Court of Appeals of Illinois, First District, Second Division
LAMORAK INSURANCE COMPANY f/k/a Commercial Union Insurance Company, f/k/a Employers Commercial Union Insurance Company, Plaintiff and Counterdefendant-Appellant,
KONE, INC., and LIBERTY MUTUAL INSURANCE COMPANY, Defendants and Counterplaintiffs-Appellees.
from the Circuit Court of Cook County. Nos. 12 CH 42887 The
Honorable Rodolfo Garcia, Judge Presiding.
PRESIDING JUSTICE NEVILLE delivered the judgment of the
court, with opinion. Justices Pucinski and Mason concurred in
the judgment and opinion.
NEVILLE PRESIDING JUSTICE
1 When a former employee sued Kone, Inc. (Kone), for injuries
suffered due to long-term exposure to asbestos, Kone notified
all the insurance companies that sold policies to Kone during
the employee's long tenure. One of the insurers, Lamorak
Insurance Company (Lamorak), argued that the policies it sold
to Kone for the years 1977 to 1985 counted as excess
insurance because Kone had agreed to a self-insured retention
(SIR) instead of a deductible for those years. Kone filed a
counterclaim that included a request for a judgment declaring
that Lamorak's policies provided primary coverage. The
circuit court granted Kone's motion for summary judgment
on that part of its counterclaim. On Lamorak's appeal
from the partial summary judgment, we find that Lamorak's
policies bear the characteristics of primary insurance.
Accordingly, we affirm the circuit court's judgment.
3 In May 2012, John Nichol filed a complaint charging Kone
with negligently exposing Nichol to asbestos and causing him
to contract malignant pleural mesothelioma. Nichol alleged
that his exposure to asbestos took place between the early
1960s and the late 1980s, when Nichol worked for Kone or
Kone's corporate predecessors. Kone provided notice of
Nichol's claim to insurers who sold liability policies to
Kone and predecessor corporations covering the years from
1961 through 1988. One of the insurers, Lamorak, agreed to
defend Kone, subject to a full reservation of rights.
4 In November 2012, Lamorak filed the complaint that
initiated the case now before us. Lamorak, in its complaint,
asked the court to enter a judgment allocating the liability
to Nichol amongst all insurers who sold policies to Kone.
Lamorak named Liberty Mutual Insurance Company (Liberty),
Kone, and others as defendants. Lamorak admitted that its
corporate predecessors sold insurance policies to Kone's
predecessors covering the period from June 30, 1971, to June
30, 1985. (We will refer to Kone and its predecessors as Kone
and to Lamorak and its predecessors as Lamorak.) Lamorak
admitted that the policies for 1971 to 1977 provided primary
coverage, subject to a deductible. For the years 1977 to
1985, Lamorak sold Kone both umbrella policies and other
policies, subject to SIRs. The parties agree that
Lamorak's umbrella policies provided excess coverage that
Kone cannot reach until it exhausts underlying coverages. The
parties disagree about Lamorak's duties under the other
policies, the policies at issue, which the umbrella policies
listed as underlying coverage.
5 Lamorak alleged, and Kone admitted, that several persons
other than Nichol also filed complaints against Kone, seeking
compensation for injury or damage due to asbestos exposure.
Lamorak sought a judgment declaring that the policies at
issue imposed on Lamorak no duty to defend because Kone had
not exhausted all of its primary insurance for the years 1961
through 1988. Lamorak contended that Liberty, as a primary
insurer for part of that period, had prior responsibility for
providing a defense and indemnity to Kone for Nichol's
6 Kone filed an answer to Lamorak's complaint and a
counterclaim. In count I of the counterclaim, Kone sought a
judgment declaring that Lamorak had a duty to indemnify Kone
for its liability to Nichol and the other persons who sued
Kone. As one part of that relief, Kone prayed for a judgment
declaring that the policies at issue count as primary
7 Liberty filed a motion for summary judgment on Kone's
counterclaim, contending that the evidence in the record
showed that the policies at issue provided primary coverage.
The parties filed with the court copies of the policies
Lamorak issued to Kone for the years 1971 to 1985. Kone and
Liberty also filed other documents, with no affidavits or
depositions explaining how they came to possess the
documents. Kone alleged that it received two of the documents
from Lamorak in response to discovery, and Liberty similarly
alleged that it received one of the documents from Lamorak in
discovery. Lamorak argued that Kone and Liberty failed to
authenticate all of the documents, but Lamorak did not deny
the allegations that it had produced the three documents in
8 The Lamorak policy for 1976 to 1977 (the last with a
deductible and not a SIR) provides:
"4. *** In the event of an occurrence, written notice
*** shall be given by or for the insured to the company ***
as soon as practicable.
6. Other Insurance: The insurance afforded by this policy
is primary insurance ***.
When both this insurance and other insurance apply to the
loss on the same basis, *** the company shall not be liable
under this policy for a greater proportion of the loss than
that stated in the applicable contribution provision below:
(a)Contribution by Equal Shares ***.
(b)Contribution by Limits. ***
I. Coverage A-Bodily Injury Liability ***
The company will pay on behalf of the insured all sums
which the insured shall become legally obligated to pay as
damages because of *** bodily injury *** to which this
insurance applies, caused by an occurrence, and the company
shall have the right and duty to defend any suit against
the insured seeking damages on account of such bodily
injury *** even if any of the allegations of the suit are
groundless, false or fraudulent[, ] and ...