Tunica Pharmacy, Inc. v Maryland Casualty Co.

2015 IL App (1st) 140918-U (Ill. App., 2015)

Words & Phrases

Estoppel

Trial Judge

Kathleen Pantle

Appellate Judge

Simon

Holding

Class plaintiffs estopped from re-litigating whether coverage exists because they were in privity with the insured by taking an assignment.

Fact Summary

In 2004, a company known as Business Pro Communications, Inc. initiated a class action suit against Express Products in Lake County, Illinois for its violations of the Act. Plaintiffs were members of the class. Maryland Casualty provided a defense for Express Products in the case, but allowed Express Products to retain independent counsel and control the defense because it anticipated potential conflicts since it intended to stand on its coverage defenses. Maryland Casualty then filed a declaratory judgment action in the United States District Court for the Eastern District of Pennsylvania seeking a finding that the policy did not entitle Express Products to coverage. While both of those cases were pending, plaintiffs filed this case seeking a declaration that, once the class action case was resolved, Maryland would have a duty to indemnify Express Products and pay the judgment. 

Express Products settled with the class for $7,999,996.00 while both of the declaratory judgment actions were pending. Part of the settlement agreement was that the class would not seek to enforce the judgment against Express Products individually and that it would only seek to recover on the insurance policies. A condition of the settlement was that plaintiffs' counsel would represent Express Products at no cost in the attempts to recover against Maryland Casualty and that plaintiffs and Express Products would cooperate fully with one another in those endeavors.

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