Kaboom! Illinois Applies the Anti-Subrogation Rule to Require a Landlord’s Subrogating Property Insurer to Defend a Third-Party Complaint Against Tenants


Attorney Ryan Bennett discusses Sheckler v. Auto-Owners Ins. Co.

December 13, 2021
Ryan Bennett - White and Williams LLP

In Sheckler v. Auto-Owners Ins. Co, 2021 IL App (3d) 190500, 2021 Ill. App. LEXIS 593, Auto-Owners Insurance Company (Insurer) paid its insured, Ronald McIntosh (McIntosh), for property damage following a fire in an apartment he rented to Monroe and Dorothy Sheckler (the Shecklers). Insurer filed suit against Wayne Workman (Workman), who performed service work on an oven in the Shecklers’ apartment that leaked gas and resulted in a fire. Workman filed a third-party complaint against the Shecklers for contribution and the Shecklers tendered the defense of the claim to Insurer. Insurer refused the tender and the Shecklers filed a declaratory judgment action. In the court below, the Shecklers argued that, as tenants, they were co-insureds on McIntosh’s property insurance policy. Following a liberal interpretation of precedent from the Supreme Court of Illinois in Dix Mutual Insurance Co. v. LaFramboise, 597 N.E. 2d 622 (Ill. 1992), an Illinois appellate court ruled that Insurer – who provided property insurance – must defend the tenants of a rental property from contribution claims if the tenants are co-insureds under the landlord’s policy.

In Sheckler, the Shecklers hired Workman to fix a broken burner on a gas stove. Finding that additional parts were needed, Workman left while the Shecklers waited inside. While waiting—and despite the smell of gas filling the kitchen—Mr. Sheckler lit the stove. “Kaboom!” wrote the appellate court when describing the scene. A fire erupted and caused substantial damage to the apartment.

Mr. Bennett may be contacted at bennettr@whiteandwilliams.com


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