Kurt M. Zitzer, a partner in Meagher & Geer’s insurance coverage practice, recently won summary judgment for Scottsdale Insurance Company in the U.S. District Court, in Illinois. The case, Scottsdale Insurance Company v. City of Waukegan, sought a declaration that Scottsdale did not owe either defense or indemnity to the City under law enforcement insurance policies issued by Scottsdale. In the underlying litigation, the City was found liable for civil rights violations committed by its Police Department after a criminal conviction was overturned based upon exonerating DNA evidence uncovered years after the criminal defendant had been incarcerated. When the claim against the City proceeded to trial, the jury awarded the claimant more than $9 million dollars in damages.

The District Court found that the City failed to provide Scottsdale with timely notice of the lawsuit, and was too late in tendering Scottsdale its defense. The court also found that Scottsdale was not barred, under Illinois law, from seeking a declaration on the issue of insurance coverage. The City had argued that Scottsdale could not contest coverage because Scottsdale had failed to defend the insured or seek a declaration of coverage before the underlying matter was adjudicated. Notwithstanding, the court found that Scottsdale had timely filed its complaint for declaratory relief, even though the declaratory action was filed after judgment was entered against the City.

“This is an important decision for our client because it protects the rights of carriers to receive timely notice of suits so insurance companies can defend allegations against their insureds, and at the same time, allow carriers to evaluate exposure for potential settlement” said Kurt Zitzer.  “We could not be more pleased with this result.”