The Clay County Circuit Court of Louisville, IL, has issued an opinion on insurance coverage that has a significant impact upon agriculture and insurance policyholders in Illinois. In a recent decision, Judge Daniel E. Hartigan ruled that Country Mutual Insurance Company wrongfully refused to defend its longtime insured, Bible Pork, Inc. in the nuisance case of Pierson, et al. v. Bible Pork, Inc., (2008-MR-14), under two Country Mutual policies, the AgriPlus comprehensive general liability policy and an umbrella policy.
This ruling is particularly important to the agriculture industry and its insurance policyholders as it provides some assurance that producers should be able to rely upon their insurance carriers to provide a defense against third-party claims promised under the terms of the policies.
The plaintiffs in the Pierson case sued Bible Pork in 2005, claiming that its newest facility, located in Louisville, IL, would be a public and private nuisance. Shortly after being served with the complaint, Bible Pork tendered the defense to Country Mutual under both its AgriPlus and Umbrella policies. Country Mutual denied coverage under both policies. Instead of filing a declaratory judgment action immediately, Country Mutual waited to sue Bible Pork until 2008, shortly before the nuisance action was set for trial. In February of 2009, following a 10-day trial before a Clay County jury, Bible Pork received a complete verdict in its favor in the nuisance case. The Illinois Fifth District Court of Appeals affirmed this verdict in 2011.
Bible Pork’s success in the nuisance action limited the scope of the declaratory judgment action to the issue of whether Country Mutual had a duty to provide reimbursement for legal fees and expenses. Despite this fact, Country Mutual continued to pursue the declaratory judgment action against Bible Pork. The parties filed cross-motions for summary judgment in the fall of 2012, which were argued on Feb. 1, 2013.
On April 26, 2013, the court ruled that Country Mutual had a duty to defend Bible Pork under both the AgriPlus and Umbrella policies. Specifically, the court found that the complaint in the nuisance action sought “damages” notwithstanding that it was styled as a “Complaint for Declaratory Judgment,” that it alleged an “occurrence” as well as “property damage,” “bodily injury” and/or “personal injury” as defined under both policies, and that the pollution exclusions in the respective policies did not bar coverage.
Bible Pork was represented by Caroline Spangenberg, Julie Lierly, Alex Bullock, and Ellen McCarley of Kilpatrick Townsend, & Stockton, LLP and Chris Koester of the Taylor Law Offices.
This is the second Illinois insurance coverage court decision in the last six months in which a court has ruled (1) that Country Mutual had a duty to defend its policyholder against a livestock nuisance action under its insurance policies and (2) that the pollution exclusion in Country Mutual’s Umbrella policy is ambiguous and therefore cannot bar coverage. On Jan. 29, 2013, the Circuit Court in Schuyler County found that Country Mutual owed its insured a duty to defend against another livestock nuisance case, in part, under the language of a similar Umbrella policy. (Country Mutual Ins. Co. v. Hilltop View, LLC, et al., 09-MR-7).