Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 74 C 18 WILLIAM J. BAUER, Judge.
Stevens, Circuit Justice,*fn* Rives, Senior Circuit Judge,*fn** and Tone, Circuit Judge.
Western Chain is an Illinois corporation which manufactures and distributes metal link chains. At all relevant times Western Chain was insured by American Mutual for products liability and other coverage under a general liability insurance policy. Condition 4(b) of that policy provides: "If claim is made or suit is brought against the insured, the insured shall immediately forward to the Company every demand, notice, summons or other process received by him or his representative." Decision of this appeal turns on the application of Condition 4(b) to American Mutual's right and duty to defend suits as set forth in the emphasized portion of the following provision of the policy:
"The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of Coverage A, bodily injury, or Coverage B, property damage, to which this insurance applies caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless. . . ."
On January 15, 1973, Western Chain received from the Secretary of State of Mississippi a registered letter forwarding a summons. The letter reads as follows:
We hand you herewith copy of process, served on HEBER LANDER, Secretary of State, your agent and attorney for service of process in Mississippi, today issued by the Clerk of the Circuit Court of Simpson County, Mississippi, to which you are defendant and Mrs. Nell Brownlee, et al., are plaintiffs.
You will understand, from a perusal of said process, that a suit is now pending in the above mentioned court and you will give such matter the attention it requires.