• Illinois Court Grants Summary Judgment To Insurer In Post-Judgment Interest Coverage Dispute
  • April 18, 2012 | Authors: David F. Cutter; Rebecca L. Ross; James J. Sanders
  • Law Firm: Troutman Sanders LLP - Chicago Office
  • The Circuit Court of Cook County, Illinois, recently granted summary judgment to a Troutman Sanders client, Occidental Fire & Casualty Company of North Carolina, in a dispute concerning Occidental’s obligation to cover approximately $3.5 million in post-judgment interest which had allegedly accrued against Occidental’s insureds, JMS Trucking Company of Illinois and Samuel Inendino. The Court held that by offering to pay the underlying plaintiff its policy limit plus accrued post-judgment interest in 2007, Occidental terminated its obligation to cover any additional interest.

    In 2004, Maria Colella, as Special Administrator of the Estate of Francesco Colella, filed a wrongful death action against JMS and Inendino in the Circuit Court of Cook County. In 2007, a jury returned a verdict of $8.3 million in favor of Colella. Under the Illinois post-judgment interest statute, interest began to accrue on the judgment at a rate of 9% per annum, or $2,055.98 per day.

    The Occidental policy included a Supplementary Payments provision which extended coverage for post-judgment interest until Occidental “paid, offered to pay, or deposited in court the part of the judgment that is within our Limit of Insurance.” Approximately 45 days after judgment was entered, Occidental offered to pay Colella the limit of the Occidental policy plus accrued post-judgment interest, which at that time was approximately $96,000. Colella never responded to the offer.

    A dispute later arose between Colella and Occidental about whether Occidental’s obligation to cover accrued post-judgment interest ended when it made the offer to Colella in 2007. In 2011, Occidental and Colella filed cross-motions for summary judgment to resolve this issue.

    In a 52-page opinion, Judge Alexander White granted Occidental’s motion for summary judgment and denied Colella’s cross-motion for summary judgment. Judge White held that Occidental’s obligation to cover post-judgment interest must be determined by the language of the insurance policy, not by the post-judgment interest statute. Judge White concluded that Occidental’s 2007 offer to Colella was an “offer to pay” under the Supplementary Payments provision, which terminated Occidental’s obligation to cover any additional interest.