Pekin Insurance Company v. Wilson

Facts

Terry Johnson filed suit against D, alleging causes of action for assault, battery, and intentional infliction of emotional distress stemming from an incident in October 2002 and one in January 2004. D tendered the defense of the suit to P, which had issued a commercial general liability policy to D. D also tendered the defense of the Johnson suit to Farmers Automobile Insurance Association (Farmers), which had issued a homeowner's policy to D. P and Farmers jointly filed a complaint for a declaratory judgment, each asking the court for a determination that it did not owe D a duty to defend the underlying lawsuit. Johnson filed an amended complaint adding a count alleging negligence against D. Johnson alleged that he had been 'assisting Debi Wilson at her place of business' when D arrived and began screaming expletives at him and 'brandished' a steel pipe. Johnson alleged that D struck him with the pipe in the shoulder and lacerated Johnson's right hand with a knife. Johnson alleged that, in order to protect himself, he subdued D and restrained him, as D continued his attempt to physically harm Johnson. After Johnson released D, D continued to scream expletives and threatened to go home to get a gun to shoot Johnson and Debi Wilson. One year later, it is alleged that D approached Johnson at a Wal-Mart store and showed him 'what appeared to be the handle of a pistol.' Johnson alleged that D said he could 'end it right now.' In the negligence count, Johnson re-alleged all the factual assertions from the intentional tort counts (assault, battery, and intentional infliction of emotional distress). Johnson then alleged that D had breached his duty of ordinary care by failing to 'adequately use tools of his employment in a safe manner[,] causing physical harm,' that D had failed to 'properly maintain tools and knives in a protective manner,' and that he had failed to 'use tools for their intended purpose[,] causing physical harm.' Finally, Johnson alleged that D's negligence was the proximate cause of his injuries. P’s policy covered D as the 'insured,' and it described his business as a 'private warehouse.' P's policy listed the following exclusion: ''Bodily injury' or 'property damage' expected or intended from the standpoint of the insured' (the intentional-act exclusion). To the intentional-act exclusion, P provided the following exception: 'This exclusion does not apply to 'bodily injury' resulting from the use of reasonable force to protect persons or property' (the self-defense exception). In an endorsement of the policy, P limited its coverage for bodily injury to occurrences 'arising out of*** the ownership, maintenance[,] or use of the premises shown in the Schedule and operations necessary or incidental to those premises.' P filed an amended complaint for a declaratory judgment, seeking a finding that it did not owe D a duty to defend him in the underlying lawsuit. The amended complaint was in response to Johnson's amended complaint in the underlying lawsuit, in which he added the negligence count. D filed a counterclaim against Johnson, alleging that, during the incident, Johnson was the aggressor and D was defending himself. The counterclaim alleged that Johnson was guilty of assault, battery, and intentional infliction of emotional distress. D contended that the allegations of the underlying lawsuit were covered by P's policy, citing the amended complaint in the underlying lawsuit which alleged that 'the occurrence took place during normal business hours at the premises where D's business is located and to which the P policy extends coverage.' Wilson also filed a counterclaim against P, alleging counts of breach of contract and vexatious and unreasonable delay in violation of section 155 of the Illinois Insurance Code (215 ILCS 5/155 (West 2006)). P filed a motion for judgment on the pleadings. The trial court entered an order declaring that P had no duty to defend D in the underlying lawsuit because its policy did not cover the claims asserted in that lawsuit. The court entered an order denying D's motion to reconsider and dismiss his counterclaim in the declaratory judgment action. The underlying lawsuit and D's counterclaim against Johnson in that lawsuit remain pending. D appealed. The appellate court reversed the judgment for P, holding that, in addition to relying upon the allegations of Johnson's complaint in the underlying lawsuit to ascertain P's duty to defend, the court could consider whether the allegations that D raised in his counterclaim against Johnson triggered the self-defense exception in the policy. P appealed. 

Issues

Rule of Law

Holding and Decision

Legal Analysis

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