# Markel International Insurance Co. Ltd. v. Montgomery

> Appellate Court of Illinois · July 28, 2020 · 2020 IL App (1st) 191175

URL: https://www.frixlaw.com/law-library/cases/10488387

## Case

- **Court:** Appellate Court of Illinois
- **Decided:** July 28, 2020
- **Citations:** 2020 IL App (1st) 191175
- **Precedential status:** Published
- **Opinion:** Opinion
- **Cited by:** 1 later opinions in the Frix Law Library

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## Opinion text

Digitally signed
by Reporter of
Decisions
Reason: I attest to
Illinois Official Reports the accuracy and
integrity of this
document
Appellate Court Date: 2021.12.20
11:01:57 -06'00'

Markel International Insurance Co. v. Montgomery, 2020 IL App (1st) 191175

Appellate Court MARKEL INTERNATIONAL INSURANCE COMPANY
Caption LIMITED, Plaintiff-Appellee and Cross-Appellant, v. AMBER
MONTGOMERY, as Special Administrator for the Estate of Kyle C.
Matthews, Deceased; TREMEICE DANGERFIELD; VALELL
CORPORATION, an Illinois Corporation, d/b/a Carolyn’s Lounge;
and CAROLYN BURTON, Individually and as President of the Valell
Corporation, Defendants-Appellants and Cross-Appellees.

District & No. First District, Sixth Division
No. 1-19-1175

Filed July 24, 2020

Decision Under Appeal from the Circuit Court of Cook County, No. 2017-CH-13342;
Review the Hon. Pamela McLean Meyerson, Judge, presiding.

Judgment Reversed.

Counsel on Eric J. Emerson, Anthony N. Balice, Joe Welch, and Donald E. Elder,
Appeal of Emerson & Elder, P.C., of Chicago, for appellants.

Matthew S. Sorem and Emily R. Steinberg, of Nicolaides Fink Thorpe
Michaelides Sullivan LLP, of Chicago, for appellee.
Panel PRESIDING JUSTICE MIKVA delivered the judgment of the court,
with opinion.
Justices Cunningham and Harris concurred in the judgment and
opinion.

OPINION

¶1 Plaintiff Markel International Insurance Company Limited (Markel) sought a declaration
in the circuit court that it did not owe a duty to defend its insured, Valell Corporation, d/b/a
Carolyn’s Lounge (Carolyn’s), a nightclub in Chicago, for an incident that occurred in the
Carolyn’s parking lot that resulted in the death of Kyle Matthews and the injury of Tremeice
Dangerfield. Ms. Dangerfield, Amber Montgomery, as administrator for the estate of Mr.
Matthews, Carolyn’s, and its owner Carolyn Burton (collectively, defendants) filed a
counterclaim arguing that (1) Markel breached its duty to defend Carolyn’s in the underlying
lawsuit, (2) Markel breached its duty to indemnify Carolyn’s, (3) Markel was estopped from
asserting defenses to coverage for the default judgment, and (4) Markel’s denial of coverage
was vexatious and unreasonable. Both parties moved for summary judgment; the circuit court
denied Markel’s motion and granted defendants’ motion. The circuit court also determined that
Markel’s indemnity obligation was limited to the policy’s $1 million limit per occurrence and
that the incident qualified as one occurrence.
¶2 Both parties appealed. Defendants argue that the circuit court erred in limiting Markel’s
indemnity obligation to $1 million. Markel argues that (1) it had no duty to defend the
underlying lawsuit, (2) it was not estopped from denying coverage for the default judgment,
(3) denial of the coverage was not vexatious and unreasonable, and, in the alternative, (4) the
circuit court was correct to cap its obligation at $1 million. For the following reasons, we
reverse the judgment of the circuit court as to Markel’s duty to defend, which also resolves the
other issues in this case.

