Statutory Claims and causes of action provide one of the hotbeds of Bad Faith Litigation. This is equally true in Third-Party and in First-Party Bad Faith Cases. See generally Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" §§ 3:28-3:30 (Third-Party, Settlement), 3:63 (Third-Party, Refusal to Defend), 3:92 (Third-Party, Conduct of Defense), and 9:14-9:16 (First-Party Claims).
Illinois has been added to the hotbeds in Download Philadelphia Indemnity Ins. Co. v. Chicago Title Ins. Co. (N.D. Ill. Case No. 09C7063, Docket Entry and Statement, both entered July 12, 2011) PUBLIC ACCESS, also published as 2011 WL 2731254 (N.D. Ill. July 12, 2011)(authorized password required to access Westlaw).
In that Federal Case decided under Illinois substantive law, a Policyholder named Western Capital Partners, LLC loaned money to third parties. WCP secured its loans with "mortgages on three parcels of property." To protect its investment, WCP purchased Title Insurance from Chicago Title Insurance Company along with an alleged letter agreement, the terms of which are not relevant to this post. Philadelphia Indemnity Insurance Co. v. Chicago Title Insurance Co., 2011 WL 2731254 at *1. At any rate, the Title Insurance Policy allegedly contained a Duty to Defend among its provisions.
"WCP filed foreclosure actions regarding certain of the mortgages and was later sued by other parties who claimed to have interests in the properties." Id. This was apparently a separately filed lawsuit. WCP requested CTI to defend. CTI declined to defend all the claims, offering to defend only some. WCP turned to another of its Insurers, Philadelphia, which in turn sued CTI claiming that it, Philadelphia, should not have to defend at all, that it was excess to CTI's Policy, and that CTI should defend the entire lawsuit against their common Insured, WCP.
The Policyholder also sued CTI in Philadelphia's lawsuit. It filed a Cross-Claim against CTI. In part, the Policyholder alleged that Chicago Title Insurance Company violated the Illinois Consumer Fraud Act or "ICFA". "CTI alleges that it was misled into purchasing the title insurance policy and that CTI, in bad faith, evaded its contractual obligations. This is sufficient to state a claim under ICFA." Id. at *2. [Emphasis added.]
The Federal Court also stated that the Policyholder's Cross-Claim sufficiently alleged Fraud under Federal Rule 9(b). Id.
However, there is no Common Law cause of action available for Bad Faith to the Policyholder against Chicago Title in this case, the Court further held. Id.
The 22nd Annual Bad Faith Litigation Conference of the American Conference Institute is being held in 2011 in Orlando, Florida. The author will be speaking. As a result, the readers of this Blog are invited to a $200.00 discount if they choose to register for the Conference. The authorized Code from the ACI is ICI 200. Here is a link to the American Conference Institute Website Page which features this Conference including registration, if you or anyone you know would like to attend.
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