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Illinois Attorneys Obtain Favorable Appellate Ruling for Insurer in EPA Case

Chicago Partner Michael P. Baniak and Attorney Dora Lee obtained a favorable result in appellate court on behalf of our insurance company client in a case that involved alleged violations of the Illinois Environmental Protection Act (EPA). Recently, the Supreme Court of Illinois upheld the Illinois First District Appellate Court’s decision that our client is not required to defend or indemnify Plaintiff, and rejected Plaintiff’s Petition for Leave to Appeal.

In 2018, the State of Illinois filed a three-count Complaint in the Circuit Court of Cook County against Plaintiff, an international hotel property located in downtown Chicago. The suit alleged that Plaintiff’s hotel property violated the Illinois EPA, specifically how their HVAC system takes water from and then returns it to the Chicago River. One of the hotel’s insurers filed a related insurance coverage lawsuit that ended up involving multiple insurance companies, including our client. The other insurers each filed similar motions for summary judgment, claiming they did not owe a duty to defend or indemnify the hotel.

Our attorneys contended that no coverage was available due to the lack of an “occurrence” as defined in our client’s general liability policy, the lack of “property damage” alleged and the application of the policy’s pollution exclusion. The Circuit Court granted our motion for summary judgment and subsequently, the hotel filed a notice of appeal with the First District.

In August 2023, the Appellate Court ruled that our client is not required to defend or indemnify the hotel because alleged violations of permitting requirements are not considered an “occurrence.” Later, in October 2023, this case was appealed to the Supreme Court of Illinois. In late January 2024, the Court rejected Plaintiff’s Petition for Leave to Appeal, preserving the insurers’ victory in appellate court.

Mike Baniak concentrates his practice in all aspects of insurance coverage law. His insurance coverage practice involves evaluating first- and third-party coverage issues, handling insurance coverage litigation and defending insurers in bad faith lawsuits. Mike advises insurers on the broad scope of necessary coverages enabling

Dora Lee focuses her legal practice on insurance coverage claims, contract interpretation and bad faith litigation. She has experience conducting research for claims involving insurance coverage, contract disputes and administrative review.