National Casualty Company v. Michael McFatridge

In the
United States Court of Appeals
For the Seventh Circuit
No. 09-1497
N ATIONAL C ASUALTY C OMPANY, ET AL.,
Plaintiffs-Appellees,
v.
M ICHAEL M. M C F ATRIDGE, ET AL.,
Defendants-Appellants.
Appeal from the United States District Court
for the Central District of Illinois.
No. 2:07-cv-02056-HAB-DCB—Harold A. Baker, Judge.
A RGUED S EPTEMBER 22, 2009—D ECIDED A PRIL 28, 2010
Before E ASTERBROOK, Chief Judge, and B AUER and
R OVNER, Circuit Judges.
B AUER, Circuit Judge. Plaintiffs National Casualty
Company and Scottsdale Indemnity Company provided
commercial general liability (“CGL”) and law enforce-
ment insurance to Edgar County, Illinois, via a series of
policies. In 2005, Gordon “Randy” Steidl sued Edgar
County and its former state’s attorney, Michael
2 No. 09-1497
McFatridge for damages stemming from Steidl’s 1986
conviction for murder, which a federal court overturned
in 2003. The district court held that National Casualty
Company and Scottsdale Indemnity Company have
no obligation to defend or indemnify McFatridge or
the county under four insurance policies issued in
1989, 1997, 1998 and 1999. The county and McFatridge
appeal and we affirm.
I. BACKGROUND
In 1987, Steidl was convicted in Edgar County of murder.
Eventually, Steidl’s appeals entered the federal system
under 28 U.S.C. § 2254. In June 2003, the district court
granted a writ of habeas corpus based on ineffectual
counsel at the trial and sentencing in the state court.
Steidl sued, under 28 U.S.C. § 1983 and Illinois law, a
number of officials involved in the prosecution, including
Illinois State Police and Paris police officers who had
investigated the murders, and former Edgar County
State’s Attorney Michael McFatridge, who was involved
in the investigation and prosecution. Steidl also named
the County of Edgar as a defendant and necessary party.
According to the complaint, McFatridge, in coopera-
tion with Paris police, framed and falsely prosecuted
Steidl. The complaint says that McFatridge coerced and
threatened two key witnesses, induced them to testify
falsely, and concealed numerous pieces of exculpa-
tory evidence during the trial. Steidl also claims that
throughout the post-conviction proceedings, even after
No. 09-1497 3
McFatridge left office in 1991, he continued to coerce
witnesses, lied about the evidence, and engaged in
a publicity campaign defending the trial and Steidl’s
conviction.
Steidl’s suit seeks damages for false arrest, false impris-
onment, malicious prosecution, conspiracy and inten-
tional infliction of emotional distress. The county
tendered the suit to National and Scottsdale, believing
itself entitled to a legal defense and indemnification
under each of four insurance policies the companies
issued. The insurers responded by filing a declaratory
judgment action, asking the court to determine that they
had no duty to defend or indemnify the county under
any of the policies.
There are four separate insurance policies at issue, each
in effect at a different time: A law enforcement liability
policy issued by Scottsdale Insurance Company was
in effect from May 25, 1989, until May 25, 1990. It named
“County of Edgar S.D.” as the insured. In addition, three
CGL policies—two issued by Scottsdale Indemnity Com-
pany, and one issued by National Casualty Com-
pany—insured Edgar County from July 1, 1997, until
July 1, 2000. Each of the three policies covered a one-
year period.
Edgar County argued that the policies are at least
ambiguous about whether they provide it or McFatridge
coverage for liability to Steidl, and should be read against
the drafters, in favor of a duty to defend. The district
court granted summary judgment for the insurers.
First, the court found no coverage for McFatridge
under the law enforcement policy in effect from May 1989
4 No. 09-1497
through May 1990 because the state’s attorney was not
a “Class C” employee under that policy. In addition, while
indicating that McFatridge’s conduct during the post-
conviction proceedings “suggests the possibility of cover-
age” under the two CGL policies in effect in 1998 and
early 1999, the court pointed out that McFatridge left
office in 1991. It held that the CGL policies did not cover
acts by former officials or employees committed during
the policy periods; therefore, McFatridge was not an
insured under any of the three CGL policies.
