Westport Insurance Corporation v. City Of Waukegan et al
Filing
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MEMORANDUM Opinion and Order. The Court denies Westport's motion 105 for reconsideration of Judge Darrah's December 11, 2014 trigger ruling, grants Waukegan's motion 103 to dismiss Count II of Westport's complaint, and denies Waukegan's motion 104 for a rule to show cause. A status hearing is set for January 27, 2016 at 9:30 a.m. Signed by the Honorable Jorge L. Alonso on 1/15/2016. Notice mailed by judge's staff (ntf, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
WESTPORT INSURANCE
CORPORATION,
Plaintiff,
v.
CITY OF WAUKEGAN,
LUCIAN TESSMAN, DONALD MEADIE,
FERNANDO SHIPLEY, HOWARD
PRATT, RICHARD DAVIS, PHLLIP
STEVENSON, TERRY HOUSE, ROBERT
REPP, BURTON SETTERLUND, ESTATE
OF DENNIS COBB, and JUAN A. RIVERA,
JR.,
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Case No. 14-cv-419
Judge Jorge L. Alonso
Defendants.
MEMORANDUM OPINION AND ORDER
Plaintiff Westport Insurance Corporation (“Westport”) brought this action against
Defendants the City of Waukegan, Lucian Tessman, Donald Meadie, Fernando Shipley, Howard
Pratt, Richard Davis, Phillip Stevenson, Terry House, Robert Repp, Burton Setterlund
(collectively, the “Waukegan Defendants” or “Waukegan”), and Juan A. Rivera, Jr. (“Rivera”),
seeking a declaratory judgment that it has no obligation to provide coverage under two insurance
policies issued to the City of Waukegan. The case is before the Court on three motions:
Westport’s motion to reconsider the Court’s December 11, 2014 trigger ruling, Waukegan’s
motion to dismiss Count II of Westport’s complaint, and Waukegan’s motion for a rule to show
cause for Westport’s failure to comply with the December 2014 trigger ruling. The Court denies
the motion to reconsider, grants the motion to dismiss, and denies the motion for rule to show
cause.
I.
BACKGROUND
Westport issued two policies to the City of Waukegan:
(1) General Liability/Law
Enforcement Policy Number 651-006954-9 (“GL/LEL Policy”), providing a $1 million limit of
liability for general liability claims and a $1 million limit of liability for law enforcement
liability claims; and (2) Umbrella Liability Policy Number 503-164027-8 (“Umbrella Policy”),
providing a $5 million limit of liability (collectively, the “Westport Policies”). (ECF No. 48, ¶¶
32, 34; ECF No. 52, ¶¶ 32, 34).
The Westport Policies were issued for the period November 1, 1997 to November 1,
1998, and were renewed for the periods November 1, 1998 to November 1, 1999, and November
1, 1999 to November 1, 2000. (ECF No. 48, ¶¶ 32-35; ECF No. 52, ¶¶ 32-35.)
On October 27, 1992, Rivera was transferred from Hill Correctional Center, where he
was confined on unrelated charges, to the Lake County Jail on a writ of habeas corpus ad
testificandum.
(ECF No. 48-1, ¶ 52.)
