Resident’s Three Claims Against Condo Association Spanning Multiple Years Deemed Single Claim Subject to Single Limit

The United States District Court for the Northern District of Illinois has held that three claims brought by a resident against a condominium owners’ association for alleged discrimination and retaliation involved related wrongful acts and therefore are properly treated as a single Claim deemed first made during the claims-made policy period when the first such claim was asserted. Great Am. Ins. Co. v. State Parkway Condo. Ass’n et al., 2018 WL 433623 (N.D. Ill. Sept. 11, 2018).

This coverage litigation involved three underlying matters spanning multiple years: an Illinois Department of Human Rights (“IDHR”) charge brought by the resident against the condo association for allegedly failing to accommodate his disability; a counterclaim the resident filed against the condo association two years later for alleged harassment and defamation; and a subsequent IDHR charge by the resident again alleging that the condo association failed to accommodate his disability, which served as the basis for a federal lawsuit. The condo association’s directors and officers insurer defended all three claims. The condo association took the position that at least two policies were implicated by the lawsuits, such that at least two policy limits were available. The insurer, on the other hand, contended that all of the claims involved “related wrongful acts”—defined as “wrongful acts that arise out of, are based on, relate to or are in consequence of, the same facts, circumstances or situations”—and therefore are properly deemed a single Claim under the first applicable claims-made policy, and subject to its single limit of liability.

On cross-motions for judgment on the pleadings, the court found in favor of the insurer, holding that the policy language defining “related wrongful acts” is unambiguous, and all three underlying matters are related within the meaning of the policy because each arises from or is based on or relates to the condo association’s alleged discriminatory and retaliatory conduct against the resident for his hearing disability.