Malicious Prosecution Claim Arose When Person Was Arrested, Not 25 Years Later When He was Exonerated, Illinois Appeals Court Rules

An appellate court in Illinois, reversing a trial court’s decision, has ruled that an insurance company was not obligated to defend a county and several of its former officials who were sued for malicious prosecution by a wrongfully convicted criminal defendant because his claim arose when he first was arrested, not years later when he was exonerated.

The Case

In May 1994, authorities in McLean County, Illinois, arrested Alan Beaman for the August 1993 murder of Jennifer Lockmiller. In March 1995, a jury convicted Beaman of that offense, and the trial court subsequently sentenced him to 50 years in prison.

In May 2008, however, the Illinois Supreme Court reversed Beaman’s conviction, concluding that prosecutors had unlawfully withheld exculpatory evidence.

Then, in January 2009, prosecutors dismissed all charges against Beaman.

In April 2012, Beaman filed a lawsuit in federal court against McLean County, two former prosecutors, and a former deputy sheriff of McClean County (collectively, the “plaintiffs”), asserting federal civil rights violations and several state-law tort claims, including malicious prosecution.

The following April, the plaintiffs went to court, seeking a ruling that States Self-Insurers Risk Retention Group, Inc., was obligated to pay the costs of the plaintiffs’ legal defense against Beaman’s federal lawsuit pursuant to an insurance policy that was in place when Beaman was exonerated.

In June 2014, the trial court granted summary judgment in favor of the plaintiffs, finding that, for purposes of Beaman’s malicious prosecution claim, the dismissal of the charges against him in January 2009 – not his arrest or prosecution in the 1990s – constituted the date of the “occurrence” that resulted in his “personal injury” within the meaning of the insurance policy. Because the trial court concluded that Beaman’s malicious prosecution claim ripened during the policy period, it ordered the insurer to pay the cost of the plaintiffs’ defense against Beaman’s federal lawsuit.

The insurer appealed.

The Appellate Court’s Decision

The appellate court reversed, finding that the “occurrence” of Beaman’s “personal injury” within the meaning of the insurance policy was his arrest and prosecution, not his exoneration.

In its decision, the appellate court decided that “none of the claims” in Beaman’s complaint, including his malicious prosecution claim, had occurred during the March 2008 to March 2009 policy period.

The appellate court said that to find that the “occurrence” resulting in Beaman’s “personal injury” had happened within the policy period, the injury caused by the malicious prosecution must have taken place within the policy period. In other words, the appellate court continued, the event that triggered coverage was the actual injury suffered by the prosecuted party, not the accrual of the tort of malicious prosecution.

In this case, the appellate court stated, Beaman’s injury “obviously” did not occur during the March 2008 to March 2009 policy period. In the appellate court’s view, a malicious prosecution injury occurred when a person was arrested and prosecuted, not when the person was exonerated, because the favorable termination of a malicious prosecution marked the “beginning of the judicial system’s remediation” of the wrong committed, not the commencement of the injury or damage.

Thus, the appellate court ruled, Beaman’s personal injury – that is, the “injury … caused by … malicious prosecution” – “took place” when Beaman was arrested and prosecuted. Because that was outside the March 2008 to March 2009 policy period, the trial court erred by granting summary judgment for the plaintiffs, the appellate court concluded.

The case is County of McLean v. States Self-Insurers Risk Retention Group, Inc., No. 4-14-0628 (Ill. Ct. App. June 2, 2015).