{ "id": 7327075, "name": "SBC HOLDINGS, INC., Plaintiff-Appellant and Cross-Appellee, v. TRAVELERS CASUALTY AND SURETY COMPANY, Defendant-Appellee and Cross-Appellant", "name_abbreviation": "SBC Holdings, Inc. v. Travelers Casualty & Surety Co.", "decision_date": "2007-05-29", "docket_number": "No. 1\u201405\u20140883", "first_page": "1", "last_page": "15", "citations": [ { "type": "official", "cite": "374 Ill. App. 3d 1" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "664 N.W.2d 776", "category": "reporters:state_regional", "reporter": "N.W.2d", "weight": 2, "year": 2003, "pin_cites": [ { "page": "782" } ], "opinion_index": 0 }, { "cite": "469 Mich. 41", "category": "reporters:state", "reporter": "Mich.", "case_ids": [ 1411230 ], "weight": 2, "year": 2003, "pin_cites": [ { "page": "52" } ], "opinion_index": 0, "case_paths": [ "/mich/469/0041-01" ] }, { "cite": "308 Ill. App. 3d 368", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 261375 ], "year": 1999, "pin_cites": [ { "page": "373" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/308/0368-01" ] }, { "cite": "316 Ill. App. 3d 1023", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1096659 ], "year": 2000, "pin_cites": [ { "page": "1028" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/316/1023-01" ] }, { "cite": "275 Ill. App. 3d 370", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 906774 ], "weight": 2, "year": 1995, "pin_cites": [ { "page": "374" }, { "page": "374" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/275/0370-01" ] }, { "cite": "304 Ill. App. 3d 697", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 564627 ], "weight": 2, "year": 1999, "pin_cites": [ { "page": "701" }, { "page": "701" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/304/0697-01" ] }, { "cite": "199 Ill. 2d 130", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 58928 ], "weight": 3, "year": 2002, "pin_cites": [ { "page": "138" }, { "page": "133" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/199/0130-01" ] }, { "cite": "125 F.3d 983", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 910755 ], "weight": 6, "year": 1997, "pin_cites": [ { "page": "987" }, { "page": "987" }, { "page": "987" }, { "page": "987" } ], "opinion_index": 0, "case_paths": [ "/f3d/125/0983-01" ] }, { "cite": "250 Ill. App. 3d 333", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2917491 ], "weight": 2, "year": 1993, "pin_cites": [ { "page": "336" }, { "page": "337" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/250/0333-01" ] }, { "cite": "144 Ill. 2d 64", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5592135 ], "weight": 2, "year": 1991, "pin_cites": [ { "page": "73" }, { "page": "74" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/144/0064-01" ] }, { "cite": "154 Ill. 2d 90", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 4820940 ], "weight": 4, "year": 1992, "pin_cites": [ { "page": "107-08" }, { "page": "108" }, { "page": "108" }, { "page": "108" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/154/0090-01" ] }, { "cite": "356 Ill. App. 3d 38", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3749788 ], "weight": 3, "year": 2005, "pin_cites": [ { "page": "41" }, { "page": "41" }, { "page": "41" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/356/0038-01" ] }, { "cite": "142 F.3d 439", "category": "reporters:federal", "reporter": "F.3d", "year": 1998, "opinion_index": 0 }, { "cite": "87 C 1409", "category": "reporters:state", "reporter": "Cow.", "year": 1997, "opinion_index": 0 } ], "analysis": { "cardinality": 1143, "char_count": 37724, "ocr_confidence": 0.799, "pagerank": { "raw": 1.9667135771450464e-07, "percentile": 0.7388067798547329 }, "sha256": "89dea093e38ea315a9507060f95d48c7626296572fa008f49207f62a10a77a4d", "simhash": "1:cdb549d60569965f", "word_count": 6109 }, "last_updated": "2023-07-14T18:10:59.295026+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "McBRIDE, EJ., and CAHILL, J., concur." ], "parties": [ "SBC HOLDINGS, INC., Plaintiff-Appellant and Cross-Appellee, v. TRAVELERS CASUALTY AND SURETY COMPANY, Defendant-Appellee and Cross-Appellant." ], "opinions": [ { "text": "JUSTICE ROBERT E. GORDON\ndelivered the opinion of the court:\nThe central issue in this case is whether defendant Travelers Casualty and Surety Company (Travelers) had a duty to defend its insured, plaintiff SBC Holdings, Inc. (SBC), in an underlying suit against SBC alleging racial discrimination. In 1987, City and Suburban Distributors (C&S) sued the Stroh Brewery Co. (subsequently renamed SBC) in the circuit court of Cook County. Following removal of the action to the United States District Court for the Northern District of Illinois, C&S filed a second amended complaint alleging that SBC wrongfully rejected two potential buyers for the C&S distributorship because neither of the buyers was black. In March 1997, almost nine years after the second amended complaint was filed, SBC tendered its defense of the C&S suit to the Aetna Casualty and Surety Company (predecessor to Travelers). Sixteen months later (July 1998), after SBC had won the C&S suit, Travelers refused SBC\u2019s tender of defense and denied coverage. In March 2003, SBC filed a complaint in the circuit court of Cook County seeking, among other things, a declaration that Travelers had a duty to defend SBC in the C&S suit. In February 2005, the circuit court held that the discrimination alleged by C&S was not covered under the Travelers policy, and Travelers therefore had no duty to defend SBC. The court entered summary judgment in favor of Travelers and against SBC. SBC timely filed a notice of appeal. Travelers filed a notice of cross-appeal from the circuit court\u2019s denial of Travelers\u2019 motion to dismiss SBC\u2019s complaint on statute-of-limitation grounds. For the reasons set forth below, we affirm the judgment of the circuit court.