Estoppel Cannot Create Insurance Coverage: Lack of Bodily Injury, Personal Injury or Occurrence Bars Coverage.

• Author: Zalma, Barry
• Position: [ON MY RADAR]

Cambridge Mutual Fire Insurance Company (Cambridge) sued seeking a declaratory judgment that it did not owe Defendants Terry Gaca and Janet Waymen (collectively, "Defendants") a duty to defend an underlying lawsuit under the terms of their insurance policy. Thomas J. Frederick sued in Illinois state court, alleging Defendants maintained a boarding house and a parking facility for large trucks on their property (the "Underlying Suit"). The Underlying Suit alleged public nuisance, conspiracy to create a public nuisance, and nine violations of City of Naperville ("Naperville") zoning ordinances under the Adjoining Landowner Act, 65 ILCS 5/1113-15.

In Cambridge Mutual Fire Insurance Company v. Terry L. Gaca, and Janet L. Wayman, individually and as trustee of The Janet L. Wayman Trust, No. 20 C 2447, United States District Court, N.D. Illinois, Eastern Division (May 17, 2022) Cambridge moved for summary judgment.

BACKGROUND

Cambridge sued seeking a declaratory judgment that it did not owe Defendants Terry Gaca and Janet Waymen (collectively, "Defendants") a duty to defend an underlying lawsuit under the terms of their insurance policy.

Defendants' policy with Cambridge includes Homeowners Liability Insurance and Personal Umbrella Liability Insurance (the "Policy"). The Policy provides:

If a claim is made or a suit is brought against an "insured" for damages because of "bodily injury" or "property damage" caused by an "occurrence" or "personal injury" caused by an offense to which this policy applies, we:

1. Will provide a defense at our expense by counsel of our choice, even if the suit is groundless, false or fraudulent.

   "'Bodily injury' means bodily harm, sickness or disease, including required care, loss of services and death that results." "'Property damage' means physical injury to, destruction of, or loss of use of tangible property." '"Personal injury' means injury arising out of... [t]he wrongful eviction from, wrongful entry into, or invasion of right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor...". Finally, "'[o] currence' means an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results... in: 'bodily injury' or 'property damage.'"

   The Policy also contains several exclusions. Coverage does not apply to:

1. "Bodily injury" or "property damage" which is expected or intended by an...