State Farm Fire & Casualty Co. v. Leverton

NO. 4-96-0937
IN THE APPELLATE COURT
OF ILLINOIS
FOURTH DISTRICT

STATE FARM FIRE AND CASUALTY COMPANY, ) Appeal from
Plaintiff-Appellee, ) Circuit Court of
v. ) Logan County
GEORGE G. LEVERTON, as Father and Next ) No. 95MR39
Friend of TIFFANY NICHOLE LEVERTON, and )
GEORGE LEVERTON, Individually, )
Defendant-Appellant, )
and ) Honorable
JEFF PRESSWOOD, ) David L. Coogan,
Defendant. ) Judge Presiding.
_________________________________________________________________

JUSTICE COOK delivered the opinion of the court:

In June 1994, the insured, Jeff Presswood, was con-
victed of the aggravated battery of George Leverton. In November
1994, Leverton filed a civil complaint against Presswood. The
complaint contained counts alleging both battery and negligence.
In August 1995, plaintiff State Farm Fire and Casualty Company
(State Farm) filed a declaratory judgment action against
Presswood and Leverton, seeking a declaration that it was not
required either to defend or indemnify Presswood. On August 22,
1996, the trial court denied State Farm's motion for summary
judgment but, on a motion to reconsider, the court reversed
itself and granted summary judgment in State Farm's favor. This
appeal followed.
On June 10, 1994, Presswood was in the Alley Bi Saloon
in Lincoln. Leverton arrived some time after, accompanied by
Shannon Follis, Presswood's former girlfriend. Follis approached
Presswood and asked him to speak with her outside in the alley.
Presswood accompanied Follis outside and stood with his back to
the alley door as he spoke with Follis. Leverton later exited
through the alley door and, while stating "havin' a fuckin'
problem," shoved Presswood in the back. The force of the shove
caused Pressman to bump into Follis, knocking her head against
the alley wall. According to Presswood, he quickly turned while
swinging the beer bottle in his right hand in order to get
whoever had pushed him away from him. Leverton was struck in the
face with the beer bottle and injured.
State Farm filed its declaratory judgment action in
August 1995. State Farm argued it was not required to defend or
indemnify Presswood due to an exclusionary provision in
Presswood's homeowner's policy. That policy provides coverage
for any "accident" that results in bodily injury but excludes
coverage where the bodily injury "is either expected or intended
by the insured." The trial court, relying on this court's
decision in Mid America Fire & Marine Insurance Co. v. Smith, 109
Ill. App. 3d 1121, 441 N.E.2d 949 (1982), ruled the intentional
acts exclusionary clause applied to Presswood's conduct to deny
coverage.
Although neither party has discussed the issue on
appeal, the trial court's decision in the declaratory judgment
action was premature, based on the supreme court's decisions in
Maryland Casualty Co. v. Peppers, 64 Ill. 2d 187, 355 N.E.2d 24
(1976), and Thornton v. Paul, 74 Ill. 2d 132, 384 N.E.2d 335
(1978). Both Peppers and Thornton held that it is improper for a
trial court to decide issues of coverage brought up in a declara-
tory judgment action prior to resolution of an underlying tort
case, at least where resolution of an issue in the declaratory
judgment action would decide "ultimate facts upon which recovery
is predicated" in the tort case. Peppers, 64 Ill. 2d at 197, 355 N.E.2d at 30; see also Thornton, 74 Ill. 2d at 158-59, 384 N.E.2d
at 346. Where bona fide disputes arise over the issue of negli-
gence versus intentional conduct for indemnification purposes,
the tort litigation should be resolved before the court decides
the coverage issue in a declaratory judgment action. Allstate
Insurance Co. v. Carioto, 194 Ill. App. 3d 767, 776, 551 N.E.2d 382, 387 (1990); State Farm Fire & Casualty Co. v. Shelton, 176
Ill. App. 3d 858, 866, 531 N.E.2d 913, 919 (1988); cf. Bay State
Insurance Co. v. Wilson, 96 Ill. 2d 487, 493, 451 N.E.2d 880, 882
(1983).
In the present case, on a motion for reconsideration
the trial court granted summary judgment in State Farm's favor,
finding Presswood's conduct was intentional and, therefore,
outside the scope of coverage of his homeowner's policy. Howev-
er, Leverton's civil suit remained unresolved at the time of the
trial court's decision. Leverton's civil suit, in addition to
alleging assault and battery, alleged negligence in that
Presswood "swung a beer bottle while in close proximity to
[Leverton], creating an unreasonably dangerous condition." Such
a theory of the negligent use of force in self-defense has been
recognized in previous cases. See Topps v. Ferraro, 235 Ill.
App. 3d 43, 47, 601 N.E.2d 292, 294 (1992); Wegman v. Pratt, 219
Ill. App. 3d 883, 895, 579 N.E.2d 1035, 1044 (1991); Blackburn v.
Johnson, 187 Ill. App. 3d 557, 561-62, 543 N.E.2d 583, 586
(1989). Thus, in the present case a bona fide dispute existed
over whether Presswood's intentional act of striking Leverton
constituted an unreasonable use of force in self-defense. As
resolution of the issue of negligence versus intentional conduct