¶3 I. BACKGROUND
¶4 A. The Incident
¶5 The underlying complaint was filed on October 28, 2013, by Ms. Dangerfield and Ms.
Montgomery, against Carolyn’s and its owner, Carolyn Burton; Leonard Lee, a Carolyn’s
security guard; and Arthur Bettis and Maurice Jones, the two alleged assailants. Detailed below
are the allegations taken from the complaint in that action.
¶6 On October 30, 2011, Mr. Matthews and Ms. Dangerfield were leaving Carolyn’s when
they were confronted by Mr. Bettis and Mr. Jones—two men who were returning to Carolyn’s
with handguns after being removed from the premises. In order to keep the two men from
entering the nightclub, Mr. Lee secured the door, leaving Mr. Matthews and Ms. Dangerfield
in the parking lot with the men. According to the underlying complaint, “[Mr.] Bettis and [Mr.]
Jones assaulted and battered [Ms.] Dangerfield in the presence of security.” When Mr.
Matthews attempted to protect Ms. Dangerfield, Mr. Bettis shot and killed him. This incident
is again described later in the complaint, where it is alleged that “[Mr.] Bettis, without any
cause or provocation and with intent to do bodily harm to [Ms.] Dangerfield, did severely harm,
assault, and batter [Ms.] Dangerfield by striking her in the face” and “without any cause or

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provocation and with intent to do bodily harm to [Mr.] Matthews, did severely harm, assault,
and batter [Mr.] Matthews, by striking him in the face and body and fatally shooting him.”
Finally, the complaint alleged, “[a]s a direct and proximate result of the intentional acts of
[Mr.] Bettis, [Ms.] Dangerfield suffered severe and permanent physical and emotional injuries
and [Mr.] Matthews[ ] suffered and died from a fatal gunshot wound.”
¶7 The underlying complaint alleged that Carolyn’s, Ms. Burton, and Mr. Lee were all
negligent. The complaint also alleged a wrongful death claim and a Survival Act claim against
Carolyn’s on behalf of Mr. Matthews’s estate. Finally, the complaint alleged claims of assault
and battery, intentional infliction of emotional distress, wrongful death, and a claim under the
Survival Act against Mr. Bettis, as well as assault and battery and intentional infliction of
emotional distress claims against Mr. Jones.

¶8 B. The Policy
¶9 Carolyn’s general commercial liability insurance—supplied by Markel—for the policy
period of February 18, 2011, to February 18, 2012, included among its coverages “bodily
injury.” The policy detailed:
“We will pay those sums that the insured becomes legally obligated to pay as damages
because of ‘bodily injury’ or ‘property damage’ to which this insurance applies. We
will have the right and duty to defend the insured against any ‘suit’ seeking those
damages. However, we will have no duty to defend the insured against any ‘suit’
seeking damages for ‘bodily injury’ or ‘property damage’ to which this insurance does
not apply.”
¶ 10 “Bodily injury” was defined by the policy as “bodily injury, sickness or disease sustained
by a person including death resulting from any of these at any time.” The policy detailed that
the insurance applied to bodily injury if “[t]he ‘bodily injury’ *** [was] caused by an
‘occurrence’ ” and fell within the policy period. The policy defined “occurrence” as “an
accident, including continuous or repeated exposure to substantially the same general harmful
conditions.” The policy limited the insurance for each occurrence to $1 million. In addition,
the policy included an endorsement titled “Exclusion—Assault and Battery” and an
endorsement titled “Exclusion—Firearms.”
¶ 11 The assault and battery exclusion stated:
“The coverage under this policy does not apply to any claim, suit, cost or expense
arising out of assault and/or battery, or out of any act or omission in connection with
the prevention or suppression of such acts, whether caused by or at the instigation or
direction of any Insured or Insured’s employees, patrons or any other person. Nor does
this insurance apply to any claim, suit, cost or expense arising out of the alleged
negligence or other wrong doing in the hiring, training, placement, supervision or
monitoring of others by the insured.”
¶ 12 The firearms exclusion stated: “This insurance does not apply to ‘bodily injury’ *** arising
out of the existence, ownership, rental, maintenance, use, misuse or accidental discharge of
firearms whether by any insured or insured employees, patron, tenant, guest or any other
person, regardless of individual, circumstances or location.” The policy also contained a liquor
liability exclusion endorsement, which, while referenced in the proceedings below, is not

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relevant on appeal.

