Randy Steidl was convicted of murder in Edgar County, Illinois in the late 1980s. The Edgar County State's Attorney at the time, Michael McFatridge, conducted the prosecution. More than fifteen years later, a federal court issued a writ of habeas corpus invalidating the conviction. Steidl brought suit against McFatridge and the County, as well as several police officers. Steidl alleged that McFatridge framed him by threatening witnesses and concealing exculpatory evidence at trial -- and that McFatridge continued his campaign long after he left office. He brought claims under § 1983 for false arrest, false imprisonment, malicious prosecution, conspiracy, and intentional infliction of emotional distress. The County tendered the complaint to its insurers. The insurers sought a declaration that they had no duty to defend. The court granted summary judgment to the insurers. McFatridge and the County appeal.

In their opinion, Chief Judge Easterbrook and Judges Bauer and Rovner affirmed. The Court first stated the well-settled rule in Illinois that an insurer has a duty to defend if the complaint alleges facts potentially within the coverage of the policy. At issue in the case were four policies: a law enforcement liability policy and three CGL policies, one per year from mid-1997 until mid-2000. First addressing the law enforcement policy, the Court agreed with the district court that it did not cover the County's liability. The principal insured under that policy was the County of Edgar Sheriff's Department. Although the County itself was an additional insured, it was so only with respect to liability arising out of the activities of the Sheriff's Department. The allegations of the complaint directed at McFatridge and the County were unrelated to any activities of the Sheriff's Department. The Court also relied on the definition of "occurrence" and the fact that McFatridge was not a County employee in affirming the coverage denial under the law enforcement policy. On the other hand, the CGL policies did insure the County and its elected officials for liability arising from offenses like false arrest and imprisonment. The Court also affirmed coverage denial under these policies, however. McFatridge was not an elected official during any of the three policy years and none of the alleged wrongs occurred during the policy years. The federal and state claims relating to false arrest and false imprisonment offenses accrued at the time of Steidl’s original arrest, long before the first policy year. The federal and state claims relating to the wrongful conviction, on the other hand, did not accrue until after Steidl’s conviction was invalidated, long after the last policy year.