Circuit, such as American Safety Casualty Insurance Co. v. City of 
Waukegan, 678 F.3d 475, 479 (7th Cir. 2012), which ruled that exoneration was “the 
‘occurrence’ ” for insurance coverage of a malicious prosecution claim. We note that the 
federal court of appeals relied heavily on Security Mutual Casualty Co. v. Harbor Insurance 
Co., 65 Ill. App. 3d 198 (1978), a case that we subsequently reversed on other grounds. 
Although we take no issue with the federal appellate court’s attempt to predict Illinois law, we 
clarify that the appellate court’s reasoning in Security Mutual does not reflect our approach for 
determining when coverage for malicious prosecution occurs under an occurrence-based 
insurance policy.  
¶ 31 
 
Separately, Chicago Heights and Sanders contend that his retrials in 2013 and 2014 
constituted separate triggers for coverage. That claim is foreclosed by the language of the 
policy. Under the policy, “[a]ll damages arising out of substantially the same Personal Injury 
regardless of frequency, repetition, the number or kind of offenses, or number of claimants, 
will be considered as arising out of one Occurrence.” (Emphases in original.) Although another 
theory of liability was added during the retrials, the personal injury (i.e., the initiation of a suit 
based on evidence manufactured by Chicago Heights police officers) remained the same.  
¶ 32 
 
Sanders also argues that our decision in Nicor compels a finding that his two retrials were 
separate occurrences that triggered coverage. It does not. In that case, mercury had spilled out 
of gas meters and into customers’ homes. Nicor, 223 Ill. 2d at 410-11. In a dispute over 
insurance coverage, the company argued that each of the 195 spills into different homes 
constituted a single occurrence. Id. at 414. This court rejected that claim, observing that no 
evidence established that the spills resulted from a common cause. Id. at 433. Here, by contrast, 
Chicago Heights officers’ fabrication of evidence to support unfounded charges against 
Sanders was the single cause of all three trials and, thus, the single relevant occurrence under 
the policy. 
 
¶ 33 
 
 
 
 
CONCLUSION 
¶ 34 
 
We hold that insurance coverage for the underlying malicious prosecution claim was 
triggered when Sanders was maliciously prosecuted in 1994. Because the triggering event 
occurred more than a decade before Illinois Union and Starr issued their policies to Chicago 
Heights, the insurers were not required to indemnify the city for damages under the policies. 
 
 
 
 
3Our focus remains on the provisions of this contract. Yet it has not escaped our notice that most 
courts that have considered this issue also have ruled that a malicious prosecution for insurance 
purposes occurs at the commencement of the prosecution. See, e.g., First Mercury, 2018 IL App (1st) 
171532; St. Paul Fire & Marine Insurance Co. v. City of Waukegan, 2017 IL App (2d) 160381; County 
of McLean, 2015 IL App (4th) 140628; Indian Harbor, 2015 IL App (2d) 140293; City of Zion, 2014 
IL App (2d) 131312; see also, e.g., Genesis Insurance Co. v. City of Council Bluffs, 677 F.3d 806 (8th 
Cir. 2012); Selective Insurance Co. of South Carolina v. City of Paris, 681 F. Supp. 2d 975 (C.D. Ill. 
2010). 
 
- 8 - 
 
¶ 35 
 
Appellate court judgment reversed. 
¶ 36 
 
Circuit court judgment affirmed. 
 
¶ 37 
 
JUSTICE NEVILLE took no part in the consideration or decision of this case.