Rivera alleges that after several days of illegal
interrogation, he was forced to sign a statement implicating himself in the rape and murder of a
young girl. (Id. at ¶¶ 53-73.) Rivera was tried for rape and murder in November 1993. (Id. ¶
103.) He was convicted of first-degree murder and sentenced to life in prison without the
possibility of parole. (Id.) He was retried and convicted of first-degree murder in September and
October 1998, and was again sentenced to life in prison without the possibility of parole. (ECF
No. 52, ¶ 23, 24.) The Illinois Appellate Court reversed Rivera’s conviction and entered a
judgment of acquittal on December 9, 2011. (ECF No. 48-1 ¶ 113.) Rivera was released from
prison on January 6, 2012. (ECF No. 48-1 ¶ 114). He subsequently filed suit against the
Waukegan Defendants, asserting claims of civil rights violations in numerous counts, as follows:
(1) a § 1983 claim alleging a coerced and false confession in violation of his Fifth
Amendment rights;
2
(2) a § 1983 claim alleging a coerced and false confession in violation of his Fourteenth
Amendment rights;
(3) a § 1983 claim for federal malicious prosecution 1;
(4) a § 1983 due process claim alleging exculpatory evidence was withheld;
(5) a § 1983 claim alleging a conspiracy to deprive him of his constitutional rights;
(6) a § 1983 claim alleging a failure to intervene;
(7) an Illinois state law claim alleging malicious prosecution;
(8) an Illinois state law claim alleging intentional infliction of emotional distress;
(9) an Illinois state law claim alleging a civil conspiracy to protect officers from liability;
(10) an Illinois state law claim alleging defamation;
(11) an Illinois state law claim for respondeat superior;
(12) an Illinois state law claim for indemnification; and
(13) a § 1983 claim alleging a conspiracy to deny Rivera access to courts.
(ECF No. 59, Ex. 1-B, 2d Am. Compl., Rivera v. Lake Cty. et al., Case No. 12 C 8655. 2) The
Waukegan Defendants tendered their defense to Westport (ECF No. 48, ¶ 45), and Westport
initiated this coverage action, seeking a declaratory judgment that Rivera’s claims do not trigger
the Westport policies and Rivera is collaterally estopped from arguing otherwise.
The parties filed cross motions for judgment on the pleadings. Judge Darrah, to whom
this case was previously assigned, granted the motions in part and denied them in part. On the
issue of whether Westport had a duty to defend, Judge Darrah ruled that Rivera’s claim that the
use of his coerced confession violated his Fifth Amendment self-incrimination rights triggered
Westport’s duty to defend the Waukegan Defendants because the coerced confession was used
against Rivera at his 1998 retrial, which occurred within a Westport policy period. On the issue
of indemnity, Judge Darrah ruled that the matter was not ripe for judgment while the underlying
action remained undecided. (ECF No. 84 (“Judge Darrah’s trigger ruling”) reported at Westport
Ins. Corp. v. City of Waukegan, 75 F. Supp. 3d 821 (N.D. Ill. 2014).)
1
Rivera’s Second Amended Complaint notes that a malicious prosecution claim under § 1983 is not currently
recognized in this Circuit and is included to preserve the issue for appeal.
2
Rivera later filed a Third Amended Complaint, which is identical to the Second Amended Complaint except that it
names as a defendant Maria Lacour, a special representative for two deceased defendants.
3
Westport promptly moved for the entry of a final judgment so it could proceed with an
appeal of Judge Darrah’s trigger ruling.
(ECF No. 85.) This case was reassigned to the
undersigned judge while the parties were in the midst of briefing Westport’s motion. Before this
Court issued any ruling, the parties in the underlying action reached a settlement agreement.
Westport withdrew its motion for final judgment because the indemnity issue was now ripe for
decision (ECF No. 100), and the parties filed the instant motions.
II.
WESTPORT’S MOTION TO RECONSIDER
Having withdrawn its motion for final judgment, Westport has now filed a motion for
reconsideration of Judge Darrah’s trigger ruling, especially in light of the Illinois Appellate
Court’s recent opinion in Indian Harbor Insurance Co. v. City of Waukegan, 33 N.E.3d 613, 616
(Ill. App. Ct. 2015), which addresses another insurer’s duty to defend Waukegan under different
policies in the same underlying action brought by Rivera against Waukegan.
Because Judge Darrah’s trigger ruling did not dispose of this case in its entirety,
Westport’s motion to reconsider is governed by Federal Rule of Civil Procedure 54(b). Under
this rule, a district court has inherent authority to reconsider its own orders entered prior to final
judgment. See Saunders v. City of Chi., No. 12-CV-09158, 2015 WL 7251938, at *2-3 (N.D. Ill.
