{ "id": 257156, "name": "BITUMINOUS CASUALTY CORPORATION, Plaintiff-Appellee, v. ROYAL INSURANCE COMPANY OF AMERICA, Defendant-Appellant", "name_abbreviation": "Bituminous Casualty Corp. v. Royal Insurance Co. of America", "decision_date": "1998-11-25", "docket_number": "No. 3\u201498\u20140183", "first_page": "720", "last_page": "728", "citations": [ { "type": "official", "cite": "301 Ill. App. 3d 720" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "403 N.E.2d 680", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1980, "opinion_index": 0 }, { "cite": "82 Ill. App. 3d 1003", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3226629 ], "year": 1980, "opinion_index": 0, "case_paths": [ "/ill-app-3d/82/1003-01" ] }, { "cite": "174 N.E.2d 7", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1961, "opinion_index": 0 }, { "cite": "30 Ill. App. 2d 132", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5790551 ], "year": 1961, "opinion_index": 0, "case_paths": [ "/ill-app-2d/30/0132-01" ] }, { "cite": "642 N.E.2d 790", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1994, "opinion_index": 0 }, { "cite": "267 Ill. App. 3d 1022", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 333091 ], "year": 1994, "opinion_index": 0, "case_paths": [ "/ill-app-3d/267/1022-01" ] }, { "cite": "299 Ill. App. 3d 169", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 221445 ], "weight": 3, "year": 1998, "pin_cites": [ { "page": "175" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/299/0169-01" ] }, { "cite": "183 Ill. 2d 317", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 209975 ], "weight": 3, "year": 1998, "pin_cites": [ { "page": "324" }, { "page": "326" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/183/0317-01" ] }, { "cite": "599 N.E.2d 1311", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 7, "year": 1992, "pin_cites": [ { "page": "1314" }, { "page": "1315" } ], "opinion_index": 0 }, { "cite": "234 Ill. App. 3d 70", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5187838 ], "weight": 7, "year": 1992, "pin_cites": [ { "page": "75" }, { "page": "77" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/234/0070-01" ] }, { "cite": "670 N.E.2d 874", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1996, "opinion_index": 0 }, { "cite": "283 Ill. App. 3d 1011", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 182773 ], "year": 1996, "opinion_index": 0, "case_paths": [ "/ill-app-3d/283/1011-01" ] } ], "analysis": { "cardinality": 654, "char_count": 16752, "ocr_confidence": 0.754, "pagerank": { "raw": 1.9676400520204461e-07, "percentile": 0.7389087162996761 }, "sha256": "978f6e8791c3943e620343b47e09f093c80e72f817a5a5e522b35c642fb95b11", "simhash": "1:0e957d1a6f81d4a5", "word_count": 2587 }, "last_updated": "2023-07-14T19:13:21.929948+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "BITUMINOUS CASUALTY CORPORATION, Plaintiff-Appellee, v. ROYAL INSURANCE COMPANY OF AMERICA, Defendant-Appellant." ], "opinions": [ { "text": "JUSTICE SLATER\ndelivered the opinion of the court:\nShortly after settling an underlying personal injuries claim against Johnson Construction, Bituminous Casualty Corporation brought suit against Royal Insurance Company in an attempt to recover half the settlement monies expended. On cross-motions for summary judgment, the trial court determined that Bituminous was entitled to contribution and ordered Royal to pay $26,251.34. Royal appeals, contending that its obligation to defend and indemnify Johnson Construction was excused by the targeted tender to Bituminous.\nFACTS\nGlenn H. Johnson Construction Company was the general contractor responsible for constructing an Eagle Food store in Jacksonville, Illinois. Johnson Construction maintained a general liability insurance policy issued by Royal Insurance that provided coverage for the construction project.\nJohnson Construction hired Builders Sales and Service, Inc., as a subcontractor. The subcontract agreement required that Johnson Construction be named as an additional insured on Builders Sales\u2019 general liability policy from Bituminous Casualty Corporation and that Bituminous handle any claims arising out of work performed by the subcontractor. This procedure of shifting the risk to the subcontractor\u2019s insurance allowed Johnson Construction to minimize its own loss history and to maintain lower premiums. For the relevant time period, Johnson Construction was listed as an additional insured on the Bituminous policy.\nDavid Peterman, an employee of Builders Sales and a plaintiff in the underlying personal injuries suit against Johnson Construction, sought damages resulting from alleged injuries sustained by Peterman while working at the construction site.\nSheroll Ritchie, controller and secretary of Johnson Construction, testified that she notified both Royal and Bituminous of Peterman\u2019s claim. However, Ritchie advised Royal that it was Johnson Construction\u2019s intent to look solely to Bituminous to defend against Peterman\u2019s claim. When Peterman\u2019s suit was filed, Ritchie tendered the defense of the lawsuit to Bituminous to act as Johnson Construction\u2019s sole primary carrier. Royal Insurance was to remain on notice as excess carrier only. Despite Johnson Construction\u2019s expressed desire that Bituminous provide exclusive coverage, Bituminous repeatedly requested Royal to participate in the defense and indemnity of the Peterman lawsuit. Royal refused.