{ "id": 3739893, "name": "CONTINENTAL CASUALTY COMPANY, Plaintiff-Appellee, v. LAW OFFICES OF MELVIN JAMES KAPLAN, Defendant-Appellant (Cort Chubko, Defendant)", "name_abbreviation": "Continental Casualty Co. v. Law Offices of Kaplan", "decision_date": "2003-12-03", "docket_number": "No. 1-02-2951", "first_page": "34", "last_page": "40", "citations": [ { "type": "official", "cite": "345 Ill. App. 3d 34" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "55 Cal. Rptr. 2d 160", "category": "reporters:state", "reporter": "Cal. Rptr. 2d", "year": 1996, "opinion_index": 0 }, { "cite": "47 Cal. App. 4th 1612", "category": "reporters:state", "reporter": "Cal. App. 4th", "case_ids": [ 4790766 ], "year": 1996, "opinion_index": 0, "case_paths": [ "/cal-app-4th/47/1612-01" ] }, { "cite": "578 N.E.2d 926", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1991, "opinion_index": 0 }, { "cite": "144 Ill. 2d 64", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5592135 ], "year": 1991, "pin_cites": [ { "page": "73" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/144/0064-01" ] }, { "cite": "607 N.E.2d 1204", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1992, "opinion_index": 0 }, { "cite": "154 Ill. 2d 90", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 4820940 ], "year": 1992, "pin_cites": [ { "page": "108-09" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/154/0090-01" ] }, { "cite": "615 N.E.2d 736", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1993, "opinion_index": 0 }, { "cite": "155 Ill. 2d 402", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 4810152 ], "year": 1993, "pin_cites": [ { "page": "411" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/155/0402-01" ] }, { "cite": "608 N.E.2d 432", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1992, "opinion_index": 0 }, { "cite": "240 Ill. App. 3d 938", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5138470 ], "year": 1992, "pin_cites": [ { "page": "944" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/240/0938-01" ] }, { "cite": "313 N.E.2d 457", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1974, "opinion_index": 0 }, { "cite": "57 Ill. 2d 376", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5407090 ], "year": 1974, "pin_cites": [ { "page": "380" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/57/0376-01" ] }, { "cite": "620 N.E.2d 1073", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1993, "opinion_index": 0 }, { "cite": "156 Ill. 2d 384", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 777543 ], "weight": 3, "year": 1993, "pin_cites": [ { "page": "391" }, { "page": "392" }, { "page": "393" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/156/0384-01" ] }, { "cite": "11 U.S.C. \u00a7 524", "category": "laws:leg_statute", "reporter": "U.S.C.", "year": 2000, "pin_cites": [ { "page": "(a)(2)" } ], "opinion_index": 0 }, { "cite": "11 U.S.C. \u00a7 362", "category": "laws:leg_statute", "reporter": "U.S.C.", "year": 2000, "opinion_index": 0 }, { "cite": "11 U.S.C. \u00a7 701", "category": "laws:leg_statute", "reporter": "U.S.C.", "year": 2000, "pin_cites": [ { "page": "et seq." } ], "opinion_index": 0 } ], "analysis": { "cardinality": 630, "char_count": 13029, "ocr_confidence": 0.723, "pagerank": { "raw": 7.332158225200558e-08, "percentile": 0.4401044230764033 }, "sha256": "52ae1f9535d3388d27750f3106a379c7ae80b2220ea27761731ed9fa6250deb9", "simhash": "1:ab34afaeb9318687", "word_count": 2114 }, "last_updated": "2023-07-14T15:40:04.128176+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "SOUTH and KARNEZIS, JJ., concur." ], "parties": [ "CONTINENTAL CASUALTY COMPANY, Plaintiff-Appellee, v. LAW OFFICES OF MELVIN JAMES KAPLAN, Defendant-Appellant (Cort Chubko, Defendant)." ], "opinions": [ { "text": "PRESIDING JUSTICE HOFFMAN\ndelivered the opinion of the court:\nThe Law Offices of Melvin James Kaplan (Kaplan) appeals from a summary judgment entered in favor of its malpractice insurance carrier, Continental Casualty Company (Continental), in Continental\u2019s action seeking a judicial declaration that it has no duty to defend Kaplan in an action brought by one of its former clients, or to indemnify Kaplan from any judgment that might be entered in that action. Kaplan also appeals from the denial of its cross-motion for summary judgment. For the reasons that follow, we reverse the judgment of the circuit court and remand this cause with directions to enter a partial summary judgment in favor of Kaplan.