innocent insured doctrine in Illinois

2024Id. at 264. -8- No. 1-23-0224 ¶ 27 After considering prior decisions construing the application of the innocent insured doctrine, including Warren, Salemi, and Miceli, the Wasik court determined that “[a]lthough the clauses could be read as entirely prohibiting coverage for a loss caused by the act or failure to act of ‘any’ insured, they do not clearly state that the policy will be void or coverage will be excluded as to all insureds in the event of some improper behavior by ‘any’ insured.” Id. at 266. ¶ 28 In Warren, the appellate court determined that the wrongdoing of a coinsured wife who

2015Defendants here argue that the reasoning of these cases is nevertheless equally applicable to Terpinas under the circumstances in this case. ¶ 21 In analyzing the innocent insured doctrine, the appellate court below relied principally on Economy Fire & Casualty Co. v. Warren, 71 Ill.

2008In making its determination as to whether the innocent insured doctrine was applicable, the Wasik court discussed the leading Illinois decisions applying that doctrine: Economy Fire & Casualty Co. v. Warren, 71 Ill.App.3d 625 , 28 Ill.Dec. 194 , 390 N.E.2d 361 (1979), West Bend Mutual Insurance Co. v. Salemi, 158 Ill.App.3d 241 , 110 Ill.Dec. 608 , 511 N.E.2d 785 (1987), and State Farm Fire & Casualty Insurance Co. v. Miceli, 164 Ill.App.3d 874 , 115 Ill.Dec. 832 , 518 N.E.2d 357 (1987).

2008In making its determination as to whether the innocent insured doctrine was applicable, the Wasik court discussed the leading Illinois decisions applying that doctrine: Economy Fire & Casualty Co. v. Warren, 71 Ill.App.3d 625 , 28 Ill.Dec. 194 , 390 N.E.2d 361 (1979), West Bend Mutual Insurance Co. v. Salemi, 158 Ill.App.3d 241 , 110 Ill.Dec. 608 , 511 N.E.2d 785 (1987), and State Farm Fire & Casualty Insurance Co. v. Miceli, 164 Ill.App.3d 874 , 115 Ill.Dec. 832 , 518 N.E.2d 357 (1987).

2024We find that the trial court did not err in applying the innocent insured doctrine and finding that plaintiff was entitled to recover on her claim. ¶ 24 “The common law innocent insured doctrine operates in cases where there are two or more insureds on a policy, and it allows an insured who is innocent of wrongdoing to recover despite the wrongdoing of other insureds.” Illinois State Bar Ass’n Mutual Insurance Co. v. Law Office of Tuzzolino & Terpinas, 2015 IL 117096, ¶ 20 .

2018See Illinois - 15 ­ 2018 IL App (2d) 170964 State Bar Ass’n Mutual Insurance Co. v. Law Office of Tuzzolino & Terpinas, 2015 IL 117096, ¶ 30 (“[T]he innocence of an insured matters a great deal when another insured’s wrongdoing triggers a policy exclusion, and a dispute arises over whether the insurer has a duty to defend the innocent insured under a policy that undisputably was in effect.”).

2014In this situation, the innocent insured doctrine preserves coverage for the innocent insureds where “a reasonable person would not understand that the wrongdoing of a coinsured would prevent recovery under the policy.” State Farm Fire & Casualty Insurance Co. v. Miceli, 164 Ill.

2013In this situation, the innocent insured doctrine preserves coverage for the innocent insureds where "a reasonable person would not understand that the wrongdoing of a co-insured would prevent recovery under the policy." State Farm Fire & Casualty Insurance Co. v. Miceli, 164 Ill.

2014The decision to apply rescission in this case, however, turns on the answer to multiple questions of law, namely, the interpretation of the policy language, the formation of the agreement, and the application of the innocent insured doctrine. “[W]here the exercise of discretion has been frustrated by the application of an erroneous rule of law, review is required to permit the exercise in a manner consistent with the law.” (Internal quotation 2 The law firm, as a separate entity, has not appealed and, other than briefly mentioning so in the heading of section II, the defendants do not argue in

2013The decision to apply rescission in this case, however, turns on the answer to multiple questions of law, namely the interpretation of the policy language, the formation of the agreement, and the application of the innocent insured doctrine. "[W]here the exercise of discretion has been frustrated by the application of an erroneous rule of law, review is required to permit the exercise in a manner consistent with the law." (Internal quotation marks omitted.) Loyola Academy v. S&S Roof Maintenance, Inc., 146 Ill. 2d 263, 274 (1992) (quoting People v. Brockman, 143 Ill. 2d 351, 363 (1991)).

