Opinion No. 96-25

November 18, 1996

TOPIC: Duty of judge to disqualify where the judge has insurance policies with an insurance company that is a defendant in a case before the judge.

DIGEST: A judge is not required to disqualify from a case because the judge has insurance policies with the defendant insurance company. Disqualification is not required even if the judge is likely to file a claim against the insurance company. Disqualification is required where the judge has filed suit against the insurance company.

REFERENCES: Illinois Supreme Court Rule 63C(1) of the Code of Judicial Conduct, Canon 3 (156 Ill.2d R. 63C); definition of "economic interest" in the Terminology section of the Illinois Supreme Court Rules of Judicial Conduct; Illinois Judicial Ethics Committee, Opinion No. 95-2; Shaman/Lubet/Alfini, Judicial Conduct and Ethics, 2nd ed., 1995, Sec. 4.25, pp. 142-143.

FACTS

A judge is assigned to preside over a bench trial in which the plaintiff is suing a mutual insurance company for $350,000.00. The judge has automobile and home insurance policies with the defendant insurance company.

QUESTIONS

1. Is a judge disqualified from hearing a case where the judge has insurance policies with an insurance company that is a defendant in the case?

2. Is disqualification required where the judge not only has insurance policies with the defendant insurance company but is likely to have a claim against the insurance company based upon a recent automobile accident?

3. Is disqualification required where the judge is suing the insurance company in a separate action?

OPINIONS

Question 1

Illinois Supreme Court Rule 63C provides that a judge must disqualify from a case whenever "the judge's impartiality might reasonably be questioned." Subparagraphs (1)(a) through (1)(e) of Rule 63C identify five specific situations in which a judge must disqualify.

Subparagraph (1)(d) requires disqualification where a judge "has an 'economic interest' in the subject matter in controversy or in a party to the proceedings..." (emphasis added). Holding a policy in a mutual insurance company is not an "economic interest" under Rule 63C(1)(d) unless the proceeding pending before the judge could substantially affect the value of the judge's proprietary interest in the insurance company. See Terminology section of the Code of Judicial Conduct defining "economic interest."

Nothing in this inquiry suggests that the judge's economic interest in the insurance company would be substantially affected by the proceedings and therefore the judge does not possess a disqualifying economic interest.

Rule 63C(1)(d) also requires recusal where a judge has a "more than de minimus" non-economic interest "that could be substantially affected by the proceedings" pending before the judge. Again, the factual context of this inquiry does not disclose any type of non-economic interest of the judge.

Since the judge does not possess a disqualifying economic or non-economic interest in the defendant insurance company, the judge may preside over the bench trial.

Question 2

Adding the fact that the judge is likely to have a claim against the insurance company because of a recent accident does not create a disqualifying economic or non-economic interest under Rule 63C(1)(d). Nor would a routine claim, in any other way, create an appearance of partiality on the part of the judge.

Question 3

The specific grounds for disqualification set forth in subparagraphs (1)(a) through (1)(e) of Rule 63C do not address the situation presented in Question 3, namely, a judge presiding over a case wherein one of the parties is being sued by the judge in a separate action. This does not mean, however, that no disqualifying interest exists since the five disqualifying situations set forth in subparagraphs (1)(a) through (1)(e) are not exhaustive and a judge must disqualify anytime his or her "impartiality may reasonably be questioned." See Rule 63C and IJEC Opinion No. 95-2. Disqualification is required under this "catch all" phrase whenever "an objective, disinterested observer fully informed of the relevant facts would entertain a significant doubt that the judge in question was impartial." Shaman/Lubet/Alfini, Judicial Conduct and Ethics, Sec. 4.25, pp. 142-143 (1995).

The Committee believes that the impartiality of a judge could reasonably be questioned where the judge has a pending lawsuit against a party who appears before the judge in an unrelated case. The judge's active, direct, and personal interest in an adversarial proceeding involving the party could lead an objective, disinterested and fully informed observer to entertain a significant doubt as to the judge's impartiality. As a result, the judge must disqualify.