Edgar County appealed the district court’s decision
and filed this appeal.
II. DISCUSSION
In determining whether the insurance companies
must provide former Edgar County State’s Attorney
Michael McFatridge with coverage—a legal defense and/or
indemnity—for liability arising from Steidl’s prosecution
and conviction, we look to Illinois law, which the parties
agree governs this dispute. Conn. Indem. Co. v. DER Travel
Serv., Inc., 328 F.3d 347, 349 (7th Cir. 2003). We review
the district court’s grant of summary judgment de novo.
Del Monte Fresh Produce N.A., Inc. v. Transp. Ins. Co., 500
F.3d 640, 643 (7th Cir. 2007).
A. Duty to Defend
An insurer’s duty to defend its insured is broader than
its duty to indemnify. If an insurer has no duty to defend,
No. 09-1497 5
it has no duty to indemnify. We determine whether an
insurer has a duty to defend by examining the underlying
complaint and the language of the insurance policy. Gen.
Agents Ins. Co. of Am., Inc. v. Midwest Sporting Goods Co.,
828 N.E.2d 1092, 1098 (Ill. 2005). Any doubts as to
whether particular claims fall within the policy are re-
solved in favor of coverage. Del Monte Fresh Produce, 500
F.3d at 643. So if the “complaint asserts facts within or
potentially within policy coverage, an insurer is obligated
to defend its insured.” Gen. Agents, 828 N.E.2d at 1098.
On the other hand, an insurer may refuse to defend an
action in which, from the face of the complaint, the al-
legations are clearly outside the bounds of the policy
coverage. U.S. Fid. & Guar. Co. v. Wilkin Insulation Co.,
578 N.E.2d 926, 930 (Ill. 1991).
Each of the four policies in question provided “occur-
rence” coverage and name “County of Edgar” or “County
of Edgar S.D.” as named insureds. Coverage depends on
whether the particular policy contemplated coverage
for McFatridge or the state’s attorney’s office, if it does,
we ask whether any of the allegations in Steidl’s com-
plaint “occurred” during the coverage periods.
The county argues that as state’s attorney, McFatridge
was an insured under the law enforcement policy in effect
from May 1989 until May 1990. During that policy
period, the complaint says that McFatridge made false
public statements about Steidl’s guilt, coerced witnesses
to prevent them from recanting false testimony and
provided fabricated evidence to the post-conviction
court. According to the county, Scottsdale has a duty to
6 No. 09-1497
defend because McFatridge was an insured under the
law enforcement policy and is potentially liable
for conduct within the policy period. And, in addition,
even though he left office in 1991, the county contends
that CGL policies in effect from mid-1997 until mid-2000
require Scottsdale and National to defend it and
McFatridge. It claims that McFatridge is an insured
under the third CGL policy because it contains an en-
dorsement that lists “persons who . . . were . . . your
lawfully elected . . . officials” as covered under that
policy.1 Alternatively, the county argues that McFatridge
participated in a long-running conspiracy to deprive
Steidl of a fair trial, that began when he was a public
official with Edgar County and continued into the
CGL policy periods. Any conduct that occurred after
McFatridge left office was therefore part of a single con-
tinuing offense committed under McFatridge’s authority
as state’s attorney. This at least raises an ambiguity,
according to the county, about whether a former official
1
The county’s brief cites to a “public officials liability coverage
form,” Appellants’ Brief at 18; App. at A-114-115, as support
for this contention. But this form plainly excludes any duty to
defend against McFatridge’s claims. It says the insurer “will not
be obligated . . . to defend any ‘suit’ in connection with any
‘claim’ made against the insured . . . [f]or false arrest, false
imprisonment, . . . defamation . . . malicious prosecution or
abuse of process.” A nearly identical form in the same policy
entitled, “Law Enforcement Liability Coverage Form”
also lists persons who “were” elected officials as insureds,
App. at A-94-96. We address the county’s argument under
this coverage form.
No. 09-1497 7
is an insured under the CGL policies for wrongful acts
that continued into the policy period, because the course
of conduct began when he was state’s attorney.