Nov. 17, 2015). “Motions for reconsideration serve a limited function: to correct manifest errors
of law or fact or to present newly discovered evidence.” Conditioned Ocular Enhancement, Inc.
v. Bonaventura, 458 F. Supp. 2d 704, 707 (N.D. Ill. 2006) (citing Caisse Nationale de Credit
Agricole v. CBI Indus., Inc., 90 F.3d 1264, 1269 (7th Cir. 1996)). A motion to reconsider may
be appropriate if there has been “a change in, or clarification of, law that makes clear that the
earlier ruling was erroneous.” Santamarina v. Sears, Roebuck & Co., 466 F. 3d 570, 572 (7th
Cir. 2006).
4
Although Waukegan is correct that it is unusual to entertain a motion for reconsideration
of a months-old order, the Court will entertain Westport’s motion under the unique
circumstances of this case. Westport has explained that it omitted to file a timely motion for
reconsideration immediately after Judge Darrah issued his trigger ruling only because, based on
the status of the underlying action at the time, it believed there was nothing left for the district
court to decide and Westport could seek immediate appellate review; now that the underlying
case has been resolved, Westport merely seeks the opportunity to move for reconsideration that it
would have taken if the circumstances had been as they are now. Waukegan is not prejudiced by
the Court’s consideration of the motion for reconsideration because this litigation has not
materially advanced since Judge Darrah’s trigger ruling. Further, the issue of trigger—an issue
of Illinois law—is central to any consideration the Court will give to the indemnity issue, so it
would be prudent to reconsider the matter in light of the new authority from the Illinois
Appellate Court in Indian Harbor and County of McLean v. States Self-Insurers Risk Retention
Group, Inc., 33 N.E.3d 1012 (Ill. App. Ct. 2015), before proceeding any further in this case.
Westport insists that Judge Darrah erred because his decision does not conform to either
of the trigger theories that Illinois courts have recognized in the context of wrongful conviction
claims. In a number of recent cases, including St. Paul Fire & Marine Insurance Co. v. City of
Zion, 18 N.E.3d 193, 196 (Ill. App. Ct. 2014), Indian Harbor and County of McLean, the Illinois
Appellate Court has held that a malicious prosecution claim triggers insurance coverage when
the prosecution is initiated because that it is when the injury functionally occurs. But federal
courts in Illinois, relying on Security Mutual Casualty Co. v. Harbor Insurance Co., 382 N.E.2d
1, 6 (Ill. App. Ct. 1978), rev’d on other grounds, 397 N.E.2d 839 (1979), have typically held that
a malicious prosecution claim triggers insurance coverage when the claim accrues because there
5
can be no injury or offense until all the elements of the tort, including exoneration, are met. See
Am. Safety Cas. Ins. Co. v. City of Waukegan, 678 F.3d 475 (7th Cir. 2012), Northfield Ins. Co.
v. City of Waukegan, 701 F. 3d 1124 (7th Cir. 2012), Nat’l Cas. Co. v. McFatridge, 604 F.3d
335, 344-45 (7th Cir. 2010).
Thus, courts interpreting Illinois law have held that coverage in wrongful conviction
cases is triggered either at the time criminal proceedings are initiated against the underlying
plaintiff, or at the time he is exonerated and a malicious prosecution claim accrues, but never in
between. Under all of these decisions, the fact that a wrongfully convicted person is languishing
in prison during an insurer’s policy period does not trigger the policy if no insured party commits
an independent offense or wrongful act and no claim based on a covered offense accrues during
the policy period. See, e.g., Indian Harbor, 33 N.E.3d at 623-24; McFatridge, 604 F.3d at 34445; see also Northfield Ins. Co. v. City of Waukegan, 761 F. Supp. 2d 766, 771-74 (N.D. Ill.