\nBACKGROUND\nAccording to SBC\u2019s complaint for declaratory judgment, SBC was formerly known as the Stroh Brewery Company (Stroh) but changed its name to SBC in 1999. SBC\u2019s complaint states that SBC is an Arizona corporation with its principal place of business in Detroit, Michigan.\nThe insurance policy at issue in this case, excess indemnity (umbrella) policy No. 65 XS 2551 SCA, was issued to the Stroh Companies, Inc., by the Aetna Casualty and Surety Company (Aetna) for the period from April 1, 1986 to April 1, 1987. Aetna was subsequently purchased by Travelers, and in 1997 changed its name to Travelers. The policy provided, in pertinent part:\n\u201c2.1 COVERAGE. The company will pay on behalf of the insured the ultimate net loss in excess of the applicable underlying limit which the insured shall become legally obligated to pay as damages because of\nA. Personal Injury,\nB. Property Damage, or\nC. Advertising Offense\nto which the policy applies, caused by an occurrence anywhere in the world ***.\n* * *\n2.3 DEFENSE OF SUITS NOT COVERED BY OTHER INSURANCE\n(a) The company shall defend any suit seeking damages which are not payable on behalf of the insured under the terms of the policies of Underlying Insurance described in Section 1 or any other available insurance\n(1) because such damages are not covered thereunder ***\nbut which are payable under the terms of Section 2.1 *** even if any'of the allegations of the suit are groundless, false or fraudulent\nSection 5. DEFINITIONS\n5.10 \u2018occurrence\u2019 means\n(2) with respect to advertising offense and personal injury respectively: an offense described in the definition of those terms in this policy;\n5.11 \u2018personal injury\u2019 means bodily injury and injury arising out of one or more of the following offenses committed during the policy period: false arrest, detention or imprisonment, malicious prosecution, wrongful entry or eviction or other invasion of the right of private occupancy, humiliation or discrimination because of race, religion, age, sex or physical disability (unless committed by or at the direction or [sic] the Insured, or unless insurance therefor is prohibited by law) ***.\u201d (Emphases added.)\nIn the mid-1980s, C&S was an. independently owned wholesale distributor of Stroh\u2019s products in the Chicago area. According to C&S\u2019s second amended complaint, sales of Stroh\u2019s products constituted about two-thirds of C&S\u2019s total sales. The following summary of events leading to the filing of C&S\u2019s second amended complaint is based, in part, on the allegations in that complaint.\nC&S distributed Stroh products pursuant to a written wholesaler agreement. In September 1986 Stroh attempted to terminate this agreement because of an allegedly unauthorized control change at C&S. Following negotiations between the parties, it was agreed\u2014 pursuant to a letter agreement dated September 15, 1986 \u2014 that C&S would continue as a Stroh distributor for 90 days while attempting to sell its business to a purchaser acceptable to Stroh. During the fall of 1986, C&S solicited a number of bids from potential purchasers, including Vierk Distributing Company and Nelson Carlo Enterprises, Inc. Vierk and Carlo each offered $5 million for all of C&S\u2019s distributorship rights.\nAccording to the second amended complaint, C&S submitted the proposals to Stroh, which rejected them even though Vierk was already a Stroh distributor and had been approved by Stroh. In a letter dated February 4, 1987, Stroh group vice president Kenneth A. Tippery explained Stroh\u2019s objections to Vierk, Carlo and a third potential purchaser, Archie Mitchell. With regard to Vierk, the letter stated, in pertinent part:\n\u201cAs you have known from the beginning of the C&S liquidation process, we have required three characteristics of prospects for consideration: *** (2) minority-owned and operated, if not wholly at least to a major extent.\u201d\nThe letter added that Stroh had \u201cjust today\u201d received C&S\u2019s latest Vierk proposal, which was \u201cunacceptable\u201d for a number of reasons. \u201cFirst, we require an active, involved minority owner-operator ***.\u201d (Emphasis in original.) The letter, which was printed on Stroh letterhead, further stated \u201cfor the record\u201d that one of the positive characteristics of the only candidate that Stroh deemed acceptable (Thomas Rand, owner of Beverage Affiliates, Inc.) was that he was a \u201c[m]ember of the dominant population in the C&S market.\u201d\nAccording to C&S\u2019s second amended complaint, Stroh insisted that C&S negotiate to sell to Beverage Affiliates (Rand). C&S further alleged that, if C&S did not sell to Rand, Stroh threatened to exercise its rights under the letter agreement to buy back its products for $2.9 million and terminate C&S\u2019s franchise. As a result, C&S filed suit in the circuit court of Cook County seeking injunctive relief to bar Stroh from terminating C&S\u2019s distributorship. The circuit court issued a temporary restraining order prohibiting Stroh from terminating or interfering with C&S\u2019s rights as a franchisee or taking action to undermine C&S as the distributor for its territory.