The appellate court reversed the trial court's granting of a judgment on the pleadings based upon the expected injury exclusion in a homeowner's policy. Allstate Indemn. Co. v. Contreras, 2018 Ill. App. LEXIS 170964 (Ill. Ct. App. July 20, 2018).
Alejandra Contreras owned Jasmine's Day Care. Her husband, Adan Contreras, was not an employee of the Day Care. Alejandra and Adan had a homeowner's policy which provided day care liability coverage through an endorsement.
Jane Doe's children, Janie Doe and Janet Doe, were enrolled in the Day Care. Jane sued the Day Care and Alejandra, alleging Adan had abused Janie and Janet. Jane's complaint alleged that as the owner and operator of the Day Care, Alejandra was obligated to supervise Janie and Janet while they were under her care. The complaint alleged Alejandra was negligent in failing to provide adequate supervision and allowing her husband to be alone with Janie and Janet.
Allstate filed a complaint for declaratory judgment against Alejandra, Adan, the Day Care, and Jane. The policy excluded "bodily injury intended by, or which may reasonably be expected to result from intentional or criminal acts or omissions of any insured person." Allstate argued that the injuries that Janie and Janet suffered did not arise out of an accident but were instead the reasonably expected result of the repeated sexual abuse by Adan.
Allstate filed a motion for judgment on the pleadings. The court agreed there was no duty to defend based upon the "expected injury" exclusion and granted the motion.
On appeal, Jane argued that she did not name Adan as a defendant in the underlying action. It was necessary to distinguish between Adan's intentional acts and the independent negligent acts of the Day Care and Alejandra. The court considered whether Adan's intent to injury Janie and Janet precluded coverage for his co-insureds, the Day Care and Alejandra, where they were allegedly negligent for failing to prevent the sexual abuse.
The court decided that under Illinois law, it could not simply impute Adan's intentional conduct to the Day Care and Alejandra for purposes of the "expected injury" exclusion. Allstate argued that Jane would be required to plead and prove in the underlying case more specific facts, including Adan's intent to harm her daughters, and this would preclude coverage for the Day Care and Alejandra.
But the absence of any specific factual allegations in the underlying complaint that would trigger the "expected injury" exclusion with respect to the Day Care or Alejandra meant that Allstate did not meet its burden of demonstrating that it owed no duty to defend. Accordingly, Allstate was not entitled to judgment on the pleadings.