Finally, the county suggests that, regardless of the
state’s attorney’s status as an insured, the Illinois Local
Governmental and Governmental Employees Tort Im-
munity Act, 745 Ill. Comp. Stat. 10/9-102 (2006), requires
it to reimburse the state’s attorney for its liability. If it is
liable for acts McFatridge took during the policy periods,
the county argues that the insurers must provide a
defense and indemnity. We address coverage under
each argument in turn.
1. The Law Enforcement Policy—Duty to De-
fend
Because the law enforcement policy was in effect during
McFatridge’s tenure as state’s attorney and provides
slightly different coverage, we discuss it separately
from the three CGL policies.
Scottsdale issued the law enforcement policy, which
was in effect from May 25, 1989, until May 25, 1990. The
law enforcement policy required Scottsdale to pay all
sums “which the insured shall become legally obligated
to pay . . . because of wrongful acts . . . caused by an
occurrence and arising out of the performance of
the insured’s duties to provide law enforcement.” App. at
A-163 (emphasis added). Under that policy, “insured—
means the named insured and all full or part-time and
all auxiliary or volunteer law enforcement officers of the
8 No. 09-1497
named insured.” App. at A-164. It defines “occurrence” as
“an event, including continuous or repeated exposure
to conditions, which results in personal injury . . . sus-
tained during the policy period.”
We first address whether the law enforcement policy
contemplated coverage for liability for the acts of
McFatridge in his role as state’s attorney. “County of
Edgar S.D.” is the named insured in the policy. The
county defendants argue that whether or not County of
Edgar S.D. refers to the sheriff’s department is am-
biguous and so should be read in favor of coverage for
the County of Edgar as a whole. However, an endorse-
ment to the policy names “County of Edgar, IL” as an
additional insured. The endorsement specifies that
County of Edgar is only an insured “with respect[] to
liability arising out of the activities of the named in-
sured,” or County of Edgar S.D. Looking at the “type
of insurance purchased, the nature of the risk involved,
and the overall purpose of the contract,” Nicor, Inc. v.
Assoc. Elec. and Gas Ins. Serv. Ltd., 860 N.E.2d 280, 286 (Ill.
2006), (in this case the provision of law enforcement
coverage), we think the policy clearly contemplated
County of Edgar Sheriff’s Department as the named
insured. The sheriff is the county’s main law enforce-
ment official. The county’s contention that “County of
Edgar S.D.” is ambiguous because it could mean some-
thing else does not make it so. See Valley Forge Ins. Co. v.
Swiderski Elecs., Inc., 860 N.E.2d 307, 314 (Ill. 2007)
(internal citations omitted) (terms are not ambiguous
“simply if the parties can suggest creative possibilities
for their meaning”). We will not strain to interpret a
No. 09-1497 9
particular provision in a way that would render another
provision meaningless. Shelton v. Andres, 478 N.E.2d 311,
314 (Ill. 1985). Reading “County of Edgar S.D.” as ambigu-
ous and potentially naming the county as a whole would
render the endorsement naming County of Edgar itself
meaningless. But if, as we conclude, the sheriff’s depart-
ment is the named insured, the endorsement negotiated
by the parties and separately added to the policy has
meaning.
Moreover, the other policies at issue, which no one
disputes insure the county government itself, list “County
of Edgar” as the named insured indicating a distinction
between CGL insurance provided to the county govern-
ment, and law enforcement coverage purchased for the
sheriff’s department.
Further undercutting the county’s argument on this
point is that the address on the policy for “County of
Edgar S.D.” is different from that of the county govern-
ment. The named insured on the law enforcement policy
is located at 228 North Central Avenue, the same address
listed publicly by the county for its sheriff’s department.
http://www.edgarcounty-il.gov/Sheriff/default.aspx (last
visited Apr. 8, 2010). The address for the County of
Edgar itself, both according to the CGL policies and the
county’s website, is “Edgar County Courthouse,” which
is actually located at 115 West Court Street in Paris.
http://www.edgarcounty-il.gov/CountyClerk/default.aspx
(last visited Apr. 8, 2010).