for coverage purposes would decide "ultimate facts upon which
recovery is predicated" in Leverton's civil suit (Peppers, 64 Ill. 2d at 197, 355 N.E.2d at 30), the trial court should have
abstained from deciding the coverage issue in the declaratory
judgment action until the culmination of Leverton's civil suit.
While in some rare situations a declaratory judgment
action may be brought and decided prior to termination of the
tort litigation without violating the commands of Peppers and
Thornton, this is not such a case. In Carioto the insured
pleaded guilty to attempt (murder) and thereby admitted inten-
tional conduct on his part. Carioto, 194 Ill. App. 3d at 770,
551 N.E.2d at 383. In addition, he made subsequent admissions of
intentional conduct in a deposition taken in preparation of civil
litigation. Carioto, 194 Ill. App. 3d at 775, 551 N.E.2d at 387.
The combination of such conclusive evidence of intentional
conduct and patently "facetious" allegations of negligence--the
victim alleged the insured had acted negligently in robbing him
and stabbing him 17 times--justified deciding the coverage issue
in a declaratory judgment action prior to the resolution of the
underlying tort action. Carioto, 194 Ill. App. 3d at 775-76, 551 N.E.2d at 387.
In the present case, while Leverton's allegation that
Presswood acted negligently in swinging the beer bottle and
hitting him in the face may be weak, such an allegation does not
rise to the level of being plainly facetious as in Carioto. As
noted, several decisions have recognized that a complaint may
state a claim of negligence where the unreasonable use of force
in self-defense is alleged. See Topps, 235 Ill. App. 3d at 47,
601 N.E.2d at 294; Wegman, 219 Ill. App. 3d at 895, 579 N.E.2d at
1044; Blackburn, 187 Ill. App. 3d at 561-62, 543 N.E.2d at 586.
That is essentially what Leverton has alleged here, and decision
of the coverage issue was, therefore, premature.
We point out that under Peppers and Thornton State Farm
will have the opportunity to relitigate the coverage issue.
Since an insurer is prevented from participating in the tort
trial and its interests are not represented, the insurer is not
bound by the verdict in the civil trial. See Peppers, 64 Ill. 2d
at 198-99, 355 N.E.2d at 31; Thornton, 74 Ill. 2d at 162, 384 N.E.2d at 348; Illinois Farmers Insurance Co. v. Puccinelli, 276
Ill. App. 3d 293, 296, 657 N.E.2d 1062, 1064 (1995); Shelton, 176
Ill. App. 3d at 867-68, 531 N.E.2d at 920. The insurer is
permitted its day in court to attempt to show that the insured's
conduct falls within the terms of its policy's intentional acts
exclusion. Puccinelli, 276 Ill. App. 3d at 296, 657 N.E.2d at
1065; Shelton, 176 Ill. App. 3d at 867-68, 531 N.E.2d at 920.
Collateral estoppel does not apply to prevent the insurer from
relitigating the issues in a subsequent declaratory judgment
action since the insurer was not a party or in privity with a
party to the prior adjudication. See Herzog v. Lexington Town-
ship, 167 Ill. 2d 288, 294-95, 657 N.E.2d 926, 929-30 (1995)
(party against whom estoppel is asserted must have been a party
or in privity with a party to the prior adjudication); Puc-
cinelli, 276 Ill. App. 3d at 296, 657 N.E.2d at 1064 (collateral
estoppel not applicable because absence of an identity of inter-
ests between insured and insurer results in an absence of privity
between the parties). Once Leverton's civil suit against
Presswood has concluded, the trial court can resolve the issue of
coverage and may very well find summary judgment in State Farm's
favor to be appropriate, given the nature of Presswood's conduct.
Mid America cannot be relied upon in support of the
trial court's ruling in the declaratory judgment action. Mid
America was decided in 1982, seven years prior to this court's
first recognition (see Blackburn, 187 Ill. App. 3d at 561-62, 543
N.E.2d at 586) that an intentional act may form the basis of a
negligence count, at least where the unreasonable use of force in
self-defense is alleged. While negligence was generally alleged
in Mid America, there is no indication that the victim alleged
the insured negligently employed force in his self-defense.
Moreover, any such claim would likely have been facetious, as the
insured was found to have kicked the victim in the head in that
case. Mid America, 109 Ill. App. 3d at 1122, 441 N.E.2d at 950.
We cannot say as a matter of law that there is no duty
to indemnify in this case. That being true, we cannot find there
is no duty to defend. An insurer's duty to defend is broader
than its duty to indemnify. If facts alleged in the complaint
are within or potentially within policy coverage, the insurer
must defend the claim even if the allegations are legally ground-
less, false, or fraudulent. State Farm Fire & Casualty Co. v.
Martin, No. 5-95-0810, slip op. at 5 (October 29, 1996), ___ Ill.
App. 3d ___, ___, ___ N.E.2d ___, ___.
For the reasons stated, we reverse and remand the judg-
ment of the trial court.
Reversed and remanded.
STEIGMANN, P.J., and GARMAN, J., concur.