¶ 13 C. Procedural Background
¶ 14 In response to the underlying lawsuit, Markel sent Carolyn’s a letter, dated November 21,
2013, which disclaimed coverage to Carolyn’s for the incident described in the underlying
complaint, explaining that the incident fell within the assault and battery exclusion, the
firearms exclusion, and the liquor liability exclusion. The letter further stated that where there
is no coverage, there is no duty to defend. In accordance with this letter, Markel did not defend
Carolyn’s in the lawsuit. On June 13, 2016, the circuit court entered a default judgment against
Carolyn’s, awarding $250,000 to Ms. Dangerfield and $2,788,087 to the estate of Mr.
Matthews.
¶ 15 On October 4, 2017, Markel filed a complaint for declaratory judgment, seeking an order
stating it did not owe a duty to defend or indemnify Carolyn’s in the underlying action. Markel
argued that the underlying incident was not an “occurrence” as defined by the policy and that
coverage was excluded under the policy’s assault and battery exclusion, firearms exclusion,
and liquor liability exclusion.
¶ 16 Defendants filed a counterclaim along with their answer to the complaint and affirmative
defenses on November 13, 2017. Their counterclaim alleged that Markel breached its duty to
defend, breached its duty to indemnify, and was estopped from asserting defenses to coverage
for the default judgment. It also alleged that Markel’s denial of coverage was vexatious and
unreasonable under section 155 of the Illinois Insurance Code (Code) (215 ILCS 5/155 (West
2016)).
¶ 17 Markel filed for summary judgment on January 25, 2018, and defendants filed their
response and cross-motion for summary judgment on March 1, 2018. The circuit court granted
defendants’ motion for summary judgment and denied Markel’s motion for summary judgment
on June 27, 2018. In its order, the circuit court found that the underlying complaint asserted a
claim that potentially fell within the policy’s coverage and alleged facts that potentially fell
outside the scope of the policy’s exclusions. The court held that Markel breached its duty to
defend and indemnify Carolyn’s and that Markel’s denial of the claim was vexatious and
unreasonable under section 155 of the Code. The court also held that “Markel is estopped from
asserting any defenses under the Policy and must satisfy the judgment entered against
Carolyn’s in the Underlying Action.”
¶ 18 Markel filed a motion for modification of the order on July 27, 2018, arguing that the circuit
court erred in stating that it was obligated to “satisfy the judgment” because the underlying
judgment was for $3,038,087 and its indemnity obligation should not exceed the policy limit
on insurance, which Markel argued was, in this case, $1 million. The circuit court granted
Markel’s motion on October 23, 2018, holding that the June 27 order should be modified to
reflect that Markel “must satisfy the underlying judgment only to the extent of its policy limit.”
The court further ordered that “[i]f the parties disagree as to the applicable policy limit, they
should so advise the court at the next status.”
¶ 19 Defendants then moved to modify the circuit court’s October 23 order and reinstate the
June 27 order. The circuit court denied defendants’ motion on April 2, 2019, and ordered the
parties to submit briefs regarding Markel’s policy limit. On May 6, 2019, the circuit court held
that the policy’s limit in this instance would be $1 million. This order was then withdrawn and
replaced the following day to correct a scrivener’s error.

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¶ 20 On June 4, 2019, the circuit court entered a judgment for amounts due to defendants, listing
$1 million owed under the policy, $64,931.45 in attorney fees and costs, and $268,273.97 in
interest. Defendants filed a notice of appeal the same day, specifically appealing (1) the
October 23, 2018, order granting Markel’s motion for modification of its indemnity obligation;
(2) the April 2, 2019, order denying defendants’ motion to modify the October 23, 2018, order;
and (3) the May 6, 2019, order finding Markel’s policy limit to be $1 million. Markel filed its
notice of cross-appeal on June 19, 2019, appealing (1) the June 27, 2018, order granting
defendants’ motion for summary judgment and (2) the June 4, 2019, order requiring Markel to
pay defendants $1,064,931.45 plus interest.
¶ 21 On August 12, 2019, Markel filed a motion to dismiss defendants’ appeal on the basis that
defendants’ notice of appeal was deficient. This motion was taken with the case and will be
denied for the reasons stated in this order.

¶ 22 II. JURISDICTION
¶ 23 The circuit court entered its final judgment on June 4, 2019, and the defendants filed their
timely notice of appeal the same day. Markel filed its timely notice of cross-appeal on June 19,
2019. This court has jurisdiction pursuant to Illinois Supreme Court Rules 301 (eff. Feb. 1,
1994) and 303 (eff. July 1, 2017), governing appeals from final judgments entered by the circuit
court in civil cases.

¶ 24 III. ANALYSIS
¶ 25 On appeal, defendants argue that the circuit court erred in determining that Markel’s
coverage liability for the underlying case was limited to its $1 million per occurrence policy
limit or, alternatively, that the circuit court erred in determining that the underlying case
involved only a single occurrence under the policy. Markel argues in its cross-appeal that (1) it
had no duty to defend the underlying lawsuit because the claims were excluded from coverage,
(2) it was not estopped from denying coverage for the default judgment, (3) its denial of
coverage did not violate section 155 of the Code, and (4) if this court determines it is estopped
from denying indemnity, the $1 million per occurrence limit applies. We analyze Markel’s
motion to dismiss defendants’ appeal first, followed by Markel’s claims on appeal, which, for
the reasons outlined below, resolve defendants’ claims on appeal.

