                                      2017 IL App (1st) 161465
                                            No. 1-16-1465
                                                                        Fifth Division
                                                                        June 30, 2017
     ______________________________________________________________________________

                                         IN THE
                             APPELLATE COURT OF ILLINOIS
                                     FIRST DISTRICT
     ______________________________________________________________________________

                                                        )
     MOTOROLA SOLUTIONS, INC.,                          )
                                                        )
            Plaintiff-Appellant,                        )
                                                        )
     v.                                                 )
                                                        )
     ZURICH INSURANCE COMPANY; ASSOCIATED               ) Appeal from the Circuit Court
     INDEMNITY CORPORATION; CONTINENTAL                 ) of Cook County.
     CASUALTY COMPANY; NATIONAL FIRE                    )
     INSURANCE COMPANY OF HARTFORD;                     ) No. 11 L 001902
     TRANSPORTATION INSURANCE COMPANY;                  )
     AMERICAN CASUALTY INSURANCE COMPANY )                The Honorable
     OF READING, PENNSYLVANIA; LIBERTY                  ) Margaret A. Brennan,
     MUTUAL FIRE INSURANCE COMPANY; and                 ) Judge Presiding.
     LIBERTY INSURANCE COMPANY,                         )
                                                        )
            Defendants                                  )
                                                        )
     (Zurich Insurance Company and Associated Indemnity )
     Corporation,                                       )
            Defendants-Appellees).                      )
                                                        )
     ______________________________________________________________________________

           PRESIDING JUSTICE GORDON delivered the judgment of the court, with opinion.
           Justice Hall concurred in the judgment and opinion.
           Justice Lampkin’s dissent or concurrence will be filed at a future date.

                                             OPINION

¶1         The instant appeal arises from a discovery dispute between plaintiff Motorola Solutions,

        Inc., and defendants Zurich Insurance Company (Zurich) and Associated Indemnity
     No. 1-16-1465


        Corporation (Associated) concerning the production of documents that plaintiff claims are

        privileged. The parties are engaged in insurance coverage litigation, stemming from several

        underlying personal injury actions in which claims were asserted against plaintiff. Plaintiff

        filed a motion for summary judgment with respect to Zurich’s duty to defend one of the

        actions and the trial court stayed briefing on the motion to permit limited discovery

        concerning a late notice defense asserted by defendants. As part of discovery, defendants

        sought the production of several documents that plaintiff claimed were privileged. The trial

        court ordered plaintiff to turn over the documents, and plaintiff refused. The trial court then

        held plaintiff in friendly civil contempt to permit plaintiff to appeal. For the reasons that

        follow, we reverse the trial court’s order requiring production of the documents and vacate

        the friendly contempt order.

¶2                                        BACKGROUND

¶3         We note that the parties’ briefs and portions of the record on appeal were permitted to be

        filed under seal. While we respect the parties’ wishes to keep confidential material private,

        our consideration of the issues on appeal necessarily requires us to discuss details of some of

        these documents. However, we include only those details necessary to our resolution of the

        issues on appeal.

¶4         The instant appeal is the third time the parties have been before this court with respect to

        the insurance coverage litigation: we considered the scope of releases executed by the parties

        in Motorola Solutions, Inc. v. Zurich Insurance Co., 2015 IL App (1st) 131529, and

        considered underlying plaintiffs’ requests to intervene in Motorola Solutions, Inc. v.

        Continental Casualty Co., 2015 IL App (1st) 131724-U. To the extent that these earlier




                                                    2
     No. 1-16-1465


        decisions discuss facts that are helpful to our understanding of the issues in the instant

        appeal, we repeat them here.

¶5         On February 18, 2011, plaintiff filed a complaint for declaratory judgment and breach of

        contract against a number of insurance companies, including Zurich and Associated; the

        complaint was amended on July 1, 2011, and again on February 22, 2013. Plaintiff sought for

        the insurers to provide it legal representation to defend plaintiff and/or coverage for defense

        costs under insurance policies issued by each of the insurers for four underlying personal

        injury actions in which claims were asserted against plaintiff.

¶6         The four underlying actions (the clean room cases) alleged that plaintiff was liable for

        injuries that children of plaintiff’s former employees and contractors allegedly sustained as a

        result of exposure to various chemicals in “clean rooms” in plaintiff’s manufacturing

        facilities. According to plaintiff’s complaint, from the 1960s through 2003, plaintiff operated

        facilities that manufactured, among other things, semiconductor products. These facilities

        included certain rooms that were designated as “clean rooms” in which the semiconductor

        products were manufactured, which “were designed to prevent dust and other similar

        materials from contacting semiconductor components during the manufacturing process.”

