Court Opinion

ID: 7019964
Source: CourtListenerOpinion
Date Created: 2022-07-24 04:38:24.888611+00
Date Added: 2024-06-11T16:10:31.977529
License: Public Domain

JUSTICE HARRISON, dissenting: I respectfully dissent from the majority and would affirm the decision of the trial court for the following reasons. Bay State maintains, and the majority has concluded, that Johnson’s shooting Wilson was intentional and that, therefore, the bodily injury which was inflicted on Wilson was “either expected or intended.” The majority relies primarily on the supreme court opinion in Thornton v. Paul (1978), 74 Ill. 2d 132, 384 N.E.2d 335. The focal point in Thornton, as here, was the construction of an exclusionary clause in an insurance policy. However, the language of the two clauses which the courts have been called upon to construe is markedly different. In Thornton, the insurance policy specifically excluded coverage for “assault and battery.” Thus the court was absolutely correct to hold that a criminal conviction for battery was prima facie evidence that the insured’s conduct was excluded under that particular clause. Here, however, the clause in question does not contain a reference to battery or to any other specific act. It refers only to injuries “intended or expected.” Because this broad language presents a different problem of construction, the issue here is closer to that decided in Cowan v. Insurance Company of North America (1974), 22 Ill. App. 3d 883. The trial court in this declaratory judgment action, also, was persuaded by the Cowan rationale. In Cowan the policyholder had a civil judgment entered against him. However, in the complaint for declaratory judgment to determine policy coverage, the insured alleged that the injury was accidental and a result of his defending himself. The Cowan court concluded that, for purposes of determining insurance coverage, the conduct of the insured could not be deemed intentional merely because tortious or criminal liability had been imposed in prior litigation between the victim and the insured. The underlying rationale was that, even though the defendant might be civilly or criminally liable, the liability would have been imposed because he unreasonably evaluated the need for defensive action, not because he intended to injure the victim. The court relied on cases from other jurisdictions which found that an insured’s honest belief that he was confronted with a self-defense situation was a sufficient basis upon which to hold that the insured may not have specifically intended to harm the victim, in spite of evidence that the insured intended to engage in the conduct which caused the harm. The court held that an issue of fact remained, i.e., whether Cowan intended the specific harm, and that, therefore, summary judgment had been improperly granted. Employing the same rationale in the recent case Grinnell Mutual Reinsurance Co. v. Frierdich (1979), 79 Ill. App. 3d 1146, 1148-49, the court drew a careful distinction between “an intentional act and an intentionally caused injury,” stating that coverage may still exist under a clause excluding intentional injuries even if an act was intended, so long as it can be shown that the specific resulting injury was not intended. Citing Cowan favorably, it found that coverage under the exclusionary clause was afforded “where the injury was the unintended result of an intentional act.” Applying this construction to the exclusionary clause in Johnson’s homeowner’s insurance policy, I cannot say that the trial court erred in finding that, even though Johnson did intend to shoot the gun, he acted in an honest belief that he was protecting himself and his property. In declaring that coverage did exist, the trial court found that Johnson sought only to defend himself, giving no real thought to the consequences of his defensive measures. These findings were not against the manifest weight of the evidence. Thus, although Johnson’s belief may have been unreasonable and his behavior reckless, it cannot be said that he intended or expected the specific bodily injury which resulted. Because his conduct did not fall within the language of exclusion, it should be covered by the policy. Accordingly, I would affirm the trial judge on that point. Likewise, I agree with the decision in favor of Gerald Wilson on his counterclaim against Bay State. Bay State exhibited bad faith in refusing to settle within the policy limits. It is undisputed that the insurance company recognized the likelihood of a judgment being entered against its insured. It is also undisputed that the company knew the judgment would be substantial. The injuries sustained by Wilson were severe and permanent. The record also shows that Bay State received a copy of Cowan, along with advice from local counsel as to its ramifications. In view of these facts, I agree with the trial judge who found, “at the very least, Bay State was negligent in its refusal to settle within the policy limits.” Bay State argues that it had no obligation to settle a suit in which it consistently denied coverage. It insists that it fulfilled its contractual obligation of good faith simply by defending Johnson in the civil suit. I note that in Thornton the supreme court specifically outlawed the insurer’s participation in litigation where the potential for ethical and moral conflicts arises: “[W]hen there is a conflict of interests, as in the present case, the insurer should not be obligated or permitted to participate in the defense of the case.” (Emphasis added.) (Thornton v. Paul (1978), 74 Ill. 2d 132,152.) Because, as this case amply demonstrates, a conflict of interest often results in prejudice to the insured, the best course of action is for insurance company counsel to control the declaratory judgment action only, not the actual civil litigation against its insured. If it controls the civil litigation by furnishing its own counsel, an insurer increases the likelihood of prejudice to the insured. It should arrange for the policyholder to retain private counsel to manage the civil suit, with the understanding that, if the declaratory judgment action determines that coverage exists, all costs incurred in defending the prior civil suit will be reimbursed. (See Maryland Casualty Co. v. Peppers (1976), 64 Ill. 2d 187, 198-99.) As the Thornton court said: “[I]ts [the insurance company’s] obligation to provide a defense should be satisfied by reimbursing the insured for the costs of the defense.” Thornton v. Paul (1978), 74 Ill. 2d 132, 152. Bay State’s decision to participate in the defense of its insured was made in direct contravention to the principles set out in Thornton. Further, Bay State’s refusal to settle the case for the policy limits served to prolong the litigation and increase the risk to the insured. As the court said in Brown v. State Farm Mutual Automobile Insurance Association (1971), 1 Ill. App. 3d 47, 51: “When the suit is in excess of the policy the insurer may, by deciding to continue litigation, expose the insured to a far greater risk than it takes.” Here, Bay State exposed Johnson to far greater risk than that to which it exposed itself. Thus, it is my opinion that Bay State exhibited bad faith by refusing to settle within the policy limits, and thus it should be liable for the entire $100,000 civil judgment entered against Johnson. Scroggins v. Allstate Insurance Co. (1979), 74 Ill. App. 3d 1027, 1030. Consequently, I would affirm the judgment of the circuit court of Madison County.