\nAs previously noted, the case was subsequently moved to federal court. On March 12, 1987, the district court granted a preliminary injunction barring Stroh \u201cfrom proceeding with a race-based selection.\u201d In reaching this decision, the district court found, among other things, that \u201crace was clearly the dominant factor in the selection process.\u201d\nC&S alleged further that, after the preliminary injunction was issued, C&S negotiated a deal with Rand for sale of the distributorship. However, Rand refused to go forward with the purchase. According to C&S, at this point prospective buyers were reluctant to negotiate with C&S, fearing rejection by Stroh or potential involvement in litigation. As a result, C&S alleged, its sales declined, along with the value of its franchise. Eventually, after more than a year of negotiations, C&S sold its distribution rights to Vierk for an amount that was allegedly about $1 million less than Vierk would have paid before Stroh rejected the earlier bid. During that interval, C&S claimed that it was forced to borrow substantial sums to keep its business open.\nThe second amended complaint, which was filed on June 9, 1988, contained four counts, each of which was based on alleged racial discrimination. Count I claimed a breach of contract in that SBC used a race-based factor in rejecting the Vierk and Carlo offers, in violation of the letter agreement with C&S. Count II alleged that Stroh violated the Illinois Beer Industry Fair Dealing Act (now see 815 ILCS 720/1 et seq. (West 2004)) by unreasonably (based on race) withholding its approval of the sale of C&S\u2019s assets. In count III, C&S alleged that Stroh tortiously interfered with the formation of contract by wrongfully rejecting the Vierk and Carlo offers on the basis of race. Count IV alleged a civil rights violation in that Stroh rejected the sale to either Vierk or Carlo based on the race of the potential buyers. With regard to Vierk, count IV stated: \u201cStroh disapproved the C&S sale of some or all of its assets to Vierk on the ground [ ] that Richard Vierk, president and owner of Vierk Distributing Company, is a white person.\u201d A similar allegation was made regarding Carlo: \u201cStroh disapproved C&S\u2019 sale of some or all of its assets to Nelson Carlo Enterprises, Inc., on the ground that Nelson Carlo, president and owner of Nelson Carlo Enterprises, Inc.: a. is not a black person; b. is an Hispanic-American.\u201d The second amended complaint sought $3.25 million in damages based on the following two allegations: (1) \u201cC&S was forced to sell its business for approximately $1 million less than it would have received if Stroh had not wrongfully rejected the Vierk and Carlo offers,\u201d and (2) \u201cC&S was forced to borrow approximately $2.25 million to remain in business in order to negotiate a subsequent sale.\u201d\nOn March 11, 1997, almost nine years after the filing of C&S\u2019s second amended complaint, Stroh tendered its defense of the C&S suit to Aetna. Two months later, Stroh won the C&S suit. City & Suburban Distributors-Illinois, Inc. v. Stroh Brewery Co., No. 87 C 1409 (N.D. Ill. 1997). The district court granted summary judgment in favor of Stroh on the ground that C&S suffered no damages as a result of racial discrimination. This decision was subsequently affirmed. City & Suburban Distributors Illinois, Inc. v. Stroh Brewery Co., 142 F.3d 439 (7th Cir. April 30, 1998).\nIn a letter dated July 27, 1998, Travelers declined Stroh\u2019s tender of defense in the C&S suit. With regard to the insurance policy at issue, excess indemnity (umbrella) policy No. 65 XS 2551 SCA, Travelers stated that C&S, in its second amended complaint, \u201cdo[es] not claim damages on account of *** personal injury *** caused by an occurrence as each of those terms is defined within the policy.\u201d\nOn March 4, 2003, SBC filed its complaint for declaratory judgment in the circuit court of Cook County. In its complaint, SBC sought, among other things, a declaration that Travelers owed and breached a duty to defend SBC in the underlying federal action brought by C&S. According to SBC, it spent at least $1,039,009 for its successful defense of the C&S suit. SBC further alleged that (1) it was a named insured under the umbrella policy at issue \u201cbecause Stroh [subsequently renamed SBC] was a wholly owned subsidiary of The Stroh Companies, Inc. [the named insured] during the policy period\u201d; (2) the policy covered \u201cdiscrimination because of race,\u201d and C&S\u2019s allegations of racial discrimination (in the second amended complaint) therefore triggered Travelers\u2019 duty to defend SBC in the underlying suit; and (3) Travelers breached its duty to defend.\nOn April 18, 2003, Travelers filed a motion to dismiss SBC\u2019s complaint on the ground that it was untimely filed. Travelers pointed to section 13 \u2014 206 of the Code of Civil Procedure (735 ILCS 5/13 \u2014 206 (West 2002)), which provides, in pertinent part: \u201cactions on *** written contracts *** shall be commenced within 10 years next after the cause of action accrued.\u201d According to Travelers, SBC\u2019s cause of action on the Travelers policy (a written contract) accrued when SBC received C&S\u2019s second amended complaint. The C&S complaint was filed on June 9, 1988, but SBC\u2019s declaratory judgment complaint against Travelers was not filed until March 4, 2003, \u201c14 years and 9 months after accrual.