\nBituminous retained counsel on behalf of Johnson Construction and worked out a settlement agreement with Peterman. Upon completion of the settlement, Bituminous filed its complaint against Royal seeking one-half the amount it expended to defend and indemnify Johnson Construction. Bituminous claimed it was entitled to contribution from Royal based on principles of equity and subrogation.\nThe trial court agreed that Royal was obliged to contribute to the Peterman settlement but reached this conclusion based only on a construction of the language in the Bituminous policy. The trial court acknowledged an insured\u2019s right to select exclusive coverage from one of its insurers but found, based on a construction of the \u201ctransfer of rights\u201d clause, that Johnson Construction unambiguously assigned to Bituminous its right to choose between two primary insurers. Thus, Bituminous had the right to trigger coverage from Royal and give effect to the \u201cother insurance\u201d clauses of both policies.\nOn cross-motions for summary judgment, the trial court found in favor of Bituminous and entered judgment against Royal in the amount of $26,251.34. On appeal, Royal contends the trial court erred in construing the \u201ctransfer of rights\u201d clause and asks us to reverse the judgment of the trial court. It is well settled that appellate review of an order granting summary judgment is de novo. Village of Hoffman Estates v. Cincinnati Insurance Co., 283 Ill. App. 3d 1011, 670 N.E.2d 874 (1996).\nANALYSIS\nA. Right to Select Exclusive Coverage\nIn essence, the issue on appeal is the scope of an insured\u2019s right to elect exclusive coverage from one of its insurers by tendering the defense and indemnity of a claim to one insurer and not the other, and thereby foreclose the settling insurer from obtaining contribution from the nonsettling insurer. Royal contends that an insured has the right to select exclusive coverage and that such election can foreclose an insurer\u2019s right to contribution. Bituminous argues that its right to equitable contribution cannot be disclaimed by the insured in an attempt to elect exclusive coverage and, further, contends that an insured\u2019s right to select can be affected by operation of various clauses in the insurance policy, namely, the \u201cother insurance\u201d clause and the \u201ctransfer of rights\u201d clause.\nThe apparent conflict between the insured\u2019s right to elect and the insurer\u2019s right to equitable contribution has already been addressed and settled in favor of the insured in Institute of London Underwriters v. Hartford Fire Insurance Co., 234 Ill. App. 3d 70, 599 N.E.2d 1311 (1992). The facts of Institute are strikingly similar to the instant case. In Institute, Great Lakes was insured by Hartford and was an additional insured under Institute\u2019s policy. A lawsuit was filed against Great Lakes and Great Lakes tendered the defense exclusively to Institute. Great Lakes notified Hartford of the claim but unequivocally instructed Hartford not to respond to the claim. Instead, Great Lakes requested Institute to provide exclusive defense and indemnification. After settling the underlying action, Institute requested that Hartford contribute half of the settlement.\nThe court rejected Institute\u2019s request for contribution and found it inequitable to require Hartford to reimburse Institute for a claim that Hartford had no obligation to pay to its insured. Institute, 234 Ill. App. 3d 70, 599 N.E.2d 1311. Hartford\u2019s duty to perform under its policy or to contribute to a settlement procured by Institute was excused by Great Lakes\u2019 exclusive tender to Institute. Institute, 234 Ill. App. 3d 70, 599 N.E.2d 1311.\nThis conclusion was affirmed by the Illinois Supreme Court in the recent case of Cincinnati Cos. v. West American Insurance Co., 183 Ill. 2d 317 (1998), which was decided during the pendency of this appeal. The court established in Cincinnati that, where the insured has not knowingly decided against an insurer\u2019s involvement, an insurer\u2019s duty to defend is triggered by actual notice of a claim against its insured regardless of the level of the insured\u2019s sophistication. In reaching this decision, the supreme court recognized the line of cases which upheld the right of the insured to designate which of its insurers should defend and cited extensively to the Institute case.\n\u201cWhere the insured makes such a designation, the duty to defend falls solely on the selected insurer. That insurer may not in turn seek equitable contribution from the other insurers who were not designated by the insured. [Citation.] This rule is intended to protect the insured\u2019s right to knowingly forgo an insurer\u2019s involvement. [Citation.]\u201d Cincinnati, 183 Ill. 2d at 324.