Opinion ID: 2480161
Heading Depth: 1
Heading Rank: 2

Heading: Declaratory Judgment Testimony

Text: During the trial on West American's declaratory judgment action, Yorkville's president, James Liggett, testified he first learned of the Kuzma matter in November 2000 when Wiegmann stated that Kuzma had accused him of making false statements about her. Liggett met with Kuzma, whom he described as being very upset. After this meeting, Liggett informed Yorkville's attorney, Daniel Kramer, that Kuzma was threatening a suit with the bank. After Liggett investigate[d] Kuzma's claims, he told her that he believed Wiegmann had done nothing improper. Liggett next heard of this matter 10 months later, when Yorkville and Wiegmann were named as defendants in the Will County defamation lawsuit filed by Kuzma in September 2001. Kramer, who was retained to defend the action, asked Liggett for a copy of Yorkville's director and officer insurance policy, which was issued by an insurer other than West American. However, Kramer did not ask for a copy of the West American policy. Liggett stated that as the litigation with Kuzma progressed, Kramer reported to us that he had contacted the insurance companies. Liggett also testified regarding the alleged instances of actual notice of the Kuzma lawsuit to West American. Liggett stated that in late 2001 or early 2002 he spoke with Richard Dickson, a principal of the Zeiter-Dickson Insurance Agency, who had placed the West American policy with Yorkville. According to Liggett, Dickson had stopped in [the bank] as he often did, and in the midst of discussions about other things Liggett told Dickson there was something I needed to ask him about. Liggett told Dickson that we were involved in this defamation lawsuit in Ottawa. That it was kind of a he said/she said sort of thing and that the [director and officer] insurance [policy] did not cover that type of suit. Then I asked if the [West American] policies would cover the suit. According to Liggett, Dickson replied probably not, because [m]ost all of those policies are written the same way anyway. Liggett testified that he had a nearly identical, in passing conversation with Joel Ottosen, another agent of Zeiter-Dickson, during the same time frame late 2001, early 2002. Ottosen stopped by the bank and Liggett told him I had an insurance question I wanted to ask him about. Liggett informed him that a defamation lawsuit had been filed against Yorkville, that it was not covered by the director and officer insurance, and asked whether the West American policy would provide coverage. According to Liggett, Ottosen replied with the exact words as had Dickson by stating probably not, as most all of those policies are written the same. Liggett did not direct Ottosen to notify West American as to the existence of the Kuzma lawsuit. Liggett further testified that two conference calls occurred between himself, Ottosen and Kramer in the second or third quarter of 2002, the first being made from his office and the second made from Kramer's office. Liggett told Ottosen that Kuzma's lawsuit was still pending, and asked again if the West American policy would provide coverage, to which Ottosen again replied probably not. According to Liggett, in January 2004 another insurance agency opined that the West American policy should cover the Kuzma suit. This prompted Liggett to call Ottosen on January 15, 2004, and ask again about coverage under that policy. According to Liggett, Ottosen stated, `I'll report it' or something to that effect. Finally, Liggett testified regarding meetings of Yorkville's board of directors during the fall of 2002. It was not until September 2002 that Liggett first informed Yorkville's board about the Kuzma litigation. Liggett stated that he prepared the minutes of the board meetings, and he read into the record a portion of the minutes of the September 2002 meeting which first referenced the Kuzma lawsuit: President Liggett reported to the Board that Attorney Cheryl Kuzman [ sic ] of Ottawa was suing the bank, Ben Wiegmann and James Clarage in a counter suit   . The basis of the suit is alleged derogatory comments made by Mr. Wiegmann    [and the] remarks have been denied   . Liggett also read a relevant portion of the minutes from the November 2002 Yorkville board meeting, which simply stated that there were additional legal expenses involved with the ClarageYorkville National BankKuzman [ sic ] law suit. Liggett stated that Richard Dickson was a member of the Yorkville board and was present at both the September and November 2002 meetings. However, insurance coverage of the Kuzma lawsuit was not discussed during any of the board meetings. Daniel Kramer's testimony at trial often conflicted with that of Liggett. Although Liggett told him in November 2000 that Kuzma came to his office and that she was upset, he did not also tell him that she threatened legal action. After Kuzma filed suit, Kramer asked Liggett for copies of Yorkville's insurance policies and was given only the policy providing director and officer coverage. Kramer tendered a defense to that insurer within 60 to 90 days after the bank was sued, but coverage was declined because that policy had an exclusion for intentional torts. Kramer was initially unaware of the West American policy until Liggett mentioned it to him in early 2002. At no time did Kramer independently contact West American about coverage of the Kuzma matter. Kramer's testimony regarding the alleged instances of actual notice also largely conflicted with that of Liggett. Kramer stated his first contact with the Zeiter-Dickson agency was by way of conference calls placed from Liggett's office in 2001 or 2002. During these calls, Liggett asked Ottosen whether Yorkville had coverage under the West American policy. Ottosen asked Liggett for a copy of the Kuzma complaint, and Liggett replied that he would get it to him right away. Because they did not hear back from Ottosen, Liggett and Kramer placed another call to him in late 2002 from Liggett's office. Ottosen stated he had forwarded the claim to West American and that they would hear from a West American attorney. Kramer testified that he prepared no documents to memorialize the conversations with Ottosen. The testimony of both Liggett and Kramer further conflicted with that of Ottosen, who testified on behalf of West American. Ottosen did not receive calls from Liggett and Kramer in 2001 and/or 2002 regarding the Kuzma matter. Instead, his first discussion regarding that action occurred on January 15, 2004, when Wiegmann called to inquire whether his personal homeowner's insurance policy could provide coverage. Ottosen advised Wiegmann that if the lawsuit arose in the course of his employment as Yorkville's vice president, it was likely that he was covered under the West American policy. Ottosen called Liggett the following day and told him that if the lawsuit arose out of Wiegmann's bank employment it should be covered. When Liggett replied, they say we are not covered, Ottosen asked who informed him that there was no coverage under the West American policy. Liggett responded: I don't know. Kramer is handling it. Ottosen asked Liggett to speak with Kramer, obtain that information, and then contact him again. After calling Liggett, Ottosen asked his secretary to contact Kramer's office to obtain a copy of the lawsuit, and he then looked up Yorkville's policy in the agency's old files. After concluding that there was potential coverage, he called Liggett back and told him that although it would be a late submission, once he received a copy of the Kuzma complaint he would submit a claim to West American, which he did on January 19, 2004. Ottosen's testimony was supported by documentation of his actions in connection with the filing of the claim.