TKK USA, Inc. v. Safety Nat'l Cas. Corp., No. 12-2091 (7th Cir. 2013)Annotate this Case
Safety National sold an excess liability insurance policy to TKK, to cover excess losses resulting from liability imposed “by the Workers’ Compensation or Employers’ Liability Laws” of Illinois. The widow of a former TKK employee sued, alleging that TKK’s negligence caused the employee to become ill with and die from mesothelioma. The claim was subject to an affirmative defense: the Illinois Workers’ Occupational Diseases Act bars common law claims by or on behalf of an employee against a covered employer “on account of damage, disability or death caused or contributed to by any disease contracted or sustained in the course of the employment.” After Safety National denied coverage, TKK filed suit. The district court granted TKK summary judgment for its costs in defending and settling the widow’s suit, reasoning that the reference to “Employers’ Liability Laws” included the common law negligence claim even if the claim ultimately must fail because of the statutory bar. The court denied TKK’s claim for attorney fees and costs in the coverage lawsuit itself, except a modest award for what the court considered a vexatious motion to reconsider. The Seventh Circuit affirmed. The key policy term, “Employers’ Liability Laws,” is broad enough to include claims under the common law, including “groundless” claims.