\nWe believe the supreme court has firmly established an insured\u2019s right to select exclusive coverage. Furthermore, it is also evident that once an insured has instructed an insurer not to involve itself in the defense or indemnification of a claim, that insurer \u201cwould then be relieved of its obligation to the insured with regard to that claim.\u201d Cincinnati, 183 Ill. 2d at 326.\nIn accord with the controlling authority established in Cincinnati, we hold that Johnson Construction was entitled to request exclusive coverage from Bituminous. Furthermore, since Johnson Construction knowingly chose to forego Royal\u2019s assistance, we find that Royal\u2019s policy was not triggered and Royal was effectively relieved of its obligation with regard to the Peterman lawsuit.\nB. Equitable Contribution\nWe are unpersuaded by Bituminous\u2019 contention that the doctrine of equitable contribution requires Royal to contribute to the settlement procured by Bituminous. The evidence is uncontroverted that the insured, Johnson Construction, chose to forego Royal\u2019s assistance. As such, Bituminous, a rival insurer, cannot invoke the doctrine of equitable contribution in an attempt to trigger coverage from Royal. Our holding is consistent with the principles set forth in Institute, where the court disallowed Institute\u2019s request for contribution because it was \u201cnot sufficient to trigger Hartford\u2019s obligation to contribute where Hartford\u2019s insured never asked it to defend or indemnify.\u201d Institute, 234 Ill. App. 3d at 75, 599 N.E.2d at 1314.\nMoreover, we believe that once Johnson Construction designated Bituminous to provide exclusive coverage for the Peterman claim, Bituminous was precluded from seeking equitable contribution from Royal. This is clearly in accord with the intention of the Cincinnati court to protect the insured\u2019s right to select. If Bituminous were allowed to circumvent the insured\u2019s express intent by invoking the doctrine of equitable contribution, then the insured\u2019s right to select would be illusory.\nC. The \u201cOther Insurance\u201d Clause\nBituminous also contends that the \u201cother insurance\u201d clauses found in both policies contemplate that all of the available coverages will be made available for any given occurrence. Bituminous maintains that the absence of an \u201cother insurance\u201d clause in Institute\u2019s policy was a dispositive factor in that case and argues that the presence of an \u201cother insurance\u201d clause in its policy mandates a different result here.\nWe disagree with Bituminous\u2019 contention that the \u201cother insurance\u201d clause in its policy operates to activate coverage from co-insurers, even in light of John Burns Construction Co. v. Indiana Insurance Co., 299 Ill. App. 3d 169 (1998). According to the Burns opinion, when Burns Construction tendered the claim to Indiana Insurance, the \u201cother insurance\u201d clause in Indiana\u2019s policy was triggered, which in turn triggered the co-insurer\u2019s duty to defend and allowed Indiana to seek contribution from the other insurer. Burns, 299 Ill. App. 3d 169. In finding for Indiana, the Burns court found a dis-positive difference between the Institute case, where Institute did not have an \u201cother insurance\u201d clause in its policy, and the case before it, where Indiana Insurance did have an \u201cother insurance\u201d clause in its policy. The Burns court reasoned that \u201c[w]ere we to hold otherwise, the \u2018other insurance\u2019 clause would be judicially written out of Indiana\u2019s policy.\u201d Burns, 299 Ill. App. 3d at 175.\nWe decline to follow Burns for several reasons. Since Burns was issued without the benefit of the supreme court\u2019s holding in Cincinnati, we believe the Burns court will be compelled to reach a different conclusion. Moreover, we disagree with the underlying premise in Burns that the absence of an \u201cother insurance\u201d clause in the Institute policy was dispositive to the holding in Institute. On the contrary, Institute failed to persuade the court that the \u201cother insurance\u201d clause of Hartford\u2019s insurance policy required Hartford to contribute to the settlement. In rejecting Institute\u2019s argument, the court held that an insurer\u2019s obligation under the \u201cother insurance\u201d clause did not exist until the insurer became obligated to pay or defend under the policy. Thus, \u201cif the policy is never triggered, the issue of liability under the \u2018other insurance\u2019 clause does not arise.\u201d Institute, 234 Ill. App. 3d at 77, 599 N.E.2d at 1315.\nIt is only when an insurer\u2019s policy is triggered that the insurer becomes liable for the defense and indemnity costs of a claim and it becomes necessary to allocate the loss among co-insurers. The loss will be allocated according to the terms of the \u201cother insurance\u201d clauses, if any, in the policies that have been triggered. As discussed above, Royal\u2019s policy was not triggered and its obligation to defend and indemnify Johnson Construction with regard to the Peterman lawsuit was excused by the targeted tender to Bituminous.