Courtroom Victory for Insurance Policyholders in Hartford Underwriters Ins. Co. v. American Tax Lien, LLC

On September 18, 2026, the Illinois Northern District Court upheld coverage for Anspach Law Office’s clients, insured tax buyers, in a complicated coverage dispute. Judge Elaine E. Bucklo of the Northern District of Illinois ruled that Hartford Underwriters Insurance Company owed a duty to defend American Tax Lien, LLC and Wheeler Financial, Inc. against two class action lawsuits. The court ultimately held that the underlying claims, which alleged a wrongful tax sale and eviction process, fell within the policies’ coverage for personal and advertising injury. This case demonstrates what happens when an insurer tries to avoid its obligations: a court holds the company to the terms it wrote into its own policy.

What Was Hartford Underwriters Insurance Co. v. American Tax Lien, LLC About?

American Tax Lien, LLC and Wheeler Financial, Inc. purchase delinquent property tax liens from Illinois counties. When a property owner fails to redeem the lien by repaying the back taxes, the tax buyer can foreclose, obtain a deed, and evict the previous owner. Two groups of former property owners filed class actions against the companies, claiming this process deprived them of the surplus value in their properties and resulted in wrongful eviction.

The companies turned to their insurer, Hartford Underwriters Insurance Company, and asked it to defend them in the lawsuits under their Business Owner’s Policies. Hartford refused, then asked the court to declare that it had no duty to defend or indemnify its policyholders.

Why Did the Insurer Argue It Had No Duty to Defend?

Hartford raised two main arguments, claiming that:

1. The underlying plaintiffs were seeking restitution rather than damages, and Illinois public policy prohibits insurance coverage for restitution.
2. The lawsuits did not actually allege a “wrongful eviction,” since the tax buyers used a legal process established under Illinois law.

How Did the Court Rule?

Judge Bucklo rejected both arguments. The court found that a reasonable reading of the underlying complaints showed that the property owners were seeking damages for wrongful eviction, a term defined in the policies as a covered offense. The judge also noted that the policies covered damages “because of” personal injury, language the Seventh Circuit has interpreted broadly to require only a causal connection between the alleged injury and the damages sought.

On the restitution question, the court explained that the underlying plaintiffs were not accusing the tax buyers of theft. Instead, they alleged that a facially lawful state process was itself unconstitutional, and that using it caused them compensable harm. Because competing interpretations of “wrongful eviction” existed, Illinois law required the court to construe the policy language in favor of the insured.

As a result, the court granted judgment in favor of American Tax Lien and Wheeler Financial and found that Hartford’s refusal to defend amounted to a breach of contract.

What Does This Decision Mean for Policyholders?

Attorney Ken Anspach, who represented American Tax Lien and Wheeler Financial, commented on the ruling: “The court recognized that the allegations of the underlying lawsuits reasonably fall within the policies’ coverage for personal and advertising injury arising from wrongful eviction, and that Hartford therefore had a duty to defend American Tax Lien and Wheeler Financial. We believe the decision correctly applies Illinois law requiring an insurer to defend where the allegations potentially fall within the policy’s coverage.”

This outcome reinforces a principle that matters for any policyholder facing a denied claim: Illinois courts construe insurance policies in favor of the insured and against the insurer that drafted it, and insurers carry a broad duty to defend whenever the underlying allegations could potentially trigger that coverage.

Choose a Legal Team That Holds Insurers Accountable

If your insurer has denied a claim that seems valid or refused to defend you as your policy allows, you don’t have to accept their decision as final. Anspach Law Office has spent decades fighting insurance companies that fail to honor their policy obligations, and this recent district court victory is yet another example of that work in action. Contact Anspach Law Office today to discuss your insurance dispute and gain an advocate who will fight for your rightful coverage.