{ "id": 3442465, "name": "DONALD B. MacNEAL, INC., Plaintiff-Appellant, v. INTERSTATE FIRE AND CASUALTY COMPANY, Defendant-Appellee", "name_abbreviation": "Donald B. MacNeal, Inc. v. Interstate Fire & Casualty Co.", "decision_date": "1985-04-10", "docket_number": "No. 84\u2014723", "first_page": "564", "last_page": "569", "citations": [ { "type": "official", "cite": "132 Ill. App. 3d 564" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "221 N.E.2d 795", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "77 Ill. App. 2d 172", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 2570835 ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/77/0172-01" ] }, { "cite": "442 N.E.2d 1362", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1966, "opinion_index": 0 }, { "cite": "110 Ill. App. 3d 759", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2997468 ], "year": 1966, "opinion_index": 0, "case_paths": [ "/ill-app-3d/110/0759-01" ] }, { "cite": "460 N.E.2d 873", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "122 Ill. App. 3d 183", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3522601 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/122/0183-01" ] }, { "cite": "574 F.2d 1176", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 926621 ], "pin_cites": [ { "page": "1178" } ], "opinion_index": 0, "case_paths": [ "/f2d/574/1176-01" ] }, { "cite": "457 N.Y.S.2d 670", "category": "reporters:state", "reporter": "N.Y.S.2d", "weight": 2, "pin_cites": [ { "page": "672" } ], "opinion_index": 0 }, { "cite": "117 Misc. 2d 665", "category": "reporters:state", "reporter": "Misc. 2d", "case_ids": [ 806633 ], "opinion_index": 0, "case_paths": [ "/misc2d/117/0665-01" ] }, { "cite": "180 Cal. Rptr. 628", "category": "reporters:state", "reporter": "Cal. Rptr.", "weight": 2, "pin_cites": [ { "page": "634" }, { "page": "632" } ], "opinion_index": 0 }, { "cite": "640 P.2d 764", "category": "reporters:state_regional", "reporter": "P.2d", "weight": 2, "pin_cites": [ { "page": "770" }, { "page": "772" } ], "opinion_index": 0 }, { "cite": "30 Cal. 3d 800", "category": "reporters:state", "reporter": "Cal. 3d", "case_ids": [ 2013842 ], "weight": 2, "pin_cites": [ { "page": "812" }, { "page": "814-15" } ], "opinion_index": 0, "case_paths": [ "/cal-3d/30/0800-01" ] }, { "cite": "395 N.E.2d 933", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "77 Ill. App. 3d 272", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3289321 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/77/0272-01" ] }, { "cite": "400 N.E.2d 921", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "78 Ill. 2d 376", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3074014 ], "opinion_index": 0, "case_paths": [ "/ill-2d/78/0376-01" ] }, { "cite": "314 N.E.2d 577", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "20 Ill. App. 3d 470", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5343756 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/20/0470-01" ] }, { "cite": "419 N.E.2d 601", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 4, "year": 1974, "opinion_index": 0 }, { "cite": "94 Ill. App. 3d 1062", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3126478 ], "weight": 4, "year": 1974, "opinion_index": 0, "case_paths": [ "/ill-app-3d/94/1062-01" ] }, { "cite": "369 N.E.2d 252", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "54 Ill. App. 3d 103", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3402749 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/54/0103-01" ] } ], "analysis": { "cardinality": 574, "char_count": 13554, "ocr_confidence": 0.756, "pagerank": { "raw": 4.101306790610759e-07, "percentile": 0.9097142343047799 }, "sha256": "f900a93f64844f4fe787b042414d9423c53fd240060ac5ba9aa50390c0be902d", "simhash": "1:2a17d1982157dc28", "word_count": 2101 }, "last_updated": "2023-07-14T22:48:37.184543+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "DONALD B. MacNEAL, INC., Plaintiff-Appellant, v. INTERSTATE FIRE AND CASUALTY COMPANY, Defendant-Appellee." ], "opinions": [ { "text": "JUSTICE McNAMARA\ndelivered the opinion of the court:\nPlaintiff, Donald B. MacNeal, Inc., brought this action for declaratory judgment against its excess insurer, defendant Interstate Fire and Casualty Company. Plaintiff sought recovery under an umbrella insurance policy for $100,000, which it paid to settle a claim when the underlying primary insurer became insolvent. The trial court entered judgment on the pleadings in favor of defendant, and plaintiff appeals.