{ "id": 186502, "name": "NORTHBROOK PROPERTY AND CASUALTY INSURANCE COMPANY, Plaintiff-Appellee, v. APPLIED SYSTEMS, INC., Defendant-Appellant (Harbor Software, Inc., Defendant)", "name_abbreviation": "Northbrook Property & Casualty Insurance v. Applied Systems, Inc.", "decision_date": "2000-05-17", "docket_number": "No. 1\u201498\u20141170", "first_page": "457", "last_page": "469", "citations": [ { "type": "official", "cite": "313 Ill. App. 3d 457" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "355 N.E.2d 1", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1976, "pin_cites": [ { "page": "3", "parenthetical": "notice of occurrence" } ], "opinion_index": 0 }, { "cite": "64 Ill. 2d 138", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5429179 ], "year": 1976, "pin_cites": [ { "page": "142", "parenthetical": "notice of occurrence" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/64/0138-01" ] }, { "cite": "690 N.E.2d 1067", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1998, "pin_cites": [ { "page": "1072" } ], "opinion_index": 0 }, { "cite": "294 Ill. App. 3d 801", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 35403 ], "year": 1998, "pin_cites": [ { "page": "807-08" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/294/0801-01" ] }, { "cite": "710 N.E.2d 28", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1999, "pin_cites": [ { "page": "35" } ], "opinion_index": 0 }, { "cite": "304 Ill. App. 3d 602", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 564661 ], "year": 1999, "pin_cites": [ { "page": "611" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/304/0602-01" ] }, { "cite": "524 N.E.2d 1016", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1988, "pin_cites": [ { "page": "1017" } ], "opinion_index": 0 }, { "cite": "171 Ill. App. 3d 9", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3617669 ], "year": 1988, "pin_cites": [ { "page": "10" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/171/0009-01" ] }, { "cite": "260 N.E.2d 276", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1970, "pin_cites": [ { "page": "280" } ], "opinion_index": 0 }, { "cite": "124 Ill. App. 2d 340", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 1578924 ], "year": 1970, "pin_cites": [ { "page": "347-48" } ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/124/0340-01" ] }, { "cite": "485 N.E.2d 1281", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1985, "pin_cites": [ { "page": "1286" } ], "opinion_index": 0 }, { "cite": "138 Ill. App. 3d 574", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 8499351 ], "year": 1985, "pin_cites": [ { "page": "581" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/138/0574-01" ] }, { "cite": "670 N.E.2d 759", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1996, "pin_cites": [ { "page": "767" } ], "opinion_index": 0 }, { "cite": "283 Ill. App. 3d 574", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 182710 ], "year": 1996, "pin_cites": [ { "page": "584" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/283/0574-01" ] }, { "cite": "674 N.E.2d 865", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 4, "year": 1996, "pin_cites": [ { "page": "870" }, { "page": "870" }, { "page": "870" }, { "page": "870", "parenthetical": "notice of occurrence" } ], "opinion_index": 0 }, { "cite": "285 Ill. App. 3d 819", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1295527 ], "weight": 4, "year": 1996, "pin_cites": [ { "page": "825" }, { "page": "826" }, { "page": "826" }, { "page": "826" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/285/0819-01" ] }, { "cite": "2 F. Supp. 2d 296", "category": "reporters:federal", "reporter": "F. Supp. 2d", "case_ids": [ 1570942 ], "weight": 6, "year": 1998, "pin_cites": [ { "page": "305", "parenthetical": "applying Illinois law" }, { "page": "305", "parenthetical": "notice of suit" }, { "page": "305" }, { "page": "305" }, { "page": "305", "parenthetical": "finding the insureds' delay in notification resulted in prejudice because it deprived the insurers of \"the opportunity to meaningfully participate in the underlying *** litigation\"" }, { "page": "305" } ], "opinion_index": 0, "case_paths": [ "/f-supp-2d/2/0296-01" ] }, { "cite": "364 N.E.2d 337", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1977, "pin_cites": [ { "page": "345" } ], "opinion_index": 0 }, { "cite": "49 Ill. App. 3d 910", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5634992 ], "year": 1977, "pin_cites": [ { "page": "920" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/49/0910-01" ] }, { "cite": "374 N.E.2d 951", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1978, "pin_cites": [ { "page": "953" }, { "page": "953" } ], "opinion_index": 0 }, { "cite": "58 Ill. App. 3d 616", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5626045 ], "weight": 2, "year": 1978, "pin_cites": [ { "page": "619" }, { "page": "619" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/58/0616-01" ] }, { "cite": "587 N.E.2d 1073", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1992, "pin_cites": [ { "page": "1075" }, { "page": "1075" } ], "opinion_index": 0 }, { "cite": "225 Ill. App. 3d 177", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5245143 ], "weight": 2, "year": 1992, "pin_cites": [ { "page": "181" }, { "page": "181" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/225/0177-01" ] }, { "cite": "630 N.E.2d 94", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1994, "pin_cites": [ { "page": "102" } ], "opinion_index": 0 }, { "cite": "257 Ill. App. 3d 842", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2890865 ], "year": 1994, "pin_cites": [ { "page": "853" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/257/0842-01" ] }, { "cite": "388 N.E.2d 253", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1979, "pin_cites": [ { "page": "255-56" }, { "page": "255" } ], "opinion_index": 0 }, { "cite": "70 Ill. App. 3d 296", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5577717 ], "weight": 2, "year": 1979, "pin_cites": [ { "page": "299" }, { "page": "302" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/70/0296-01" ] }, { "cite": "639 N.E.2d 584", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1993, "pin_cites": [ { "page": "588" }, { "page": "8-9" } ], "opinion_index": 0 }, { "cite": "266 Ill. App. 3d 1", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 887196 ], "weight": 2, "year": 1993, "pin_cites": [ { "page": "7" }, { "page": "8-9" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/266/0001-01" ] }, { "cite": "583 N.E.2d 547", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1991, "pin_cites": [ { "page": "551" }, { "page": "551" } ], "opinion_index": 0 }, { "cite": "145 Ill. 2d 423", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5595581 ], "weight": 2, "year": 1991, "pin_cites": [ { "page": "431" }, { "page": "431" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/145/0423-01" ] }, { "cite": "631 N.E.2d 1292", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1994, "pin_cites": [ { "page": "1300" } ], "opinion_index": 0 }, { "cite": "260 Ill. App. 3d 299", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2865245 ], "year": 1994, "pin_cites": [ { "page": "310-11" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/260/0299-01" ] }, { "cite": "379 N.E.2d 34", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1978, "pin_cites": [ { "page": "38" } ], "opinion_index": 0 }, { "cite": "62 Ill. App. 3d 80", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5621978 ], "year": 1978, "pin_cites": [ { "page": "85" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/62/0080-01" ] }, { "cite": "731 F.2d 457", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1943918 ], "weight": 2, "year": 1984, "pin_cites": [ { "page": "460" } ], "opinion_index": 0, "case_paths": [ "/f2d/731/0457-01" ] }, { "cite": "566 N.E.2d 889", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1991, "pin_cites": [ { "page": "896" } ], "opinion_index": 0 }, { "cite": "208 Ill. App. 3d 281", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2549668 ], "year": 1991, "pin_cites": [ { "page": "291" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/208/0281-01" ] }, { "cite": "694 N.E.2d 593", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 4, "year": 1998, "pin_cites": [ { "page": "596" }, { "page": "598" }, { "page": "597" }, { "page": "598", "parenthetical": "stating same rule but also indicating that prejudice may be considered as a \"factor\" in the reasonableness analysis" } ], "opinion_index": 0 }, { "cite": "296 Ill. App. 3d 1011", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 222570 ], "weight": 4, "year": 1998, "pin_cites": [ { "page": "1015" }, { "page": "1018" }, { "page": "1017" }, { "page": "1017-18" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/296/1011-01" ] }, { "cite": "709 N.E.2d 680", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1999, "pin_cites": [ { "page": "685" } ], "opinion_index": 0 }, { "cite": "304 Ill. App. 3d 34", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 564560 ], "year": 1999, "pin_cites": [ { "page": "40-41" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/304/0034-01" ] }, { "cite": "682 N.E.2d 366", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "year": 1997, "pin_cites": [ { "page": "370" }, { "page": "370" }, { "page": "370" } ], "opinion_index": 0 }, { "cite": "289 Ill. App. 3d 241", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 351011 ], "weight": 3, "year": 1997, "pin_cites": [ { "page": "247" }, { "page": "247" }, { "page": "247" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/289/0241-01" ] }, { "cite": "617 N.E.2d 228", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1993, "pin_cites": [ { "page": "233" } ], "opinion_index": 0 }, { "cite": "247 Ill. App. 3d 326", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2928300 ], "year": 1993, "pin_cites": [ { "page": "332-33" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/247/0326-01" ] }, { "cite": "663 N.E.2d 1", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1995, "pin_cites": [ { "page": "7" } ], "opinion_index": 