Acuity v. Marion Glass and Mirror, Inc.

Summary

The United States District Court for the Southern District of Illinois granted Acuity’s motion for default judgment against Marion Glass and Mirror, Inc. in a declaratory-judgment action concerning insurance coverage for an underlying construction-related lawsuit. The court held that Acuity had no duty to defend or indemnify Marion Glass under the policy’s Business Liability, Errors and Omissions, or Commercial Excess Liability provisions because the alleged property damage and wrongful acts predated the relevant coverage periods and the excess coverage was not triggered. The court directed the Clerk to enter judgment and close the case.

Holdings

1. Default judgment was appropriate because Marion Glass failed to plead or otherwise defend, and Acuity's well-pleaded factual allegations, together with the policy provisions, established entitlement to the requested declaratory relief.
2. Acuity owed no duty to defend or indemnify Marion Glass under the Business Liability coverage because the alleged property damage occurred before the policy period; alternatively, any continuing damage was discovered before the policy period and therefore fell outside the policy's known-loss condition.
3. Acuity owed no duty to defend or indemnify Marion Glass under the Contractors Errors and Omissions coverage because the alleged wrongful acts and resulting claims arose before the policy's December 30, 2020, retroactive date.
4. Acuity owed no duty to defend or indemnify Marion Glass under the Commercial Excess Liability coverage because that coverage applied only when scheduled underlying insurance also applied, and the Business Liability coverage did not apply to the alleged property damage.
5. Illinois law imposes a duty to defend when the facts alleged in the underlying complaint fall within or potentially within the policy's coverage, but that standard did not create a duty here because the allegations placed the claimed damage outside the relevant coverage provisions.

Questions Presented

1. Whether Acuity was entitled to default judgment establishing that it owed no duty to defend or indemnify Marion Glass under the Business Liability coverage.
2. Whether Acuity was entitled to default judgment establishing that it owed no duty to defend or indemnify Marion Glass under the Contractors Errors and Omissions coverage.
3. Whether Acuity was entitled to default judgment establishing that it owed no duty to defend or indemnify Marion Glass under the Commercial Excess Liability coverage.
4. Whether the well-pleaded allegations and insurance policy provisions established Acuity's entitlement to declaratory relief despite Marion Glass's default.

Disposition

other