Insurance Coverage-Defense Costs

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7^th Circuit Court of Appeals

Case Name: Great American Insurance Company v. State Farm Fire and Casualty Company

Case No.: 23-1854

Officials: Sykes, Chief Judge, and Ripple and Rovner, Circuit Judges.

Focus: Insurance Coverage-Defense Costs

Robert Breuder, the former president of the College of DuPage, alleged defamation and other claims following his termination. The board members were insured under a policy issued by the Illinois Community College Risk Management Consortium (Consortium), which was assigned to Great American Insurance Company, and a personal liability umbrella policy issued by State Farm Fire and Casualty Company. Great American sued State Farm to recover defense costs it claimed State Farm was obligated to cover for one board member.

The district court dismissed Great American’s claims, determining that the State Farm insurance contract was unambiguous and that State Farm had no duty to provide defense costs since the primary policy from Great American’s assignor covered the underlying loss. Great American appealed and the appellate court found that the State Farm policy clearly stated it would only provide a defense if no other insurance policy covered the loss. Since the Consortium policy covered the loss, State Farm was not obligated to provide defense costs. The court rejected Great American’s arguments that the State Farm insurance contract language was ambiguous and that State Farm’s coverage was primary regarding the board member’s liability for actions taken in her individual capacity.

Affirmed.

Decided 06/24/24

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