\u201d In September 2003 the circuit court denied Travelers\u2019 motion to dismiss and found that SBC\u2019s suit was timely filed. Travelers subsequently moved to certify for interlocutory appeal, pursuant to Supreme Court Rule 308(a) (155 Ill. 2d R. 308(a)), the question of whether Travelers\u2019 motion to dismiss was properly denied. In December 2003 the circuit court denied Travelers\u2019 Rule 308 motion.\nIn May 2004 Travelers moved for summary judgment. In its motion, Travelers pointed to its policy language defining \u201cpersonal injury\u201d as \u201cinjury arising out of one or more of the following offenses committed during the policy period: *** discrimination because of race, religion, age, sex or physical disability (unless committed by or at the direction of the Insured, or unless insurance therefore is prohibited by law).\u201d (Emphasis added.) Based on this language, Travelers asserted that it was entitled to summary judgment as a matter of law \u201cbecause the underlying C&S Second Amended Complaint does not allege a \u2018personal injury\u2019 offense which is covered by the Travelers policy, but rather alleges discrimination because of race which was committed by or at the direction of Strohs.\u201d In its memorandum in support of its motion for summary judgment, Travelers elaborated on its argument that the allegations in C&S\u2019s second amended complaint did not trigger Travelers\u2019 duty to defend. Travelers stated: \u201c[E]ach cause of action in the Second Amended C&S Complaint is based upon a deliberate business decision by Stroh to employ a race-based selection criterion] in connection with C&S\u2019s attempted sale of its Stroh franchise.\u201d Travelers pointed again to the insurance policy\u2019s definition of \u201cpersonal injury\u201d as \u201cinjury arising out of,\u201d among other things, \u201cdiscrimination because of race *** unless committed by or at the direction of the Insured.\u201d Travelers stated: \u201cThe allegations of the Second Amended C&S Complaint clearly fall outside of that definition.\u201d\nOn September 24, 2004, SBC filed a cross-motion for summary judgment. SBC acknowledged that \u201cthere are no material fact questions\u201d and argued that SBC was entitled to judgment as a matter of law \u201cbecause Travelers breached its duty to defend and so must pay for all of Stroh\u2019s defense costs in the underlying C&S suit.\u201d SBC repeated its allegation from its declaratory judgment complaint that C&S sought damages against Stroh for racial discrimination and that this triggered Travelers\u2019 duty to defend the C&S suit. SBC also alleged that Travelers\u2019 insurance for discrimination was ambiguous and therefore \u201cmust be construed in favor of the duty to defend.\u201d According to SBC, Travelers \u201cpromises insurance for discrimination but then takes it all away for discrimination \u2018committed by or at the direction of the insured.\u2019 \u201d SBC also alleged that Michigan insurance law applied to Stroh\u2019s coverage and that, under Michigan law, Travelers was \u201crequired to pay for all $1.1 million of Stroh\u2019s defense costs incurred from the filing of the C&S suit.\u201d\nPursuant to an agreed order entered in November 2004, two questions were at issue in the summary judgment motions: (1) whether the allegations in the underlying C&S complaint triggered Travelers\u2019 duty to defend SBC in the C&S suit, and (2) whether Travelers was hable to SBC for defense costs which SBC incurred prior to notifying Travelers of the C&S suit.\nOn February 24, 2005, the circuit court heard arguments on the cross-motions for summary judgment, and entered summary judgment in favor of Travelers and against SBC. The court explained that it had compared C&S\u2019s second amended complaint with \u201cthe insuring agreement covering personal injury\u201d and concluded that \u201con its face there is no potential for coverage of that underlying [C&S] action under this policy.\u201d The court stated:\n\u201cWhat we have here that\u2019s clearly shown by the second amended complaint in the underlying action and its exhibits, which includes that [February 4, 1987,] letter from the vice president, is that that was an action, an action of discrimination committed by and at the direction [of Stroh] *** it was a corporate act, a corporate policy of affirmative action.\u201d\nThe circuit court expressly held that Travelers had no duty to defend the C&S suit. Because of this decision, the court did not address the second question at issue in the summary judgment motions: whether Travelers was liable for defense costs incurred by SBC prior to SBC\u2019s notifying Travelers of the underlying C&S suit.\nSBC timely filed a notice of appeal. Travelers cross-appealed from the circuit court\u2019s September 2003 denial of Travelers\u2019 motion to dismiss SBC\u2019s complaint on statute-of-limitation grounds.\nANALYSIS\nOn appeal, SBC argues, as it did below, that: (1) the allegations of race discrimination in C&S\u2019s second amended complaint triggered Travelers\u2019 duty to defend SBC in the C&S suit, and (2) Travelers is required to pay SBC the defense costs which SBC incurred prior to notifying Travelers of the C&S suit, as well as the defense costs incurred after this notification.