0 }, { "cite": "278 Ill. App. 3d 606", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1156771 ], "year": 1995, "pin_cites": [ { "page": "614" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/278/0606-01" ] }, { "cite": "698 N.E.2d 635", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1998, "pin_cites": [ { "page": "639" } ], "opinion_index": 0 }, { "cite": "298 Ill. App. 3d 371", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1073548 ], "year": 1998, "pin_cites": [ { "page": "376" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/298/0371-01" ] }, { "cite": "595 N.E.2d 1311", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1992, "pin_cites": [ { "page": "1313" } ], "opinion_index": 0 }, { "cite": "231 Ill. App. 3d 143", "category": "reporters:state", "reporter": "Ill. 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App. 3d", "case_ids": [ 456211 ], "year": 1997, "pin_cites": [ { "page": "979" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/291/0974-01" ] }, { "cite": "15 U.S.C.A. \u00a7 1501", "category": "laws:leg_statute", "reporter": "U.S.C.", "year": 1998, "pin_cites": [ { "page": "et seq." } ], "opinion_index": 0 } ], "analysis": { "cardinality": 1143, "char_count": 27575, "ocr_confidence": 0.772, "pagerank": { "raw": 1.859572822015447e-07, "percentile": 0.7246675385321693 }, "sha256": "5c3d6f8a112792e3e74850c1b2f5f9e88e055cea453f8bcd6f36f814f8b61ec4", "simhash": "1:6b365d902bd1e004", "word_count": 4333 }, "last_updated": "2023-07-14T18:54:53.541010+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "NORTHBROOK PROPERTY AND CASUALTY INSURANCE COMPANY, Plaintiff-Appellee, v. APPLIED SYSTEMS, INC., Defendant-Appellant (Harbor Software, Inc., Defendant)." ], "opinions": [ { "text": "JUSTICE CERDA\ndelivered the opinion of the court:\nIn this declaratory judgment action, defendant, Applied Systems, Inc. (Applied), appeals the order of the circuit court entering summary judgment in favor of plaintiff, Northbrook Property & Casualty Insurance Company (Northbrook), on the ground that Northbrook had no duty under either of two commercial liability insurance policies to defend or indemnify Applied in a federal lawsuit filed against it by Harbor Software, Inc. (Harbor). The primary issue before us is whether Applied provided Northbrook with timely notification of the Harbor litigation under the policies as a matter of law. We have jurisdiction of the case pursuant to Supreme Court Rules 301 and 303 (155 Ill. 2d Rs. 301, 303), and for the following reasons we affirm.\nBACKGROUND\nApplied and Harbor are each businesses engaged in the area of developing and marketing computer software programs to the insurance industry. In the 1980s, Harbor\u2019s principal product was an automated management system developed for insurance agencies known as \u201cSales Center Manager\u201d (Sales Manager). At the same time, Applied marketed a similar, but somewhat less advanced, product called \u201cAgency Manager.\u201d\nOn November 5, 1992, Harbor filed a six-count complaint against Applied in the federal district court of New York alleging claims for copyright infringement, violations of the Lanham Trade-Mark Act (15 U.S.C.A. \u00a7 1501 et seq. (West 1998)), fraud, misappropriation of trade secrets, unfair competition and unjust enrichment. A copy of Harbor\u2019s complaint was served upon and received by Applied\u2019s corporate counsel, Mark Camasta, on the same date.\nAccording to the complaint\u2019s allegations, Applied contacted Jeffrey Tollaksen, the co-founder of Harbor, in late 1988 to express Applied\u2019s interest in either acquiring or licensing the Sales Manager software. Following a meeting between Applied and Harbor associates in January 1989, at which Tollaksen demonstrated the Sales Manager program under Applied\u2019s assurances of confidentiality, the parties commenced negotiations regarding the formulation of an agreement that would grant Applied the exclusive licensing rights to Sales Manager.\nDuring the negotiation period, Tollaksen completed, at the request of Applied, a successful integration of Sales Manager with Agency Manager, so as to allow the two programs to operate together. Once the integration of the two programs was complete, Applied abruptly ended negotiations regarding the exclusive licensing agreement and informed Harbor it was no longer interested in marketing the Sales Manager program.\nShortly thereafter, Applied offered a new version of Agency Manager which allegedly performed substantially all of the automated marketing functions of Sales Manager, as well as many other program features. Applied allegedly copied the Sales Manager software and integrated it with the old version of Agency Manager. According to the complaint, Applied \u201cnever intended to enter into an exclusive licensing agreement with *** [it], but instead sought to learn *** [its] trade secrets, to steal the source code for the [Sales Manager] Program, to fraudulently enlist Mr. Tollaksen\u2019s services in adapting the [Sales Manager] Program for Agency Manager, and to unfairly compete with\u201d it. The complaint explains that Harbor first discovered Applied\u2019s wrongful conduct when Tollaksen saw an advertisement in an industry publication announcing the new version of Agency Manager.