\nThe facts of this case are not in dispute. Continental issued a policy of insurance (hereinafter referred to as the Policy) pursuant to which it agreed to pay on behalf of Kaplan all sums in excess of the stated deductible that Kaplan \u201cshall become legally obligated to pay as damages and claim expenses because of a claim that is both first made against *** [Kaplan] and reported in writing to *** [Continental] during the policy period by reason of an act or omission in the performance of legal services by *** [Kaplan] or by any person for whom *** [Kaplan] is legally liable.\u201d The Policy defines \u201clegal services,\u201d in relevant part, as \u201cthose services performed by an Insured for others as a lawyer.\u201d It also states that the term \u201cdamages\u201d includes \u201cjudgments, awards, and settlements,\u201d but that the term does not include, among other things:\n\u201c1. legal fees, costs and expenses paid or incurred or charged by *** [Kaplan], no matter whether claimed as restitution of specific funds, forfeiture, financial loss, set-off or otherwise, and injuries that are a consequence of any of the foregoing;\n2. civil or criminal fines, sanctions, penalties or forfeitures, whether pursuant to law, statute, regulation or court rule ***;\n3. punitive or exemplary amounts.\u201d\nThe Policy provides that Continental has \u201cthe right and duty to defend in *** [Kaplan\u2019s] name and on *** [Kaplan\u2019s] behalf a claim covered by this Policy even if any of the allegations of the claim are groundless, false or fraudulent.\u201d\nOn January 3, 2001, Cort Chubko, one of Kaplan\u2019s former clients, filed a class-action complaint in the Federal District Court for the Northern District of Illinois (hereinafter referred to as the underlying action). Chubko\u2019s second amended complaint in that action alleged, inter alia: that Kaplan represented him in a proceeding brought pursuant to chapter 7 of the United States Bankruptcy Code (Code) (11 U.S.C. \u00a7 701 et seq. (2000)); that, prior to filing a petition on his behalf, Kaplan required Chubko to sign a retainer agreement for the payment of attorney fees in installments; and that a portion of the fees collected by Kaplan from Chubko after the filing of his bankruptcy petition was for services rendered by Kaplan prior to the filing of the petition. In count I of his second amended complaint, Chubko sought relief against Kaplan for a violation of the automatic stay provisions of section 362 of the Code (11 U.S.C. \u00a7 362 (2000)) by reason of Kaplan having collected, after Chubko\u2019s bankruptcy petition was filed, fees for services rendered to him prior to the filing of the petition. In count II, Chubko asserted a negligence claim against Kaplan for having failed to obtain a discharge of a prepetition obligation of his; namely, the fees that he owed Kaplan for prepetition services. Count III sought a finding of contempt against Kaplan and an award of actual damages, punitive damages and attorney fees predicated upon Kaplan\u2019s alleged violation of the injunction imposed under the provisions of section 524(a)(2) of the Code (11 U.S.C. \u00a7 524(a)(2) (2000)), prohibiting the collection of a prepetition debt after discharge. Each of the counts was brought on behalf of Chubko individually and as the putative representative of all similarly situated former clients of Kaplan.\nOn March 14, 2001, Continental filed the instant action in the circuit court of Cook County, seeking a judicial declaration that it has no duty under the Policy to defend or indemnify Kaplan from the claims made by Chubko in the underlying action. Continental and Kaplan filed cross-motions for summary judgment. The circuit court issued a written memorandum opinion and order wherein it found that all of the claims asserted by Chubko against Kaplan in the underlying action sought recovery for injuries incurred as a consequence of legal fees charged by Kaplan and were, as a result, excluded from coverage under the terms of the Policy. The circuit court granted Continental\u2019s motion for summary judgment and denied Kaplan\u2019s cross-motion. This appeal followed.