Insurer refusing to cover Zion defense of Lake County Fielders lawsuit
Zion's insurance carrier has filed a federal lawsuit contending it has no obligation to pay the city's attorney bills stemming from a legal tussle initiated by the Lake County Fielders independent baseball team.
Grand Slam Sports and Entertainment, the parent company of the on-hiatus Fielders, filed an amended lawsuit in April against the city, Mayor Lane Harrison and former economic development director J. Delaine Rogers, contending the team was lured in 2011 to play a second season in a temporary stadium and misled about construction of a permanent facility.
At a meeting in April, the Zion city council voted 4-1 in favor of providing an advance payment of $250,000 to the Ancel, Glink, Diamond, Bush, DiCianni and Krafthefer law firm to guarantee services for the defense of Grand Slam Sports' complaint.
But Minnesota-based OneBeacon America Insurance Co. doesn't intend on covering Zion's legal tab for the Fielders' complaint, according to the suit attorney David Morgans filed June 7 in U.S. District Court in Chicago. Morgans declined to comment, citing pending litigation.
OneBeacon contends in court documents that the one-year commercial general liability policy obtained by Zion doesn't cover the city because Grand Slam's lawsuit contains accusations against Harrison and Rogers apart from their official government duties.
In addition, OneBeacon claims part of Grand Slam's suit cites actions by Harrison and Rogers that reportedly occurred before the policy took effect Dec. 15, 2010. OneBeacon states it "has no duty" to cover the city, Harrison or Rogers for any judgments resulting from Grand Slam Sports' case, which was filed in Lake County circuit court.
"An insured is not entitled to indemnification by an insurer for punitive damages imposed under Illinois law, which is the law governing the (Grand Slam) lawsuit, as a matter of public policy," OneBeacon's lawsuit says in part.
Harrison couldn't be reached for comment, but Zion City Attorney Scott Puma said Tuesday he's familiar with OneBeacon's suit. He said Zion submitted an insurance claim for attorney fees from the Fielders' suit that has yet to receive a response from OneBeacon.
"We need to review the complaint and read the (insurance) policy again," said Puma.
Headed by attorney Richard Ehrenreich, Grand Slam Sports contends in its suit Zion carried out a ruse to make it look like work would start on a permanent ballpark in 2011, going as far as having a construction fence built. No work was accomplished. Grand Slam Sports seeks up to $10.7 million in damages in the suit alleging fraud and breach of contract.
In March, Zion fought back with a lawsuit of its own, contending the Fielders owe nearly $500,000 for unpaid rent, real-estate taxes and damage to equipment at the temporary stadium. Ehrenreich maintains he stopped paying rent because Zion didn't build a permanent ballpark as promised in 2011.
Grand Slam Sports attorney Stephen Boulton said Ehrenreich is capable of assembling an independent baseball team at any time if the Zion stadium is built.
"Lake County Fielders are not defunct," Boulton said Tuesday. "They are on hiatus. They have every ability to come back and play."
Zion received a $1.3 million grant from state taxpayers to install professional stadium lights, a playing field, dugouts, bare-bones scoreboard and parking area on the privately owned land at Route 173 and Green Bay Road, where the city placed the temporary facility with roughly 4,000 seats. The permanent stadium was pegged for that same land, which Zion rented from a developer. Court documents state Zion wants a judge to grant possession of the ballpark site to the city. It's believed Grand Slam Sports has control over a locked fence surrounding the vacant 23 acres, which were improved with money from the Illinois Department of Commerce and Economic Opportunity on the premise of job creation. Zion documents obtained by the Daily Herald through a Freedom of Information Act request show the city incurred at least $875,162 in temporary stadium expenses including seat, restroom, banquet table, bar stool and generator rental last year.
Actor Kevin Costner was promoted as a Fielders co-owner, with his images appearing on pocket schedules and a team website. Costner's publicist, Arnold Robinson, has refused to make him available to discuss the Fielders or the Zion ballpark situation. Ehrenreich formerly co-owned the now-defunct Schaumburg Flyers independent baseball team, which the village and park district evicted from a publicly owned stadium previously called Alexian Field in February 2011. A new team, called the Schaumburg Boomers, plays there now. A Cook County judge ordered Flyers ownership to pay $551,829 in overdue rent, but Ehrenreich said the Flyers were a limited-liability corporation without assets to pay the judgment.