The Illinois Supreme Court in First Mercury Ins. Co. v. Ciolino, 107 N.E.3d 240, appeal denied, 108 N.E.3d 840 (Ill. 2018), considered when a malicious prosecution claim became an “offense” for purposes of insurance coverage and whether the claim fell within the subject policy. The Court found that when dealing with malicious prosecution claims, the date of occurrence for triggering coverage was the date that the prosecution commenced and not the date on which plaintiff was exonerated. The Court noted that the use of the term “offense” in the policy did not demonstrate the intent of the parties that coverage would only be triggered upon the fulfillment of all elements of the tort of malicious prosecution under Illinois law. The Court found that coverage was dependent upon whether the insured’s offensive conduct was committed during the policy period, irrespective of whether there had been an accrual of the malicious prosecution tort.
In this case, the insured, Paul Ciolino, was a private investigator for Northwest University. In the subject complaint, it was alleged that a Northwestern professor who taught an investigative journalism class and Ciolino, among others, fabricated evidence against Alston Simon, coercing him into falsely confessing to murder. Simon was indicted by a grand jury. Simon alleged that the grand jury indictment was based on false evidence that was manufactured by the defendants, including Ciolino. Later, the Illinois State Attorney General’s Office requested that the trial court vacate the charges against Simon based upon the record and he was then released.
First Mercury did not insure Ciolino at the time of Simon’s 1999 guilty plea and conviction. However, First Mercury was Ciolino’s insurer at the time of Simon’s exoneration in 2014. According to the First Mercury policy, the insurer provided coverage to Ciolino for sums that Ciolino became legally obligated to pay because of personal injury or advertising injury caused by an “offense” but only in situations where the offense was committed during the policy period. The policy did not define what “offense” meant. However, personal injury was defined by the policy as meaning injuries other than bodily injury arising out of a listed offense, which included malicious prosecution.
The Illinois Court of Appeals found that the term “offense” referred to the misconduct that was allegedly committed by Ciolino, which led to Simon’s plea and conviction, but not to Simon’s later exoneration. This was so because the exoneration was not part of any offense committed by Ciolino and the alleged defense did not occur during the policy periods of First Mercury’s policies. The Court of Appeals concluded that First Mercury was not required to defend Ciolino against the malicious prosecution claim because the offense was not committed during First Mercury’s policy periods.