2010) (malicious prosecution not a continuing tort that supports a continuous trigger theory),
aff’d, 701 F.3d 1124 (7th Cir. 2012). Rivera was coerced to confess in 1992, leading to a trial
and conviction in 1993, and he was exonerated in December 2011, leading to his release from
prison in January 2012; therefore, according to Westport, his claims trigger coverage in one of
those years, not in the late 1990s, when the Westport policies were in effect.
Waukegan responds that Judge Darrah correctly ruled that the use of Rivera’s coerced
confession at his 1998 retrial potentially triggered coverage for his § 1983 claim of a Fifth
Amendment self-incrimination clause violation, and therefore Westport had a duty to defend
Waukegan in the Rivera suit, regardless of when any malicious prosecution or prosecutorial due
process claim might have been triggered.
6
In construing an insurance policy, a court's primary task is to ascertain the intent of the
parties as expressed in their agreement. Pekin Ins. Co. v. Wilson, 930 N.E.2d 1011, 1017 (Ill.
2010). The pertinent coverage language is found in Section 1 of Part II of Westport’s GL/LEL
Policy:
1.
Coverage
a. General Liability
We will pay all sums in excess of the “Self Insured Retention” limit
stated in the Policy Declarations that any “Insured” becomes legally
obligated to pay as damages because of “Bodily Injury” or “Property
Damage” caused by an “Occurrence”, or “Advertising Injury” or
“Personal Injury'” caused by an offense to which this coverage applies.
The amount we will pay in damages is limited as described in Section 2 B.
below. The above stated coverage applies only if the “Occurrence” or
offense occurs during the policy period and within the Policy
Territory as set forth in the General Policy Provisions. This General
Liability Coverage Part does not apply if the “Occurrence” or offense
arises as a result of a “Law Enforcement Activity”.
b. Law Enforcement Liability
We will pay all sums in excess of the “Self Insured Retention” limit
stated in the Policy Declarations that any “Insured” becomes legally
obligated to pay as damages because of “Bodily Injury” or “Property
Damage” caused by an “Occurrence” in the course of a “Law
Enforcement Activity” or because of “Advertising Injury” or “Personal
Injury” caused by an offense in the course of your “Law Enforcement
Activity”.
c. Duty to Defend
We shall have the right and duty to defend or be associated with the
defense of any claim or “Suit” seeking damages to which Part II applies,
but 1.) The amount we will pay for damages is limited as described in
2. b. Limits of Insurance and Application of Limits . . .
(ECF No. 35-5, at 52.) Common Policy Definitions are given under Section 3, Part III of the
General Policy Provisions:
9. “Bodily Injury” means bodily injury, sickness, disease, disability, shock,
mental anguish, mental injury and humiliation sustained by a person, including
death resulting from any of these at any time.
7
***
21. “Law Enforcement Activity” means all operations of your police force or
any other public safety organization which enforces the law and protects persons
or property. This includes the maintenance, use or existence of any premises
occupied by this organization.
***
29. “Occurrence” means an accident caused by a “Covered Cause of Loss”,
including continuous or repeated exposure to substantially the same general
harmful conditions.
30. “Personal Injury” means injury, other than “Bodily Injury”, arising out of
one or more of the following offenses:
a. False arrest, detention or imprisonment;
b. Malicious prosecution;
***
d. Oral or written publication of material that slanders or libels a
person or organization or disparages a person's or organization's
goods, products or services; or
***
g. Violation of the Federal Civil Rights Act of 1871 or 42 U.S.C.
1983 and similar laws.
(ECF No. 35-5, at 81, 84, 86.)
Thus, under both the General Liability and Law Enforcement Liability coverages, the
Westport policies provide coverage for “personal injury caused by an offense.” “Personal
injury” is defined as “injury . . . arising out of” any of a number of enumerated “offenses,”
including “[m]alicious prosecution” and, more to the point, “[v]iolation of the Federal Civil
Rights Act of 1871 or 42 U.S.C. 1983 and similar laws.”
