Indemnity and Defense Agreement Must be Enforced
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Defendants, Fox Mill Limited Partnership and the Kane County Land Company (collectively, FMLP), appealed from a declaratory judgment for defense costs in favor of the Wasco Sanitary District (District) in Wasco Sanitary District v. Fox Mill Limited Partnership, and Kane County Land Company, No. 2-20-0650, 2021 IL App 200650-U, Court of Appeals of Illinois, Second District (December 9, 2021) and the Court of Appeal resolved the issue.
BACKGROUND
In 1994 the District entered into an annexation agreement to provide water and wastewater treatment services for FMLP’s residential development, a subdivision called Fox Mill. This subdivision included about 800 high-end custom homes in the Village of Campton Hills. Under the agreement, FMLP would pay for or construct water facilities for the District and in return FMLP could collect for the connection permits for the Fox Mill subdivision. (The connection permits were sold for around $25,000 for each single-family home. The agreement also provided that FMLP could sell the District’s excess capacity provided that the excess was created by FMLP’s improvements.
One of the District’s residents, Ed Fiala and a third-party home developer, Tim Kobler Custom Homes, Inc. (Fiala) filed suit against the District, its trustees, its outside counsel as well as FMLP, B&B, Boose, Blood, B&B and FMLP’s attorney and Harrison.
The District received an order granting it approximately $1.3 million.
ANALYSIS
FMLP could not express bewilderment that the District was a party to the Fiala litigation; both FMLP and the District were represented at counsels’ table in the same suit concerning the 1994 agreement. Therefore, the Court of Appeal, like the trial court, refused to permit FMLP to continue to deny the obvious.
The appellate court rejected FMLP’s contentions. The 1994 annexation agreement plainly obligated FMLP to defend and indemnify the District, and the trial court correctly determined that FMLP had a continuing duty to defend and indemnify the District and its trustees.
ZALMA OPINION
The essence of insurance is the transfer of a risk from an individual to an insurer. Insurance is not, however, the only risk transfer device. The “hold harmless” agreement was a risk transfer device established by a contract between the District and FMLP. It was an effective risk transfer device and the District – although it took them ten years to do so – they got their attorneys fees paid from a bond posted by FMLP. I can only wonder what took the parties and the courts so long to enforce a clear and unambiguous contract and how much faster an insurance policy would have provided defense and indemnity.
© 2022 – Barry Zalma
Concealing a Weapon Used in a Murder is an Intentional & Criminal Act
Post 5002
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In Howard I. Rosenberg; Kimberly L. Rosenberg v. Chubb Indemnity Insurance Company Howard I. Rosenberg; Kimberly L. Rosenberg; Kimberly L. Rosenberg; Howard I. Rosenberg v. Hudson Insurance Company, No. 22-3275, United States Court of Appeals, Third Circuit (February 11, 2025) the Third Circuit resolved whether the insurers owed a defense for murder and acts performed to hide the fact of a murder and the murder weapon.
FACTUAL BACKGROUND
Adam Rosenberg and Christian Moore-Rouse befriended one another while they were students at the Community College of Allegheny County. On December 21, 2019, however, while at his parents’ house, Adam shot twenty-two-year-old Christian in the back of the head with a nine-millimeter Ruger SR9C handgun. Adam then dragged...
Renewal Notices Sent Electronically Are Legal, Approved by the State and Effective
Post 5000
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Washington state law allows insurers to deliver insurance notices and documents electronically if the party has affirmatively consented to that method of delivery and has not withdrawn the consent. The Plaintiffs argued that the terms and conditions statement was not “conspicuous” because it was hidden behind a hyperlink included in a single line of small text. The court found that the statement was sufficiently conspicuous as it was bolded and set off from the surrounding text in bright blue text.
In James Hughes et al. v. American Strategic Insurance Corp et al., No. 3:24-cv-05114-DGE, United States District Court (February 14, 2025) the USDC resolved the dispute.
The court’s reasoning focused on two main points:
1 whether the ...
Rescission in Michigan Requires Preprocurement Fraud
Post 4999
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Lie About Where Vehicle Was Garaged After Policy Inception Not Basis for Rescission
This appeal turns on whether fraud occurred in relation to an April 26, 2018 renewal contract for a policy of insurance under the no-fault act issued by plaintiff, Encompass Indemnity Company (“Encompass”).
In Samuel Tourkow, by David Tourkow v. Michael Thomas Fox, and Sweet Insurance Agency, formerly known as Verbiest Insurance Agency, Inc., Third-Party Defendant-Appellee. Encompass Indemnity Company, et al, Nos. 367494, 367512, Court of Appeals of Michigan (February 12, 2025) resolved the claims.
The plaintiff, Encompass Indemnity Company, issued a no-fault insurance policy to Jon and Joyce Fox, with Michael Fox added as an additional insured. The dispute centers on whether fraud occurred in...
Insurance Fraud Leads to Violent Crime
Post 4990
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CRIMINAL CONDUCT NEVER GETS BETTER
In The People v. Dennis Lee Givens, B330497, California Court of Appeals, Second District, Eighth Division (February 3, 2025) Givens appealed to reverse his conviction for human trafficking and sought an order for a new trial.
FACTS
In September 2020, Givens matched with J.C. on the dating app “Tagged.” J.C., who was 20 years old at the time, had known Givens since childhood because their mothers were best friends. After matching, J.C. and Givens saw each other daily, and J.C. began working as a prostitute under Givens’s direction.
Givens set quotas for J.C., took her earnings, and threatened her when she failed to meet his demands. In February 2022, J.C. confided in her mother who then contacted the Los Angeles Police Department. The police ...
Police Officer’s Involvement in Insurance Fraud Results in Jail
Post 4989
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Von Harris was convicted of bribery, forgery, and insurance fraud. He appealed his conviction and sentence. His appeal was denied, and the Court of Appeals upheld the conviction.
In State Of Ohio v. Von Harris, 2025-Ohio-279, No. 113618, Court of Appeals of Ohio, Eighth District (January 30, 2025) the Court of Appeals affirmed the conviction.
FACTUAL BACKGROUND
On January 23, 2024, the trial court sentenced Harris. The trial court sentenced Harris to six months in the county jail on Count 15; 12 months in prison on Counts 6, 8, 11, and 13; and 24 months in prison on Counts 5 and 10, with all counts running concurrent to one another for a total of 24 months in prison. The jury found Harris guilty based on his involvement in facilitating payments to an East Cleveland ...
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To Dispute an Arbitration Finding Party Must File Dispute Within 20 Days
Post 4988
EXCUSABLE NEGLECT SUFFICIENT TO DISPUTE ARBITRATION LATE
In Howard Roy Housen and Valerie Housen v. Universal Property & Casualty Insurance Company, No. 4D2023-2720, Florida Court of Appeals, Fourth District (January 22, 2025) the Housens appealed a final judgment in their breach of contract action.
FACTS
The Housens filed an insurance claim with Universal, which was denied, leading them to file a breach of contract action. The parties agreed to non-binding arbitration which resulted in an award not
favorable to the Housens. However, the Housens failed to file a notice of rejection of the arbitration decision within the required 20 days. Instead, they filed a motion for a new trial 29 days after the arbitrator’s decision, citing a clerical error for the delay.
The circuit court ...