\nOur resolution of this appeal turns on an analysis of the issue of whether, under the terms of the Policy, Continental is obligated to defend Kaplan in the underlying action. The issue is one of contract construction.\n\u201cThe construction of an insurance policy and a determination of the rights and obligations thereunder are questions of law for the court which are appropriate subjects for disposition by way of summary judgment.\u201d Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384, 391, 620 N.E.2d 1073 (1993). Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2 \u2014 1005(c) (West 2000); Carruthers v. B.C. Christopher & Co., 57 Ill. 2d 376, 380, 313 N.E.2d 457 (1974). When, as in this case, parties file cross-motions for summary judgment, they concede the absence of a genuine issue of material fact and invite the court to decide the questions presented as a matter of law. Spencer v. Riordan, 240 Ill. App. 3d 938, 944, 608 N.E.2d 432 (1992). Our review, however, is de novo. In re Estate of Hoover, 155 Ill. 2d 402, 411, 615 N.E.2d 736 (1993).\nIn Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 108-09, 607 N.E.2d 1204 (1992), our supreme court held:\n\u201cIn construing an insurance policy, the court must ascertain the intent of the parties to the contract. [Citations.] To ascertain the meaning of the policy\u2019s words and the intent of the parties, the court must construe the policy as a whole [citations], with due regard to the risk undertaken, the subject matter that is insured and the purposes of the entire contract [citations]. If the words in the policy are unambiguous, a court must afford them their plain, ordinary, and popular meaning. [Citations.] However, if the words in the policy are susceptible to more than one reasonable interpretation, they are ambiguous [citation] and will be construed in favor of the insured and against the insurer who drafted the policy [citations].\u201d (Emphasis in original.)\nIn assessing the scope of coverage afforded by a policy of insurance, our initial consideration is the \u201ctype of policy for which the parties have contracted.\u201d Crum & Forster, 156 Ill. 2d at 392. The policy at issue in this case unambiguously covers professional liability. It is labeled a \u201cLawyers Professional Liability Policy\u201d and, as noted earlier, provides that Continental agreed to pay on behalf of Kaplan damages and expenses incurred as the consequence of claims arising out of \u201can act or omission in the p\u00e9rformanee of legal services.\u201d The risks undertaken by Continental under the Policy are clearly those inherent in the practice of law. See Crum & Forster, 156 Ill. 2d at 393.\nIn urging reversal of the trial court\u2019s judgment in this case, Kaplan argues that Chubko\u2019s second amended complaint in the underlying action alleges a claim arising out of the performance of legal services and, as a consequence, triggers Continental\u2019s duty to defend. Continental disagrees, contending, as it did before the trial court, that the sums sought by Chubko in the underlying action do not fall within the Policy\u2019s definition of \u201cdamages\u201d that Continental has a duty to pay on behalf of Kaplan and that, in the absence of an obligation to indemnify Kaplan for the sums sought, it has no duty to defend against the claims.\nAddressing the issue of an insurer\u2019s duty to defend its insured, the supreme court in U.S. Fidelity & Guaranty Co. v. Wilkin Insulation Co., 144 Ill. 2d 64, 73, 578 N.E.2d 926 (1991), stated:\n\u201cIf the underlying complaints allege facts within or potentially within policy coverage, the insurer is obliged to defend its insured even if the allegations are groundless, false, or fraudulent. [Citation.] An insurer may not justifiably refuse to defend an action against its insured unless it is clear from the face of the underlying complaints that the allegations fail to state facts which bring the case within, or potentially within, the policy\u2019s coverage. [Citation.] Moreover, if the underlying complaints allege several theories of recovery against the insured, the duty to defend arises even if only one such theory is within the potential coverage of the policy. [Citation.]\u201d (Emphasis in original.)