The opinion of the court was delivered by: ASPEN
MARVIN E. ASPEN, UNITED STATES DISTRICT JUDGE
This multi-count action arises from a dispute between defendant Home Indemnity Co. ("Home"), the primary carrier of comprehensive liability coverage for Mid States General & Mechanical Contracting Corp. ("Mid States") and plaintiff Ranger Insurance Co., the excess carrier, over who should assume liability for the judgment and post-judgment interest assessed against Mid States in a personal injury action. Currently before the Court are various motions for summary judgment and to dismiss. For the reasons set forth below, we grant Ranger's motion for summary judgment on Count I and to dismiss the counterclaim and deny Home's motion for summary judgment on all counts.
In 1983, Paul Hall, an employee of the Corrigan Co., was killed when he fell through a catwalk at an Archer-Daniels-Midland Company ("ADM") plant in Decatur, Illinois. ADM had hired the Corrigan Co. to fit pipes in a construction project at the Decatur plant. Sarah Hall, conservator of Hall's estate, filed a personal injury action against Mid States, general contractor for the project, and ADM. ADM settled with Hall for $ 1,500,000 and thereafter pursued contribution claims against Mid States and the Corrigan Co. At the time, Home insured Mid States for up to $ 500,000 under a primary coverage policy. Mid States also had excess coverage under a policy with Ranger. Throughout the Hall litigation, Home assumed full responsibility for Mid States' defense. After a trial on ADM's contribution claims, a jury found Mid States 48% at fault for Paul Hall's accident, and the court entered judgment against Mid States in the amount of $ 788,989.
Mid States appealed. As at trial, Home controlled the litigation and at no time requested Ranger's participation. Before the appellate court rendered its decision, Home offered to settle with ADM for $ 500,000, the face value of the primary coverage policy, without interest. ADM accepted on the condition that Ranger pay the remaining $ 288,989. Ranger, apparently optimistic about Mid States' chances on appeal, offered ADM $ 145,000. ADM refused, and the parties decided to forego settlement and rely on their fortunes before the appellate courts. At least in the short term, Ranger's optimism proved well-founded. On April 7, 1986, the appellate court reversed the jury verdict and remanded for retrial. Hall v. Archer-Daniels-Midland Co., 142 Ill. App. 3d 200, 491 N.E.2d 879, 96 Ill. Dec. 600 (4th Dist. 1986). However, two years later, the Illinois Supreme Court reinstated the jury verdict. Hall v. Archer-Daniels-Midland Co., 122 Ill. 2d 448, 524 N.E.2d 586, 120 Ill. Dec. 556 (1988).
This action originally involved only Ranger and Home's dispute over how liability for post-judgment interest on the $ 788,989 judgment against Mid States should be apportioned. In what is now Count I, Ranger charges that Home is liable for interest on the entire judgment, including Ranger's $ 288,989 portion. Since the original complaint, the parties' differences have widened into an attempt by each side to pin on the other liability for the entire judgment. In Counts II and III of its amended complaint, Ranger charges that Home's failure to engage in reasonable settlement negotiations with Sarah Hall before ADM settled for $ 1,500,000 violated its duties as primary carrier to Ranger and thus renders Home additionally liable for Ranger's $ 288,989 portion of the judgment. Home charges in a counterclaim that Ranger's refusal to accept ADM's offer prior to the appellate decision, a settlement that would have spared both parties post-judgment interest, violated Ranger's duty to Home to pursue settlement in good faith and that Ranger is accordingly liable for all post-judgment interest and Home's $ 500,000 portion of the judgment. The motions here are directed at all counts, and we address each in turn.
Ranger's claim that Home is liable for post-judgment interest that accrued on the entire judgment against Mid States hinges on the following provision in the Home policy:
The company [Home] will pay, in addition to the applicable limit of liability [i.e., $ 500,000]:
(a) All expenses incurred by the company, all costs taxed against the insured in any suit defended by the company and all interest on the entire amount of any judgment therein which accrues after entry of the judgment and before the company has paid or tendered or deposited in court that part of the judgment which does not exceed the limit of the company's liability thereon.
Home never tendered to ADM or deposited in any state court the full amount of the judgment against it -- $ 500,000 plus interest accrued on that amount. Accordingly, Ranger concludes, Home must additionally assume Ranger's liability for post-judgment interest on that portion of the judgment covered by the Ranger excess liability policy.
Illinois law, which the parties agree governs this action, squarely supports Ranger's application of this post-judgment interest provision. In River Valley Cartage Co. v. Hawkeye-Security Ins. Co., 17 Ill. 2d 242, 161 N.E.2d 101 (1959), an insured attempted to recover post-judgment interest accrued on a $ 175,000 judgment assessed against it from an insurer that covered only $ 50,000 of that judgment. The insurer had tendered $ 50,000 to the insured but did not include post-judgment interest that had accrued on that $ 50,000. The Illinois Supreme Court interpreted a clause virtually identical to that of the Home policy
to hold the insurer liable for post-judgment interest that accrued on the entire $ 175,000 judgment. The court reasoned that the unambiguous language in the clause and "the realities of the relationship between the insurer and insured" indicate that the insurer had agreed to pay interest that accrued on a judgment until it properly tendered its portion of that judgment, post-judgment interest that accrued on that portion and costs. Id., 161 N.E.2d at 103. River Valley remains good law in Illinois. Green v. J. C. Penney Auto Ins. Co., Inc., 806 ...