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April 10, 1989

FORUM INSURANCE COMPANY, an Illinois corporation, Plaintiff,
RANGER INSURANCE COMPANY, a Texas corporation, Defendant. RANGER INSURANCE COMPANY, Third-Party Plaintiff, v. DESNOYERS & ASSOCIATES, INC., an Illinois corporation, Third-Party Defendant

John A. Nordberg, United States District Judge.

The opinion of the court was delivered by: NORDBERG



 The plaintiff, Forum Insurance Co., filed this diversity action against Ranger Insurance Co., asking that Ranger be required to share with Forum the costs of defending a mutual insured, Desnoyers & Associates, Inc. and Richard Desnoyers (collectively, Desnoyers). *fn1" In Count I Forum seeks a declaratory judgment that Ranger was obligated to defend Desnoyers and that Ranger pay, under a theory of contribution, a share of past and future expenses incurred in defending Desnoyers. In Count II Forum seeks an identical declaratory judgment under a subrogation theory. Ranger moved to dismiss Forum's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), claiming that Ranger was not obligated to defend Desnoyers because Desnoyers never tendered its defense to Ranger. Furthermore, Ranger argued, under Illinois law an insurer has no right to receive from a second insurer contribution towards or reimbursement of expenses incurred in the defense of a mutual insured.

 Ranger then filed a third-party complaint against Desnoyers, ostensibly pursuant to Rule 14(a), seeking a declaratory judgment that it was not liable to Desnoyers under its insurance policy issued to Desnoyers and, therefore, that it did not have a duty to defend Desnoyers. Desnoyers moved to dismiss the third-party complaint on the ground that it did not allege that Desnoyers was liable for all or part of Forum's claim against Ranger. For the following reasons, the court denies Ranger's motion to dismiss the first amended complaint, but grants Desnoyers' motion to dismiss the third-party complaint.

 II. Facts

 For purposes of a motion to dismiss, the court must accept as true all well-pleaded factual allegations in the complaint and must draw all reasonable inferences in the light most favorable to the plaintiff. Powe v. City of Chicago, 664 F.2d 639, 642 (7th Cir. 1981). A complaint should not be dismissed for failure to state a claim unless it is beyond doubt that the plaintiff could prove no set of facts that would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). The court, however, need not accept as true legal conclusions or opinions that are couched as factual allegations. Briscoe v. LaHue, 663 F.2d 713, 723 (7th Cir. 1981), aff'd, 460 U.S. 325, 75 L. Ed. 2d 96, 103 S. Ct. 1108 (1983). Accordingly, the facts of this case, as alleged in the plaintiff's amended complaint, are as follows.

 In 1984 Forum issued a liability insurance policy to Desnoyers, an Illinois corporation engaged in the business of private investigations. The policy provided professional liability coverage for the term from April 1, 1984, to April 1, 1985. In 1985 Ranger issued to Desnoyers a professional liability policy that covered the term from April 1, 1985, to April 1, 1986.

 In June 1986, persons not parties to this action filed suit against Desnoyers in federal court, alleging violations of the Racketeer Influenced and Corrupt Organizations Act, the Civil Rights Acts, and the Fair Credit Reporting Act. (The complaint also contained a pendent state claim for breach of contract.) The same plaintiffs also sued Desnoyers in state court, alleging invasion of privacy, intentional infliction of emotional distress, intentional interference with contractual relations, and harassment of witnesses. On July 21, 1986, Desnoyers tendered the defense of both the federal and the state court actions to Forum for defense and indemnification under the Forum policy. Forum accepted its obligation to defend subject to a reservation of rights, under which Forum claimed that the wrongful acts and damages alleged may not have taken place during the term covered by the Forum policy. Forum, through its claims agent, Ed Flavin, then suggested to Desnoyers' insurance agent, the Cutrona Insurance Agency, that it notify Desnoyers' subsequent liability insurers in order to invoke all applicable coverage. See Amended Complaint, Exh. E (Flavin suggested that Desnoyers notify Ranger of the claim).

 On December 5, 1986, Cutrona, acting on behalf of Desnoyers, sent a "notice of claim" letter to Ranger, see id. para. 9, in which Cutrona notified Ranger of the pending suit against Desnoyers. (Cutrona also stated that the letter was prompted by Flavin's suggestion that Desnoyers notify its subsequent insurance carrier.) After noting that there was a question regarding the date of the alleged incidents in the Desnoyers suit (and, therefore, a question of policy coverage), Cutrona suggested that Ranger "may wish to coordinate [its] efforts with Mr. Flavin of the Forum Insurance Company." The letter included Flavin's direct dial number and, in closing, stated: "Please furnish our office with your claim number once it has been assigned." The letter apparently included a copy of Desnoyers' July 21, 1986, tender letter to Forum as well as all relevant documents. *fn2"

 On December 15, 1986, Ed Flavin, on behalf of Desnoyers, wrote to Ranger, stating: "We are advised by the Cutrona Insurance Agency . . . that you are the comprehensive general liability carrier for the captioned defendants under policy # C.G.L. 53-36-99, effective 4-1-85 to 4-1-86. They wrote your office on December 5, 1986 and placed you on notice of the captioned matter." The letter claimed that some of the reported acts in the Desnoyers suits occurred prior to the coverage period on Forum's policy and, therefore, that Forum was defending under a reservation of rights. Forum then asked for Ranger's "cooperation in contributing to the defense of the insured as well as to any indemnity that may be awarded to the plaintiffs for acts covered by our respective policies." Id., Exh. F.

 On March 4, 1987, Ranger responded to this letter, stating that it had "determined that the litigation which is the subject of these claims makes no allegations which would invoke either a duty to indemnify or defend Desnoyers and Associates under Ranger Policy No. CG533699." Id., Exh. G. Since then, Ranger has refused to defend Desnoyers or to contribute to the defense costs incurred by Forum. Forum has paid and continues to pay all costs of defense.

 On March 23, 1988, Forum filed its original complaint against Ranger, in which Forum requested a declaratory judgment that Ranger is obligated to contribute to the costs of defense. Ranger filed a motion to dismiss on the ground that the complaint did not allege that Desnoyers tendered its defense to Ranger. Forum agreed to file a more specific amended complaint, to which Ranger's current motion to dismiss is directed. After this motion was briefed, Ranger then filed a third-party complaint against Desnoyers, which promptly filed a motion to dismiss the third-party complaint.

 In its motion to dismiss Ranger alleges that 1) its duty to defend never was triggered because Desnoyers did not tender its defense to Ranger, and 2) even if Desnoyers did tender its defense to Ranger, Forum cannot recover from Ranger the costs of defending a mutual insured -- either under a contribution or subrogation theory. In its motion to dismiss the third-party complaint, Desnoyers claims that it cannot be ...

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