Maryland Casualty Company v. Peppers

In Maryland Casualty Company v. Peppers, 64 Ill. 2d 187, 355 N.E.2d 24 (1976), the insured defendant was sued, in the underlying personal injury action, for intentional, negligent, and willful and wanton conduct. Peppers, 64 Ill. 2d at 190-95, 355 N.E.2d at 26-29. The insurance policy at issue excluded coverage for intentionally inflicted injuries. Peppers, 64 Ill. 2d at 190-95, 355 N.E.2d at 26-29. The insurer then filed suit for a declaratory judgment, alleging that the defendant's conduct was intentional and that the policy exclusion applied to bar coverage. Peppers, 64 Ill. 2d at 190-95, 355 N.E.2d at 26-29. In ruling on the insurance company's action for declaratory judgment, the circuit court found that the defendant had intentionally caused the injuries sustained by the plaintiff in the underlying personal injury action. Peppers, 64 Ill. 2d at 196, 355 N.E.2d at 29-30. The supreme court, in reviewing the case, held that the circuit court abused its discretion in making a determination, within the context of the declaratory judgment action, that the defendant's conduct in the underlying action was intentional. Our supreme court held that the issue was one of the "ultimate facts upon which recovery is predicated in the underlying personal injury action against the defendant, which had been filed considerably before the declaratory judgment action had been instituted." Peppers, 64 Ill. 2d at 197, 355 N.E.2d at 30. The court reasoned that such a determination regarding the declaratory judgment action was "premature" and collateral estoppel would preclude the plaintiff in the underlying action from recovering under other alleged theories-such as negligence. This ruling has come to be known as the Peppers doctrine. Peppers, 64 Ill. 2d at 197, 355 N.E.2d at 30.