\nAt the time Harbor filed its lawsuit, Applied was insured under a commercial general liability insurance policy (CGL Policy) and a commercial exeess/umbrella liability insurance policy (Excess/Umbrella Policy) (collectively referred herein at times as the policies), both issued by Northbrook. Each policy had an effective coverage period of April 1, 1992, to April 1, 1993.\nCoverage B of the CGL Policy, entitled \u201cPersonal and Advertising Injury Liability,\u201d requires Northbrook in part to \u201cpay those sums that *** [Applied] becomes legally obligated to pay as damages because of *** advertising injury to which this insurance applies\u201d and further \u201cto defend any suit seeking those damages.\u201d Coverage B specifically provides coverage for \u201cadvertising injury caused by an offense committed in the course of advertising [Applied\u2019s] goods, products or services\u201d during the policy period.\nThe Excess/Umbrella Policy contains two coverage forms, Coverage A and Coverage B. Coverage A, which is entitled \u201cExcess Liability Over Underlying Insurance,\u201d provides liability coverage over the limits provided in applicable underlying insurance as listed in the underlying insurance schedule and is subject to all the terms and conditions of the underlying policy.\nUnder Coverage B, entitled \u201cUmbrella Liability Over the Retained Limit or Insurance Not Listed in the Schedule of Underlying Insurance,\u201d umbrella coverage is provided over the amount in which Applied is self-insured or the limits of insurance not listed in the underlying insurance schedule. The record does not disclose if any other underlying insurance is applicable, but it does reveal that Applied has a retained limit of $10,000.\nPer this coverage provision, Northbrook is required to pay those sums Applied \u201cbecomes legally obligated to pay as damages because of injury in excess of the retained limit *** or any insurance not specified as underlying insurance, whichever is greater, caused by an occurrence during the policy period.\u201d Northbrook is further obligated to \u201cinvestigate and defend any claim or suit alleging damages insured by Coverages A and/or B\u201d provided no other insurer is obliged to undertake such an investigation or defense. The term \u201cinjury\u201d as used in Coverage B specifically includes \u201cadvertising injury.\u201d\nBoth polices contain a \u201cConditions\u201d section which discusses, inter alia, the insured\u2019s duties in the event of an occurrence, claim or suit. The CGL Policy provides in relevant part:\n\u201cb. If a claim is made or suit is brought against any insured, [Applied] must:\n;\u00a1c % sf;\n(2) Notify [Northbrook] as soon as practicable.\n[Applied] must see to it that [Northbrook] receive[s] written notice of the claim or suit as soon as practicable,\nc. [Applied] and any other involved insured must:\n(1) Immediately send [Northbrook] copies of any demands, notices, summonses or legal papers received in connection with the claim or suit.\u201d\nThe Excess/Umbrella Policy imposes similar duties upon Applied, providing:\n\u201cb. If a claim is received by any insured, [Applied] must:\n* * *\n(2) Notify [Northbrook] as soon as practicable.\n[Applied] must see to it that [Northbrook] receive[s] written notice of the claim as soon as practicable,\nc. [Applied] and any other involved insured must:\n(1) Immediately send [Northbrook] copies of any demands, notices, summonses or legal papers received in connection with the claim or suit.\u201d\nThe term \u201csuit\u201d is defined by the CGL Policy, in part, as \u201ca civil proceeding in which damages because of *** advertising injury to which this insurance applies are alleged.\u201d The Excess/Umbrella Policy similarly defines \u201csuit\u201d to mean \u201ca civil proceeding in which damages because of injury to which this insurance applies are alleged.\u201d\nAs part of the discovery process in the underlying litigation, Applied was served with a \u201cThird Set of Document Requests\u201d by Harbor on December 15, 1993. In this document, Harbor requested Applied to produce, inter alia, \u201call documents used in connection or intended to be used in connection with the marketing of the [upgraded version of Agency Manager]. \u2019 \u2019\nApproximately four months after its receipt of Harbor\u2019s third document request, in late March 1994, Applied tendered its defense in the Harbor litigation by sending notice of the case to its insurance agent, the Lambrecht Agency. Applied specifically sent the agency a statement prepared by Camasta describing Applied\u2019s understanding of the coverage afforded under Coverage B of the CGL Policy in relation to the Harbor lawsuit. Camasta explains, both in Applied\u2019s statement and in an affidavit filed in connection with Northbrook\u2019s