A co-insurer for Southwestern Illinois College seeks to dismiss a lawsuit claiming it failed to provide defense costs for the college in an underlying rape case allegedly involving a St. Clair County transit bus driver.
Catlin Indemnity Company filed a motion to dismiss and a supporting memorandum on July 2 through attorney Heather Igoe of Collinsville. The defendant argues that “even if the allegations in the complaint are accepted as true, plaintiff has failed to state a claim upon which relief can be granted.”
“Here, plaintiff’s complaint does not plead direct or inferential allegations that Catlin is primarily liable to the insured for a loss under a policy of insurance or that plaintiff is secondarily liable to the insured for the same loss under its policy,” the memorandum in support of the motion to dismiss states.
“Plaintiff merely pleads that both plaintiff and Catlin issued Commercial General Liability insurance policies to Southwestern Illinois College (SWIC) for the same period of time and that those policies provided concurrent coverage,” it continued.
Catlin Indemnity also argues that plaintiff Arch Insurance Company’s allegations are ambiguous.
“While the complaint contains some elements of a claim or claims, the allegations do not amount to a coherent claim to which Catlin can adequately respond to in its current form,” the memorandum states.
Specifically, Catlin Indemnity argues that it is unclear what legal theories the plaintiff alleges entitle it to coverage. The defendant also claims that it cannot tell the difference between the two counts.
Arch Insurance filed the two-count complaint for declaratory judgment on May 3 through attorney John Lynch Jr. of Cremer Spina Shaughnessy Jansen & Siegert LLC in Chicago.
According to the complaint, the case involves an underlying lawsuit filed by plaintiff Peggy Kachadorian seeking recovery for damages after she was allegedly raped by Paul Rongey on a St. Clair County Transit District bus on April 12, 2016. Rongey was driving the bus, which had an Alternative Transportation Systems (ATS) logo. Kachadorian alleges SWIC entered into a contract with Metro-East Transit District of St. Clair County, doing business as St. Clair County Transit District, to provide the bus transportation services. She also alleges SWIC does business as ATS and is vicariously liable for harm caused by Rongey.
Arch Insurance provided defense for SWIC against Kachadorian’s lawsuit. On June 20, 2020, Arch Insurance allegedly advised Catlin Indemnity that a mediation was scheduled for July 22, 2020, and demanded Catlin participate and share in the defense. Catlin Indemnity allegedly informed Arch Insurance that it would not be participating and disclaimed coverage.
Kachadorian’s case was settled for $865,000 on July 22, 2020. Arch Insurance allegedly paid $750,000 on behalf of SWIC. The remainder was paid on behalf of the other defendants in the action. The following day, Arch Insurance advised Catlin Indemnity of the settlement and demanded reimbursement for its proportionate share.
On July 24, 2020, Catlin Indemnity allegedly declined coverage, arguing that the policies were not intended to provide overlapping coverage and that its policy was not intended to cover the community transportation services. Arch Insurance argues that the allegations in Kachadorian’s complaint implicate coverage under Catlin Indemnity’s policy.
“Specifically, the Sexual Misconduct Declaratory Endorsement of the Catlin Policy provides that Catlin ‘will pay those sums that the insured becomes legally obligated to pay as damages because of ‘sexual misconduct’ to which this insurance applies’ and that Catlin has ‘the right and duty to defend the insured against any ‘suit’ seeking those damages,’” the suit states.
Arch Insurance argues that Catlin Indemnity’s policy does not include any exclusions for certain operations, including community transportation services.
Arch Insurance seeks an order declaring that Catlin Indemnity is a primary co-insurer of SWIC and had an obligation to contribute and participate in SWIC’s defense. The plaintiff seeks reimbursement for Catlin Indemnity’s share of the settlement and costs.
U.S. District Court for the Southern District of Illinois case number 3:21-cv-444