\nPlaintiff purchased primary and excess liability insurance for the operation of its recreational facility known as Holiday Park. The primary liability insurance policy was issued by All-Star Insurance Corporation. The initial policy provided bodily injury liability coverage of $100,000 per person, effective December 1, 1972, to April 1, 1974. A successor policy, effective April 1, 1974, to April 1, 1975, provided coverage of $300,000 per person. The excess insurance policy issued by defendant provided umbrella bodily injury liability coverage of $1,000,000 for any one occurrence, effective June 14, 1973, to June 14, 1976. Defendant\u2019s liability applied \u201cin excess of (1) the amount recoverable under underlying insurance as set out in Item 4.\u201d Item 4 described the \u201cUnderlying insurance\u201d for Holiday Park as \u201cComprehensive General Liability\u201d issued by All-Star and stated the limits of insurance as \u201c$100/300/50,000.\u201d Alternatively, defendant\u2019s liability was \u201cin excess of *** (2) $10,000.00 ultimate net loss in respect of each occurrence not covered by said underlying insurance.\u201d\nA business invitee sustained a serious injury at Holiday Park on July 4, 1974, and filed an action against plaintiff in 1975 requesting $1,000,000 in damages. On March 1, 1977, All-Star was ordered into liquidation because of insolvency. While the personal injury action was pending, plaintiff filed the present complaint for declaratory judgment against defendant, pursuant to section 2 \u2014 701 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 2 \u2014 701). Plaintiff sought a declaration of rights and obligations of the parties arising out of defendant\u2019s excess insurance policy involving All-Star\u2019s insolvency. Thereafter, the personal injury suit against plaintiff was settled for $1,000,000; plaintiff paid $100,000 and defendant paid $900,000. Plaintiff and defendant agreed that the payments would not prejudice the rights of either to a determination of their ultimate respective rights and obligations under the excess insurance contract.\nThereafter, plaintiff filed an amended complaint seeking reimbursement for the defense and compromise of the claim in excess of $10,000 ($139,135.84) or in excess of $100,000 ($49,135.84). Defendant\u2019s answer stated that its coverage was in excess of $300,000 ultimate loss. Plaintiff sought judgment on the pleadings, maintaining that defendant was obligated to pay the entire $1,000,000 coverage under its excess policy because the \u201camount recoverable\u201d from the insolvent underlying insurer was zero. Plaintiff requested reimbursement for $100,000 which it had contributed to the $1,000,000 settlement. Defendant asserted that the \u201camount recoverable\u201d from the underlying insurance was the face value of the primary policy.\nDefendant filed a counterclaim for declaratory judgment seeking $200,000 reimbursement from plaintiff. Defendant also moved for judgment on the pleadings. The trial court, finding that defendant did not assume the obligations of the primary insurer for plaintiff, denied plaintiff\u2019s motion and granted defendant\u2019s motion for judgment on the pleadings. The issue raised by defendant\u2019s counterclaim was reserved by the trial court. After the trial court granted defendant\u2019s motion to dismiss its counterclaim with prejudice, plaintiff filed this appeal.\nThe issue on appeal is whether under the language of the insurance contract plaintiff (insured) or defendant (excess insurer) is obligated to bear the loss resulting from the insolvency of the primary insurer. Plaintiff maintains that the language of the insurance contract which provided coverage for amounts \u201cin excess of the amount recoverable under underlying insurance\u201d requires defendant to reimburse plaintiff for the $100,000 paid to settle the personal injury action. Plaintiff argues that this $100,000 was within the coverage of the underlying insurance which was not paid by the underlying primary insurer, All-Star. Since All-Star was ordered into liquidation, plaintiff claims that the \u201camount recoverable\u201d was zero. Defendant contends that as an excess insurer, it does not bear the risk of a primary insurer\u2019s insolvency because it did not contract to assume that risk.