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Certain Underwriters at Lloyd's, London v. Illinois Central Railroad Co.

April 15, 2002

CERTAIN UNDERWRITERS AT LLOYD'S, LONDON; COMMERCIAL UNION ASSURANCE COMPANY, PLC; AND INTERNATIONAL INSURANCE COMPANY, INDIV. AND AS SUCCESSOR IN INTEREST TO INTERNATIONAL SURPLUS LINES INSURANCE COMPANY, PLAINTIFFS-APPELLEES,
v.
ILLINOIS CENTRAL RAILROAD COMPANY, INDIV. AND AS SUCCESSOR IN INTEREST TO THE GULF, MOBILE AND OHIO RAILROAD COMPANY, DEFENDANT-APPELLANT
(ADMIRAL INSURANCE COMPANY; AMERICAN CENTENNIAL INSURANCE COMPANY; AMERICAN HOME ASSURANCE COMPANY; AMERICAN REINSURANCE COMPANY; AUDUBON INDEMNITY COMPANY; CASUALTY INSURANCE COMPANY; CENTURY INDEMNITY COMPANY, AS SUCCESSOR TO BOTH CIGNA SPECIALTY INSURANCE COMPANY, F/K/A CALIFORNIA UNION INSURANCE COMPANY, AND TO CCI INSURANCE COMPANY, SUCCESSOR TO INSURANCE COMPANY OF NORTH AMERICA; COLUMBIA CASUALTY COMPANY; CONTINENTAL CASUALTY COMPANY; EMPLOYERS INSURANCE OF WAUSAU; EMPLOYERS MUTUAL CASUALTY COMPANY; FEDERAL INSURANCE COMPANY; FIREMAN'S FUND INSURANCE COMPANY; FIRST STATE INSURANCE COMPANY; GENERAL REINSURANCE CORPORATION; GRANITE STATE INSURANCE COMPANY; HARBOR INSURANCE COMPANY; THE HOME INSURANCE COMPANY; INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA; INTERSTATE REINSURANCE CORPORATION, A/K/A INTERSTATE INDEMNITY COMPANY; LANDMARK INSURANCE COMPANY; LEXINGTON INSURANCE COMPANY; NATIONAL SURETY CORPORATION; NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA; NATIONWIDE MUTUAL INSURANCE COMPANY; NORTHEASTERN FIRE INSURANCE COMPANY OF PENNSYLVANIA; OLD REPUBLIC INSURANCE COMPANY; RELIANCE FIRE AND ACCIDENT INSURANCE CORPORATION, LTD.; ROYAL INSURANCE COMPANY; STONEWALL INSURANCE COMPANY; TRANSPORTATION MUTUAL INSURANCE COMPANY; TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, AS SUCCESSOR TO AETNA CASUALTY AND SURETY COMPANY; UNION ATLANTIQUE D'ASSURANCES, S.A.; AND YOSEMITE INSURANCE COMPANY, DEFENDANTS).



Appeal from the Circuit Court of Lake County. No. 00-MR-130 Honorable Barbara C. Gilleran Johnson, Judge, Presiding.

The opinion of the court was delivered by: Justice McLAREN

UNPUBLISHED

Defendant Illinois Central Railroad Company (Illinois Central) appeals the trial court's denial of its motion to transfer venue from the circuit court of Lake County to the circuit court of Cook County pursuant to the doctrine of forum non conveniens. We reverse and remand.

The action pending in Lake County involves insurance coverage for environmental contamination in 35 railroad sites owned and operated by defendant Illinois Central located in nine states, including Illinois. In an amended complaint filed in Lake County, Illinois, Certain Underwriters at Lloyds, London (Lloyds), joined by 94 insurance companies, seek a declaratory judgment that there is no coverage for environmental claims concerning 35 of Illinois Central's railroad sites and that there is no duty to defend or indemnify Illinois Central with respect to the environmental claims.

I. BACKGROUND

In 1850, Illinois Central was formed as a Delaware corporation for north-south railroad operations with headquarters in Chicago, Illinois. The Gulf, Mobile & Ohio Railroad Company (GM&O), formed in the mid-1800s and headquartered in Mobile, Alabama, operated railroad transportation facilities in the southern United States. In 1972, GM&O merged with Illinois Central. The combined railroad operated in 13 states, with a northern terminus in Chicago and a southern terminus in Mobile, Alabama. No rails or operations of Illinois Central premerger or postmerger with GM&O were located in Lake County, which is north of the railroad's northern terminus in Chicago.

