(Editor's note: This article has been updated to reflect that attorneys George Ripplinger and Patricia Zimmer of Belleville represent Bruce Siddle and Sandra Siddle in litigation at St. Clair County. Attorney Jay Dowling represents Rex Carr's estate, Bruce Carr, and the firm. The Record had reported the reverse representation, and regrets the errors).
SPRINGFIELD – Rex Carr, who won most of his court battles while alive, has won a court battle in death.
On June 27, Fourth District appellate judges ruled that State Bar Association Mutual Insurance Company must defend Carr’s estate in a malpractice suit.
The judges found that Carr’s misrepresentation of facts in a policy application for a single year did not void his coverage in following years.
The judges affirmed Sangamon County Circuit Judge John Schmidt, who granted summary judgment to Carr’s estate and the firm he led.
The underlying malpractice suit remains pending before St. Clair County associate judge John O’Gara, who plans a status conference on Sept. 25.
In that suit, Bruce Siddle and Sandra Siddle of Millstadt blame Carr for a $2,160,000 judgment that a Tennessee court entered against them.
In 2001, Bruce Siddle formed a joint venture between his security training firm, PPCT Management Systems, and a firm named Homeland Security Company.
Doctor Crants Jr., and Doctor Crants III owned Homeland Security.
Siddle took 25 percent ownership of their firm, in exchange for turning his firm into a wholly owned subsidiary.
By 2005, the Siddles began to suspect that Crants and Crants cheated them by favoring other entities they controlled.
The Siddles retained a Tennessee firm that the late U.S. Senator Howard Baker once led, and resolved the dispute without going to court.
Crants and Crants agreed to depart, and the Siddles signed releases of all claims.
One release obligated the parties to file any litigation in Nashville, Tenn.
The release provided that if any suit should arise, the prevailing party would recover all legal fees and costs.
Another suit arose in 2008, after the Siddles retained Rex Carr and son Bruce Carr.
They sued Crants, Crants, and other defendants at U.S. district court in East St. Louis, challenging the validity of the releases they signed.
In 2009, District Judge Patrick Murphy transferred the case to district court in Nashville.
“This release agreement was negotiated between two sophisticated businessmen who had known each other for some time,” Murphy wrote.
“The claim that fraud, coercion, and failure of consideration were involved in the release agreement doesn’t help Siddle.”
Rex Carr and Bruce Carr filed another suit in East St. Louis two weeks later, with the same claims against other defendants.
That suit also bounced to Nashville.
Defendants there moved for summary judgment, and District Judge Aleta Trauger granted it in 2010.
Sixth Circuit appellate judges affirmed the decision in 2012.
Defendants then moved to recover legal fees as prevailing parties.
The motion created a conflict for the Carrs, who withdrew from the case.
The Siddles retained Tony Duncan of Nashville, who filed a third party complaint seeking to hold the Carrs liable for all fees and expenses.
The Carrs notified State Bar Mutual Insurance of the complaint, and the insurer asked Sangamon County court to relieve it of any duty to defend them.
The insurer argued that it wouldn’t have insured Rex Carr if he hadn’t made material misrepresentations in his policy application of 2008.
The Carrs needed no defense at that point, however, for Trauger dismissed it without prejudice.
She ruled that the Siddles hadn’t asked for permission to file it.
In 2013, she found the Siddles jointly and severally liable for $2,159,738.04 in fees and expenses.
She found Bruce Carr jointly and severally liable for $412,500, and Rex Carr jointly and severally liable for $31,500.
Rather than request Trauger’s permission to sue the Carrs in Nashville, the Siddles sued them in St. Clair County.
The Carrs notified State Bar Mutual, which continued to deny its duty to defend.
The insurer argued that it covered only damages, not legal fees and expenses.
Judge Schmidt ruled that State Bar Mutual must defend the Carrs, and Fourth District judges agreed.
Justice Thomas Appleton wrote that, “in the eyes of the law, each renewal of an insurance policy results in a new contract, a new policy.”
He wrote that under section 154 of Illinois insurance code, misrepresentations in other policies are irrelevant.
“Plaintiff criticizes this requirement as unfair and against sound public policy, but section 154 says what it says, and we are powerless to rewrite it,” Appleton wrote.
He wrote that on April 4, 2012, when Rex Carr signed the application, he answered no to a question asking if any claim had been made in the past 12 months.
He wrote that Carr answered no to a question asking if he became aware of any circumstance that might result in a claim.
Appleton asked what claim was made that wasn’t reported, or what unreported circumstance Rex Carr became aware of that might result in a claim.
“The answers to these questions should be front and center in plaintiff’s argument for rescission, but they are not,” he wrote.
Appleton rejected the argument that the policy did not cover the suit because it applied to damages and not to fees.
He wrote that the complaint pleads damages including but not limited to the entry of judgment in Tennessee.
“Unless it is clear that the complaint fails to state any facts that are within, or potentially within, the coverage of the policy, the insurer has a duty to defend the insured,” he wrote.
Justices Lisa Holder White and James Knecht concurred.
Gordon Gates of Springfield represented the Carrs at the Fourth District.
Robert Chemers of Chicago represented State Bar Mutual.
In the St. Clair County action, George Ripplinger and Patricia Zimmer of Belleville represent the Siddles.
Rex Carr represented himself until his death in 2015.
Jay Dowling represents his estate, Bruce Carr, and the firm.