Illinois Appellate Court Links Duty to Defend to Insured’s Intention, Not Activity
Insurance Law Update
Pekin Insurance Co. v. Miller Tree Service
Illinois Appellate Court
In Pekin Insurance Co. v. Miller Tree Service, --- N.E.2d---, 2006 WL 2265604 (Ill. App., Aug. 8, 2006) an Illinois appellate court held that the relevant inquiry to determine whether an incident is an “occurrence” for the purpose of determining a duty to defend, is “whether the injury is expected or intended by the insured, not whether the acts were performed intentionally.”
In Pekin, the insured tree-cutting service was hired to clear trees; however, they did so from the wrong lots. The lot owner filed suit against the insured for negligent trespass and violation of the Illinois Wrongful Tree Cutting Act. The insured tendered its defense to its general liability insurer, which denied a defense on the ground that the insured’s conduct was intentional. Therefore it was not an “occurrence,” which the policy defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” The insurer filed an action for declaratory relief contending that it had no obligation to defend or indemnify.
The circuit court granted the insured’s motion for judgment on the pleadings and the insurer appealed. The Court of Appeal affirmed the circuit court, finding no evidence that the insured intended the harmful result – the clearing of trees on the wrong property. Thus, the court held that there was an “occurrence” potentially covered by the policy. The court also held that two exclusions relating to the insured’s “work” were ambiguous and thus to be construed against the insurer.