¶ 26 A. Motion to Dismiss Defendants’ Appeal
¶ 27 On August 12, 2019, after both parties filed their notices of appeal, Markel filed a motion
before this court to dismiss defendants’ appeal with prejudice, arguing that defendants’ notice
of appeal did not confer appellate jurisdiction “because it appeal[ed] from non-appealable
interlocutory orders.” We find defendants’ notice of appeal sufficient to survive dismissal.
¶ 28 “The filing of a notice of appeal ‘is the jurisdictional step which initiates appellate
review.’ ” People v. Smith, 228 Ill. 2d 95, 104 (2008) (quoting Niccum v. Botti, Marinaccio,
DeSalvo & Tameling, Ltd., 182 Ill. 2d 6, 7 (1998)). If there is no properly filed notice of appeal,
then the reviewing court has no jurisdiction and should dismiss the appeal. Id.
¶ 29 Illinois Supreme Court Rule 303 (eff. July 1, 2017) governs appeals from final judgments
in the circuit court. Illinois Supreme Court Rule 303(b)(2) (eff. July 1, 2017) requires that a
notice of appeal “shall specify the judgment or part thereof or other orders appealed from and

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the relief sought from the reviewing court.” Courts have routinely held that “a notice of appeal
‘will confer jurisdiction on an appellate court if the notice, when considered as a whole, fairly
and adequately sets out the judgment complained of and the relief sought so that the successful
party is advised of the nature of the appeal.’ ” In re Marriage of O’Brien, 2011 IL 109039,
¶ 22 (quoting Burtell v. First Charter Service Corp., 76 Ill. 2d 427, 433-34 (1979)). Therefore,
“[w]here the deficiency in notice is one of form, rather than substance, and the appellee is not
prejudiced, the failure to comply strictly with the form of notice is not fatal.” (Internal
quotation marks omitted.) General Motors Corp. v. Pappas, 242 Ill. 2d 163, 176 (2011). We
construe notices of appeal liberally. Smith, 228 Ill. 2d at 104.
¶ 30 Markel argues that the judgments defendants specified in their notice of appeal were not
final judgments and therefore the notice of appeal did not comply with the supreme court rules.
Defendants argue in response that their notice of appeal does satisfy the requirements of Rule
303(b)(2) and, in the alternative, that Markel’s notice of a cross-appeal cures any jurisdictional
defect.
¶ 31 In their notice of appeal, defendants listed the orders they wanted to appeal as the October
23, 2018, April 2, 2019, and May 6, 2019, circuit court orders. The October 23, 2018, order
modified the June 27, 2018, order, which granted summary judgment to defendants and
required Markel to indemnify defendants for the underlying judgment in its entirety. The
October 23 order stated that Markel only needed to satisfy the underlying judgment to the
extent of its policy limit. The April 2, 2019, order denied defendants’ motion for modification
of the October 23 order and reinstatement of the June 27 order. The May 6, 2019, order
determined that the policy limit in this case was $1 million. While that order was replaced the
next day to correct a minor error, the circuit court itself referred to the May 6 order instead of
the May 7 order in its final judgment. Finally, the relief defendants requested on appeal was to
“[r]einstate the Circuit Court’s June 27, 2018[,] Order and Opinion granting summary
judgment in favor of Appellants and against Appellee in its entirety; and vacate the subsequent
Orders which reduced Appellee’s financial obligation for the full underlying judgment
amount.”
¶ 32 While defendants’ notice of appeal failed to specifically list the final order in the case—
the June 4, 2019, order—it nonetheless undoubtedly “set[ ] out the judgment complained of
and the relief sought so that the successful party is advised of the nature of the appeal.” (Internal
quotation marks omitted.) O’Brien, 2011 IL 109039, ¶ 22. Defendants filed their notice of
appeal directly after the final judgment in the case was delivered—clearly not intending to file
an interlocutory appeal—and they specifically appealed the orders that comprised the June 4
judgment, except for the original order granting summary judgment in their favor, and
requested that the court “vacate the subsequent Orders which reduced [Markel’s] financial
obligation for the full underlying judgment amount.” Read broadly, this would include the June
4 order, which stated that “[Markel] shall pay $1,000,000.00 which was awarded to Defendants
by the Court on May 6, 2019” and that Markel was to pay $64,931.45 in defendants’ attorney
fees and costs and $268,273.97 in interest. This was an error of form and not of substance,
which in no way prejudiced Markel on appeal.
¶ 33 Markel cites numerous cases to support its position. However, each of those cases concern
notices of appeal containing errors of substance that can be easily differentiated from
defendants’ notice of appeal in this case. In General Motors Corp., 242 Ill. 2d at 176-78, for
example, the court held that the notices of appeal in question “did not confer jurisdiction on

