Sheckler v. Auto-Owners Insurance Co.

2022 IL 128012 (IL. 2022)

Words & Phrases

Duty To Defend: Additional Insured

Trial Judge

Michael D. Risinger

Appellate Judge

White

Holding

Insurer had no duty to defend tenants of an insured property against a third-party contribution claim because they were not identified as persons insured under the policy.

Fact Summary

The issue presented in this appeal is whether an insurer’s duty to defend or indemnify extends to the tenants of an insured property against a third-party negligence contribution claim when the tenants are not identified as persons insured under the policy. The circuit court held that defendant, Auto-Owners Insurance Company (Auto-Owners), owed no duty to defend or indemnify plaintiffs, Monroe and Dorothy Sheckler, the tenants of the insured property, against a third-party contribution claim brought against them in Tazewell County case No. 17-L-49. The appellate court reversed and remanded, finding an equitable extension of Dix Mutual Insurance Co. v. LaFramboise, 149 Ill. 2d 314 (1992), under the facts of this case, required Auto-Owners to defend and, if appropriate, indemnify the Shecklers against the contribution claim. 2021 IL App (3d) 190500, ¶¶ 25, 41. Justice Holdridge specially concurred, writing separately to express his disagreement with Dix for the reasons set forth in Justice Heiple’s dissent therein (Dix, 149 Ill. 2d at 326-30 (Heiple, J., dissenting)) but recognized Dix as controlling authority. 2021 IL App (3d) 190500, ¶ 48 (Holdridge, J., specially concurring). Presiding Justice McDade dissented, concluding “an insurer’s duty to defend [or indemnify] does not extend to the tenants of the insured property against a third-party negligence contribution claim when the tenants are not identified—or identifiable—as persons insured under the policy.” Id. ¶ 63 (McDade, P.J., dissenting). For the following reasons, we reverse the appellate court’s judgment and affirm the judgment of the circuit court.

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