summary judgment motion, that Applied did not believe from the averments of the Harbor complaint that Harbor sought damages for any alleged advertising injury caused by the marketing of the new Agency Manager software. According to Camasta, he \u201cassumed\u201d coverage was unavailable because the claims asserted in Harbor\u2019s complaint resembled intentional tortious conduct, which he believed was excluded under the policies. Camasta did not base his assumption on any particular provision in the policies, but rather on his understanding from studies in law school. Camasta further explains Applied never evaluated the Harbor complaint to assess whether coverage was afforded by the policies because the advertising injury provisions therein were, in his words, \u201cbeyond our comprehension.\u201d\nCamasta maintains Applied understood for the first time that Harbor may pursue an advertising injury claim in December 1993 when it received Harbor\u2019s request for the upgraded program\u2019s marketing materials. Shortly thereafter, Camasta explains he reviewed some legal materials discussing advertising injury coverage. Following his own investigation and research of the subject, Camasta believed North-brook may be obliged under the CGL Policy to defend Applied in the Harbor litigation and to pay any resulting damages. Camasta\u2019s statement to the Lambrecht Agency makes no demand for a defense or indemnification under the Excess/Umbrella Policy.\nThe Lambrecht Agency advised Northbrook of Applied\u2019s tender of defense on April 6, 1994. In response, Northbrook informed Applied by letter dated April 22, 1994, that, for various reasons including the late notification of the Harbor suit, it was disclaiming any coverage under the CGL Policy. Northbrook\u2019s letter does not disclaim its duties under the Excess/Umbrella Policy.\nOn March 2, 1995, Northbrook filed the instant declaratory judgment action against Applied and Harbor, as a necessary party, seeking a determination of its duties under the policies. In particular, North-brook sought a judicial declaration that it had no duty to defend or indemnify Applied in the Harbor litigation under either the CGL or Excess/Umbrella Policies. Northbrook specifically asserted, inter alia, that Applied failed to provide timely notice of Harbor\u2019s lawsuit and, consequently, forfeited any claims of coverage under the policies.\nDuring the pendency of Northbrook\u2019s declaratory judgment action, the Harbor case proceeded to trial in mid-1996, and in October of that year, a federal jury found that Applied had wilfully and maliciously misappropriated certain Harbor trade secrets contained in the Sales Manager program. A verdict was entered in favor of Harbor and against Applied in the total amount of $5 million.\nIn April 1997, Northbrook successfully moved for summary judgment pursuant to section 2 \u2014 1005 of the Code of Civil Procedure (735 ILCS 5/2 \u2014 1005 (West 1996)), and Applied\u2019s timely appeal followed.\nANALYSIS\nThe purpose of summary judgment under section 2 \u2014 1005 of the Code is to determine whether there exist any genuine issues of material facts between the parties. Hubble v. O\u2019Connor, 291 Ill. App. 3d 974, 979, 684 N.E.2d 816, 820 (1997). Summary judgment is appropriate where the pleadings, depositions, and admissions on file, together with any affidavits, present no genuine issue of material fact and show that the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2 \u2014 1005(c) (West 1998); Hartford Accident & Indemnity Co. v. Rush-Presbyterian-St. Luke\u2019s Medical Center, 231 Ill. App. 3d 143, 147, 595 N.E.2d 1311, 1313 (1992). Our review of an order granting summary judgment is conducted de novo (John Deere Insurance Co. v. Allstate Insurance Co., 298 Ill. App. 3d 371, 376, 698 N.E.2d 635, 639 (1998)), and we will construe all pleadings, depositions and affidavits in a light most favorable to the nonmoving party. Soderlund Brothers, Inc. v. Carrier Corp., 278 Ill. App. 3d 606, 614, 663 N.E.2d 1, 7 (1995).\nIn its summary judgment motion, Northbrook argues in part that it has been relieved of any contractual duties to provide Applied with defense costs and indemnification of the Harbor jury\u2019s verdict by Applied\u2019s failure to give it timely notice of Harbor\u2019s complaint. As the record shows, Harbor filed its action against Applied on November 5, 1992, and Applied\u2019s in-house counsel received notice of the complaint on the same date. Yet, Applied waited until April 1994 to advise North-brook of the Harbor suit, 17 months after the underlying complaint was served.\nWe initially note that Applied, in giving notice to Northbrook, only tendered a defense under the CGL Policy and did not specifically reference coverage under the Excess/Umbrella Policy. Notwithstanding, Applied\u2019s notice was applicable under both polices because notice by an insured to its insurance company is sufficient to charge the insurer on all policies running in the insured\u2019s favor. See Casualty Insurance Co. v. E.W. Corrigan Construction Co., 247 Ill. App. 3d 326, 332-33, 617 N.E.2d 228, 233 (1993) (stating foregoing rule with regard to notice of occurrence and holding that \u201cif an insured notifies its insurer of an occurrence and references its workers\u2019 compensation policy, it should be considered notice in regard to any general liability policy the insured might have with the same insurer\u201d).