The opinion of the court was delivered by: J. Phil Gilbert District Judge
This matter comes before the Court on plaintiff Safety National Casualty Corporation's ("Safety National") motion for summary judgment (Doc. 19). Defendant Village of Cahokia ("Cahokia") has responded to the motion (Doc. 24) and has sought to modify its response (Doc. 33). The Court will allow the modification. In this case Safety National seeks a declaration that it is not obligated to pay benefits to Cahokia under an excess workers' compensation insurance policy it issued to Cahokia. It claims Cahokia breached its obligation under the policy to promptly notify Safety National of a workers' compensation claim by former Cahokia employee Robert Wright. Safety National now asks for summary judgment because there is no evidence it was timely notified of the claim.
I. Summary Judgment Standard
Summary judgment is appropriate where "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c)(2); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Spath v. Hayes Wheels Int'l-Ind., Inc., 211 F.3d 392, 396 (7th Cir. 2000). The reviewing court must construe the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in favor of that party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Chelios v. Heavener, 520 F.3d 678, 685 (7th Cir. 2008); Spath, 211 F.3d at 396.Where the moving party fails to meet its strict burden of proof, a court cannot enter summary judgment for the moving party even if the opposing party fails to present relevant evidence in response to the motion. Cooper v. Lane, 969 F.2d 368, 371 (7th Cir. 1992).
In responding to a summary judgment motion, the nonmoving party may not simply rest upon the allegations contained in the pleadings but must present specific facts to show that a genuine issue of material fact exists. Fed. R. Civ. P. 56(e)(2); Celotex, 477 U.S. at 322-26; Johnson v. City of Fort Wayne, 91 F.3d 922, 931 (7th Cir. 1996). A genuine issue of material fact is not demonstrated by the mere existence of "some alleged factual dispute between the parties," Anderson, 477 U.S. at 247, or by "some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); Michas v. Health Cost Controls of Ill., Inc., 209 F.3d 687, 692 (7th Cir. 2000). Rather, a genuine issue of material fact exists only if "a fair-minded jury could return a verdict for the [nonmoving party] on the evidence presented." Anderson, 477 U.S. at 252; accord Michas, 209 F.3d at 692.
Viewed in favor of Cahokia, the evidence establishes the following relevant facts.*fn1
Safety National issued an excess insurance policy (No. AGC-4638-IL; the "Policy") to Cahokia to cover Illinois workers' compensation claims that might be made against it for injuries from July 12, 2002, to July 12, 2004. The Policy required a self-insured retention amount of $250,000 per occurrence, that is, Safety National would not be required to pay anything unless the claim exceeded $250,000. Cahokia was solely responsible for paying claims of $250,000 or less. The Policy also contained the following provisions:
J. Prompt Reporting of Claims
As soon as the EMPLOYER [Cahokia] becomes aware, the EMPLOYER must provide notice to the CORPORATION [Safety National] of: (a) any claim or action commenced against the EMPLOYER which exceeds, or is likely to exceed, fifty percent (50%) of the Self-Insured Retention Per Occurrence specified in item 7 of the Declarations; . . . and (c) any disability claim, whether or not contested by the EMPLOYER, where it appears reasonably likely that such disability will exceed one year in duration, or where such disability actually exceeds one year in duration. * * * Failure to render prompt notice of any claim in a manner sufficient to the CORPORATION by the EMPLOYER, or its designated representative(s), may result in the disclaimer of coverage for the particular claim. To constitute prompt, sufficient notice, the EMPLOYER must provide complete information as to the details of the injury, disease, or death.
The EMPLOYER shall investigate and settle or defend all claims and shall conduct the defense and appeal of all actions, suits, and proceedings commenced against it. The EMPLOYER shall forward promptly to the CORPORATION copies of any pleadings or reports as may be requested. The CORPORATION shall not be obliged to assume charge of the investigation, defense, appeal, or settlement of any claim, suit, or proceeding brought against the EMPLOYER, but the CORPORATION shall be given the opportunity to investigate, defend, or participate with the EMPLOYER in the investigation and defense of any claim, if, in the opinion of the CORPORATION, its liability under this Agreement might be involved.
At the time Safety National wrote the Policy, Cahokia's workers' compensation claims were administered by Gallagher-Bassett. Later, Cahokia hired insurance agent John Kreisler to try to find a less expensive third-party claims administrator. On Kreisler's recommendation, in August 2004 Cahokia transferred its claims processing function to ClaimsOne (a third-party defendant in this suit). ClaimsOne took over handling the pending claims that had been previously reported to Gallagher-Bassett, referred to in the ...