The opinion of the court was delivered by: ASPEN
MARVIN E. ASPEN, Chief Judge:
Plaintiff Commercial Union Insurance Company brings this diversity action for a judgment declaring that it owes no duty to defend Defendants Image Control Property Management and Jean Wojcik
against a housing discrimination suit filed in federal court. Commercial Union has also named the plaintiffs in the underlying discrimination suit as defendants in this declaratory judgment action: Paul Ores, Kirk Ores, Warren Ores, Louise Ores, and Anna Niemer. Commercial Union moves for summary judgment, and Image Control and Wojcik have filed a cross-motion for summary judgment. For the reasons discussed below, we grant Commercial Union's motion and deny Image Control's cross-motion.
According to the complaint in the underlying discrimination suit, in January 1994 brothers Paul and Kirk Ores contracted to purchase a condominium unit in the Willow West Condominiums of Willowbrook, Illinois. Pl.'s 12(M), Ex. A, Second Amended Compl. ("Ores Compl."). Paul and Kirk, who are mentally disabled, had secured financing aid from the Illinois Department of Mental Health. However, in March 1994--before the purchase could be completed--members of the Willow West Condominium Association made discriminatory inquiries into Paul and Kirk's attempted purchase, and made discriminatory statements to Paul and Kirk, their parents Warren and Louise, and Anna Niemer, the real estate agent acting for the unit's seller. Ores Compl. PP 14-17. In order to discourage the purchase, these members requested to observe and interview Paul and Kirk with all condominium members present. Id. P 19. In addition, members of Willow West devised and promulgated discriminatory rules and procedures regarding approval of the sale to Paul and Kirk. Id. P 18. Finally, Wojcik, who worked for Image Control, "adopted and took steps to advance" Willow West's discriminatory rulemaking, and "undertook to disguise discriminatory statements, treatment and acts." Id. P 20. The alleged discrimination prevented Paul and Kirk from closing on the purchase. Id. P 21.
On January 23, 1995, the Oreses and Niemer filed a second amended complaint against Willow West, individual residents of Willow West, Image Control, and Wojcik, alleging violations of the Fair Housing Act of 1968, 42 U.S.C. §§ 3604(c), (f), 3617. Commercial Union, a Massachusetts corporation, had issued a commercial general liability insurance policy to Image Control effective for one year starting December 14, 1993. Pursuant to the policy, Image Control demanded coverage for itself and Wojcik. However, Commercial Union rejected coverage, filed this declaratory judgment action, and now moves for summary judgment. Commercial Union argues that the allegations in the Ores complaint do not fall within the policy's coverage; Image Control cross-moves for summary judgment, contending that the allegations fall within the policy's coverage. We address their arguments in turn.
II. Standard for Reviewing Motion for Summary Judgment
Under the Federal Rules of Civil Procedure, summary judgment is appropriate if "there is no genuine issue as to any material fact, and ... . the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). This standard places the initial burden on the moving party to identify "those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986) (quoting Fed. R. Civ. P. 56(c)). Once the moving party has done this, the non-moving party "must set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e). In deciding a motion for summary judgment, the court must read all facts in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); Griffin v. Thomas, 929 F.2d 1210, 1212 (7th Cir. 1991).
In determining whether an insurer owes its insured a duty to defend against particular suits, "the court must look to the allegations of the underlying complaints. If the underlying complaints allege facts within or potentially within policy coverage, the insurer is obliged to defend its insured even if the allegations are groundless, false, or fraudulent." United States Fidelity & Guar. Co. v. Wilkin Insulation Co., 144 Ill. 2d 64, 578 N.E.2d 926, 930, 161 Ill. Dec. 280 (Ill. 1991) (emphasis in original). In order for the insurer to justifiably refuse to defend the insured, it must be "clear from the face of the underlying complaints that the allegations fail to state facts" bringing the case within or potentially within coverage, id. (emphasis in original), or if the insurer relies on an exclusionary provision, it must be "clear and free from doubt that the policy's exclusion prevents coverage," Travelers Ins. Cos. v. Penda Corp., 974 F.2d 823, 833 (7th Cir. 1992); Bituminous Cas. Corp. v. Fulkerson, 156 Ill. Dec. 669, 571 N.E.2d 256, 262 (Ill. App. Ct. 1991). In addition, we must liberally construe the underlying complaints and the insurance policy in favor of the insured. Wilkin Insulation Co., 578 N.E.2d at 930. Finally, "if the underlying complaints allege several theories of recovery against the insured, the duty to defend arises even if only one such theory is within the potential coverage of the policy." Id.
"Occurrence" means an accident, including continuous or repeated exposure to substantially the same ...