\nAn insured\u2019s duties are controlled by the terms and conditions of its insurance contract. American Country Insurance Co. v. Bruhn, 289 Ill. App. 3d 241, 247, 682 N.E.2d 366, 370 (1997). A notice of suit provision in an insurance liability policy is not a mere technical requirement for the convenience of the insurer, but is a valid condition precedent to the triggering of the insurer\u2019s contractual duties. Aetna Casualty & Surety Co. v. Allsteel, Inc., 304 Ill. App. 3d 34, 40-41, 709 N.E.2d 680, 685 (1999); Cincinnati Insurance Co. v. Baur\u2019s Opera House, Inc., 296 Ill. App. 3d 1011, 1015, 694 N.E.2d 593, 596 (1998)). Where the insured fails to comply with a notice provision, the insurer will be relieved of its duties to defend and indemnify under the policy. See American Family Mutual Insurance Co. v. Blackburn, 208 Ill. App. 3d 281, 291, 566 N.E.2d 889, 896 (1991); Casualty Indemnity Exchange v. Village of Crete, 731 F.2d 457, 460 (7th Cir. 1984); INA Insurance Co. v. City of Chicago, 62 Ill. App. 3d 80, 85, 379 N.E.2d 34, 38 (1978).\nA notice of suit requirement in a policy serves the purpose of enabling the insurer to conduct a timely and thorough investigation of the insured\u2019s claim (see American States Insurance Co. v. National Cycle, Inc., 260 Ill. App. 3d 299, 310-11, 631 N.E.2d 1292, 1300 (1994)), as well as to locate and participate in the defense of the insured. Baur\u2019s Opera House, 296 Ill. App. 3d at 1018, 694 N.E.2d at 598; see also 14 Couch on Insurance \u00a7 199:84, at 199 \u2014 140 (3d ed. 1999) (notice of suit provision is to aid the insurer in the discovery of facts bearing on coverage and to afford it an opportunity to control the litigation).\nThe notice provisions contained in the policies here are nearly identical, requiring Applied to give Northbrook notice of Harbor\u2019s suit \u201cas soon as practicable.\u201d Under Illinois law, a provision calling for the insured to provide notice of a suit \u201cas soon as practicable\u201d requires notification be made within a reasonable time. State Security Insurance Co. v. Burgos, 145 Ill. 2d 423, 431, 583 N.E.2d 547, 551 (1991). Whether an insured\u2019s notice was given in a reasonable time generally depends on the facts and circumstances of the particular case. Burgos, 145 Ill. 2d at 431, 583 N.E.2d at 551.\nThe law expects an insured to act diligently when providing notice of a suit to its insurer (see Twin City Fire Insurance Co. v. Old World Trading Co., 266 Ill. App. 3d 1, 7, 639 N.E.2d 584, 588 (1993); Illinois Valley Minerals Corp. v. Royal-Globe Insurance Co., 70 Ill. App. 3d 296, 299, 388 N.E.2d 253, 255-56 (1979)), and while this determination is typically a question of fact, it may be properly resolved as a matter of law where, as here, the material facts are not in dispute. Jones v. Universal Casualty Co., 257 Ill. App. 3d 842, 853, 630 N.E.2d 94, 102 (1994).\nWe note the majority of published decisions considering the reasonableness of an insured\u2019s notice involve alleged late notices of an \u201coccurrence\u201d or accident, and very few reported cases have addressed the reasonableness of an insured\u2019s notice of suit. A review of these cases reveals that, regardless of the type of notice involved, the courts generally apply the same legal principles in their analyses.\nA lengthy passage of time in notification is not an absolute bar to a claim of defense and indemnity under a policy, provided the facts and circumstances show that the insured\u2019s delay was justifiable. American Country Insurance Co. v. Efficient Construction Corp., 225 Ill. App. 3d 177, 181, 587 N.E.2d 1073, 1075 (1992); McFarlane v. Merit Insurance Co., 58 Ill. App. 3d 616, 619, 374 N.E.2d 951, 953 (1978). Of primary importance in this regard is the insured\u2019s reason for not providing notice within the period of delay at issue. Efficient Construction, 225 Ill. App. 3d at 181, 587 N.E.2d at 1075; McFarlane, 58 Ill. App. 3d at 619, 374 N.E.2d at 953; Rivota v. Kaplan, 49 Ill. App. 3d 910, 920, 364 N.E.2d 337, 345 (1977); see also 14 Couch on Insurance \u00a7 199:118, at 199 \u2014 174 (3d ed. 1999). Absent a valid excuse, the insured\u2019s failure to satisfy the notice requirement will generally absolve the insurer of its duties under the policy.