Prior wrongful conviction trigger cases in Illinois, interpreting similar (but often not
identical) “personal injury” language, have typically addressed underlying claims of the tort of
8
malicious prosecution.
Rivera’s complaint included claims of malicious prosecution and
prosecutorial due process, but he also made a § 1983 claim for violation of his Fifth Amendment
self-incrimination rights, and neither party has identified a case that specifically addresses when
insurance coverage for any such claim is triggered. 3 As Judge Darrah explained, if at least one
claim in a suit against the insured is potentially covered, then the insurer is required to defend the
entire suit. See Pekin Ins. Co. v. Wilson, 930 N.E.2d 1011, 1015 n. 2 (Ill. 2010); Nat’l Union
Fire Ins. Co. of Pittsburgh v. Glenview Park Dist., 632 N.E.2d 1039, 1042-43 (Ill. 1994).
Whatever courts in Illinois have said about when, for purposes of insurance coverage,
“personal injury” “arising out of” malicious prosecution occurs, or when the “offense” of
malicious prosecution occurs, “[t]he privilege against self-incrimination guaranteed by the Fifth
Amendment is a fundamental trial right of criminal defendants,” United States v. VerdugoUrquidez, 494 U.S. 259, 264 (1990) (emphasis added), and a Fifth Amendment violation for
which § 1983 provides a right to recovery occurs only with “courtroom use of a criminal
defendant's compelled, self-incriminating testimony,” Sornberger v. City of Knoxville, 434 F.3d
1006, 1027 (7th Cir. 2006) (citing Burrell v. Virginia, 395 F.3d 508, 513 (4th Cir. 2005)).
Judge Darrah relied on the recent decision of the Illinois Appellate Court in St. Paul Fire
and Marine Insurance Co. v. City of Zion, 18 N.E.3d 193 (Ill. App. Ct. 2014), which looked to
the leading case on trigger of coverage for tortious law enforcement activity, Muller Fuel Oil Co.
v. Insurance Co. of North America, 232 A.2d 168 (N.J. Super. Ct. App. Div. 1967), and
3
Westport treats a number of distinguishable cases as analogous. In St. Paul Fire & Marine Ins. Co. v. City of Zion,
18 N.E.3d 193, 196 (Ill. App. Ct. 2014), appeal denied, 23 N.E.3d 1207 (Ill. 2015), the underlying case involved a
coerced confession, and the underlying complaint included a claim for violation of the plaintiff’s self-incrimination
rights, see Hobbs v. Cappelluti, 899 F. Supp. 2d 738, 752 (N.D. Ill. 2012), but the underlying claim the Illinois
Appellate Court actually addressed in its opinion in St. Paul was a state-law malicious prosecution claim, not a §
1983 claim for violation of self-incrimination rights. Similarly, although Indian Harbor, 33 N.E.3d at 615-16, 62223, stems from the exact same underlying matter as in this case, the Illinois Appellate Court opinion in that case
addressed coverage for a malicious prosecution claim and a prosecutorial due process claim, but not a Fifth
Amendment self-incrimination claim. McLean, 33 N.E.3d at 1014-15, also focused on malicious prosecution; the
underlying complaint did not contain a self-incrimination claim.
9
approved of its holding that “the injury ‘flows immediately from the tortious act’” because the
“‘essence’ of the tort [of malicious prosecution] is the wrongful conduct in making the criminal
charge.” St. Paul, 18 N.E.3d at 199 (quoting Muller Fuel, 232 A.2d at 174). In the context of
malicious prosecution, that may mean, as the Illinois Appellate Court now regularly holds, that
coverage is triggered when the prosecution is initiated because the essential “tortious act” at the
heart of a malicious prosecution claim, or the “essence” of the claim, is the malicious
commencement of judicial proceedings against a suspect without probable cause, and the
“continuing effects” are “really continuations of the same alleged harm” that do not separately
trigger coverage. See Indian Harbor, 33 N.E.3d at 617, 623. But in the different context of a §
1983 claim of a Fifth Amendment self-incrimination clause violation, the “tortious act” that is
the “essence” of the claim is “courtroom use of a criminal defendant's compelled, selfincriminating testimony”; there is no Fifth Amendment self-incrimination claim merely for
coercing a suspect to confess, Sornberger, 434 F.3d at 1027, nor is exoneration an element of the
cause of action.