From April 1, 1948, to June 1, 1985, Illinois Central and its predecessors purchased insurance policies from each of the defendant insurers for liability incurred as a result of its operations. The insurance policies were purchased by executives in Chicago and Mobile, Alabama. Illinois Central's broker for purchase of the policies was the Chicago office of Rollins Burdick Hunter, thereafter acquired by AON corporation, headquartered in Chicago. None of the policies were purchased or delivered in Lake County, Illinois.

Lloyds, London is an underwriter of insurance policies issued through the London insurance market. Plaintiff Stonewall Insurance Company is an Ohio corporation with its principal place of business in Ohio. The collective plaintiffs--Lloyds, London; Stonewall Insurance Company; and 91 London market insurers--subscribed to certain liability insurance policies issued to Illinois Central and/or GM&O by defendants.

Illinois Central received notice of suits from governmental agencies, including the Environmental Protection Agency, that operations at various facilities in numerous states resulted in the release of hazardous environmental contaminants. On October 28, 1999, Illinois Central filed suit in the circuit court of Mobile County, Alabama, seeking a declaration of its right to coverage for the environmental losses. Identified as defendants in the Alabama suit were Lloyds, London, International Insurance Company, and 150 additional insurance companies.

II. THE LAKE COUNTY INSURANCE COVERAGE LITIGATION

On February 15, 2000, plaintiffs Lloyds, London; Commercial Union; and International Insurance Company filed a declaratory judgment action in the circuit court of Lake County against Illinois Central and 33 insurance companies (see appendix A). The complaint sought a declaration that there is no insurance coverage with respect to the environmental claims arising in 35 sites in 9 states, including Alabama, Arkansas, Illinois, Iowa, Louisiana, Mississippi, Missouri, Tennessee, and Virginia, and that plaintiffs have no duty to defend or indemnify Illinois Central with respect to the environmental claims arising in 35 sites in 9 states. The sites of environmental claims in Illinois are located in Cook County, Greene County, McLean County, Madison County, Morgan County, and St. Clair County. None of the sites are located in Lake County. The complaint alleges that venue is proper in Lake County because Illinois Central does business in Lake County and certain defendant insurers have offices in Lake County or are doing business in Lake County.

On April 18, 2000, plaintiffs amended the complaint to change the status of Stonewall Insurance Company from defendant to plaintiff, to drop Commercial Union as a plaintiff, and to add 91 additional insurance companies as plaintiffs (see appendix B). Again, the amended complaint identified Illinois Central and 32 insurance companies as defendants and sought a declaration of no insurance coverage with respect to the environmental claims arising in 35 sites in 9 states. While this appeal was pending, Illinois Central moved to voluntarily dismiss plaintiff International Insurance Company, individually and as successor-in-interest to International Surplus Lines Insurance Company, with prejudice. The motion was granted, leaving Lloyds and the remaining insurance companies listed in appendix B as the plaintiffs.

Illinois Central moved to dismiss the Lake County declaratory judgment action pursuant to section 2--619(a)(3) of the Code of Civil Procedure (the Code) (735 ILCS 5/2--619(a)(3) (West 2000)). The motion asserted that the Lake County action was duplicative of the action filed by Illinois Central in Alabama involving the same parties, same cause of action, the same insurance policies, and the same loss. In denying Illinois Central's motion to dismiss, the trial court found that there were more contacts, track, policies, sites, parties, and overall economic interest in maintaining the coverage action in Illinois. Illinois Central's motion for certification of the trial court's ruling pursuant to Supreme Court Rule 308 (155 Ill. 2d R. 308) was denied. This opinion is not concerned with the correctness of the court's denial of the section 2--619(a)(3) motion. Nothing in this opinion should be deemed to preclude the filing of a new section 2--619(a)(3) motion based upon additional facts regarding the status of litigation in the Alabama court.

On September 27, 2000, Illinois Central filed a motion to transfer venue of the declaratory judgment action from the circuit court of Lake County to the circuit court of Cook County pursuant to the doctrine of forum non conveniens. A hearing was held on November 2, 2000. The trial court denied Illinois Central's motion to transfer, finding that either Cook or Lake County would be an appropriate forum and stating that Cook County had a ...


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