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Tkk Usa Inc., F/K/A the Thermos Company v. Safety National Casualty Corporation

June 29, 2011


The opinion of the court was delivered by: Judge James B. Zagel


This case centers on whether Defendant Safety National Casualty Corporation ("Safety National") has a duty to reimburse its insured, the Plaintiff TKK USA Inc. ("Thermos"). The parties have filed cross-motions for summary judgment, and no facts are in dispute. For the following reasons, Plaintiff's motion for summary judgment is granted. Defendant's motion for summary judgment is denied.


The facts of this case are not in dispute. Safety National sold Thermos policy number AGC-4551-IL on August 31, 1995 ("the Policy"). Thermos purchased a continuation of the Safety National Policy through August 31, 1997.

On August 28, 2009, Juanita M. Perkins, as Special Administrator of the Estate of Blannie Perkins, filed a complaint against "Thermos-King, Inc." and other defendants in the Circuit Court of the Third Judicial Circuit of Madison County, Illinois ("the underlying complaint"). Blannie Perkins was an employee at the Thermos employee in Freeport, Illinois, and his last day of employment with Thermos was February 10, 1997. The underlying complaint seeks damages under Illinois common law, alleging two counts of common law negligence, and four counts of intentional and willful misconduct by Thermos. Specifically, this complaint alleges that Blannie Perkins was exposed to asbestos-containing products in the course of his employment that were supplied by Thermos and used throughout the facility. Such exposure, it is alleged, resulted in his death from mesothelioma.

On October 14, 2009, Thermos provided notice to Safety National of the lawsuit. On March 23, 2010, counsel for Thermos spoke with Safety National's claims analyst and advised her that Thermos expected to exhaust the Safety National Policy's $275,000.00 self-insured retention in the defense of the Perkins lawsuit and requested that Safety National provide a coverage determination. On August 25, 2010, Safety National forwarded a letter to Thermos declining coverage under the policy. Thermos asked that Safety National reconsider its denial of coverage, but Safety National maintained its position that Thermos was not entitled to coverage under the policy.


Summary judgment should be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). A genuine issue of triable fact exists only if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Pugh v. City of Attica, Ind., 259 F.3d 619, 625 (7th Cir. 2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

Once the moving party has set forth the basis for summary judgment, the burden shifts to the nonmoving party who must go beyond mere allegations and offer specific facts showing that there is a genuine issue for trial. Fed. R. Civ. P. 56(e); see Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). A party will be successful in opposing summary judgment only if it presents "definite, competent evidence to rebut the motion." EEOC v. Sears, Roebuck & Co., 233 F.3d 432, 437 (7th Cir. 2000). I consider the record in the light most favorable to the nonmoving party, drawing all reasonable inferences in the non-movant's favor. Lesch v. Crown Cork & Seal Co., 282 F.3d 467, 471 (7th Cir. 2002).


The parties agree that Safety National owes Thermos no duty to defend. Instead, the question before me is whether Safety National must reimburse Thermos for the cost of defending the Perkins lawsuit. I find that they must.

Safety National argues that the Policy does not impose any duty to reimburse Thermos for defense and investigation costs relating to the underlying lawsuit because any such duty would only be triggered if a claim was filed against Thermos under the Workers' Compensation or Employers' Liability Laws of Illinois. Safety National argues that because the underlying plaintiff attempts to recover under a theory of negligence, the suit does not arise under either Illinois' Workers' Compensation or Employers' Liability laws. Accordingly, Safety National's indemnity obligations have not been triggered. Thermos contends that the negligence suit filed does in fact fall under the Employers' Liability laws, and therefore Defendants are obligated to reimburse them for the cost of the defense.

A. Liability Alleged in the Complaint

The Policy requires Safety National to reimburse Thermos' costs incurred in defending claims brought under either the Workers' Compensation Laws of Illinois or the Employers' Liability Laws of Illinois. Neither Employers' Liability Laws, nor Workers' Compensation Laws are defined terms in the Policy. The underlying complaint alleges negligence as well as intentional and willful misconduct. As an initial matter, the claims for intentional or willful misconduct fall directly within the Policy's exclusion for damages because of "serious and willful misconduct, including intentional acts or omissions resulting in injury." However, under Illinois law, if several theories of recovery are alleged in the underlying complaint against the insured, the insurer must pay defense costs for the entire suit, even if only one of the theories is potentially within the coverage of the policy. U.S. Fid. & Guar. Co. v. ...

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