\nFurthermore, only the insured or someone acting at the specific request of the insured can properly tender and trigger a defense. Institute, 234 Ill. App. 3d 70, 599 N.E.2d 1311. Coverage cannot be triggered by a tender from a rival insurer. Empire Fire & Marine Insurance Co. v. Clarendon Insurance Co., 267 Ill. App. 3d 1022, 642 N.E.2d 790 (1994).\nFor these reasons, we reject Bituminous\u2019 contention that the \u201cother insurance\u201d clause in its policy empowers it to reach into Royal\u2019s insurance policy with Johnson Construction and thereby trigger coverage from Royal against the express wishes of the insured. Bituminous cannot trigger coverage from Royal nor can it avail itself of any rights under Royal\u2019s policy. Such a construction of the \u201cother insurance\u201d clause would transform Royal\u2019s insurance policy into a third-party beneficiary contract entered into by the insured, Johnson Construction, for the benefit of third parties. Institute, 234 Ill. App. 3d 70, 599 N.E.2d 1311. Clearly, Johnson Construction did not intend this result when it purchased coverage from Royal.\nD. The \u201cTransfer of Rights\u201d Clause\nNor are we persuaded, as was the trial court, that the \u201ctransfer of rights\u201d clause operates to deprive the insured of its right to select between two primary carriers.\nThe \u201ctransfer of rights\u201d clause contained in the policy issued by Bituminous provides as follows:\n\u201cTransfer of Rights of Recovery Against Others to Us.\nIf the insured has rights to recover all or part of any payment we have made under this Coverage Part, those rights are transferred to us. The insured must do nothing after loss to impair them. At our request, the insured will bring \u2018suit\u2019 or transfer those rights to us and help us enforce them.\u201d\nBituminous argued, and the trial court agreed, that the effect of this contract language was an unambiguous assignment to Bituminous of Johnson Construction\u2019s right to choose between two primary insurance carriers. Thus, according to the trial court, Bituminous had obtained the right to trigger coverage from Royal. Once Royal\u2019s coverage was triggered, the \u201cother insurance\u201d clauses of both policies became operative and required Royal to contribute to the defense and settlement of the lawsuit.\nWe disagree that the transfer of rights operates to deprive the additional insured, Johnson Construction, of the right to choose which co-insurer will provide exclusive coverage on a particular claim. Instead, the \u201ctransfer of rights\u201d clause is a subrogation clause which transfers to the insurer remedies that the insured may have against a tortfeasor. The clause entitles the insurer to stand in the shoes of the insured to recover against a tortfeasor those amounts paid to or on behalf of an insured. Remsen v. Midway Liquors, Inc., 30 Ill. App. 2d 132, 174 N.E.2d 7 (1961). In other words, the clause transfers to the insurer the right to sue any party whom the insured could have sued. See Black\u2019s Law Dictionary 1427 (6th ed. 1990).\nThe concept of subrogation generally involves actions against tortfeasors and is inimical to Bituminous\u2019 claim for relief against Royal. Subrogation does not allow one insurer to proceed directly against another insurer for reimbursement of moneys paid on behalf of a common insured. The right of an insurer to be reimbursed by another does not lie in subrogation, but in contribution. Royal Globe Insurance Co. v. Aetna Insurance Co., 82 Ill. App. 3d 1003, 403 N.E.2d 680 (1980). As discussed above, however, an insurer\u2019s right to contribution can be foreclosed by an insured\u2019s selection of exclusive coverage.\nCONCLUSION\nWe have carefully considered the other issues raised by the parties and believe that no further discussion is necessary. We hold that Johnson Construction is entitled to request exclusive coverage from Bituminous and that Bituminous is precluded from seeking contribution from Royal. Furthermore, we find that neither the \u201ctransfer of rights\u201d clause nor the \u201cother insurance\u201d clause operates to deprive the insured of the right to select exclusive coverage.\nWe conclude that summary judgment in favor of Bituminous was based on an erroneous interpretation of the policy language. We reverse the trial court\u2019s judgment in favor of Bituminous and enter summary judgment in favor of Royal.\nReversed.\nHOMER, EJ., and HOLDRIDGE, J., concur.", "type": "majority", "author": "JUSTICE SLATER" } ], "attorneys": [ "William E. Spizzirri (argued), of Kralovec & Marquard, Chartered, of Chicago, for appellant.", "Hector L. Lareau (argued) and Eric F. Schwartz, both of Snyder & Schwartz, EC., of Rock Island, for appellee." ], "corrections": "", "head_matter": "BITUMINOUS CASUALTY CORPORATION, Plaintiff-Appellee, v. ROYAL INSURANCE COMPANY OF AMERICA, Defendant-Appellant.\nThird District\nNo. 3\u201498\u20140183\nOpinion filed November 25, 1998.\nWilliam E. Spizzirri (argued), of Kralovec & Marquard, Chartered, of Chicago, for appellant.\nHector L. Lareau (argued) and Eric F. Schwartz, both of Snyder & Schwartz, EC., of Rock Island, for appellee." }, "file_name": "0720-01", "first_page_order": 738, "last_page_order": 746 }