The Fifth District Appellate Court has ruled that Farmers Insurance Company had the duty to defend its policy holder in a four-year-old dispute involving a gun shot injury.

Filed under Supreme Court Rule 23, a Fifth District Appellate Court panel in late June affirmed in part and reversed in part a decision from St. Clair County, concluding that insurance companies have a duty to defend their clients, but a duty to indemnify relies on material fact.

Justice Melissa Chapman delivered the opinion. Justice James Donovan concurred, while Justices Stephen Spomer concurred in part and dissented in part.

The case started in February 2008 when Robert Farrow, now deceased, shot his long time girlfriend Rosalind Wells in the eye with a gun.

Shortly after the incident, Wells filed a complaint arguing Farrow was negligent by brandishing a loaded weapon, shooting the weapon at Wells, and failing to make sure the weapon was unloaded and the safety lock secure.

She also alleged a cause of action for intentional battery.

The case at hand deals with the plaintiff, Illinois Farmers Insurance Company, and defendant, William Farrow, the executor of the estate of Robert Farrow.

Famers Insurance filed a complaint arguing it had no duty to defend or indemnify Farrow against the complaint filed by Wells.

According to the complaint, Farmers Insurance claimed that the facts set forth in Well's complaint did not fit within the definition of an "occurrence" within its policy.

On Nov. 16, 2010, St. Clair County Associate Judge Andrew Gleeson granted motions for summary judgment filed by Wells and Farrow, and denied Farmers Insurance the motion for a summary judgment, ruling that the company has the duty to defend and indemnify Farrow against Well's complaint.

The appellate court affirmed a portion of the circuit court's order, which declared that Farmers Insurance had a duty to defend Farrow against the claims from Wells. However, the appellate court reversed another portion of the order, which declared that Farmers Insurance had a duty to indemnify Farrow against those claims.

Justice Chapman addressed the duty to defend and the duty to indemnify separately.

"Accordingly, applying the four corners of the complaint to the insurance policy, which provided coverage for an accidental occurrence resulting in bodily injury, there was a potential for coverage," Chapman wrote, adding that the circuit court was correct in ruling Farmers Insurance had a duty to defend.

"Unlike the duty to defend, the duty to indemnify arises only when the insured becomes legally obligated to pay damages in the underlying action that gives rise to a claim under the policy," Chapman said.

Under Farrows' insurance policy an injury must have resulted from an "occurrence," defined by an "accident."

Chapman points out that the policy does not define accident and has no legal meaning.

"We believe the meaning of the term 'accident' is ambiguous, and consequently, we must give the term a liberal construction in favor of coverage," Chapman said. "Our Supreme Court of Illinois directs that the real question of inquiry as to whether something is an accident, is whether the result was intended or expected, not whether the act causing the injury was intentional."

Chapman said neither party has proven that they are entitled to summary judgment. Both parties should seek material fact, motive and intent, she added.

"The parties should have the opportunity to fully develop the factual basis for their respective positions and not be foreclosed by summary judgment," Chapman said for the majority of the court.

Justice Spomer agreed with Chapman in finding that Farmers had the duty to defend Farrow and erred in finding the duty to indemnify. However, Spomer disagreed with the order to remand for further proceedings based on the findings that there is a genuine issue of material fact on the indemnification issue.

Spomer wrote that there would be no way to further develop the record of facts because Farrow is deceased, Wells has no memory of being shot, and there were no witnesses.

"The outcome of the indemnification issue turns solely on which party had the initial burden of proof," Spomer wrote, adding that he would find that Farmers Insurance is entitled to summary judgment on the indemnification issue.

Spomer wrote that rather than remanding for further proceedings, he would instruct the circuit court to enter judgment in favor of Farmers Insurance as to its duty to indemnify.

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