\nSince both parties have filed motions for judgment on the pleadings, it is generally conceded that no fact questions exist and that the issues presented to the court are solely questions of law. (Zipf v. Allstate Insurance Co. (1977), 54 Ill. App. 3d 103, 369 N.E.2d 252.) Moreover, construction of an insurance policy presents only a question of law (State Farm Mutual Automobile Insurance Co. v. Schmitt (1981), 94 Ill. App. 3d 1062, 419 N.E.2d 601), and this issue is, therefore, appropriate for determination by means of judgment on the pleadings. See Kravis v. Smith-Marine, Inc. (1974), 20 Ill. App. 3d 470, 314 N.E.2d 577.\nUnder established rules of construction, if a provision of an insurance contract is ambiguous, it will be construed in favor of the insured and against the insurer who drafted the instrument (Dora Township v. Indiana Insurance Co. (1980), 78 Ill. 2d 376, 400 N.E.2d 921) and seeks to limit its liability. (State Farm Mutual Automobile Insurance Co. v. Schmitt (1981), 94 Ill. App. 3d 1062, 419 N.E.2d 601.) A provision in an insurance contract is considered to be ambiguous if it is subject to more than one reasonable interpretation. (Reserve Insurance Co. v. General Insurance Co. of America (1979), 77 Ill. App. 3d 272, 395 N.E.2d 933.) The provision at issue is as follows:\n\u201cItem 3. Limit of Liability: The limit of the company\u2019s liability shall be ***.\n(a) $1,000,000 single limit any one occurrence ***.\n* * *\nin excess of\n(1) The amount recoverable underlying insurance as set out in Item 4\nor\n(2) $10,000 ultimate loss in respect of each occurrence not covered by said underlying insurance.\u201d\nItem 4 listed the underlying insurance for Holiday Park as the Comprehensive General Liability policy issued by All-Star.\nSimilar language in an excess-insurance contract was considered by the Supreme Court of California in Reserve Insurance Co. v. Pisciotta (1982), 30 Cal. 3d 800, 812, 640 P.2d 764, 770, 180 Cal. Rptr. 628, 634. In that case the relevant condition stated:\n\u201cThe Company [CNA] (excess insurer) shall only be liable for the ultimate net loss in excess of ***:\n(1) the amount recoverable under the underlying insurance as set out in the schedule of the underlying insurance ***.\u201d\nThe court considered whether the wording of the excess policy required the excess insurer to provide coverage that the primary insurer would have assumed had it not become insolvent. The court reasoned:\n\u201cCNA assumed liability for any excess over the \u2018amount recoverable\u2019 under the underlying policy. That language might possibly be interpreted either to expose CNA only for amounts over the dollar limits of the underlying insurance or to expose CNA for amounts which the insured is not able to actually recover from the underlying insurer because of its insolvency. Because there are two meanings which may reasonably be attributed to the term in question, it is ambiguous and under settled principles must be construed in favor of the insured.\u201d (30 Cal. 3d 800, 814-15, 640 P.2d 764, 772, 180 Cal. Rptr. 628, 632.)\nThe court concluded that the excess insurer\u2019s policy included the risk of the primary insurer\u2019s insolvency within the scope of its coverage.\nWe adopt the reasoning of Pisciotta and conclude that defendant\u2019s term limiting liability in excess of the amount recoverable under underlying insurance was subject to two interpretations and is, therefore, ambiguous. Construing the ambiguous phrase \u201camount recoverable\u201d most strongly against the insurer and in favor of the insured, we hold that the language of the excess insurance contract requires defendant to assume the risk of the primary insurer\u2019s insolvency. See State Farm Mutual Automobile Insurance Co. v. Schmitt (1981), 94 Ill. App. 3d 1062, 419 N.E.2d 601.\nThe policy language in the present case and in Pisciotta is different from that contained in Molina v. United States Fire Insurance Co. (4th Cir. 1978), 574 E2d 1176, and St. Vincent\u2019s Hospital & Medical Center v. Insurance Co. of America (1982), 117 Misc. 2d 665, 457 N.Y.S.2d 670. Those cases held that insolvency of the primary insurer did not require the excess insurer to assume the primary\u2019s obligation. In Molina, however, the excess policy indemnified the insured for \u201cthe ultimate net loss in excess of the retained limit,\u201d where \u201cretained limit\u201d was defined as \u201cthe total of the applicable limits of the underlying policies ***.\u201d (574 F.2d 1176, 1178.) In St. Vincent\u2019s, the excess insurer was obligated to indemnify the insured for the \u201cexcess of the amounts specified\u201d in the primary insurance policies. (457 N.Y.S.2d 670, 672.) Clearly, the language in Molina and St. Vincent\u2019s reveals that the insurance provided that the excess insurer would pay for losses in excess of a fixed amount, the primary policy limits. In contrast, the term \u201camount recoverable\u201d can be interpreted as a variable amount which depends on the actual amount recoverable from the primary insurer, not the fixed policy limits.