\nIn assessing the validity of an insured\u2019s excuse, several factors are considered, including: (1) the specific language of the policy\u2019s notice provision; (2) the degree of the insured\u2019s sophistication in the world of commerce and insurance; (3) the insured\u2019s awareness that a \u201clawsuit\u201d as defined under the terms of the policy has taken place; and (4) once this awareness arises, the insured\u2019s diligence and reasonable care in ascertaining whether policy coverage is available. Amerisure Insurance Co. v. Laserage Technology Corp., 2 F. Supp. 2d 296, 305 (W.D.N.Y. 1998) (applying Illinois law); Ankus v. Government Employees Insurance Co., 285 Ill. App. 3d 819, 825, 674 N.E.2d 865, 870 (1996); Baur\u2019s Opera House, 296 Ill. App. 3d at 1017, 694 N.E.2d at 597.\nIn addition to assessing the soundness of the proff\u00e9red reason, consideration in most cases is given to whether the insured\u2019s delay prejudiced the insurer. The general rule in notice cases is that the insurer need not prove prejudice (Bruhn, 289 Ill. App. 3d at 247, 682 N.E.2d at 370; Kerr v. Illinois Central R.R. Co., 283 Ill. App. 3d 574, 584, 670 N.E.2d 759, 767 (1996); Ankus, 285 Ill. App. 3d at 826, 674 N.E.2d at 870), since the controlling issue is not whether the insurer\u2019s interests have been compromised by the insured\u2019s inaction but only whether reasonable notice has been given. Mitchell Buick & Oldsmobile Sales, Inc. v. National Dealer Services, Inc., 138 Ill. App. 3d 574, 581, 485 N.E.2d 1281, 1286 (1985); City of Chicago v. United States Fire Insurance Co., 124 Ill. App. 2d 340, 347-48, 260 N.E.2d 276, 280 (1970). Prejudice is merely a factor in assessing the reasonableness of the notice. Bruhn, 289 Ill. App. 3d at 247, 682 N.E.2d at 370; Ankus, 285 Ill. App. 3d at 826, 674 N.E.2d at 870; American Country Insurance Co. v. Cash, 171 Ill. App. 3d 9, 10, 524 N.E.2d 1016, 1017 (1988); Illinois Valley Minerals, 70 Ill. App. 3d at 302, 388 N.E.2d at 255; contra Illinois Founders Insurance Co. v. Barnett, 304 Ill. App. 3d 602, 611, 710 N.E.2d 28, 35 (1999) (\u201c \u2018[w]hen notice of the lawsuit is the issue, the rule is that the insurer is required to show that it was prejudiced by the insured\u2019s omission or delay in order to escape liability on its policy,\u2019 \u201d quoting Rice v. AAA Aerostar, Inc., 294 Ill. App. 3d 801, 807-08, 690 N.E.2d 1067, 1072 (1998)); Baur\u2019s Opera House, 296 Ill. App. 3d at 1017-18, 694 N.E.2d at 598 (stating same rule but also indicating that prejudice may be considered as a \u201cfactor\u201d in the reasonableness analysis).\nIn the present matter, Applied maintains its 17-month delay in notifying Northbrook of the Harbor suit was reasonable since it justifiably believed that coverage was not afforded under the terms of its policies. Courts have recognized that an insured\u2019s belief of noncoverage under a policy may be an acceptable excuse where the insured, acting as a reasonably prudent person, believed the occurrence or lawsuit was not covered by the policy. Farmers Automobile Insurance Ass\u2019n v. Hamilton, 64 Ill. 2d 138, 142, 355 N.E.2d 1, 3 (1976) (notice of occurrence); Amerisure, 2 F. Supp. 2d at 305 (notice of suit); Ankus, 285 Ill. App. 3d at 826, 674 N.E.2d at 870 (notice of occurrence). Before a belief of noncoverage will be accepted, the law is clear that the insured must have acted as a reasonable person would have acted under the circumstances.\nWe find Applied\u2019s belief that coverage was not available under the policies to be unreasonable as a matter of law. The policies do not mandate Applied to give notice of every lawsuit that is filed against it, but only those suits that fall within the definition of that term, namely, any civil proceeding in which damages because of advertising injury to which the insurance applies are alleged. An insured, in deciding whether to provide notice to Northbrook, must necessarily evaluate the third-party\u2019s complaint in light of the policy provisions to ascertain whether advertising injury coverage is implicated so as to require notice of the suit. Applied accordingly should have reviewed the policies and Harbor\u2019s complaint together. Yet, Applied did not do so because, according to its general counsel, it did not understand the coverage it procured.\nApplied, a corporation engaged in the business of developing computer software for the insurance industry, having obtained more than one commercial liability policy and retaining in-house and outside counsel who could have made a coverage evaluation, was not an unsophisticated insured. By failing to review the policies and the complaint together to determine whether advertising injury coverage was implicated, Applied, and specifically Camasta as general counsel, failed to act like a reasonably prudent insured under the circumstances. A reasonable insured\u2019s attorney would have examined the complaint and relevant policy provisions to gauge the applicability of coverage rather than \u201cassuming,\u201d as Camasta did, that coverage was excluded. A reasonable insured additionally would not have simply concluded that the advertising injury coverage was uncomprehensible. If Camasta did indeed find the policies too complicated to understand, he could have easily conferred with someone knowledgeable in the subject within a reasonable time period to determine if notice and a tender of defense should have been given to Northbrook.