G.M. Sign, Inc. v. Schane

2013 IL App (2d) 120434 (Ill. App., 2013)

Words & Phrases

Duty To Indemnify

Trial Judge

Hon. Mitchell L. Hoffman

Appellate Judge

Justice Burke

Holding

Insurer entitled to vacate a stipulated judgment in TCPA class action, even though insurer initially failed to defend the insured.

Fact Summary

Insurer had standing and acted with diligence in filing a Section 2-1401 petition.

This is a fascinating procedural move by an insurer that breached its duty to defend, abandoned the insured in its defense of a class action.  A settlement was reaced in which the plaintiff agreed in a consent judgment for $4.9 million to be collected solely from State Farm.   In a standard post-judgment move, GM Sign sought a finding that the settlement was covered.  State Farm answered asserting that no coverage existed for the TCPA claims and averred that the settlement was not reasonable.  The DJ court granted GM Sign's motion for judgment on the pleadings finding that State Farm had the duty to defend and indemnify Schane.

Then, State Farm took an unprecedented step and went back to the class action suit and filed a petition to vacate the class action settlement order, alleging defenses that its insured did not raise.

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