Under this reasoning, a covered “offense” occurred and Rivera suffered a “personal
injury caused by an offense” when his coerced confession was used against him in violation of
his Fifth Amendment self-incrimination rights at the 1998 retrial. Both the “personal injury”
occurred and the “offense” accrued, in the sense that all the elements of the cause of action
occurred, in 1998, during Westport’s policy period. It follows that Rivera’s Fifth Amendment
self-incrimination claim was potentially covered under the Westport policies, and Westport had a
duty to defend Waukegan in the underlying Rivera lawsuit, under either of the recognized trigger
theories.
10
Westport replies that, even if Waukegan is correct that coverage is triggered by
courtroom use of Rivera’s self-incriminating statement in a criminal case, coverage must have
been triggered prior to the 1998 retrial. Westport cites Sornberger, in which the Seventh Circuit
determined that, in a case in which the criminal charges against a suspect were dropped prior to
trial, the courtroom use of the suspect’s unwarned confession against her at “a probable cause
hearing, a bail hearing and an arraignment proceeding,” was sufficient to allow her to state a
claim for violation of the Fifth Amendment’s self-incrimination clause pursuant to § 1983,
despite the fact that the Supreme Court had suggested in Chavez v. Martinez, 538 U.S. 760
(2003), that the “Fifth Amendment is, at bottom, a trial protection.” Sornberger, 434 F.3d at
1026. Thus, based on Sornberger, Westport suggests that coverage for the Fifth Amendment
self-incrimination claim was triggered when Rivera’s self-incriminating statement was first used
in pretrial proceedings, long before the 1998 retrial; stated differently, coverage was triggered
when the prosecution was initiated, and the Fifth Amendment self-incrimination claim is no
different from a malicious prosecution claim under the theory the Illinois Appellate Court has
recently adopted.
Again, Westport makes an unwarranted assumption that a Fifth Amendment selfincrimination claim should be treated like a malicious prosecution claim for purposes of
triggering insurance coverage.
As the Court has explained above, a claim of malicious
prosecution is critically different from a § 1983 claim of a violation of Fifth Amendment selfincrimination rights, and the Court fails to see why a Fifth Amendment self-incrimination claim
should trigger coverage only when the incriminating statement is first used in the criminal case.
Certainly, Sornberger does not hold that a plaintiff cannot recover for the use of his selfincriminating statement against him at trial if the statement has already been used against him in
11
pretrial proceedings. Importantly, Sornberger does not concern insurance coverage at all, nor is
the Court aware of any relevant authority directly addressing when a Fifth Amendment selfincrimination claim triggers coverage under Illinois law. Westport is correct that Illinois law
does not treat a malicious prosecution or prosecutorial due process claim as a “continuing tort”
that triggers insurance coverage in each year its effects are felt, see Northfield Ins. Co. v. City of
Waukegan, 761 F. Supp. 2d 766, 771-74 (N.D. Ill. 2010), but that fact has no bearing on when a
Fifth Amendment self-incrimination claim, a different sort of claim altogether, triggers coverage.
It is at best uncertain whether the Illinois Supreme Court would conclude that a Fifth
Amendment self-incrimination claim should be treated like a malicious prosecution claim, in the
sense that it should trigger coverage only in the early stages of a criminal case. 4 Judge Darrah’s
ruling that Rivera’s Fifth Amendment self-incrimination claim against Waukegan potentially
triggers coverage and gives rise to a duty to defend was not manifest error.