\nWe find the decision in Amerisure supportive of our finding here that Applied\u2019s excuse was unjustified. In that case, the insureds, Laserage Technology Corporation (Laserage) and Ciron Technologies Corporation (Ciron), each corporate entities, were covered under commercial general insurance liability policies issued by Amerisure Insurance Company (Amerisure) and Michigan Mutual Insurance Company (Michigan Mutual). These policies provided coverage in part for advertising injury. In July 1995, Laserage and Ciron were sued for various statutory and common law offenses, including trade secret misappropriation and patent infringement, allegedly committed during the effective coverage periods of the insurers\u2019 policies.\nThe policies at issue contained notice provisions identical to those contained in the Northbrook policies, requiring notification of any suit \u201cas soon as practicable.\u201d Laserage and Ciron both waited eight months before advising Amerisure and Michigan Mutual about the underlying litigation. According to the record, the insureds\u2019 sole reason for the delay was their belief that coverage was not afforded under the policies. Notably, neither Laserage nor Ciron reviewed its policies before believing coverage was not available. Amerisure and Michigan Mutual ultimately filed for declaratory judgment in the federal district court of New York seeking a determination of their duties under their respective policies.\nThe court, applying Illinois law, held that the belief of noncoverage shared by Laserage and Ciron was unjustified. Amerisure, 2 F. Supp. 2d at 305. After discussing the clear wording of the policies\u2019 language and the insureds\u2019 sophistication in the area of commerce and insurance, the court concluded Laserage and Ciron \u201cclearly failed to exercise due diligence in ascertaining whether coverage was available, as evidenced by the fact that they'did not even review their policies.\u201d Amerisure, 2 F. Supp. 2d at 305.\nSimilarly, here, Applied failed to act diligently in not reviewing the complaint\u2019s allegations in light of its policies and making a good-faith determination regarding coverage of Harbor\u2019s claims. Further, as a result of Applied\u2019s inaction, we find Northbrook was prejudiced in that it was precluded from being able to meaningfully participate in the pretrial discovery occurring prior to Applied\u2019s notification, which the record reveals to have been substantial. See Amerisure, 2 F. Supp. 2d at 305 (finding the insureds\u2019 delay in notification resulted in prejudice because it deprived the insurers of \u201cthe opportunity to meaningfully participate in the underlying *** litigation\u201d).\nGiven Applied\u2019s unjustified excuse for its delay, coupled with the prejudice experienced by Northbrook, we conclude Applied\u2019s notification of the Harbor lawsuit 17 months after the filing of the underlying complaint was unreasonably late. Northbrook therefore has no obligation to provide defense costs or indemnification under the policies.\nCONCLUSION\nFor the following reasons, the order of the circuit court entering summary judgment in favor of Northbrook is affirmed.\nAffirmed.\nCAHILL, EJ., and WOLFSON, J., concur.\nWhile the record does not contain the schedule portion of the Excess/ Umbrella Policy, both parties indicate that the CGL Policy is listed as the underlying insurance in question.\nWe are aware that the Excess/Umbrella Policy does not use the word \u201csuit\u201d but rather refers to a \u201cclaim.\u201d Upon review of the policy language, we find the use of the term \u201cclaim\u201d encompasses a lawsuit that is filed against the insured.\nSome courts have stated that the lack of prejudice to the insurer under Illinois law is only relevant where either (1) the delay in notice was relatively brief or (2) where the insured has a good excuse for not acting. Amerisure, 2 F. Supp. 2d at 305; Twin City Fire, 266 Ill. App. 3d at 8-9, 639 N.E.2d at 8-9; Village of Crete, 731 F.2d at 459 (citing cases). Under this approach, the matter of prejudice is irrelevant to the court\u2019s analysis where the length of the insured\u2019s delay was substantial or where the insured\u2019s excuse is determined to be unreasonable.", "type": "majority", "author": "JUSTICE CERDA" } ], "attorneys": [ "Johnson & Bell, of Chicago (Thomas H. Fegan, of counsel), for appellant.", "Hinshaw & Culbertson, of Chicago (Fritz K. Huszagh, Ilene S. Grant, and Christine L. Olson, of counsel), for appellee." ], "corrections": "", "head_matter": "NORTHBROOK PROPERTY AND CASUALTY INSURANCE COMPANY, Plaintiff-Appellee, v. APPLIED SYSTEMS, INC., Defendant-Appellant (Harbor Software, Inc., Defendant).\nFirst District (3rd Division)\nNo. 1\u201498\u20141170\nOpinion filed May 17, 2000.\nJohnson & Bell, of Chicago (Thomas H. Fegan, of counsel), for appellant.\nHinshaw & Culbertson, of Chicago (Fritz K. Huszagh, Ilene S. Grant, and Christine L. Olson, of counsel), for appellee." }, "file_name": "0457-01", "first_page_order": 475, "last_page_order": 487 }