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State Farm takes necessary steps to appeal Judge Kelley’s duty to defend order

By Heather Isringhausen Gvillo | Aug 4, 2015


State Farm has indicated it will appeal St. Clair County Associate Judge Randall Kelley’s finding that it owes a duty to defend Tom Lakin and his son Kristopher Lakin in a sexual abuse case involving minors.

Tom Lakin, a registered sex offender and former attorney, sued his home insurer seeking coverage for a John Doe civil sexual abuse lawsuit that originated in Madison County in 2006 and settled in St. Clair County in 2013. 

State Farm's attorney Daniel G. Hasenstab of Brown & James filed a motion for a Rule 304(a) finding on July 20, requesting an order finding “there is no just reason to delay the appeal” of the court’s June 22 order concluding State Farm has a duty to defend Lakin.

According to Supreme Court Rule 304(a), a party may appeal a final judgment when multiple claims of relief are involved, but only if the trial court files a written finding that there is no reason for delaying enforcement, appeal or both.

State Farm seeks an appeal, stating that without it, any funds expended to Lakin’s defense are not reimbursable and there are no other effective avenues of appellate review.

Hasenstab argues that the interpretation of Lakin's homeowners' policy presents questions of law for immediate appellate review in light of the court’s decision, adding that there are “clearly fairly debatable coverage issues and public policy considerations.”

“In the event that Appellate Court determines State Farm owes Thomas Lakin no duty to defend, all issues pending before this court with respect to Thomas Lakin will immediately become moot because no duty to indemnify exists in the absence of a duty to defend," he wrote. 

“Furthermore, there is no risk that the need for Appellate review will be mooted by any further development in the trial court."

Hasenstab wrote that all that remains pending is the duty to indemnify, which the court will not address until after final adjudication of the Doe lawsuit.

Additionally, he argues there is no possibility that the appellate court will have to consider whether State Farm has a duty to defend Lakin a second time.

“The Appellate Court will determine in the interlocutory proceeding whether State Farm owes Thomas Lakin a duty to defend. If the Appellate Court holds no duty to defend exists, the coverage action Thomas Lakin will be concluded absent an appeal to the Illinois Supreme Court," Hasenstab wrote. 

“If the Appellate Court holds a duty to defend does exists, then, absent an appeal to the Illinois Supreme Court, the only possible future appeal regarding Thomas Lakin would address the duty to indemnify – which is a narrower duty."

Kelley scheduled a motion hearing to address State Farm’s request on Aug. 6 at 8:30 a.m.

State Farm disputed in previous documents filed by attorney John Cunningham of Brown & James that it had to provide coverage in the lawsuit, arguing that Tom Lakin intentionally harmed the minors.

The defendant argued that coverage excludes willful and malicious acts, and that permitting minors to consume drugs and alcohol and engage in sex with adults is considered willful and malicious.

The Doe family's 2006 lawsuit launched a federal investigation that ended with Tom Lakin's conviction on drug charges in 2008. The civil action stalled while Tom Lakin served six years in federal prison. 

While in custody in 2011, Tom Lakin registered as a sex offender in a Madison County court after admitting sexual abuse against a 15-year-old boy.

State Farm became a party in litigation after the Doe family amended their complaint. The insurer objected, saying it found the amendment suspicious, suggesting the family changed its claims in order to qualify for legal fees under Lakin’s homeowner policy.

In a June 2, 2014, brief filed by State Farm, the defendant argued that insurance coverage was not appropriate because the Doe family deleted factual allegations, stripped damning facts from other allegations and re-styled claims against Kristopher as vague negligence counts.

Hasenstab wrote that the Lakins incorrectly represented the negligence counts to allege only that minors were abused by others.

The Lakins are represented by Clyde Kuehn of Belleville.

St. Clair County Circuit Court case number 13-MR-83

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