\nWith regard to SBC\u2019s first argument, the circuit court, as noted, granted summary judgment in favor of Travelers, concluding that Travelers owed no duty to defend SBC. \u201cSummary judgment is appropriate where the pleadings, depositions, admissions, and affidavits on file, when taken together in the light most favorable to the non-movant, show that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law.\u201d Gawryk v. Firemen\u2019s Annuity & Benefit Fund of Chicago, 356 Ill. App. 3d 38, 41 (2005). Where, as here, \u201cthe parties have filed cross-motions for summary judgment, they agree that no genuine issue as to any material fact exists and that only a question of law is involved, and they invite the court to decide the issue based on the record.\u201d Gawryk, 356 Ill. App. 3d at 41. We review a circuit court\u2019s ruling on a motion for summary judgment de novo. Gawryk, 356 Ill. App. 3d at 41.\nIn determining whether an insurer has a duty to defend its insured, a court looks to the allegations in the underlying complaint and compares them to the relevant provisions of the insurance policy. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 107-08 (1992). \u201cIf the facts alleged in the underlying complaint fall within, or potentially within, the policy\u2019s coverage, the insurer\u2019s duty to defend arises.\u201d Outboard Marine, 154 Ill. 2d at 108. However, if it is clear from the face of the complaint that the allegations fail to state facts which bring the case within, or potentially within, the policy\u2019s coverage, an insurer may properly refuse to defend. United States Fidelity & Guaranty Co. v. Wilkin Insulation Co., 144 Ill. 2d 64, 73 (1991), quoted in State Farm Fire & Casualty Co. v. Hatherley, 250 Ill. App. 3d 333, 336 (1993). \u201c[Wlhere the language of an insurance policy is clear and unambiguous, it will be applied as written.\u201d Hatherley, 250 Ill. App. 3d at 337. The construction of an insurance policy presents a question of law that is reviewed de novo. Outboard Marine, 154 Ill. 2d at 108.\nIn the second amended complaint, C&S alleged that, during the fall of 1986, C&S solicited a number of bids from potential purchasers of C&S\u2019s distributorship. Included among these bidders were the Vierk Distributing Company and Nelson Carlo Enterprises, Inc., each of which offered $5 million for all of C&S\u2019s distributorship rights. C&S further alleged that it submitted these proposals to Stroh, but Stroh rejected them even though Vierk was already a Stroh distributor and had been approved by Stroh.\nIn a letter to C&S dated February 4, 1987, Stroh group vice president Kenneth A. Tippery explained Stroh\u2019s objections to Vierk, Carlo and a third potential purchaser, Archie Mitchell. With regard to Vierk, the letter stated, in pertinent part:\n\u201cAs you have known from the beginning of the C&S liquidation process, we have required three characteristics of prospects for consideration: *** (2) minority-owned and operated, if not wholly at least to a major extent.\u201d\nThe letter added that Stroh had \u201cjust today\u201d received C&S\u2019s latest Vierk proposal, which was \u201cunacceptable\u201d for a number of reasons. \u201cFirst, we require an active, involved minority owner-operator ***.\u201d (Emphasis in original.) The letter further stated \u201cfor the record\u201d that one of the positive characteristics of the only candidate that Stroh deemed acceptable (Thomas Rand, owner of Beverage Affiliates, Inc.) was that he was a \u201c[mjember of the dominant population in the C&S market.\u201d\nC&S\u2019s second amended complaint contained four counts, each of which was based on alleged racial discrimination. Specifically, each count was predicated on Stroh\u2019s alleged improper use of a race-based factor in rejecting the Vierk and Carlo offers. Count IV which claimed a civil rights violation, stated:\n\u201c21. Stroh disapproved the C&S sale of some or all of its assets to Vierk on the ground[ ] that Richard Vierk, president and owner of Vierk Distributing Company, is a white person.\n22. Stroh disapproved C&S\u2019 sale of some or all of its assets to Nelson Carlo Enterprises, Inc., on the grounds that Nelson Carlo, president and owner of Nelson Carlo Enterprises, Inc.:\na. is not a black person;\nb. is an Hispanic-American.\u201d\nUnder the relevant policy language, Travelers promised to cover personal injury \u201cto which this policy applies, caused by an occurrence anywhere in the world.\u201d An \u201coccurrence,\u201d as related to \u201cpersonal injury,\u201d was defined as \u201can offense described in the definition[ ] of [personal injury] in this policy.\u201d \u201cPersonal injury,\u201d in turn, was defined as \u201cinjury arising out of *** discrimination because of race, religion, age, sex or physical disability (unless committed by or at the direction of the Insured, or unless insurance therefor is prohibited by law).\u201d\nC&S\u2019s second amended complaint appears to allege deliberate, business-driven racial discrimination committed by Stroh. It seems clear that such discrimination falls outside the scope of the relevant policy language, whose plain, ordinary meaning is that there is no coverage for discrimination committed by or at the direction of Stroh. This was the view of the circuit court, which, after hearing argument on the parties\u2019 cross-motions for summary judgment, stated:\n\u201cI am going to grant the insurer\u2019s motion for summary judgment and deny the insured\u2019s [motion] on the basis that by reading the second amended complaint and its attachments in the underlying action, and comparing that to the insuring agreement covering personal injury, that on its face there is no potential for coverage of that underlying action under this policy.