Stonecrafters v. Wholesale Life Insurance Brokerage

State: Illinois

Court: 2nd District Appellate

Docket No: 2-08-0865 Rel

Case Date: 07/13/2009

Preview:No. 2--08--0865 Filed: 7-13-09 ______________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS SECOND DISTRICT ______________________________________________________________________________ STONECRAFTERS, INC., Individually and on Behalf of Members of a Certified Class, as Assignee, ) Appeal from the Circuit ) Court of McHenry County. ) ) Plaintiff and Third-Party ) Citation Petitioner-Appellant, ) ) v. ) No. 03--CH--435 ) WHOLESALE LIFE INSURANCE ) BROKERAGE, INC., ) ) Defendant ) ) (Unitrin, Inc., and Milwaukee Insurance ) Honorable Company, Third-Party Citation ) Michael J. Sullivan, Respondents-Appellees). ) Judge, Presiding. ______________________________________________________________________________ JUSTICE BURKE delivered the opinion of the court: This interlocutory appeal, brought pursuant to Supreme Court Rule 308 (155 Ill. 2d R. 308), involves two certified questions that are based on Guillen v. Potomac Insurance Co. of Illinois, 203 Ill. 2d 141 (2003). First, is a liability insurer that has breached its duty to defend an underlying lawsuit and is estopped from raising any coverage defense also collaterally estopped from challenging the trial court's express finding of the reasonableness of the underlying settlement between the insured and the plaintiff? Second, if not, can the trial court permit the insurer to take discovery regarding the reasonableness of the underlying settlement? We hold that Guillen does not prevent an insurer from challenging the reasonableness of the underlying settlement even though it has breached its duty to

No. 2--08--0865 defend and is prevented from claiming a coverage defense. Further, because Guillen allows the insurer to request a hearing where the plaintiff must prove that the settlement it reached with the insured was reasonable, under the facts in this case the trial court must permit the parties to take discovery regarding the reasonableness of the settlement. Accordingly, we answer the first question in the negative and, given the facts of this case, we answer the second question in the positive, and we remand the cause. FACTS On June 12, 2003, plaintiff and third-party citation petitioner, Stonecrafters, Inc., filed a class action complaint against defendant, Wholesale Life Insurance Brokerage, Inc., which was served on June 17, 2003. The complaint alleged violations of the federal Telephone Consumer Protection Act of 1991 (TCPA) (47 U.S.C.

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