Judgment Reversed And Entered For Essex Ins. Co. In Coverage Case
May 6, 2008
On May 6, 2008 the Illinois Appellate Court, Second District rendered its opinion in which it completely reversed the trial court's decision and also entered judgment for our client Essex Insurance Company. This case involved a question of whether there was insurance coverage against a developer/general contractor for claims of construction defect brought by a purchaser of a town home and a claim for indemnity by a home warranty company.
Essex contested coverage on the grounds that there was no coverage under its CGL policy for breach of contract, the claims sought only economic loss, did not involve an "accident" or "occurrence" or "property damage." The trial court never got to the question of whether or not there was coverage as it ruled that Essex had an undisclosed conflict of interest when it assumed the insured's defense under a reservatioin of rights. The trial court also found that the conflict was significant enough to estopp Essex from asserting any defenses to coverage.
The appellate court reversed finding that there was no conflict of interest and there was no estoppel. Instead of reversing and remanding the case back to the trial court, the appellate court examined the underlying coverage issue and, again, completely agreed with the positions taken by Essex finding that no coverage was owed. On this basis, the appellate court entered judgment in favor of Essex.
The case is Stoneridge Development v. Essex Insurance, No. 2-06-1166 (Ill.App.2d May 6, 2008) and can be located here. Steven N. Novosad handled the case for Essex at the trial court level with Edward M. Kay and the CM Appellate Dept. handling the appeal. Feel free to call Steve or Ed if you have any questions.