Westport also argues that the underlying complaint does not trigger Westport’s duty to
defend based on any claim of wrongdoing in the 1998 retrial because the complaint does not
even mention the 1998 retrial. Again, however, this Court agrees with Judge Darrah, who
reasoned as follows in the December 11, 2014 trigger ruling:
“[T]he duty to defend does not require that the complaint allege or use language
affirmatively bringing the claims within the scope of the policy.” Am. Econ. Ins.
Co. v. Holabird & Root, 886 N.E.2d 1166, 1171 (2008). Courts are “charged with
comparing the underlying complaint, inferences, and other known facts to the
insurance policy.” Northfield Ins. Co., 701 F.3d at 1130. While Rivera does not
specifically allege that his claims are applicable to the 1998 trial and conviction,
several of his claims potentially apply to that trial. See id. at 1129 (“Because we
can imagine an IIED claim potentially falling within the policy terms, we will
4
The present motion for reconsideration does not require this Court to make a prediction, but the Illinois Supreme
Court could conceivably conclude, for example, that each courtroom use of a self-incriminating statement in a
criminal case is a separate triggering occurrence or offense, or, alternatively, that repeated use of a self-incriminating
statement in a criminal case is a continuing occurrence or offense that triggers coverage in each policy period in
which the statement is used in a courtroom proceeding. See generally Roman Catholic Diocese of Joliet, Inc. v.
Interstate Fire Ins. Co., 685 N.E.2d 932, 938-39 (Ill. App. Ct. 1997) (discussing issue of trigger of coverage for
claim of negligent supervision of a priest who committed acts of abuse over a period of years).
12
assume that Starks fully intends to submit such a claim.”) Any claims regarding
an injury that occurred during the 1998 trial and conviction would potentially fall
within the policy coverage.
(ECF No. 84 at 8-9.) Rivera clearly alleged that the use of his coerced confession against him
violated his self-incrimination rights; he merely omitted the date of the trial at which his coerced
confession was used against him, which nothing required him to include.
There is no
requirement that the underlying plaintiff plead the date of his injury in order for a complaint to
trigger insurance coverage. See, e.g., Roman Catholic Diocese of Springfield in Ill. v. Maryland
Cas. Co., 139 F.3d 561, 567 (7th Cir. 1998).
Nor is it true that Rivera’s claim of constitutional injury based on the use of his coerced
confession against him at the 1998 retrial was a merely “hypothetical” claim that was not
actually pled in Rivera’s complaint. The Court agrees with Westport that “it is the actual
complaint, not some hypothetical version, that must be considered,” Connecticut Indem. Co. v.
DER Travel Serv., Inc., 328 F. 3d 347, 350-51 (7th Cir. 2003), but Rivera did claim in his actual
complaint that his self-incrimination rights were violated. It is of no consequence that he left out
the date on which that violation occurred; federal pleading standards did not require him to plead
the claim with such specificity in order to give Waukegan notice of his claim. It is clear from
Rivera’s complaint that he intended to assert claims arising out of his prosecution for the Holly
Staker rape and murder; there was no question as to what case was the subject of the underlying
complaint.
Westport’s motion for reconsideration of Judge Darrah’s trigger ruling is denied.
III.
WAUKEGAN’S MOTION TO DISMISS COUNT II OF WESTPORT’S
COMPLAINT
Waukegan moves to dismiss Count II of Westport’s complaint, in which Westport alleges
that Waukegan is collaterally estopped from asserting that Westport owes coverage for the
13
Rivera lawsuit because it already unsuccessfully litigated the same issue of trigger of coverage in
American Safety Casualty Insurance Co. v. City of Waukegan, 678 F.3d 475 (7th Cir. 2012), and
Northfield Insurance Co. v. City of Waukegan, 701 F. 3d 1124 (7th Cir. 2012).