        The clean room cases all involved substantially similar allegations, in general alleging that

        hazardous or toxic materials were present in the “clean rooms” and that “either the father, the

        mother, or both worked in [plaintiff’s] clean room facility for some period of time before,

        and in a number of cases after, the [underlying] plaintiff child was born; often the period of

        employment [was] alleged to have continued through the in utero period. The [underlying]

        plaintiffs generally claim[ed] that the children were injured as a result of parents working in

        clean rooms” as a result of toxic exposure.


                                                      3
     No. 1-16-1465


¶7         Plaintiff’s complaint alleges that one or more of the insurer defendants had a duty to

        defend and/or pay defense costs in the clean room cases and that, by failing to do so, the

        insurers had breached their obligations to plaintiff under the insurance policies.

¶8         Both of the defendants in the instant appeal filed answers and affirmative defenses and

        included counterclaims in which they alleged that plaintiff had released all of its claims for

        coverage for the clean room cases in settlement agreements and releases that the parties had

        executed in 2003. The parties then engaged in litigation concerning the scope of the releases,

        which culminated in a bench trial on the issue in December 2012 and defendants’ first appeal

        before this court in 2015, in which we affirmed the trial court’s finding that the releases did

        not encompass the claims in the clean room cases. See Motorola Solutions, Inc. v. Zurich

        Insurance Co., 2015 IL App (1st) 131529. During the pendency of the appeal, the trial court

        stayed all action in the coverage litigation. However, the underlying plaintiffs in one of the

        clean room cases sought to intervene in the coverage litigation in order to seek a modification

        of a protective order covering discovery that had been conducted concerning the scope of the

        releases. The trial court declined to assert jurisdiction on the motion to intervene in light of

        the order staying the proceedings, and the appeal of that order was the basis for our second

        decision in this matter. See Motorola Solutions, Inc. v. Continental Casualty Co., 2015 IL

        App (1st) 131724-U.

¶9         According to plaintiff’s brief, while the issue concerning the scope of the releases was

        being litigated, plaintiff was “effectively denied a defense” of the clean room cases “for

        several years.” During that time, the underlying clean room cases were proceeding, and on

        September 3, 2015, plaintiff filed a motion for summary judgment against Zurich, seeking a




                                                     4
       No. 1-16-1465


          declaratory judgment regarding Zurich’s duty to defend one of those underlying claims. 1 In

          response, Zurich filed a motion pursuant to Illinois Supreme Court Rule 191(b) (eff. Jan. 4,

          2013), seeking leave to take discovery concerning the timeliness of plaintiff’s notice to

          Zurich prior to responding to plaintiff’s summary judgment motion. The trial court granted

          Zurich’s motion on November 12, 2015, but ordered the parties to meet and confer about the

          scope of discovery and the entry of a protective order. The parties negotiated an agreed

          protective order, which the trial court entered on January 12, 2016.

¶ 10         The discovery sought by Zurich, later joined by Associated, included two categories of

          documents at issue on appeal. One consisted of documents pertaining to plaintiff’s clean

          room safety program (CRSP documents). In the 1990s, a number of lawsuits had been filed

          against IBM, a competitor of plaintiff’s, concerning alleged birth defects found in children

          whose parents worked in the manufacturing process in creating semiconductors in IBM’s

          clean room facilities. According to plaintiff, “[plaintiff], as a prudent company also operating

          in that manufacturing sector, engaged counsel and formed a working group to conduct an

          analysis of [plaintiff’s] practices in and risks arising from its clean rooms.” This was known

          as plaintiff’s “Clean Room Safety Program.” The efforts of the program resulted in the

          creation of the CRSP documents in 1996, reports prepared by, or at the direction of,

          plaintiff’s outside counsel. These CRSP documents had been sought by defendants since

          discovery began in the coverage litigation, with plaintiff withholding the documents on the

          basis of both the attorney-client privilege and the work product doctrine. Production of these

          documents has also previously been considered by this court on appeal, where we affirmed

          the trial court’s finding that the CRSP documents were not relevant to the issue of



             1
              According to the parties, the underlying claim has since been settled.
                                                          5
       No. 1-16-1465


          determining the scope of the releases in the first appeal. See Motorola Solutions, 2015 IL

          App (1st) 131529, ¶¶ 135-42. Documents concerning plaintiff’s knowledge of the clean room

          risks are also of great interest to the underlying clean room plaintiffs, who sought to

          intervene during the pendency of the first appeal in order to obtain access to documents

          covered by a protective order. 2 See Motorola Solutions, 2015 IL App (1st) 131724-U, ¶ 3.

¶ 11          The second category of documents sought by defendants concerned plaintiff’s 2003 sale

          of its semiconductor manufacturing business to a new entity, Freescale Semiconductor, Inc.

