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Evergreen Real Estate Services, LLC v. Hanover Insurance Co.

2019 IL App (1st) 181867 (Ill. App., 2019)

Words & Phrases

Professional Liability Policy: In General

Trial Judge

Diane Larsen

Appellate Judge



Class action asserting violations of the Residential Landlord Tenant Ordinance (RLTO) were not excluded as claims arising from “unfair or deceptive business practices” including “violations of any local, state or federal consumer protection laws.”

Fact Summary

This is an insurance coverage action in which plaintiff, Evergreen Real Estate Services, LLC (Evergreen), sought a declaration that defendant, Hanover Insurance Company (Hanover Insurance), has a duty to defend Evergreen in a class action case. Evergreen also sought damages for a bad faith denial of its claim under the Illinois Insurance Code (215 ILCS 5/1 et seq. (West 2016)). Hanover Insurance filed a counterclaim against Evergreen and a third-party claim against the building’s owner, Martin Luther King Partners, LP (MLK Partners), who sought coverage as an additional insured. The parties filed cross-motions for summary judgment on all claims.

The trial court found that the claims asserted in the class action case arguably represented subject matter covered by the policy that Hanover Insurance issued to Evergreen and were not specifically excluded from coverage, so the court ordered Hanover Insurance to provide a defense. The trial court, however, found that Hanover Insurance’s refusal to provide a defense did not constitute bad faith under section 155 of the Illinois Insurance Code (id. § 155). Each party appeals the ruling that was adverse to it. We affirm.

Evergreen was entitled to coverage for corporate entity liability and for professional liability. The “entity liability insuring agreement” broadly covers “[l]oss which the Insured Entity is legally obligated to pay due to a Claim first made against the Insured Entity during the Policy Period.” The entity liability insuring agreement, however, contains a professional services exclusion. That exclusion provides that coverage is removed under the entity liability insuring agreement for claims arising from the provision of professional services. The “miscellaneous professional liability insurance policy” provides coverage for “any claim made against [Evergreen] arising from a wrongful act in the rendering or failure to render professional services by [Evergreen].” The professional liability policy,however, contains an exclusion for claims arising from “unfair or deceptive business practices” including “violations of any local, state or federal consumer protection laws.”