## Facts

- Jack O. Wilson was insured under a Pekin commercial general liability policy covering bodily injury, subject to an intentional-acts exclusion and an exception for “reasonable force” used to protect persons or property (self-defense).
- Terry Johnson sued Wilson for assault, battery, and intentional infliction of emotional distress based on two alleged incidents.
- For an October 2002 incident at a business location, Johnson alleged Wilson screamed expletives, brandished a steel pipe, struck Johnson’s shoulder, and cut Johnson’s hand with a knife; Johnson alleged he restrained Wilson to protect himself and that Wilson later threatened to get a gun.
- For a January 2004 incident at a retail store, Johnson alleged Wilson displayed what appeared to be a pistol handle and threatened to “end it right now.”
- Wilson tendered defense to Pekin; Pekin denied a duty to defend based on the intentional-acts exclusion.
- Johnson later amended his complaint to add a negligence count while retaining intentional tort counts.
- Wilson filed a counterclaim in the underlying case alleging his conduct was in self-defense.
- Pekin filed a declaratory judgment action and sought judgment on the pleadings, arguing the duty-to-defend analysis must consider only the underlying plaintiff’s complaint and not Wilson’s self-defense counterclaim.

## Issues

1. Whether, in determining an insurer’s duty to defend, a court may consider allegations in the insured’s counterclaim in the underlying action.
2. Whether self-defense allegations in the insured’s counterclaim can create a potential for coverage under a policy’s self-defense exception to an intentional-acts exclusion, thereby triggering the duty to defend.

## Decision

- The Illinois Supreme Court affirmed the appellate court and reversed the trial court’s judgment for Pekin.
- The court held Pekin had a duty to defend because Wilson’s counterclaim alleged self-defense, which potentially placed the conduct within the policy’s “reasonable force” exception.
- The court rejected a rigid rule limiting the duty-to-defend analysis to only the allegations in the underlying plaintiff’s complaint when other pleadings contain relevant facts bearing on potential coverage.

## Legal Principles

- An insurer’s duty to defend is broader than its duty to indemnify and arises if the underlying allegations show facts within or potentially within policy coverage.
- In a coverage declaratory action, courts may consider relevant pleadings beyond the underlying complaint, including pleadings that supply facts material to potential coverage.
- Where a policy excludes intentional acts but restores coverage for reasonable force used to protect persons or property, self-defense allegations can create a potential for coverage sufficient to trigger a defense obligation.
- Declaratory judgment procedure in insurance disputes is intended to settle the parties’ rights based on the relevant allegations framing the underlying dispute, rather than a one-sided pleading view.

## Conclusion

The court held that self-defense allegations asserted by an insured in an underlying counterclaim are relevant to the duty-to-defend inquiry and, where they potentially fit within a self-defense exception to an intentional-acts exclusion, they can trigger the insurer’s duty to defend.


Pekin Ins. Co. v. Wilson, 237 Ill. 2d 446, 930 N.E.2d 1011 (Ill. 2010)