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the appellate court to review the trial court’s award of judgment interest” where the final
judgment “constituted an entirely different matter concerning the trial court’s award of
judgment interest at the rate of 6%” from the orders the party appealed from. (Emphasis added.)
Likewise, in Clark v. Gannett Co., 2018 IL App (1st) 172041, ¶¶ 55-58, the court found that a
notice of appeal referencing an order that found “indirect criminal contempt” did not confer
jurisdiction on the appellate court when that order was withdrawn for an order finding “direct
criminal contempt.” Finally, in Corah v. The Bruss Co., 2017 IL App (1st) 161030, ¶¶ 20-21,
the court held that a notice of appeal from an order granting summary judgment on a
whistleblower claim did not confer jurisdiction over claims “involving emotional distress and
punitive damages.”
¶ 34 Here, defendants’ notice of appeal listed orders that limited their coverage to $1 million.
The final order of the case again listed $1 million as their recovery, in addition to attorney fees
and interest. Unlike the appellees in the cases it cites, Markel was not prejudiced by the error
in the notice of appeal—indeed Markel does not even make an argument that it was—because
the orders defendants appealed from concerned the same issue as the final judgment and
defendants’ requested relief was for the court to vacate all orders that reduced Markel’s
coverage obligation. Markel was therefore aware of the judgment being appealed and not
prejudiced by this error in form. Accordingly, we deny Markel’s motion to dismiss defendants’
appeal.

¶ 35 B. Duty to Defend
¶ 36 Markel argues in its cross-appeal that the circuit court erred when it determined that Markel
had a duty to defend Carolyn’s in the underlying lawsuit. We review the circuit court’s grant
of summary judgment de novo. Williams v. Manchester, 228 Ill. 2d 404, 417 (2008).
“Summary judgment is appropriate only where the pleadings, depositions, and admissions on
file, together with the affidavits, if any, show that there is no genuine issue as to any material
fact and that the moving party is entitled to a judgment as a matter of law.” (Internal quotation
marks omitted.) Id. “The construction of an insurance policy and a determination of the rights
and obligations thereunder are questions of law for the court which are appropriate subjects for
disposition by way of summary judgment.” Crum & Forster Managers Corp. v. Resolution
Trust Corp., 156 Ill. 2d 384, 391 (1993).
¶ 37 When construing an insurance policy, the goal of the court is to give effect to the parties’
intentions as expressed in the language of the agreement and, in doing so, analyze the policy
as a whole. Id. If the insurance policy is unambiguous, it will be applied as written and “only
reasonable interpretations will be considered.” Hobbs v. Hartford Insurance Co. of the
Midwest, 214 Ill. 2d 11, 17 (2005). When the policy language is ambiguous, it will be construed
liberally in favor of coverage. Country Mutual Insurance Co. v. Livorsi Marine, Inc., 222 Ill.
2d 303, 311 (2006).
¶ 38 In determining whether an insurer has a duty to defend:
“the court must compare the allegations of the underlying complaint to the policy
language. [Citations.] The allegations in the underlying complaint must be liberally
construed in favor of the insured. [Citation.] If the court determines that these
allegations fall within, or potentially within, the policy’s coverage, the insurer has a
duty to defend the insured against the underlying complaint.” (Emphasis omitted.)
Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 125 (1992).