The endorsement does provide coverage for Edgar
County as an additional insured. But it does not cover
10 No. 09-1497
McFatridge or the state’s attorney’s office for the claims in
Steidl’s suit. Edgar County is an additional insured “only
with respect[] to liability arising out of the activities of
the named insured,” the sheriff’s department. However,
the law enforcement policy does not contemplate cov-
erage for all law enforcement activity simply by virtue
of its taking place within Edgar County. McFatridge and
the state’s attorney’s office became involved as the state’s
chief prosecuting official in Edgar County. The state’s
attorney’s duty in this case arises from Illinois law, and
not “out of the activities of the [sheriff’s department].”
Under state law the state’s attorney must “prosecute
all . . . indictments and prosecutions . . . in the circuit court
for his county.” 55 Ill. Comp. Stat. 5/3-9005(a)(1). When
McFatridge investigated, charged and prosecuted Steidl,
he engaged in activity arising out of his duties as state’s
attorney as defined by Illinois law, not as part of the
activities of the County of Edgar Sheriff’s Department.
A reading of Steidl’s complaint reveals that the sheriff’s
department was not involved in the investigation and
its activities are not the subject of the lawsuit. McFatridge
worked solely with the Paris police and Illinois State
Police. In short, the county is not insured in this
case because any liability it might have to Steidl for
his wrongful prosecution arises only through the activity
of the state’s attorney and not through any activities of
the sheriff’s department.
If coverage for the county in Steidl’s case were not
already foreclosed by the fact that the law enforcement
policy and its endorsement cover sheriff’s department
activities only, the rest of the policy’s terms unambigu-
No. 09-1497 11
ously do the job. The terms of the “Insuring Agreement”
explicitly provide that the policy provides coverage in
the event of an injury or damage caused by an “occur-
rence.” The policy defines “occurrence” as “an
event, . . . which results in . . . injury . . . and arising out of
the performance of the insured’s law enforcement du-
ties.” App. at A-164 (emphasis added). As mentioned
above, the insureds in this case are the sheriff’s depart-
ment and the county, but only for “liability arising out
of the activities” of the sheriff’s department. There is
no such liability here. McFatridge’s involvement arose
out of his duty as state’s attorney and the activities of the
Paris police and Illinois State Police. With no law en-
forcement activity by the sheriff’s department, there
was no covered “occurrence” and no duty for Scottsdale
to defend the county in this case.
Despite this seemingly clear language limiting coverage
to situations where liability arose from sheriff depart-
ment activities, Edgar County further maintains that
ambiguity in the “Conditions” section of the policy
creates the possibility of coverage for McFatridge. The
section provides as follows:
1. PREMIUM. . . . For the purpose of determining
the actual premium, the following definitions will
apply:
....
“Class C Employees”—those employees who
do not exercise power of arrest and whose
duties are only administrative in nature.”
12 No. 09-1497
App. at A-164. The policy then lists specific positions that
are part of the Class C category—county commissioner,
mayor, auxiliary police officer and coroner. The district
court held that McFatridge and the Edgar County State’s
Attorney are not Class C employees because under
Illinois law the state’s attorney’s duties are not just
“administrative” in nature, a construction which the
plaintiffs National and Scottsdale urge us to affirm. Edgar
County maintains that the state’s attorney fits within
this definition because he is not specifically excluded,
does not have the power of arrest, and “provides admin-
istrative assistance to law enforcement.” But the plain
language of this section indicates that in order to be a
“Class C” employee, one must be an “employee” of the
insured. McFatridge is not an employee of the sheriff’s
department or the county, and cannot be a Class C em-
ployee under the law enforcement policy. The best charac-
terization of the state’s attorney is that he is a state con-
stitutional official with jurisdiction in the county in
which he is elected. He can serve as an agent of the
county when representing county officers in suits
brought against them or on their behalf. 55 Ill. Comp.
Stat. 5/3-9005(a)(3), (4). But his primary duty is prose-
cuting criminal actions—a function he fulfills as a state
employee. 55 Ill. Comp. Stat. 5/3-9005(a)(1). The govern-
ment of the county in which the state’s attorney is
elected has neither the power to direct, oversee nor
control these prosecutions; the state’s attorney is not
its employee. Further, Illinois law explicitly holds that
the state’s attorney is a state, and not a county employee.
