Stewart Title Breached Duty To Defend Insured Party
10-13-2000
Judge Loretta C. Douglas of the Circuit Court of Cook County entered a judgement in favor of the plaintiff in the amount of $482,000 in the case of Cole Taylor Bank v. Stewart Title Guaranty Company, Case No. 97 CH 7843. Following a bench trial, Judge Douglas found that Stewart Title had failed to fully defend its insured, the plaintiff, under a policy of title insurance in an underlying case. The plaintiff served as trustee for a Trust holding title to a commercial real estate space in Chicago's downtown area. The plaintiff was represented by attorneys Eric Macey, Joel S. Schreier, and Alaya Meyers of Novack and Macey, a Chicago-based litigation law firm.
The subject of the underlying action was to determine whether a 1,600 sq. ft. basement space was property of the condominium association or of the Trust. Stewart had issued a title policy insuring the Trust's rights to the basement space. The condominium association successfully challenged the Trust's rights to the space, and the Trust and its beneficiary were ordered to return the space. Stewart, who had initially defended the Trust in the underlying action, refused to continue to defend its insured. Thus, the insured was left to prosecute an appeal and defend itself, out-of-pocket, against remaining money damage claims.
According to Schreier, "This case represents poor judgment on the part of Stewart Title. It could have avoided any liability had it been loyal to its insured for the duration of the lawsuit."
By law, an insurer who breaches its duty to defend its insured is liable for the amount of the judgment against the insured or a reasonable settlement, plus any expenses incurred. The Trust sought damages for the loss of the use of the space, the cost incurred to defend the Underlying Action, and the prejudgment interest.
"The plaintiff should never have been forced to bring this issue to court in the first place. This should have been an open and shut case, with complete coverage and support provided by the insurer," adds Schreier.
Founded in 1984, Novack and Macey is a litigation firm that concentrates in complex commercial cases. The firm has successfully represented clients in a wide variety of business disputes, including matters involving banking, contracts, class actions, RICO, securities, business torts, real estate, land use, partnerships and close corporations, employment, unfair competition and antitrust, insurance coverage, and environmental issues. Novack and Macey attorneys have honed their skills in courtrooms, mediations and arbitrations nationwide. Clients include corporations, institutions, investment ventures, partnerships and individuals, as well as the United States Government.
For further information about Cole Taylor Bank v. Stewart Title Guaranty Company, Case No. 97 CH 7843, please contact Joel S. Schreier at 312-419-6900.
The subject of the underlying action was to determine whether a 1,600 sq. ft. basement space was property of the condominium association or of the Trust. Stewart had issued a title policy insuring the Trust's rights to the basement space. The condominium association successfully challenged the Trust's rights to the space, and the Trust and its beneficiary were ordered to return the space. Stewart, who had initially defended the Trust in the underlying action, refused to continue to defend its insured. Thus, the insured was left to prosecute an appeal and defend itself, out-of-pocket, against remaining money damage claims.
According to Schreier, "This case represents poor judgment on the part of Stewart Title. It could have avoided any liability had it been loyal to its insured for the duration of the lawsuit."
By law, an insurer who breaches its duty to defend its insured is liable for the amount of the judgment against the insured or a reasonable settlement, plus any expenses incurred. The Trust sought damages for the loss of the use of the space, the cost incurred to defend the Underlying Action, and the prejudgment interest.
"The plaintiff should never have been forced to bring this issue to court in the first place. This should have been an open and shut case, with complete coverage and support provided by the insurer," adds Schreier.
Founded in 1984, Novack and Macey is a litigation firm that concentrates in complex commercial cases. The firm has successfully represented clients in a wide variety of business disputes, including matters involving banking, contracts, class actions, RICO, securities, business torts, real estate, land use, partnerships and close corporations, employment, unfair competition and antitrust, insurance coverage, and environmental issues. Novack and Macey attorneys have honed their skills in courtrooms, mediations and arbitrations nationwide. Clients include corporations, institutions, investment ventures, partnerships and individuals, as well as the United States Government.
For further information about Cole Taylor Bank v. Stewart Title Guaranty Company, Case No. 97 CH 7843, please contact Joel S. Schreier at 312-419-6900.