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¶ 39 The duty to defend is broader than the duty to indemnify. Crum & Forster Managers Corp.,
156 Ill. 2d at 398. To establish a duty to defend, the complaint needs only to present a
possibility of recovery, not a probability, for coverage to potentially exist. La Grange
Memorial Hospital v. St. Paul Insurance Co., 317 Ill. App. 3d 863, 869 (2000). The question
for this court, then, is whether the claims in the underlying lawsuit potentially fell within
Markel’s policy’s coverage. Markel argues that its policy’s “Assault and Battery Exclusion
and Firearms Exclusion categorically exclude [Mr. Matthews and Ms. Dangerfield’s] injuries
from coverage.” Defendants respond that Markel has failed to demonstrate that either exclusion
covers all of the claims in the underlying complaint.
¶ 40 The underlying complaint in this action alleged that “[u]nknown employees/agents of
[Carolyn’s] locked or otherwise secured the front door of the premises, preventing [Mr.]
Matthews[ ] and [Ms.] Dangerfield from re-entering the premises after being confronted by the
armed [Mr.] Bettis and [Mr.] Jones” and that “[Mr.] Bettis and [Mr.] Jones assaulted and
battered [Ms.] Dangerfield in the presence of security/bouncer, [Mr.] Lee.” More specifically,
the complaint alleged that “[Mr.] Bettis, without any cause or provocation and with intent to
do bodily harm to [Ms.] Dangerfield, did severely harm, assault, and batter [Ms.] Dangerfield
by striking her in the face” and “without any cause or provocation and with intent to do bodily
harm to [Mr.] Matthews, did severely harm, assault, and batter [Mr.] Matthews, by striking
him in the face and body and fatally shooting him.” The complaint further alleged, “[a]s a
direct and proximate result of the intentional acts of [Mr.] Bettis, [Ms.] Dangerfield suffered
severe and permanent physical and emotional injuries and [Mr.] Matthews, suffered and died
from a fatal gunshot wound.”
¶ 41 Under the assault and battery exclusion, Markel’s policy specifically excluded “any claim,
suit, cost or expense arising out of assault and/or battery, or out of any act or omission in
connection with the prevention or suppression of such acts, whether caused by or at the
instigation or direction of any Insured or Insured’s employees, patrons or any other person.”
¶ 42 The firearms exclusion in the policy stated:
“This insurance does not apply to ‘bodily injury’, ‘property damage’, ‘personal injury’,
‘advertising injury’ or medical payments arising out of the existence, ownership, rental,
maintenance, use, misuse or accidental discharge of firearms whether by any insured
or insured employees, patron, tenant, guest or any other person, regardless of
individual, circumstances or location.”
¶ 43 These endorsements to the policy are unambiguous in their exclusion of coverage for any
claim arising out of an assault and battery, any claim arising out of any act or failure to act to
prevent an assault or battery, or any claim arising out of the use or misuse of a firearm resulting
in bodily injury, including accidental discharge. See, e.g., Hobbs, 214 Ill. 2d at 20 (where there
is only one reasonable interpretation of a provision, the provision is not ambiguous).
¶ 44 In Britamco Underwriters, Inc. v. J.O.C. Enterprises, Inc., 252 Ill. App. 3d 96, 99-101
(1993), this court found that there was no possibility of coverage where the insurance policy
in question excluded coverage for any action alleging damages from “1. Assault and Battery
or any act or omission in connection with the prevention or suppression of such acts [or] 2.
Harmful or offensive contact between or among two or more persons ***” and the action
resulting in liability was an assault and battery of a patron, the defendant, at a pub. (Internal
quotation marks omitted.) The underlying complaint in Britamco alleged that “[the pub]
breached a duty to provide [the defendant] a safe environment by not ejecting the three patrons