Collateral estoppel applies if the following four elements are met: “1) the issue sought to
be precluded must be the same as that involved in the prior action, 2) the issue must have been
actually litigated, 3) the determination of the issue must have been essential to the final
judgment, and 4) the party against whom estoppel is invoked must be fully represented in the
prior action.” La Preferida, Inc. v. Cerveceria Modelo, S.A. de C.V., 914 F.2d 900, 906 (7th Cir.
1990). Waukegan contends that Count II should be dismissed because it did not litigate the
same trigger issue that this case presents in either the Northfield case or the American Safety
case.
The trigger issues Waukegan litigated in Northfield and American Safety may have been
similar to the extent they arose in wrongful conviction cases like this one, but they were not
identical. Northfield and American Safety concerned coverage for other underlying lawsuits
brought by other claimants, and neither decision addressed trigger of coverage for a Fifth
Amendment self-incrimination claim. Westport contends that the issues need not be totally
identical in all particulars for collateral estoppel to apply, citing H-D Michigan, Inc. v. Top
Quality Service, Inc., 496 F.3d 755, 760-61 (7th Cir. 2007) and Meyer v. Rigdon, 36 F.3d 1375,
1378-79 (7th Cir. 1994), but neither case supports that proposition; indeed, as Waukegan points
out, H-D Michigan rather undermines it. 5
5
In H-D Michigan, the Seventh Circuit concluded that an earlier decision holding that the word “hog” was generic
as applied to large motorcycles had no preclusive effect in a case involving whether “hog” was generic as applied to
a motorcycle club. H-D Michigan, 496 F.3d at 760-61. Thus, the case tends to support Waukegan’s position that
there is no collateral estoppel if there are even slight differences in the issues.
14
Because and to the extent that Count II seeks a declaration that Waukegan is collaterally
estopped from arguing that the Westport policies are triggered by certain of Rivera’s claims
based on cases that did not concern the Rivera matter at all, Westport fails to state a claim on
which relief can be granted, and Waukegan’s motion to dismiss Count II is granted. 6
IV.
WAUKEGAN’S MOTION FOR A RULE TO SHOW CAUSE
Waukegan moves for a rule to show cause why Westport should not be held in contempt
for failing to pay defense costs after Judge Darrah issued his December 11, 2014 trigger ruling.
Waukegan misunderstands the nature of Judge Darrah’s ruling. Judge Darrah did not
issue an injunction or other order that compelled or commanded Westport to do anything. After
the parties filed motions for judgment on the pleadings in this declaratory judgment action, Judge
Darrah simply declared that Westport had a duty to defend.
There was no deadline for
compliance or any other indication of an injunctive component to the ruling.
The cases
Waukegan cites in its briefs are inapposite, as they concern either court orders that by their very
nature command a party to do something, such as an injunction or subpoena duces tecum, or
contumacious conduct in violation of a court’s explicit directions. There was no unambiguous or
unequivocal command in Judge Darrah’s order, and therefore Westport is not in contempt that
order. Waukegan’s motion for rule to show cause is denied.
6
The Court’s ruling is limited to the issue of whether Waukegan is barred by collateral estoppel, based on its
positions in American Safety and Northfield, from taking the position that certain of Rivera’s claims trigger coverage
under the Westport policies; it does not extend to other positions Waukegan may take or other preclusion doctrines.
15
CONCLUSION
For the reasons set forth above, the Court denies Westport’s motion [105] for
reconsideration of Judge Darrah’s December 11, 2014 trigger ruling, grants Waukegan’s motion
[103] to dismiss Count II of Westport’s complaint, and denies Waukegan’s motion [104] for a
rule to show cause. A status hearing is set for January 27, 2016 at 9:30 a.m.
SO ORDERED.
ENTERED: January 15, 2016
______________________
HON. JORGE ALONSO
United States District Judge
16
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