McGrath v. Gillis, 44 F.3d 567, 571 (7th Cir. 1995);
No. 09-1497 13
Ingemunson v. Hedges, 549 N.E.2d 1269 (Ill. 1990)
(“[D]rafters of our present constitution agreed . . . that
state’s attorneys should be classified as state, rather
than county officers.”).
That the Illinois Constitution treats state’s attorneys
differently from other county officials adds further
support to this holding. The position of state’s attorney
is created in the judicial article. Ill. Const. art. VI, § 19.
Counties have no power to eliminate the state’s attorney
position and multiple counties may share a single state’s
attorney only if the voters in each county agree. Id. By
contrast, all other county offices are created within the
constitution’s local government article. Id. at art. VII, § 4
(sheriff, clerk, treasurer, coroner, assessor, recorder,
auditor). Unlike its limited power over the state’s attor-
ney, the county can completely eliminate any of these
positions via referendum and can even eliminate
some simply by passing an ordinance. Id.
Acknowledging this authority, the county attempts to
distinguish the Illinois cases and constitutional frame-
work by pointing out that the state’s attorney serves as
the county’s attorney—its agent—in civil actions brought
by, and against the county. The budget for the state’s
attorney’s office and a portion of his salary come from
county coffers, suggesting that the state’s attorney may
be a county employee in some situations. The problem
with this argument is that it also proves the opposite
point: when prosecuting criminal cases, such as the
case against Steidl, the state’s attorney acts in his inde-
pendent capacity as a representative of the people of
14 No. 09-1497
Illinois in the county in which he works. While
the county does pay a portion of the salary, the state
pays two-thirds, a division that would seem to reflect
the division between the state’s attorney’s duties as a
criminal prosecutor and service to the county in other
circumstances. See 55 Ill. Comp. Stat. 5/4-2001(a). It is
true, as the county points out that the state’s attorney
can be characterized a county agent at various times.
But when McFatridge investigated, charged and prose-
cuted Steidl, he acted on behalf of the state and was not
a Class C employee of Edgar County or even an em-
ployee at all.
Finally, we note that even if none of the above was
true regarding the state’s attorney’s non-status as a
county employee, it is doubtful that the “Conditions”
section of the law enforcement policy would give rise
to the insurer’s duty to defend. As the insurers point out,
this section purports only to define classes of employees
for purposes of calculating premiums. It says nothing
about changing other definitions in the policy describing
who is an insured. So a duty to defend the insured for
an act of a “Class C” employee arises only if the other
policy requirements and definitions are satisfied. For
example, the “Insuring Agreement” says that the policy
will pay damages caused by the insured’s wrongful acts
“arising out of the performance of the insured’s duties to
provide law enforcement” activity. As discussed above,
the “insured” is the sheriff’s department with the
County of Edgar being additionally covered. So acts
are covered only if they arise out of the performance of
the sheriff’s department’s law enforcement duties, or at
No. 09-1497 15
its very broadest, the county’s law enforcement duties.
McFatridge’s prosecution of Steidl had nothing to do
with duties of either the county or its sheriff’s depart-
ment to provide law enforcement activities. Based on the
complaint, the county and its sheriff’s department had
nothing to do with the prosecution and any misconduct
by McFatridge was not part of the county’s “duties to
provide law enforcement.” Even if McFatridge fit the
definition of a “Class C” employee, which he does not,
the insurer has no duty to defend him under the law
enforcement policy because the “Insuring Agreement”
limits coverage to liability for those acts of the various
classes of employees undertaken pursuant to the
county’s duty to provide law enforcement. The defini-
tion of Class C employees does nothing to change this
and the insurers have no duty to defend under the
law enforcement policy.
2. McFatridge as an Insured—The CGL Policies
Like the law enforcement policies, the three CGL policies
cover the county on an occurrence basis. To determine
whether the insurers have a duty to defend, we match
the factual allegations in Steidl’s complaint against each
of the policies to determine whether any of the claims
fall within the coverage. BASF AG v. Great Am. Assurance
Co., 522 F.3d 813, 819 (7th Cir. 2008). Any ambiguities
in the policy are resolved in the insured’s favor.