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who attacked and beat him.” Id. at 100. The court first determined that the section excluding
assault and battery from coverage was unambiguous in that, according to the language, the
insurer “[was] not obligated to defend [the pub] in an action arising out of an incident in the
nature of assault or battery.” Id. The court then looked at the definition of “civil battery” in
Illinois case law, which it defined as “the wil[l]ful touching of the person of another or a
successful attempt to commit violence on the person of another.” (Internal quotation marks
omitted.) Id. at 101. The court reasoned:
“In his complaint [the defendant] alleges that the three patrons ‘physically attacked
[him,] hitting him with their hands and kicking him with their feet on various parts of
the body including the head’ and that [the defendant] ‘was seriously injured.’ Thus, the
facts alleged in [the compliant] constitute[d] harmful or offensive contact, as stated in
the endorsement, and civil battery as defined by Illinois law.” Id.
¶ 45 The court further determined that the actions alleged met the definition for criminal battery
and noted that one of the patrons was convicted of aggravated battery for his actions in the
incident. Id. The court held that “the underlying incident, by all accounts in the nature of a
battery, is not within the indemnity coverage of the policy, and therefore, [the insurance
company] is not obliged to defend the action or indemnify the insured.” Id.
¶ 46 Here, the complaint alleged that Mr. Bettis, “with intent to do bodily harm,” attacked both
Mr. Matthews—“by striking him in the face and body and fatally shooting him”—and Ms.
Dangerfield—“by striking her in the face.” Mr. Matthews was murdered, and Ms. Dangerfield
was seriously injured. The policy did not define “assault” or “battery,” so we must afford them
their ordinary meaning. See Valley Forge Insurance Co. v. Swiderski Electronics, Inc., 223 Ill.
2d 352, 366 (2006). Assault is defined as
“[t]he threat or use of force on another that causes that person to have a reasonable
apprehension of imminent harmful or offensive contact; the act of putting another
person in reasonable fear or apprehension of an immediate battery by means of an act
amounting to an attempt or threat to commit a battery.” Black’s Law Dictionary (11th
ed. 2019).
Battery is defined as “[t]he nonconsensual touching of, or use of force against, the body of
another with the intent to cause harmful or offensive contact.” Black’s Law Dictionary (11th
ed. 2019). The allegations of underlying complaint, that Mr. Bettis intentionally hit both Ms.
Dangerfield and Mr. Matthews and intentionally shot Mr. Matthews, are allegations of battery
that fall under the policy’s exclusion.
¶ 47 Defendants attempt to distinguish Britamco by citing the fact that one of the individuals
who committed the assault and battery was tried and found guilty of aggravated battery and by
arguing that the exclusion in Britamco was broader than the exclusion the present policy.
However, as Markel correctly points out, these arguments are inconsequential. While the
policy in Britamco did explicitly list “[h]armful or offensive contact between or among two or
more persons” (internal quotation marks omitted) (Britamco, 252 Ill. App. 3d at 99), and the
exclusion in this case did not, the court in Britamco specifically decided the case under the
assault and battery language (id. at 101). And while one of the batterers was convicted of
aggravated battery, the law directs courts to look only to the allegations of the underlying
complaint and the language of the policy to determine whether there is coverage. Outboard
Marine Corp., 154 Ill. 2d at 125. Whether or not Mr. Bettis was ever tried and found guilty of
battery is immaterial.

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¶ 48 Defendants cite L.A. Connection v. Penn-America Insurance Co., 363 Ill. App. 3d 259
(2006), to support their argument that the policy exclusions, despite their clear language to the
contrary, do not bar coverage here. The underlying complaint in L.A. Connection alleged that
an armed individual entered the “plaintiff’s premises on November 11, 2001, armed with a
handgun and thereafter shot and killed [a patron].” Id. at 261. The complaint further alleged
that the plaintiff was negligent for allowing the armed individual to enter, for not providing
security, and for failing to search the armed individual for a weapon. Id. The defendant-insurer
argued that it had no duty to defend because its policy “contained an exclusion for injury or
damages ‘resulting from assault and battery or physical altercations that occur in, on, near, or
away from’ the insured premises, including damages arising out of the insured’s failure to
properly supervise or keep the premises in a safe condition.” Id. at 263. The plaintiff argued
that this exclusion did not “necessarily apply because the complaint [did] not allege an
intentional shooting and could describe an accidental discharge of the firearm.” (Emphases in
original.) Id. The court agreed with the plaintiff, reasoning that, when construing the complaint
liberally in favor of the plaintiff, “the allegations of the complaint are not, on their face, clearly
encompassed by the assault and battery exclusion and therefore are potentially within the
policy’s coverage.”(Emphases in original.) Id.
¶ 49 The complaint and exclusion in L.A. Connection, however, differ from the underlying
complaint and exclusion in this case. The court noted in L.A. Connection that the underlying
complaint did not allege “an intentional shooting and could describe the accidental discharge
of the firearm.” (Emphases in original.) Id. The underlying complaint in this case, however,
alleged an “intentional” battery. It specifically alleged that Mr. Bettis acted “with intent to do
bodily harm” to both Mr. Matthews and Ms. Dangerfield. In reference to Ms. Dangerfield, it
also specifically alleged that Mr. Bettis “did severely harm, assault, and batter [Ms.]
Dangerfield by striking her in the face.” Further, the complaint alleged that Mr. Matthews was
“assault[ed] and batter[ed]” by Mr. Bettis and Mr. Jones. In addition, in this case, in contrast
to L.A. Connection, the firearms exclusion was also operable, and it explicitly limited coverage
for even accidental discharges of firearms. Even if the assault and battery exclusion did not
apply to Mr. Matthews’s injuries, which it clearly does, the firearms exclusion would bar
coverage.
¶ 50 Finally, defendants argue that the underlying complaint “allege[d] negligent conduct on
the part of Carolyn’s that does not relate to, or arise out of, any potential assault or battery.”
Defendants specifically point this court to the allegations that “Carolyn’s security guards
allowed Mr. Bettis and Mr. Jones to enter the premises in an ‘obviously intoxicated state’;
allowed them to consume their own bottles of alcohol; and never called the police once they
were asked to leave the premises.” Markel responds that these “negligent acts and omissions
were alleged to have caused the attack that injured Ms. Dangerfield and killed Mr. Matthews”
and that, “[t]herefore, the alleged negligence is inseparable from the assault and battery and
the use of a firearm, and there is no coverage under the Policy regardless of how the causes of
action were pleaded.” We agree.
¶ 51 Every allegation in the underlying complaint clearly arises out of the assault and battery of
Ms. Dangerfield and Mr. Matthews and the use of the firearm to kill Mr. Matthews. The
“allegations” listed by defendants as not arising out of the assault and battery or the shooting,
e.g., Carolyn’s negligently allowing Mr. Bettis and Mr. Jones to consume alcohol on the
premises, are allegations that Carolyn’s breached its duty of care. However, to state their claim

