WOODSTOCK – The McHenry County Board accepted receiving $700,000 in a legal settlement with the insurance companies that were on the hook to reimburse the county's legal defense against lawsuits by exonerated former death row inmate Gary Gauger.
County Board members voted with no discussion Tuesday, 21-0, to approve the settlement with the insurers. The county successfully fought the wrongful imprisonment and malicious prosecution lawsuits filed by Gauger, of Richmond, who was wrongly convicted by a McHenry County court and sentenced to death for the slayings of his elderly parents. But one of the insurance companies covering the county filed suit alleging that its predecessor was in fact responsible for the costs.
A McHenry County jury in 1993 convicted Gauger for the grisly deaths of Morris and Ruth Gauger, and Judge Henry Cowlin sentenced him the following January to die by lethal injection.
The conviction was based on an alleged confession after 18 hours of interrogation, and without physical evidence or witnesses tying him to the crime. He spent 3½ years in prison, nine months of it on death row, before his conviction was overturned by an appellate court that ruled that police had no probable cause to arrest him. He was pardoned by former Gov. George Ryan, and two members of the Outlaws motorcycle gang were later convicted of the murders as part of a federal racketeering case.
Gauger filed two lawsuits against McHenry County. He filed a federal lawsuit in 1999, which a judge dismissed in 2002. He then filed a lawsuit in state court, but a jury in 2009 ruled in the county's favor, and the appellate court upheld the verdict.
A group of London-based insurers, including underwriters at Lloyd's, had covered the county at the time of Gauger's conviction, but the county moved to a new company, Insurance Company of the West, by the time of Gauger's exoneration and lawsuits. San Diego-based ICW sued in 2012, alleging the London insurers, not ICW, were legally responsible for the costs. Under the settlement, ICW will pay $250,000, the Lloyd's underwriters will pay $415,394, and the remaining named London insurers will pay $34,606.
The $700,000 settlement, when added to a $100,000 paid earlier by Lloyd's for the federal lawsuit, brings the county about $100,000 shy of the maximum reimbursement it could receive, minus the $350,000 total it paid to meet its deductibles.
Gauger's sentence was part of a rash of wrongful convictions that prompted Ryan in his final days in office in 2003 to empty death row, declaring Illinois' capital punishment system fundamentally flawed. The General Assembly in 2011 abolished the death penalty in Illinois.