2014The decision to apply rescission in this case, however, turns on the answer to multiple questions of law, namely, the interpretation of the policy language, the formation of the agreement, and the application of the innocent insured doctrine. “[W]here the exercise of discretion has been frustrated by the application of an erroneous rule of law, review is required to permit the exercise in a manner consistent with the law.” (Internal quotation 2 The law firm, as a separate entity, has not appealed and, other than briefly mentioning so in the heading of section II, the defendants do not argue in

2013The decision to apply rescission in this case, however, turns on the answer to multiple questions of law, namely the interpretation of the policy language, the formation of the agreement, and the application of the innocent insured doctrine. "[W]here the exercise of discretion has been frustrated by the application of an erroneous rule of law, review is required to permit the exercise in a manner consistent with the law." (Internal quotation marks omitted.) Loyola Academy v. S&S Roof Maintenance, Inc., 146 Ill. 2d 263, 274 (1992) (quoting People v. Brockman, 143 Ill. 2d 351, 363 (1991)).

2014In Illinois, the long-standing general rule has been that “rescission, if made, must be full, and embrace the entire contract.” Bowen v. Schuler, 41 Ill. 192, 196 (1866).

2013In Illinois, the long-standing general rule has been that "rescission, if made, must be full, and embrace the entire contract." Bowen v. Schuler, 41 Ill. 192, 196 (1866).

2014Id. at 25 . 5 The court in Ratcliffe consequently did not address Warren or any other case applying the innocent insured doctrine.

2013Id. at 25 .5 The court in Ratcliffe consequently did not address Warren or any other case applying the innocent insured doctrine.

2022See Tuzzolino, 2015 IL 1170906, ¶ 41 (determining that the innocent insured doctrine was not relevant where the misrepresentation in the policy application affected the “validity of the policy as a whole”); Contreras, 2018 IL App (2d) 170964 (exclusion that was for “expected or intended” bodily injury did not exclude coverage for “innocent” owner of day care center whose husband had abused one of the children at the day care center). - 11 - 2022 IL App (2d) 210389-U ¶ 25 The defendants’ argument that they are entitled to coverage because they were not the sole proximate cause of the victim’s i

2018We explained: - 14 ­ 2018 IL App (2d) 170964 “Although the [exclusionary] clauses could be read as entirely prohibiting coverage for a loss caused by the act or failure to act of ‘any’ insured, they do not clearly state that the policy will be void or coverage will be excluded as to all insureds in the event of some improper behavior by ‘any’ insured.” Wasik, 351 Ill.

2014Gallagher v. Lenart, 226 Ill. 2d 208, 219 (2007). ¶ 24 Defendants point to section V.I of the policy, entitled “Innocent Insured.” Under the plain language of the policy, this section applies “[w]henever coverage *** would be excluded or lost because of the INSURED’S failure to provide timely notice.” (Emphasis added.) Defendants contend this section operates here because “[i]t is undisputed that [Terpinas’] coverage was lost because Tuzzolino failed to report the Colletta claim on the renewal application.” We are not persuaded by defendants’ argument. ¶ 25 Defendants attempt to characterize t

2013Gallagher v. Lenart, 226 Ill. 2d 208 , 8 1-12-2660 219 (2007). ¶ 24 Defendants point to section V.I of the policy, entitled "Innocent Insured." Under the plain language of the policy, this section applies "[w]henever coverage *** would be excluded or lost because of the INSURED'S failure to provide timely notice." (Emphasis added.) Defendants contend this section operates here because "[i]t is undisputed that [Terpinas'] coverage was lost because Tuzzolino failed to report the Coletta claim on the renewal application." We are not persuaded by defendants' argument. ¶ 25 Defendants attempt to ch