\nDefendant argues that the maintenance clause requires plaintiff to assume the responsibility for the underlying primary insurance. The maintenance clause provides that failure of the insured to maintain primary insurance will not invalidate the policy, \u201cbut in the event of such failure the company shall only be liable to the same extent as they would have been had the insured complied with said condition.\u201d It is obvious that plaintiff did maintain the underlying primary insurance during the applicable policy period. It was not until after the accident in 1974, the filing of the personal injury action in 1975, and the expiration of the policies in question on April 1, 1975, and June 14, 1976, that All-Star was ordered into liquidation on March 1, 1977. Questions of the applicable coverage provided by an insurance policy can be determined only as of the time of the incident creating potential liability. (Hawkeye Security Insurance Co. v. Sanchez (1984), 122 Ill. App. 3d 183, 460 N.E.2d 873.) Since plaintiff carried the primary insurance policy at the time of the accident giving rise to potential liability, plaintiff fulfilled its contractual obligation under the maintenance clause. Therefore, even if the maintenance clause did require plaintiff to assume responsibility for primary insurance, it did not shift the risk of the primary insurer\u2019s insolvency to plaintiff (insured) in this instance.\nDefendant also maintains that excess insurance coverage is not operative absent primary insurance. Defendant\u2019s contention again overlooks the fact that plaintiff retained primary insurance at the time of the incident creating liability for both primary and excess insurance. Moreover, the cases offered by defendant to support this proposition concern the issue of whether excess insurance coverage should apply at all. (Whitehead v. Fleet Towing Co. (1982), 110 Ill. App. 3d 759, 442 N.E.2d 1362; Farmers Automobile Insurance Association v. Iowa Mutual Insurance Co. (1966), 77 Ill. App. 2d 172, 221 N.E.2d 795.) Here, defendant admits in its pleadings that the excess coverage should apply. The issue is whether defendant should assume the primary insurance coverage, and we have concluded that defendant\u2019s policy language requires it to do so.\nDefendant finally claims that it did not assume the risk of the primary insurer\u2019s insolvency because the reduced premium for excess insurance reflects its intention to place that risk upon the insured. The intention of the parties to a contract is expressed in the words of the contract and an insurance policy must be construed as a whole. (State Farm Mutual Automobile Insurance Co. v. Schmitt (1981), 94 Ill. App. 3d 1062, 419 N.E.2d 601.) We have examined the language of the contract and have concluded that it requires defendant to assume the risk of primary insurer\u2019s insolvency. The fact that defendant offered its excess policy at a reduced rate does not change the interpretation of the entire contract. Defendant\u2019s language admitting its liability controls the amount of coverage it must pay to settle a suit, not the amount it charges its insured for excess insurance. Construing the policy as a whole to give effect to the intention of the parties requires defendant to pay the entire settlement.\nFor the foregoing reasons, the judgment of the circuit court of Cook County is reversed and the cause is remanded for further proceedings consistent with the holdings of this opinion.\nReversed and remanded.\nWHITE, P.J., and RIZZI, J., concur.", "type": "majority", "author": "JUSTICE McNAMARA" } ], "attorneys": [ "Jacobs, Williams & Montgomery, Ltd., of Chicago (Barry L. Kroll and Lloyd E. Williams, Jr., of counsel), for appellant.", "Pretzel & Stouffer, Chartered, of Chicago (Robert Marc Chemers, of counsel), for appellee." ], "corrections": "", "head_matter": "DONALD B. MacNEAL, INC., Plaintiff-Appellant, v. INTERSTATE FIRE AND CASUALTY COMPANY, Defendant-Appellee.\nFirst District (3rd Division)\nNo. 84\u2014723\nOpinion filed April 10, 1985.\nJacobs, Williams & Montgomery, Ltd., of Chicago (Barry L. Kroll and Lloyd E. Williams, Jr., of counsel), for appellant.\nPretzel & Stouffer, Chartered, of Chicago (Robert Marc Chemers, of counsel), for appellee." }, "file_name": "0564-01", "first_page_order": 586, "last_page_order": 591 }