Illinois Appellate Court Affirms Cook County Summary Judgment Order that Insurer Must Defend Toxic-Tort Complaints Even When the Dates of Exposure or Injury Were Vague or Unknown

Illinois Tool Works purchased commercial liability policies many years ago from Travelers Casualty Surety Co. and Century Indemnity Co. They were purchased by Illinois Tool Works for the years 1971 through 1987.The policies were designed to have the insurance companies defend Illinois Tool Works against toxic-tort injury complaints that did not allege dates or exposure or injury.

The insurance companies reportedly declined to defend Illinois Tool in thousands of toxic-tort cases in which the plaintiffs alleged that their injuries were caused by exposure to hazardous substances, which included asbestos, benzene and manganese in welding supplies and other products distributed by other companies Illinois Tool started buying in 1993. According to the facts in the case, Illinois Tool did not enter the welding product market until 1993, while the last insurance policy that was issued expired in 1987.

A Cook County judge granted Illinois Tool’s request for summary judgment. On appeal, the tort complaints were characterized this way:

1. Cases where “the underlying plaintiff alleges that he was exposed to an Illinois Tool product during at least some point within a relevant policy’s term.”

2. Lawsuits where “the underlying plaintiff alleges that exposure to an Illinois Tool product resulted in an injury but does not set forth when the occurrence occurred or when the injury manifested.”

3. Complaints that alleged successor-liability claims against Illinois Tool for the conduct of companies it acquired after the policies expired.

4. “The group in which the underlying plaintiff alleges that Illinois Tool is directly liable, but is also liable as a successor in interest.”

Even if the allegations in the first category were groundless, the insurers were obligated to defend Illinois Tool against these complaints.

The Illinois Appellate Court noted as to the second group, “No Illinois cases directly address the question presented by this category of cases, but we are guided by a well-settled principle followed by Illinois courts; that vague, ambiguous allegations against an insured should be resolved in favor of finding a duty to defend.”

Last, Illinois Tool “essentially conceded that it is not entitled to a defense in [the third] category of cases.” But the insurers were obligated to provide a defense to claims in the fourth category because “under Illinois law, when an insurer has a duty to defend against one claim in a suit, it has a duty to defend against all claims, even if some of the claims standing alone would be beyond the scope of the policy.”

The court found that in the underlying cases, the ambiguous or unstated time period must be resolved in favor of a duty to defend by the insurer. The allegations of complaints leave open the possibility that the plaintiffs’ exposure or injury occurred during the policy periods. Accordingly, the underlying allegations do not foreclose coverage.

Therefore, the court found that even in cases where allegations against Illinois Tool were made without a time of injury, there would still be a duty to defend. After the last insurance policy expired in 1987, Illinois Tool chose to self-insure. Where there is no exposure date alleged in a complaint, there is no way to know whether the underlying plaintiff is claiming that he was exposed to the harmful materials or that the injury manifested itself during the policy period or instead during the time Illinois Tool was self insured.

The insurers argued that for the period after 1987, Illinois Tool assumed the risk of litigation and, therefore, if we require them to bear the full burden of defending these cases, we would be imposing obligations on them for a period of time that they never agreed to provide coverage or defense.

The insurance policies provided that the insurers would defend Illinois Tool against “any suit” and pay “all sums” for claims of personal injuries against it, but the policies also state that the injuries must take place during the policy in order be covered. The trial court rejected the insurers’ request for a pro-rata allocation of the burden of proving a defense and concluded that “all triggered policies are jointly and severely liable for defense for the particular period in which the duty to defend arises” and found that the insurers must bear the burden of all defense costs.

The Illinois Supreme Court had rejected a pro-rata allocation approach in these cases: Zurich Insurance Co. v. Raymark, 118 Ill.2d 23 (1987); John Crane v. Admiral Insurance, 2013 IL App (1st) 1093240-B.

In those cases cited here, the courts held that once a policy was triggered, the insurer was obligated to pay the total defense costs without proration.

In conclusion, the Illinois Appellate Court agreed that Illinois Tool was entitled to the insurers defending it even if the cases brought against it were groundless. The insurers must provide a defense for Illinois Tool for all cases where the bare, underlying allegations, if proved, would render Illinois Tool individually liable. If Illinois Tool is alleged to be individually liable or liable both directly and as a successor, there is a duty to defend. The duty to defend is joint and several. If Illinois Tool is alleged to be liable solely as a successor, there is no duty to defend.

Illinois Tool Works v. Travelers Casualty & Surety, 2015 IL App (1st) 132350 (Jan. 13, 2015).

Kreisman Law Offices has been handling work injury cases, asbestos and mesothelioma cases, construction site accident cases, roadway accident cases and automobile accident cases for individuals and families who have been harmed, injured or died as a result of the carelessness or negligence of another for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Robbins, Rolling Meadows, Schaumburg, Skokie, South Barrington, South Chicago Heights, South Holland, Stickney, Thornton, Tinley Park, Western Springs, Willow Springs, Winnetka, Park Ridge, Palos Heights, Hoffman Estates, Hanover Park, Bedford Park, Bensenville, Country Club Hills, Crestwood, Crete, Des Plaines, East Hazelcrest, Elgin, Elmwood Park and Forest Park, Ill.