\u201d\nNotwithstanding the foregoing, SBC contends that Travelers\u2019 relevant policy language is ambiguous and therefore must be construed in favor of coverage. According to SBC, Travelers\u2019 insurance policy promises coverage for discrimination but then, by prohibiting coverage for discrimination \u201ccommitted by or at the direction of the Insured,\u201d takes back what the policy had promised. In SBC\u2019s view, Travelers is essentially saying: \u201c[W]e cover you for discrimination unless you do it.\u201d SBC argues that this is contradictory and ambiguous.\nIn making this argument, SBC relies primarily on North Bank v. Cincinnati Insurance Cos., 125 F.3d 983 (6th Cir. 1997), a federal court of appeals case that predicts Michigan law with regard to the type of liability limitation at issue here. North Bank found ambiguous an insurance policy provision barring coverage for discrimination \u201ccommitted by or at your [the named insured\u2019s] direction.\u201d North Bank, 125 F.3d at 987. According to defendant in the case at bar, North Bank held \u201cthat the exclusion for \u2018discrimination committed by or at your direction\u2019 forfeits all coverage for \u2018intentional\u2019 and \u2018unintentional\u2019 discrimination, leaving the insured with nothing.\u201d We disagree with this interpretation of the language in question. Here, Travelers acknowledges that, under its version of this language, there is potential coverage for negligent or vicarious discrimination. In its brief to this court, Travelers asserts: \u201cCorporate liability based *** on its \u2018negligent supervision\u2019 or [imposed] \u2018vicariously\u2019 for the acts of its personnel would potentially fall within the \u2018personal injury\u2019 definition, because the discrimination itself was not \u2018committed by or at the direction of the Insured.\u2019 \u201d Travelers adds that \u201cdisparate impact\u201d claims against the insured also would potentially fall within its policy\u2019s \u201cpersonal injury\u201d definition. In our view, Travelers\u2019 policy language barring coverage for discrimination \u201ccommitted by or at the direction of the Insured\u201d does not eliminate coverage for all types of unintentional discrimination. We reject SBC\u2019s argument, based on North Bank, that Travelers\u2019 liability limitation is ambiguous.\nSBC next points to the rule of the last antecedent, which provides:\n\u201c[RJelative or qualifying words or phrases in a statute serve only to modify words or phrases which are immediately preceding. They do not modify those which are more remote.\u201d People v. Davis, 199 Ill. 2d 130, 138 (2002).\nSBC applies this rule to the Travelers policy\u2019s definition of \u201cpersonal injury,\u201d which lists several fypes of offenses and ends with the restrictive parenthetical at issue: \u201c(unless committed by or at the direction of the Insured *** ).\u201d SBC notes that discrimination because of \u201cphysical disability\u201d is the last type of discrimination listed before the parenthetical and concludes that, based on the rule of the last antecedent, the limiting parenthetical therefore applies only to discrimination because of physical disability and not to the four prior types of discrimination, including race discrimination. SBC acknowledges that the circuit court below interpreted the limiting parenthetical as applying to all five types of discrimination, rather than simply to the last type. SBC asserts that the circuit court erred in its interpretation. SBC adds that, regardless of which interpretation is correct, the rule of the last antecedent \u201cshows that Travelers\u2019 wording can reasonably be read either way,\u201d and the parenthetical limitation thus is ambiguous. We find this argument unpersuasive.\nAs previously indicated, the definition of \u201cpersonal injury\u201d in Travelers\u2019 policy states, in pertinent part:\n\u201c \u2018[P]ersonal injury\u2019 means bodily injury and injury arising out of one or more of the following offenses committed during the policy period: false arrest, detention or imprisonment, malicious prosecution, wrongful entry or eviction or other invasion of the right of private occupancy, humiliation or discrimination because of race, religion, age, sex or physical disability (unless committed by or at the direction of the Insured ***).\u201d\nWe agree with the circuit court that the last antecedent in this instance is \u201cdiscrimination,\u201d which is the last in a series of offenses listed in the definition prior to the parenthetical. If we were to adopt SBC\u2019s reading, we would be forced to conclude, illogically, that Travelers chose to provide coverage for discrimination because of race, religion, age, or sex, even if committed by or at the direction of the insured, but nevertheless chose not to provide coverage for discrimination because of physical disability if the discrimination were committed by or at the direction of the insured. No plausible argument is offered to explain such a decision on the part of Travelers.