Quick takes on Thursday's Illinois Supreme Court opinions

FAMILY

Baumgartner v. Baumgartner

By Celia G. Gamrath, Partner, Schiller DuCanto & Fleck LLP In Baumgartner v. Baumgartner, the Illinois Supreme Court ruled that the incarceration of a 20-year-old child is not a self-emancipating event that automatically terminates a parent's obligation to contribute to a child's postsecondary education expenses. Though Baumgartner decides only the question of incarceration, the Court's decision affects a broader range of cases in which a child marries or enters the armed forces. For parents, here's the rub: Self-emancipation for support purposes automatically occurs when a child reaches the age of majority; however, it does not necessarily occur if a child is convicted of a felony and incarcerated, gets married or joins the military. Under these scenarios, the Circuit Court must consider all relevant facts and decide whether the colossal event has the effect of emancipating the child and constitutes an abandonment of any pursuit of a higher education. A "lengthy incarceration is simply one of many situations in which a minor may be found to be emancipated." Case summary Supreme Court opinion 109047

CIVIL

Founders Ins. Co v. Munoz

By Michael T. Reagan, Herbolsheimer Lannon Henson Duncan and Reagan PC Founders Ins. Co v. Munoz takes up the narrow but frequently recurring question of whether an unlicensed driver is excluded from automobile liability insurance coverage where an exclusion applies to "use by any person of a vehicle without a reasonable belief that the person is entitled to do so." In these six consolidated cases, the circuit court held that the exclusion was effective, but the appellate court disagreed, finding it to be ambiguous. The Supreme Court holds that the exclusion is not ambiguous, and that it does not contravene Illinois public policy, including the policy expressed in the Financial Responsibility Law. In this closely reasoned opinion, the court said that it was not concerned with all possible connotations of the word "entitle," but only the connotation which arises out of the use of that word in these policies. Because permission and ownership issues are already resolved under another portion of the policy, the question of entitlement only arises thereafter, in determining whether the exclusion applies. After considering the statutory requirements concerning driver's licenses, the court crisply concluded that "irrespective of whether a person owns the vehicle, or is a permissive user, without a valid license, a person cannot have a reasonable belief that he or she is entitled to drive in this state." This case clears up this dispute, which has been simmering in various courts for years. Case summary Supreme Court opinion 108605

Pekin Insurance Co. v. Wilson

By Michael T. Reagan, Herbolsheimer Lannon Henson Duncan and Reagan PC Pekin Insurance Co. v. Wilson offers important clarification on an insurance coverage issue which is confronted by the Chancery Division in Cook County and in courts deciding declaratory judgments across the state on a daily basis. Pekin's insured was sued in the underlying tort case for assault, battery, intentional infliction of emotional distress, and for negligence. But the appellate court found that even the negligence count alleged intentional acts. The issue presented is whether, in this declaratory judgment action, the insured may rely upon his counterclaim in the underlying case in which he alleged that he was engaged in self-defense. Pekin contended that the duty to defend is to be determined only from the complaint. The Supreme Court disagreed. The court clarified earlier Supreme Court cases by stating that it is only "the general rule" that the duty to defend is to be determined solely from the complaint. While that remains true as the general rule, in this case, the court permitted broad resort to contentions in the pleadings, for two reasons. First, because Pekin had moved for judgment on the pleadings, all pleadings were to be considered, including the underlying counterclaim. Second, there were "unusual or compelling circumstances" present which required an examination of matters beyond the allegations of the underlying complaint. The court agreed with the appellate court that it would be unlikely that any underlying complaint would ever allege facts sufficient to permit the insured to invoke the self-defense exception to the intentional act exclusion. If Pekin were to be permitted to rely solely upon the complaint, then the coverage it sold would have been illusory. This case will become a central pivot point for any determination of the duty to defend, except in the most basic of cases. Case summary Supreme Court opinion 108799

Cwik v. Giannoulias

By Jean M. Prendergast, Schuyler, Roche & Crisham, P.C Today, a unanimous Illinois Supreme Court held that the State Treasurer properly kept interest earned on money held pursuant to the Uniform Disposition of Unclaimed Property Act (“Act”) because the Act does not sanction an unconstitutional “taking” of property. The plaintiffs, an alleged class of similarly situated property owners, sought interest on money held by the State prior to their reclaiming the money. The plaintiffs challenged the constitutionality of the Act’s express provision which barred recovery of such income. The circuit court denied the State’s motion to dismiss and certified the class. The appellate court answered certified questions pursuant to Illinois Supreme Court Rule 308, found that no claim for just compensation existed and reversed the class certification order. The Illinois Supreme Court agreed with the appellate court’s conclusion, but offered different reasons. Ultimately, the court ruled that the Act did not offend constitutional principles by divesting neglectful property owners of interest earned. The court relied, in part, on United States Supreme Court cases upholding statutes which divest neglectful proper owners of all rights in certain property. The court further reasoned that the inaction of the neglectful property owners triggered the State’s involvement in the first instance.  The court noted that the State assumed safekeeping responsibilities for the property until the owners reclaimed it. The court viewed this arrangement as a “seemingly advantageous, long-term reclamation service” provided for the ultimate benefit of the neglectful property owners. The court observed that in return for this service, the State properly receives the benefit of interest.  The court distinguished its decision in Canel v. Topinka, reasoning that interest earned because of State actions in managing money belong to the State whereas dividends automatically issued to the owner of stock belong to the stock holder of record. Case summary Supreme Court opinion 108313