Key Points

  • The Illinois Appellate Court, First District, affirmed dismissal of Church Mutual's declaratory judgment and recoupment complaint against the operators of The Auberge at Orchard Park.
  • The court held that a pre-suit letter giving notice of an attorney's lien on 'any recovery from the claim,' citing personal injuries and malpractice, and asking that it be sent to liability insurers was a 'demand made by or for the injured person for monetary damages' and thus a timely claim under the claims-made policies.
  • The court adopted the Eighth Circuit's reasoning in Berry v. St. Paul Fire & Marine, treated 'damages' and 'monetary damages' as interchangeable, and found nothing in the policy requiring the demand to be explicit or to state a dollar amount.
  • The court rejected the insurer's proposed bright-line rule requiring an actual demand for money and said its ruling rests solely on this policy's language and this letter.
  • Arguments first raised at oral argument, about improper inferences under section 2-615 and disputed facts, were held forfeited under Illinois Supreme Court Rule 341(h)(7).

An Illinois appeals court ruled Thursday that a lawyer's letter announcing an attorney's lien and demanding that an assisted-living facility preserve evidence was a "claim" for money damages under the facility's insurance policy, even though the letter never named a dollar amount. The ruling keeps a resident's wrongful death case inside Church Mutual Insurance Co.'s coverage.

The First District panel affirmed a Cook County judge's dismissal of Church Mutual's suit against Frontier Management LLC and Welltower Tenant Group LLC, which own and operate The Auberge at Orchard Park in Morton Grove. The insurer sought to avoid coverage and recover its defense costs and settlement payment. Presiding Justice Quish wrote for a unanimous panel, joined by Justices Lampkin and Rochford.

The policies were claims-made coverage, which insures against claims first made during the policy period rather than injuries that occur during it. Because the estate sued only after the policies and a 60-day extended reporting period had expired, coverage turned on whether the earlier letter counted as a claim. The court held that it did, finding no requirement in the policy that a demand for money be explicit.

According to the opinion, Bertrand Nedoss, a resident with dementia, left the facility early on Jan. 5, 2021, and was found outside in 32-degree weather. He was hospitalized for hypothermia and pronounced dead that day.

Nine days later, the estate's lawyers at Passen & Powell sent a letter titled "NOTICE OF ATTORNEYS LIEN & DEMAND TO PRESERVE EVIDENCE." It said the family had retained the firm "for personal injuries and related malpractice sustained at The Auberge at Orchard Park," that the client had agreed to pay "a sum equal to one-third of any recovery from the claim," and that the facility should refer the letter to its liability insurers. The companies forwarded it to Church Mutual, which hired counsel to respond.

The policies, in effect from July 1, 2020, to July 1, 2021, defined a claim as "a 'suit' or demand made by or for the injured person for monetary damages because of alleged injury to which this insurance applies." The estate sued on Oct. 15, 2021, and Church Mutual defended under a reservation of rights, asserting that the letter did not demand monetary damages.

A federal judge in the Northern District of Illinois first ruled for the companies on partial summary judgment, holding that the letter was a claim. In February 2024, the insurer and the companies agreed that each would fund half of any settlement, with either side able to recoup its share depending on the coverage outcome. The estate settled confidentially that September; Church Mutual alleged that it paid the entire amount.

After the federal case was dismissed for lack of jurisdiction, Church Mutual refiled in Cook County in March 2025. Judge Cecilia A. Horan dismissed the complaint under section 2-615 of the Code of Civil Procedure, which tests whether a complaint states a legally sufficient claim, relying on Berry v. St. Paul Fire & Marine Insurance Co., a 1995 Eighth Circuit decision that treated a similar lien letter as a claim.

The appeals court agreed that Berry was persuasive. Borrowing that court's language, Quish wrote that even without an explicit monetary demand, "the inference that [Nedoss's death] should be compensated in money is unmistakable" because the estate had retained counsel for personal injuries and malpractice. The letter also let the insurer identify and investigate the risk, the court said, the purpose of claims-made coverage.

"An attorneys lien cannot attach unless there is an underlying monetary award and thus, the letter necessarily made a claim for monetary damages," Quish wrote. There was, the court said, "no reasonable way to interpret this letter as other than seeking money damages from defendants."

Church Mutual argued that Berry's policy required only that "damages" be alleged, while its own required a demand for "monetary damages." The panel found the terms interchangeable. It distinguished decisions from a federal court in Oklahoma and from Delaware and Maryland courts that declined to follow Berry, saying they turned on different policy language or on letters lacking the allegations present here.

The court also rejected the insurer's reading of its own 2017 decision in James River Insurance Co. v. TimCal Inc. "TimCal did not hold that such demand had to be explicit, as Church Mutual argues," Quish wrote. It distinguished a 2024 decision involving an EPA information request because the Nedoss letter "does not request information or reference an investigation."

The insurer further argued that the letter at most signaled a possible future lawsuit. "A demand for monetary damages is sufficient in and of itself under that definition, even if no lawsuit is ever filed," the court held. On the insurer's objection that the ruling let an implicit demand qualify, the panel answered that "there is also no language in the policy stating the demand for monetary damages must be explicit."

The panel held forfeited two arguments that Church Mutual's counsel raised first at oral argument, that the trial court drew improper inferences and that fact questions barred dismissal.

The panel also declined to adopt a bright-line rule requiring an actual demand for money. "We disagree that a bright line rule is justified when interpreting different insurance policies involving different policy terms and different definitions of a 'claim,'" Quish wrote, adding that the ruling rested "solely on the language and definitions in this policy and the language of the letter sent by the Estate."

Lawyers for Church Mutual included Clinton E. Cameron of Clyde & Co. US LLP. Frontier Management and Welltower were represented by lawyers including Angela R. Elbert of Neal Gerber & Eisenberg LLC.

The decision leaves in place the dismissal with prejudice of Church Mutual's complaint, including its bid to recover defense costs and the settlement payment. A footnote said neither side had raised whether the earlier federal ruling had preclusive effect.