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for negligence, the underlying plaintiffs also had to allege the other three elements of
negligence: duty, causation, and damages. Enadeghe v. Dahms, 2017 IL App (1st) 162170,
¶ 14. The complaint clearly stated that “[a]s a direct and proximate result of one of the aforesaid
acts or omissions, or a combination thereof, [Ms.] Dangerfield suffered severe and permanent
physical and emotional injuries and [Mr.] Matthews[ ] was shot and killed.” Put another way,
Carolyn’s actions in permitting Mr. Bettis and Mr. Jones to drink on the premise caused the
assault and battery and the use of the firearm to shoot Mr. Matthews. There would be no
negligence claim without the assault, battery, and shooting, and these endorsements
specifically excluded coverage for “any claim” “arising out of” the use of a firearm or an
assault and battery.
¶ 52 Defendants argue that, since Markel made no effort to defend Carolyn’s in the underlying
lawsuit, it is estopped from denying coverage. This argument however rests on a
misunderstanding of estoppel in the insurance context.
¶ 53 Under Illinois law, when an insurer disputes its duty to provide a defense in an underlying
lawsuit, it must either (1) defend the suit under a reservation of rights or (2) seek a declaratory
judgment that there is no coverage. Employers Insurance of Wausau v. Ehlco Liquidating
Trust, 186 Ill. 2d 127, 150 (1999). If the insurer fails to do either and is later found to have
wrongfully denied coverage, it will be estopped from raising policy defenses to coverage. Id.
at 150-51. The estoppel doctrine only applies, however, “where an insurer has breached its
duty to defend.” Id. at 151. Estoppel does not apply “if the insurer had no duty to defend, or if
the insurer’s duty to defend was not properly triggered.” Id. In other words, while estoppel
may bar the insurer from relying on policy defenses like an insured’s late notice of the claim,
it cannot create coverage where no coverage would otherwise exist. Id.
¶ 54 In short, due to the clear and unambiguous language in the exclusions, Markel had no duty
to defend because the allegations do not even potentially fall within the policy’s coverage.

¶ 55 C. Defendants’ Appeal
¶ 56 Our finding that there was no duty to defend moots or resolves all the issues in defendants’
appeal. We need not concern ourselves with policy limits or the number of occurrences this
incident represents, since there was no possibility of coverage.
¶ 57 Section 155 of the Code permits the award of attorney fees and costs if the insurer’s actions
are “vexatious and unreasonable.” 215 ILCS 5/155 (West 2016). Because we find that the
policy did not provide coverage for the underlying lawsuit, Markel’s failure to defend was not
vexatious and unreasonable under section 155. See O’Rourke v. Access Health, Inc., 282 Ill.
App. 3d 394, 406 (1996) (“a legitimate policy defense, supported by appropriate authority,
cannot be considered vexatious and unreasonable”).

¶ 58 IV. CONCLUSION
¶ 59 For the reasons stated above, we reverse the circuit court’s decision granting summary
judgment to the defendants and denying Markel’s motion for summary judgment.

¶ 60 Reversed.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10488387. Public record. Not legal advice.