1 3 Hartford now seeks a declaratory judgment that it has no duty to defend or indemnify iNetworks. On that date, iNetworks demanded Hartford Casualty defend and indemnify iNetworks and Smat under the General Policy and the Umbrella Policy. iNetworks informed Hartford Casualty of the lawsuit and the Server Compromise on August 7, 2018. San Jose’s lawsuit was dismissed on Januand is currently pending before an Illinois appellate court. On June 14, 2019, Hartford filed a motion to intervene and vacate, which the Circuit Court of Cook County granted. The Circuit Court of Cook County entered a default judgment against the iNetwork defendants for $10,518,379 on May 21, 2019. San Jose filed a Second Amended Complaint on December 6, 2018, adding iNetwork Services as a defendant. At that time, iNetworks asked Hartford Fire for coverage under the Technology Policy. iNetworks did not inform Hartford Fire of the Server Compromise or the lawsuit until six months later, on July 15, 2018. On January 31, 2018, San Jose filed a lawsuit against iNetworks in the Circuit Court of Cook County alleging one count of negligence.
Between April 2016 and August 2016, San Jose and iNetworks exchanged emails about the Server Compromise, its causes, the impact it had on San Jose’s business, and potential settlement offers. iNetworks and Smat were aware of the Server Compromise in April 2016. On April 1, 2016, the iNetworks server containing San Jose’s data was infected by a virus that destroyed all of San Jose’s data (the “Server Compromise”). In September 2014, San Jose contracted with iNetworks to store all of San Jose’s data on iNetworks’ servers. 2 iNetworks provides data storage to its clients. Several months later, Hartford Fire issued to iNetwork Services a Technology Liability Policy (“Technology Policy”) for the period of Januto January 27, 2017. Underlying Litigation In August 2015, Hartford Casualty issued iNetworks Group a General Liability Policy (“General Policy”) and an Umbrella Liability Policy (“Umbrella Policy”) for the period of Novemto November 6, 2016. The remaining Counts II, IV, and VIII are dismissed as moot. The Court addresses the parties’ arguments regarding Counts III and V-VII below. After reviewing the relevant policy provisions, the Court grants Hartford’s unopposed motion for summary judgment on Counts I and IX-XIV. Only San Jose responded to the motion, stating that it does not oppose Hartford’s motion for Counts I and IX-XIV. Hartford moved for “default and summary judgment” on Counts I, III, V-VII, IX-XIV. San Jose responded to the Complaint (Dkt. On February 15, 2019, the Court granted default judgment against the iNetwork Defendants and David Smat. The iNetwork Defendants and David Smat have not responded to the lawsuit despite being served. 1 PROCEDRUAL POSTURE Hartford filed a Complaint in this Court seeking a declaratory judgment that it had no duty to defend or indemnify the iNetwork Defendants and David Smat. Counts II, IV, and VIII are dismissed as moot. Hartford’s motion for summary judgment is granted as to Counts III and V-VII. For the reasons stated below, Hartford’s unopposed motion for summary judgment is granted as to Count I and Counts IX-XIV. Before the Court is Hartford’s motion for summary judgment. MEMORANDUM OPINION & ORDER This lawsuit arises from an insurance coverage dispute between Plaintiffs Hartford Fire Insurance Company (“Hartford Fire”) and Hartford Casualty Insurance Company (“Hartford Casualty”) (collectively, “Hartford”) on the one side, and Defendants iNetworks Services, LLC, iNetworks Group Inc., (collectively, “iNetwork”), David Smat, and the San Jose Group Company (“San Jose”) (collectively, “Defendants”) on the other.
INETWORKS SERVICES, LLC, INETWORKS GROUP, INC., DAVID SAMAT, and THE SAN JOSE GROUP CO., Defendants. 39 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION HARTFORD FIRE INSURANCE COMPANY and HARTFORD CASUALTY INSURANCE COMPANY, Case No.
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