\nOur conclusion here is supported by People v. Davis, 199 Ill. 2d 130 (2002), a case cited by SBC. In Davis, our supreme court applied the rule of the last antecedent to section 33A \u2014 1(b) of the Criminal Code of 1961 (720 ILCS 5/33A \u2014 1(b) (West 1992)), which defined a category I weapon:\n\u201cA category I weapon is a pistol, revolver, rifle, shotgun, spring gun, or any other firearm, sawed-off shotgun, a stun gun or taser as defined in paragraph (a) of Section 24 \u2014 1 of this Code, knife with a blade of at least 3 inches in length, dagger, dirk, switchblade knife, stiletto, or any other deadly or dangerous weapon or instrument of like character.\u201d 720 ILCS 5/33A \u2014 1(b) (West 1992).\nThe supreme court interpreted the concluding words, \u201cor any other deadly or dangerous weapon or instrument of like character,\u201d as applying to the entire class of blade-type weapons listed in the statute (\u201cknife with a blade of at least 3 inches in length, dagger, dirk, switchblade knife, stiletto\u201d) and not just to \u201cstiletto.\u201d Davis, 199 Ill. 2d at 133.\nIn sum, we conclude that the Travelers policy\u2019s liability limitation barring coverage for discrimination \u201ccommitted by or at the direction of the Insured\u201d is not ambiguous. Anticipating our decision on this issue, SBC argued, in its briefs to this court, that Michigan had the most significant contacts with the insurance policy at issue and that, under Illinois choice of law rules, Michigan law therefore controlled Travelers\u2019 policy coverage in this case. According to SBC, \u201cMichigan holds that Travelers\u2019 discrimination insurance is ambiguous and so must be construed in favor of SBC\u2019s right to a defense of the underlying C&S suit.\u201d\nBefore \u00e1 court can apply a choice-of-law analysis to determine which state\u2019s law applies to the dispute, it must first determine if there is a conflict in the laws of the two states. McGrew v. Pearlman, 304 Ill. App. 3d 697, 701 (1999); Malatesta v. Mitsubishi Aircraft International, Inc., 275 Ill. App. 3d 370, 374 (1995). A conflict exists if the difference in laws will result in a difference in outcome. McGrew, 304 Ill. App. 3d at 701; Malatesta, 275 Ill. App. 3d at 374. If the law of the jurisdictions in question is essentially the same on the disputed point, there is no need to apply a choice-of-law analysis. Wreglesworth v. Arctco, Inc., 316 Ill. App. 3d 1023, 1028 (2000). In the absence of a conflict, Illinois law applies as the law of the forum. Dearborn Insurance Co. v. International Surplus Lines Insurance Co., 308 Ill. App. 3d 368, 373 (1999).\nSBC argues that it has sufficiently alleged a conflict between Illinois and Michigan law. In support of this contention, SBC points to North Bank v. Cincinnati Insurance Cos., 125 F.3d 983 (6th Cir. 1997), a federal court of appeals case predicting Michigan law with regard to the liability limitation wording at issue in the case at bar. As previously noted, North Bank found ambiguous a policy exclusion worded similarly to Travelers\u2019 provision barring coverage for discrimination \u201ccommitted by or at the direction of the Insured.\u201d In reaching this conclusion, North Bank pointed to the doctrine of reasonable expectations. Under this doctrine, a court grants coverage if the policyholder, upon reading the contract language, has a reasonable expectation of coverage. North Bank, 125 F.3d at 987. According to the court of appeals in North Bank, the plaintiff bank \u201creasonably expected that the [underlying] discrimination claim would be covered by the umbrella policy.\u201d North Bank, 125 F.3d at 987. In the court\u2019s view, \u201cthe defendant insurance company should not be permitted to sell the bank a policy covering discrimination claims and then to refuse to cover garden variety discrimination claims.\u201d North Bank, 125 F.3d at 987.\nTo the extent that North Bank predicted Michigan law with regard to the policy language at issue here, it has been undermined by Wilkie v. Auto-Owners Insurance Co., 469 Mich. 41, 664 N.W.2d 776 (2003). In Wilkie, the Michigan Supreme Court abandoned the rule of reasonable expectations, concluding that it was \u201cinvalid as an approach to contract interpretation.\u201d Wilkie, 469 Mich, at 52, 664 N.W.2d at 782. In view of the decision in Wilkie, we conclude that North Bank is insufficient authority to support SBC\u2019s allegation of a conflict between Michigan and Illinois law. We reject SBC\u2019s argument that Michigan law controls Travelers\u2019 policy coverage in this case.\nSBC argues, in the alternative, that the C&S second amended complaint alleged vicarious discrimination and that this allegation triggered Travelers\u2019 duty to defend. SBC asserts that Travelers has admitted coverage for vicarious liability.\nAccording to SBC, \u201c[t]he C&S allegations target the personal bias of Stroh\u2019s group vice-president (Kenneth Tippery),\u201d the author of the February 4, 1987, letter explaining Stroh\u2019s objections to the proposed purchasers submitted by C&S, including Vierk and Carlo. SBC contends there is evidence in the record that Tippery, in explaining the reasons for rejecting Vierk and Carlo, was acting on his own, in contravention of Stroh corporate policy.\nThe February 4 letter stated, in pertinent part:\n\u201cAs you have known from the beginning of the C&S liquidation process, we have required three characteristics of prospects for consideration: *** (2) minority-owned and operated, if not wholly at least to a major extent.