Malicious Prosecution Only Happens When a Person Is Maliciously Prosecuted

Doctored Evidence Resulting in 80 Year Sentence Results in Malicious Prosecution Conviction of City

Police are usually seriously concerned, fair, detailed and reasonable when they arrest someone for the crime of murder. However, police are not perfect. Some do terrible and wrongful acts. For that reason cities, like the City of Chicago Heights, buy insurance to protect against claims of malicious prosecution.

In Rodell Sanders et al. v. Illinois Union Insurance Company et al., Docket No. 124565, 2019 IL 124565, Supreme Court of the State of Illinois (November 21, 2019) the Supreme Court of the State of Illinois, was called upon to determine when the offense of malicious prosecution occurred and, therefore, which insurers were required to defend and indemnify the city.


In 1994, based on doctored evidence from the City of Chicago Heights Police Department, Rodell Sanders was charged with murder, attempted murder, and armed robbery. Sanders was wrongfully convicted and imprisoned for approximately 20 years before being exonerated in 2014. From November 2011 to November 2014, Chicago Heights obtained primary liability insurance from Illinois Union Insurance Company (Illinois Union) and excess liability insurance from Starr Indemnity & Liability Company (Starr). The primary insurance policy indemnified Chicago Heights for, among other things, damages arising out of the “offense” of “malicious prosecution.” At issue is whether the offense of malicious prosecution occurred during the policy period, thereby triggering the insurers’ obligation to provide coverage.


The survivor of a murderous attack later provided Chicago Heights police officers with a description of two of the assailants. Officers arrested Sanders in January 1994. Sanders did not match either physical description provided by the surviving victim, and he had an alibi that was confirmed by alibi witnesses. Nonetheless, the Supreme Court concluded that the officers manipulated the evidence to ensure his conviction.


Sanders filed a post-conviction petition, and in January 2011 the Cook County circuit court overturned the conviction and vacated his sentence. The appellate court affirmed its judgment in May 2012. Meanwhile, at some point in 2012, Chicago Heights provided Illinois Union and Starr with a notice of claim based on their policies from November 1, 2011, through November 1, 2014.

The prosecution retried Sanders twice, one resulting in a mistrial and a second time where the jury acquitted him.


Illinois Union responded to Chicago Heights’ notice of claim in December 2014. At that time, it notified the city that it was declining to provide coverage because no covered events occurred during the policy periods. One year later, Starr similarly sent a declination, claiming that the malicious prosecution did not fall within the policy periods.

The Policy

The “general liability coverage part” of the insurance policy provides: “The Insurer will indemnify the Insured for Damages and Claim Expenses in excess of the Retained Limit for which the Insured becomes legally obligated to pay because of a Claim first arising out of an Occurrence happening during the Policy Period in the Coverage Territory for Bodily Injury, Personal Injury, Advertising Injury, or Property Damage taking place during the Policy Period.”

“Personal injury” was defined as “one or more of the following offenses *** [f]alse arrest, false imprisonment, wrongful detention or malicious prosecution *** wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies by or on behalf of the owner, landlord or lessor.” The policy provided that “[a]ll damages arising out of substantially the same Personal Injury regardless of frequency, repetition, the number or kind of offenses, or number of claimants, will be considered as arising out of one Occurrence.”

Circuit Court Proceedings

In February 2016, Chicago Heights filed a complaint for declaratory judgment against Illinois Union and Starr. The city sought a declaration that it was entitled to coverage under the insurance policy, thereby requiring the insurers to indemnify it for attorney fees and costs that were paid in excess of the retained limit.

A consent judgment was entered in Sanders’s favor in the federal civil rights action for $15 million. Chicago Heights agreed to contribute $2 million, and United National Insurance Company (Chicago Heights’ insurer from 1994) agreed to contribute $3 million toward the judgment. Additionally, Chicago Heights assigned its rights against Illinois Union and Starr to Sanders in exchange for his agreement not to seek the remaining $10 million from the city.

The insurers filed an amended motion to dismiss the complaint with prejudice. Illinois Union and Starr noted that Sanders “was maliciously prosecuted in 1994 resulting in his conviction and incarceration for a crime he did not commit.” In their view, his injury predated the effective dates of their policies. Illinois Union and Starr therefore argued that they were neither required to provide coverage for Chicago Heights nor obligated to contribute to its settlement with Sanders.

The circuit court granted the insurers’ amended motion to dismiss.  The court acknowledged that, to prevail on a tort claim of malicious prosecution, a plaintiff must establish, among other things, that the prior proceeding terminated in his favor. But it also noted that the vast majority of courts to consider the issue have ruled that the filing of the underlying malicious suit was the occurrence causing personal injury under an insurance policy.

The Appellate Court’s Decision

On appeal, a split panel reversed. The majority ruled that the plain and ordinary meaning of the term offense, as used in relation to the phrase malicious prosecution, referred to the completed cause of action.


The question before the Supreme Court was whether the offense of malicious prosecution occurred during the policy period, such that Illinois Union and Starr were required to provide coverage to Chicago Heights.

When the terms of a policy are clear and unambiguous, the court must ascribe to them their plain and ordinary meaning. The policy in this case provides that the offense of malicious prosecution, must have happened during the policy period, and take place during the policy period. The Supreme Court concluded that the most straightforward reading of the term “offense” indicates that coverage depends upon whether the insured’s offensive conduct was committed during the policy period.

The Supreme Court reversed concluding that the word offense in the insurance policy refers to the wrongful conduct underlying the malicious prosecution. In so ruling both the meaning of the word “offense” and the contractual requirement that the offense must both happen and take place during the policy period.

“A malicious prosecution neither happens nor takes place upon exoneration.” (emphasis added)  The gist of the action for malicious prosecution is that the prosecutor acted without probable cause. Further, courts have found that the personal injury of malicious prosecution in the context of an insurance policy differs from the common-law elements of the tort of malicious prosecution. In the context of insurance, malicious prosecution occurs upon the institution of the underlying action.

A typical occurrence-based policy, containing multiple references to coverage for occurrences or offenses happening during the term of the policy, reflects the intent to insure only for the insured’s acts or omissions that happen during a policy period. If the court was to deem exoneration the trigger for coverage of a malicious prosecution insurance claim, liability could be shifted to a policy period in which none of the acts or omissions giving rise to the claim occurred. That would violate the intent of the parties to an occurrence-based policy.

Chicago Heights officers’ fabrication of evidence to support unfounded charges against Sanders was the single cause of all three trials and, thus, the single relevant occurrence under the policy.

Therefore, the Supreme Court concluded, insurance coverage for the underlying malicious prosecution claim was triggered when Sanders was maliciously prosecuted in 1994. Because the triggering event occurred more than a decade before Illinois Union and Starr issued their policies to Chicago Heights, the insurers were not required to indemnify the city for damages under the policies.


The City was wise enough to buy insurance against the offense of malicious prosecution. It bought an occurrence policy that responded with $3 million because it was in effect when Sanders was prosecuted. The City – and Sanders as its assignee – attempted to get coverage from a policy that was issued ten years after his prosecution because he was compelled to undergo two more attempts to convict him after he was exonerated and because his damages exceeded the available limits. It didn’t work because of the clear and unambiguous language of the occurrence policy that required the offense happen during the policy period. In hindsight, Sanders should have gone to trial, obtain a judgment and  execute against the available insurance and the assets of the City to get the full amount of the judgment if the jury awarded more than the available insurance.

© 2019 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at and

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 51 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.




About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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