The three CGL policies did not take effect until after
McFatridge left the state’s attorney’s office. They
offer nearly identical coverage. Each policy covers
16 No. 09-1497
“ ‘[p]ersonal injury’ caused by an offense arising out
of [County of Edgar’s] business . . . but only if the
offense was committed . . . during the policy period.” App.
at A-27, A-50, A-74. All three policies covered personal
injury arising from offenses such as “false arrest, deten-
tion or imprisonment” and “[m]alicious prosecution.”
The first policy, issued by National, covered the period
from July 1, 1997, through July 1, 1998. Scottsdale
issued the second two policies, each in effect for one
year, from July 1, 1998, through July 1, 2000. Each
insured the “County of Edgar,” its “employees,” “elective
officers,” and “duly elected officials.” Thus the three
CGL policies insure the county, its employees and
elected officials in the event one of them becomes
liable because of an offense committed within the
policy period.
The district court held that only two allegations in
Steidl’s complaint describe offenses committed during
the policy periods. In January 1998, McFatridge gave
false testimony at an evidentiary hearing held to deter-
mine whether post-conviction relief was warranted.
Then, while Steidl’s post-conviction petition was
pending, McFatridge perpetuated a publicity campaign
to defeat the petition. The court held that neither of
these acts triggers coverage under the CGL policies.
McFatridge left the state’s attorney’s office in 1991 and
was no longer an elected official in the county when
he engaged in these acts. To the extent they constitute
“offenses” within the coverage provided, the district
court determined that McFatridge acted as a private
citizen and not as an insured. It concluded that none of
the three CGL policies contemplates coverage for
No. 09-1497 17
liability arising from offenses committed by a former
official after that official left office.
We agree with the district court. The CGL policies cover
“insureds,” defined as “employees” and “elected . . .
officials.” McFatridge left the state’s attorney’s office in
1991 and was not an elected official during any of the
CGL policy periods. Because he was not an insured, none
of the misconduct Steidl claims McFatridge committed
during the policy periods is a covered occurrence.
The county points to several endorsements to the third
CGL policy stating that “all persons who were . . . your
lawfully elected . . . officials” are insureds. But the
policy covers only insureds for liability arising out of
occurrences during the policy period. Steidl’s complaint
does not claim any misconduct during the third CGL
period. If none of McFatridge’s offenses occurred during
the policy period, there is no duty to defend under
that policy.
The county also claims that coverage is triggered under
the CGL policies because McFatridge’s misconduct was
an ongoing tort that continued from Steidl’s arrest in
1987 until his release in 2003. But this ignores that the
CGL policies provide coverage only if the “offense was
committed . . . in the policy period.” None of the tort
offenses Steidl claims McFatridge committed as state’s
attorney occurred during any of the policy periods.
The complaint says McFatridge’s conduct entitles
Steidl to damages for a variety of offenses under both
state and federal law. The federal law offenses under
42 U.S.C. § 1983 include false imprisonment, deprivation
18 No. 09-1497
of the Steidl’s right to a fair trial, wrongful conviction
and denial of due process. But none of these offenses
occurred during the CGL policy periods. A § 1983 false
imprisonment claim seeks damages for injury caused by
the plaintiff’s detention without probable cause. The
false imprisonment ends, and the claim accrues when he
is held pursuant to a warrant or other judicially issued
process. Wallace v. Kato, 549 U.S. 384, 390-93 (2007).
McFatridge obtained a warrant to arrest Steidl on
February 19, 1987, and a grand jury indicted Steidl on
March 10, 1987. So to the extent Steidl’s complaint
makes out a § 1983 claim in the nature of false arrest,
that offense was committed at the very latest in 1987,
before Steidl was arrested pursuant to a judicially
issued warrant, and well before any of the policy peri-
ods. Steidl’s other federal law claims for unconstitutional
conviction, imprisonment, and denial of due process, on
the other hand, challenge the validity of his conviction.
These claims did not accrue until 2003, because they
require Steidl to prove that his “conviction . . . has been
reversed on direct appeal, . . . or called into question by a
federal court’s issuance of a writ of habeas corpus.” Heck v.