\nIt seems fairly clear that the theories of recovery asserted in counts I and III of Chubko\u2019s second amended complaint arise out of Kaplan\u2019s actions as a creditor collecting a debt. Neither of the theories pled in these counts arises out of an act or omission by Kaplan in rendering, or failing to render, legal services. As such, neither count constitutes a claim under the terms of the Policy and neither count would trigger Continental\u2019s duty to defend. Our analysis focuses, therefore, on the theory of recovery pled in count II of Chubko\u2019s second amended complaint.\nCount II asserts a cause of action for professional negligence against Kaplan, arising out of its representation of Chubko in his bankruptcy proceedings. Chubko charges that Kaplan was negligent in failing to secure a discharge of one of his prepetition debts. The debt at issue is Kaplan\u2019s own fee claim for legal services rendered to Chubko in the bankruptcy proceedings prior to the filing of his petition.\nContinental correctly asserts that two requirements must be met in order to trigger coverage under the Policy. First, the claim made against Kaplan in the underlying action must have arisen by reason of an act or omission in performance of legal services. Second, the recovery sought in the underlying action must fall within the Policy\u2019s definition of damages. See Tana v. Professional Prototype I Insurance Co., 47 Cal. App. 4th 1612, 55 Cal. Rptr. 2d 160 (1996). Continental\u2019s arguments to the contrary notwithstanding, the charging allegations set forth in count II of Chubko\u2019s second amended complaint clearly satisfy the first requirement. The issue remains whether the recovery sought by Chubko in count II falls within the Policy\u2019s definition of damages that Continental is obligated to pay on behalf of Kaplan.\nAs noted earlier, Continental argues that the injury for which recovery is sought in count II is a consequence of legal fees charged by Kaplan and, as such, falls outside the Policy\u2019s definition of damages. We disagree. An event is the consequence of another when the former follows the latter as a natural or necessary result. See Webster\u2019s Third New International Dictionary 482 (1981). The fact that the damages sought by Chubko in count II may well be measured by the sums paid to Kaplan, postdischarge, for legal services rendered prior to the filing of Chubko\u2019s petition in bankruptcy does not mean that the injury suffered is a consequence of the fees charged. Rather, the injury suffered is a consequence of Kaplan\u2019s alleged negligent failure to secure a discharge of Chubko\u2019s obligation to pay those fees.\nWe believe that count II of Chubko\u2019s second amended complaint in the underlying action alleges facts and a theory of liability against Kaplan that potentially fall within the coverage afforded under the Policy and, as a consequence, Continental is obligated to defend Kaplan. Accordingly, we reverse the summary judgment entered by the circuit court in favor of Continental and the denial of Kaplan\u2019s cross-motion, and we remand this cause to the circuit court with directions to enter a partial summary judgment in favor of Kaplan on the issue of Continental\u2019s duty to defend and to stay any further proceedings on the issue of Continental\u2019s duty to indemnify Kaplan pending the resolution of the underlying action.\nReversed and remanded with directions.\nSOUTH and KARNEZIS, JJ., concur.", "type": "majority", "author": "PRESIDING JUSTICE HOFFMAN" } ], "attorneys": [ "Beermann, Swerdlove, Woloshin, Berezky, Becker, Genin & London, of Chicago (Timothy M. Kelly, of counsel), for appellant.", "Ross, Dixon & Bell, L.L.E, of Washington, D.C. (Richard A. Simpson and Lynda Guild Simpson, of counsel), and Ross, Dixon & Bell, L.L.E, of Chicago (Scott E. Turner, of counsel), for appellee." ], "corrections": "", "head_matter": "CONTINENTAL CASUALTY COMPANY, Plaintiff-Appellee, v. LAW OFFICES OF MELVIN JAMES KAPLAN, Defendant-Appellant (Cort Chubko, Defendant).\nFirst District (3rd Division)\nNo. 1-02-2951\nOpinion filed December 3, 2003.\nRehearing denied January 12, 2004.\nBeermann, Swerdlove, Woloshin, Berezky, Becker, Genin & London, of Chicago (Timothy M. Kelly, of counsel), for appellant.\nRoss, Dixon & Bell, L.L.E, of Washington, D.C. (Richard A. Simpson and Lynda Guild Simpson, of counsel), and Ross, Dixon & Bell, L.L.E, of Chicago (Scott E. Turner, of counsel), for appellee." }, "file_name": "0034-01", "first_page_order": 54, "last_page_order": 60 }