United States District Court, C.D. Illinois
ORDER AND OPINION
E. Shadid United States District Judge.
matter is now before the Court on Plaintiff's Motion 
for Judgment on the Pleadings. Defendant filed a response
 and the matter is ripe for disposition. For the reasons
set forth below, Plaintiff's Motion is GRANTED.
Rockhill Insurance Company (“Rockhill”), brought
this action against Defendant, Carri Scharf Materials Company
(“Scharf”), seeking a declaratory judgment that
Rockhill owes no duty to defend or indemnify Scharf under the
commercial general liability policies issued to Scharf from
September 1, 2014 to September 1, 2018 for the case
People of the State of Illinois v. Carri Scharf Materials
Company, No. 12-CH-320, Circuit Court of Peoria County,
Illinois (“Underlying Complaint”).
is a concrete aggregate mineral and mining operation, and the
owner of a salt storage facility and barge unloading
terminal. D. 38-1, at 3. As part of its operations, Scharf
conveys salt over the Illinois River levee from barges and
then stockpiles the salt for future sale at a storage
facility located in Bartonville, Peoria County, Illinois.
State of Illinois (the “State”) filed the
Underlying Complaint against Scharf in May 2012, which
contained six counts: two counts of surface water pollution;
one count for ground water contamination; two counts for
failing to obtain necessary permits; and one count for
failure to comply with a necessary permit. D. 38-1, at 4-5.
It alleged generally that Scharf's conduct caused,
threatened, or allowed the discharge of contaminants into the
Illinois River, a nearby marsh, a runoff pond, a ditch and
storm water resulting in pollution. Id. On various
dates between 2008 and 2011, the Illinois Environmental
Protection Agency (“IEPA”) inspected Scharf's
storage facility, noting evidence of salt spillage into the
river, salt pile runoff, and salt stockpiled and uncovered.
Id. at 5-8. The IEPA also collected water samples
from areas on or surrounding Scharf's property during
that same period, with results indicating elevated levels of
chloride concentrations and/or cyanide. Id. The
Underlying Complaint further alleged Scharf did not obtain
necessary permits for construction and industrial activities
between 2008 and 2011. Id. at 7-8.
September 1, 2014 to September 1, 2018, Rockhill issued four
commercial general liability policies (“Rockhill
Policies”) to Scharf. Id. at 10. Subject to
all terms, conditions and exclusions described in the
policies, the Rockhill Policies provided “bodily
injury” liability coverage, “property
damage” liability coverage, and “personal
injury” or “advertising injury” liability
coverage. Id. at 11. The parties agree Rockhill owes
no obligation to Scharf under the “bodily injury,
” “personal injury, ” or “advertising
injury” coverages of the Rockhill Policies.
Id. The parties do not agree as the “property
damage” liability coverage. With regards to the
“property damage” provisions of the Rockhill
Policies, it provides in part that the insurance coverage
applies to “property damage” that “occurs
during the policy period.” Id. at 12.
Rockhill Policies contain exclusions for coverage, in
relevant part, regarding pollution and pre-existing damage or
injury. The “TOTAL POLLUTION EXCLUSION
ENDORSEMENT” declares the Rockhill Policies do not
apply to any “request, demand, order or statutory or
regulatory requirement” to the insured to respond to
assess the effects of “pollutants.” Id.
at 14. The Rockhill Policies define “pollutants”
as “any solid, liquid, gaseous or thermal irritant or
contaminant, including smoke, vapor, soot, fumes, acids,
alkalis, chemicals and waste.” Id. There is
also a provision entitled “EXCLUSION - PRE-EXISTING
DAMAGE OR INJURY”. Id. at 15. It states the
insurance coverage does not apply to any property damage that
occurred before the effective date of the policy, are alleged
to be in the process of occurring as of the effective date,
or are in the process of settlement, adjustment, or suit as
of the effective date. Id.
Rockhill Policies also contain certain conditions
(“Notice Conditions”) governing when the insured
must notify Rockhill in the event of an occurrence or offense
that may result in a claim or suit, or in the event that a
claim or suit is filed against the insured. D. 38-1, at 17.
The Notice Conditions state an insured must notify Rockhill
“as soon as practicable” of any occurrence or
offense which may result in a claim. Id. The insured
must also notify Rockhill in writing “as soon as
practicable” of any claim made or suit brought against
the insured. Id. at 18. The insured must immediately
send copies of any demands, notices, summonses, or legal
papers to Rockhill. Id. Scharf notified Rockhill of
the Underlying Complaint on May 21, 2018. Id. at 18.
March 2018, the Office of the Attorney General for the State
of Illinois sent a letter to counsel for Scharf and Compass
Minerals America, Inc., notifying them of its intent to amend
the Underlying Complaint to include Morton Salt, Inc.
(“Morton Salt”) and Compass Minerals America,
Inc. D. 17-1, at 2. A copy of the letter was also sent to
Morton Salt. Id. at 3. Morton Salt sent a letter to
Scharf on April 23, 2018, demanding defense and
indemnification in the State's action. D. 17-2, at 2.
Scharf then sent Morton Salt's demand letter to Rockhill
on May 21, 2018. D. 38, at 3.
judgment on the pleadings may be granted if the pleadings
disclose no genuine issue of material fact and the movant is
entitled to judgment as a matter of law. Cincinnati Ins.
Co. v. Allen, 347 F.Supp.2d 586, 589 (C.D. Ill. 2004).
In this case, both parties agree on the material facts
concerning the language in the Rockhill Policies and the
Underlying Complaint. The parties also agree Illinois law
should be applied to this case. See D. 35, at 10, and D. 38,
determine whether an insurer has a duty to defend its
insured, we compare the factual allegations of the underlying
complaint … to the language of the insurance
policy.” Amerisure Mut. Ins. Co. v. Microplastics,
Inc., 622 F.3d 806, 810 (7th Cir. 2010). If the
underlying complaint contains alleged facts within or
potentially within the policy's coverage, the
insurer's duty to defend arises. Id. The duty to
defend is broader than the duty to indemnify, and a finding
of no duty to defend precludes a finding of no duty to
indemnify. Health Care Indus. Liab. Ins. Program v.
Momence Meadows Nursing Ctr., Inc., 566 F.3d 689, 693
(7th Cir. 2009).
provisions within insurance policies impose valid
prerequisites to coverage. W . Am. Ins. Co. v. Yorkville
Nat. Bank, 238 Ill.2d 177, 185 (2010); Williams v.
BNSF Ry. Co., 2015 IL App (1st) 121901-B, P37, 29 N.E.3d
1097, 1105. A policy provision requiring notice “as
soon as practicable” means notice must be given
“within a reasonable time.” Yorkville,
238 Ill.2d at 185. The timeliness of the notice given is
generally a question of ...