\u201d\nThe letter added that \u201cwe have just today received\u201d C&S\u2019s latest Vierk proposal, which, the letter stated, \u201cis unacceptable to us\u201d for a number of reasons. \u201cFirst, we require an active, involved minority owner-operator ***.\u201d (Emphasis in original.) The letter, which was printed on Stroh letterhead, further stated \u201cfor the record\u201d that one of the positive characteristics of the only candidate who was deemed acceptable (Thomas Rand, owner of Beverage Affiliates, Inc.) was that he was a \u201c[m]ember of the dominant population in the C&S market.\u201d\nSBC concedes that \u201cMr. Tippery\u2019s February 4 correspondence says \u2018we\u2019 require minority ownership.\u201d In other words, the letter uses the third-person plural \u201cwe\u201d rather than the first-person singular \u201cI.\u201d SBC attempts to avoid the obvious implications of the use of \u201cwe\u201d by stating: \u201cMr. Tippery used the pronoun \u2018we\u2019 but does not say who shares his motive for minority ownership.\u201d SBC adds that Tippery does not say in the letter that minority ownership \u201cis a Stroh corporate policy [or] a Stroh corporate requirement.\u201d Finally, SBC acknowledges that the letter \u201cis written on Stroh stationery,\u201d but adds that it is \u201csimply signed \u2018Kenneth A. Tippery, Group Vice President.\u2019 \u201d\nWe find SBC\u2019s argument that Tippeiy was acting in contravention of corporate policy unpersuasive, as did the circuit court. During the hearing on the parties\u2019 cross-motions for summary judgment, the circuit court rejected any argument that the discrimination alleged by C&S was vicarious. The court stated, in pertinent part:\n\u201cThis was a company policy. That letter came right out and said our company policy; me, the vice president speaking on behalf of the company, I\u2019m telling you that our company policy is to base these things on race. That\u2019s not the supervisor who fires somebody because he doesn\u2019t like somebody because he\u2019s black. This is a corporate act. This is an expression of corporate policy.\u201d\nIn sum, we conclude that, in the case at bar, Travelers\u2019 limiting parenthetical denying coverage for discrimination \u201ccommitted by or at the direction of the Insured\u201d is not ambiguous and must be applied as written (Wilkin, 144 Ill. 2d at 74). C&S\u2019s second amended complaint clearly alleged, on its face, deliberate, business-driven race discrimination \u201ccommitted by or at the direction of\u2019 Stroh. The facts alleged do not fall, even potentially, within the policy\u2019s coverage, and Travelers therefore had no duty to defend SBC in the underlying C&S suit. See Outboard Marine, 154 Ill. 2d at 108. Travelers was entitled, as a matter of law, to summary judgment. We affirm the circuit court\u2019s awarding of summary judgment in favor of Travelers and against SBC.\nBecause of our disposition in this case, we need not address SBC\u2019s argument that Travelers must pay the defense costs which SBC incurred prior to notifying Travelers of the C&S suit, as well as the costs incurred after this notification. We also need not consider Travelers\u2019 cross-appeal from the circuit court\u2019s denial of Travelers\u2019 motion to dismiss SBC\u2019s complaint on statute-of-limitation grounds.\nFinally, we note that Travelers filed a motion requesting that' we strike portions of SBC\u2019s opening appellant brief for violation of Supreme Court Rule 341(h)(2) (210 Ill. 2d R. 341(h)(2)). Rule 341(h)(2) spells out what is to be included in the introductory paragraph in an appellant\u2019s brief describing the nature of the action. In its motion, Travelers argues that the introductory \u201cnature of the action\u201d section of SBC\u2019s brief improperly includes \u201cargumentative matters\u201d in violation of Rule 341(h)(2). We agree with Travelers that portions of this introductory section of SBC\u2019s brief contain argument that should not have been included in this section. To the extent that any improper argument was included, we have not considered it in reaching our decision. We therefore deny Travelers\u2019 motion to strike as moot.\nCONCLUSION\nThe circuit court\u2019s entering of summary judgment in favor of Travelers and against SBC is affirmed.\nAffirmed.\nMcBRIDE, EJ., and CAHILL, J., concur.\nThe underlying C&S complaint alleged discrimination by Stroh in January and February 1987, which is within the policy period.\nSBC acknowledges that North Bank \u201cis the only Michigan authority on point\u201d regarding this issue.", "type": "majority", "author": "JUSTICE ROBERT E. GORDON" } ], "attorneys": [ "Palmer & Associates, of Chicago (Dwight B. Palmer, Jr., and Tiffany J. Beverly, of counsel), for appellant.", "O\u2019Hagan, Smith & Amundsen, L.L.C., of Chicago (Richard T. Valentino and Michael Resis, of counsel), for appellee." ], "corrections": "", "head_matter": "SBC HOLDINGS, INC., Plaintiff-Appellant and Cross-Appellee, v. TRAVELERS CASUALTY AND SURETY COMPANY, Defendant-Appellee and Cross-Appellant.\nFirst District (1st Division)\nNo. 1\u201405\u20140883\nOpinion filed May 29, 2007.\nPalmer & Associates, of Chicago (Dwight B. Palmer, Jr., and Tiffany J. Beverly, of counsel), for appellant.\nO\u2019Hagan, Smith & Amundsen, L.L.C., of Chicago (Richard T. Valentino and Michael Resis, of counsel), for appellee." }, "file_name": "0001-01", "first_page_order": 19, "last_page_order": 33 }