Humphrey, 512 U.S. 477, 486-87 (1994); Johnson v. Dossey,
515 F.3d 778, (7th Cir. 2008). So Steidl did not have a
complete cause of action, and there was no offense of
wrongful conviction or deprivation of due process until
June 17, 2003, when the district court issued the writ of
habeas corpus. This is long after the CGL policies expired
and the insurers have no duty to defend against these
claims.
No. 09-1497 19
Steidl’s state law claims suffer the same fate. He
claims damage for false imprisonment, malicious prose-
cution, intentional infliction of emotional distress and
conspiracy under Illinois law. Like his § 1983 claims,
Steidl’s false arrest ended, and the claim accrued when
authorities got a warrant for his arrest. Mercado v. Vill.
of Addison, 898 N.E.2d 1089, 1092 (Ill. App. Ct. 2008);
Smith v. Boudreau, 852 N.E.2d 433, 442 (Ill. App. Ct. 2006)
(citing Wallace, 549 U.S. at 427, as controlling accrual
of state and federal false arrest claims). Any offenses
relating to Steidl being arrested without probable cause
were accordingly committed, at the very latest, in
February or March 1987, long before any of the policy
periods. On the other hand, the state law malicious prose-
cution claim depends upon the invalidation of Steidl’s
underlying conviction. Cult Awareness Network v. Church
of Scientology, Inter., 685 N.E.2d 1347, 1351 (Ill. 1997).
That offense did not occur, for insurance purposes, until
June 2003, several years after the CGL policies expired
in 2000. See Sec. Mutual Cas. Ins. Co. v. Harbor Ins., 382
N.E.2d 1, 6 (Ill. App. Ct. 1978), rev’d on other grounds
397 N.E.2d 839 (Ill. 1979).
3. The Local Governmental and Governmental
Employees Tort Immunity Act
The county additionally argues that Illinois law
requires it to indemnify the state’s attorney’s office for
any damages it pays to Steidl on his claims. See 745 Ill.
Comp. Stat. 10/9-102; Carver v. Sheriff of LaSalle County,
787 N.E.2d 127, 138-39 (Ill. 2003). Indemnifying the
20 No. 09-1497
state’s attorney’s office for its liability, according to the
county, means that it would be “legally obligated to
pay damages because of ‘personal injury,’ ” which it
claims the policies cover. We find, however, that such a
view misreads both the terms of the insurance policies,
and the holding in Carver, 787 N.E.2d at 139.
Carver held that the Local Governmental and Govern-
mental Employees Tort Immunity Act, 745 Ill. Comp.
Stat. 10/9-102, requires a county to pay judgments
rendered against the sheriff’s office, an independently
elected county official reliant on the county for opera-
tional funding. Carver, 787 N.E.2d at 138-39. Courts have
subsequently applied this principle to suits involving
other independent officials whose operations the
county funds. See, e.g., Horstman v. County of DuPage, 284
F. Supp. 2d 1125, 1131-32 (N.D. Ill. 2003) (citing Biggerstaff
v. Moran, 671 N.E.2d 781, 784 (Ill. 1996)). But the obliga-
tion to pay the judgment does not mean the county itself
is liable to the plaintiff. Rather, the county is only a neces-
sary party to the suit so that, as an insurer or backstop
for the independent official, it may “veto improvident
settlements.” Carver v. Sheriff of LaSalle County, 324
F.3d 947, 948 (7th Cir. 2003).
Additionally, as we held above, the policies issued to
Edgar County cover only “insureds,” meaning the
county, its elected officials, and employees. These
insureds are not covered unless the offense occurs
during the policy period. Even though personal injury
liability may be the original source of an official’s
liability, a county’s obligation to indemnify that official
No. 09-1497 21
for that liability arises by operation of law and is not an
occurrence. The county’s obligation to pay judgments
against McFatridge or the state’s attorney’s office under
§ 10/9-102 is not an occurrence or accident as defined
by the policies and the insurers have no duty to defend
or indemnify the county.
III. CONCLUSION
For the foregoing reasons, the insurers have no duty
to defend or indemnify McFatridge or Edgar County.
The decision of the district court is A FFIRMED.
4-28-10