Eviction and Insurer’s Duty to Defend
In Doyle Trust v. Country Mutual Insurance Co., John T. Doyle Trust, Kevin C. Doyle, Michael W. Doyle, and Pamela Doyle (collectively, the Doyles) leased work space to Christian K. Nakiewicz-Lane. During the lease term, the Doyles sold the leased premises, and in the process removed Nakiewicz-Lane’s personal items. As a result, Nakiewicz-Lane filed a lawsuit against the Doyles in federal district court where he alleged that he had a valid lease to rent the premises, but evicted him. The Doyles requested defense and indemnity from Country Mutual Insurance pursuant to their insurance policy. Country Mutual denied having an obligation to provide defense and indemnity.
The issue before the court was whether the insurer has a duty to defend. The court determined that Country Mutual had a duty to defend the Doyles in the federal lawsuit pursuant to the policy’s “personal and advertising injury” coverage provision. Nakiewicz-Lane alleged in the federal lawsuit that the Doyles violated the Illinois Forcible Entry and Detainer Act by evicting him and disposing of his personal contents. He further alleged that the Doyles did not compensate him for the value of those items. Section F.14(c) in the policy specified personal and advertising injury as including “wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling, or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor.” The court goes on to state that if the parties intended to limit the commonly understood definition of “eviction” to include only wrongfully evicting a person and not property, they could have added express language in the policy to reflect that intent. The court refused to restrict the definition of eviction because the policy listed that phrase under “personal and advertising injury,” as opposed to under “property damage.” In any event, to the extent an ambiguity is created by listing “wrongful eviction” under “personal and advertising injuries,” and not under “property damages,” we must construe ambiguity liberally in favor of the Doyles. In summary, by listing “wrongful eviction” under the policy’s “personal and advertising injury” section, the parties did not intend to limit the plain and ordinary meaning of “eviction” to cover only physical harm to a person. Accordingly, because Nakiewicz-Lane alleged in the federal lawsuit that his personal property was damaged as a result of the Doyles wrongfully evicting him, Country Mutual had a duty to defend the Doyles in that proceeding.
The second issue before the court was whether the Doyles are entitled to section 155 sanctions. 29 Section 155 of the Insurance Code allows for an award of attorney fees and costs for an insurer’s “unreasonable and vexatious” refusal to comply with its policy obligations. However, an insurer will not be liable for fees and costs merely because it litigated and lost the issue of insurance coverage; that is, if a bona fide dispute existed regarding insurance coverage, the insurer’s delay in settling a claim does not violate section 155. The court determined that Country Mutual had a bona fide reason with which to challenge coverage. Country Mutual could have believed that the policy encompassed such harm as Nakiewicz-Lane suffered.
The court held that because the insurance policy defined personal and advertising injury as including “wrongful eviction[s],” Country Mutual had a duty to defend the Doyles in a federal lawsuit involving allegations that the Doyles wrongfully evicted a tenant. Further, the policy’s exclusions were too broad to be enforced and also created an ambiguity in coverage that the court must resolve in the Doyles’s favor. In the cross-appeal, we held that the trial court did not abuse its discretion in denying the Doyles’s request for sanctions pursuant to section 155 of the Insurance Code.
Doyle Trust v. Country Mutual Insurance Co., 2013 WL 5434584 (Ill.App. 2 Dist.). (This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).).