          In the course of that sale, plaintiff was required to file a United States Securities and

          Exchange Commission Form S-1 Registration Statement (S-1 documents). The form contains

          a section entitled “Risk Factors,” which informs potential investors about “significant risk

          factors currently known and unique to” the seller of the securities. In this disclosure, plaintiff

          stated:

                    “In the last few years, there has been increased media scrutiny and associated reports

                    focusing on a potential link between working in semiconductor manufacturing clean

                    room environments and certain illnesses, primarily different types of cancers ***

                    Because we utilize these clean rooms, we may become subject to liability claims.”

          Defendants sought access to the documents related to the S-1 securities filing.

¶ 12          In response to defendants’ discovery requests, plaintiff declined to produce the CRSP

          documents or the S-1 documents and, on January 20, 2016, defendants filed a motion to

          compel production of the documents. In the motion, defendants claimed that these documents

          were material evidence showing that plaintiff had been aware of the facts underlying the

          clean room actions since at least 1996 and that defendants intended to rely on this evidence to

              2
                 According to plaintiff, the underlying clean room plaintiffs again sought to intervene shortly
       after the trial court granted the Rule 191(b) motion for discovery but were again unsuccessful.
                                                          6
       No. 1-16-1465


          support their late notice defense. Defendants argued that under the Illinois Supreme Court

          case of Waste Management, Inc. v. International Surplus Lines Insurance Co., 144 Ill. 2d 178

          (1991), the attorney-client privilege and work product doctrines did not apply to shield

          production of such documents from plaintiff’s insurers. In its response, plaintiff contended

          that the CRSP documents were not prepared in connection with the defense of the clean room

          actions and that plaintiff did not learn until December 2007 that any individuals were

          considering pursuing any action against plaintiff, information which plaintiff promptly

          forwarded to its insurers.

¶ 13         On March 8, 2016, the trial court granted defendants’ motion to compel, ordering

          plaintiff to produce:

                       “All documents comprising the CRSP Notebook, as identified on the privilege

                 logs attached as Exhibits 2 and 17 to the Affidavit of Karen M. Dixon.

                       All communications to or from [plaintiff’s] legal and/or risk management

                 departments concerning the Clean Room Safety Program or any other assessments of

                 [plaintiff’s] potential liability for bodily injury claims arising out of the Clean Rooms

                 and/or the Clean Room Chemicals, Substances and Radiation.

                       All documents in the possession of [plaintiff’s] Corporate Insurance Department

                 (a/k/a risk management) that refer in any way to the Clean Rooms.

                       All documents, including all communications with [plaintiff’s] risk management

                 or legal department, concerning the disclosure of potential clean room related

                 liabilities to investors in *** December 2003 (the SEC S-1 Filing).

                       All documents/communications that refer in any way to potential clean room

                 related claims and/or liabilities that were received, sent, or created by [plaintiff’s]


                                                       7
       No. 1-16-1465


                    legal and/or risk management departments prior to [plaintiff’s] first notice to

                    Associated/Zurich.”

¶ 14            On March 29, 2016, plaintiff filed a motion for reconsideration or, in the alternative, for a

           finding of friendly contempt in order for plaintiff to appeal. On May 4, 2016, the trial court

           denied plaintiff’s motion for reconsideration and found plaintiff in friendly contempt for

           refusing to comply with its discovery order, imposing a $100 penalty. This appeal follows. 3

¶ 15                                                ANALYSIS

¶ 16            The instant appeal was filed pursuant to Illinois Supreme Court Rule 304(b)(5) (eff. Mar.

           8, 2016), which permits an interlocutory appeal of “[a]n order finding a person or entity in

           contempt of court which imposes a monetary or other penalty.” Here, the trial court found

           plaintiff in contempt of court and imposed a monetary penalty. Accordingly, we have

           jurisdiction to consider plaintiff’s appeal. “Because discovery orders are not final orders, they

           are not ordinarily appealable.” Norskog v. Pfiel, 197 Ill. 2d 60, 69 (2001). “However, it is

           well settled that the correctness of a discovery order may be tested through contempt

           proceedings.” Norskog, 197 Ill. 2d at 69. “When [a party] appeals contempt sanctions

           imposed for violating, or threatening to violate, a pretrial discovery order, the discovery order

           is subject to review. [Citation.] Review of the contempt finding necessarily requires review

           of the order upon which it is based. [Citation.]” Norskog, 197 Ill. 2d at 69.

¶ 17            On appeal, plaintiff argues that the trial court erred in ordering it to produce the CRSP

           documents and the S-1 documents. We note that before the trial court, plaintiff argued that

           the documents were shielded by both the attorney-client privilege and the work product

           doctrine; however, on appeal, plaintiff focuses only on the attorney-client privilege, and

                3
                 We note that Associated did not file a separate brief on appeal but joined in and adopted Zurich’s
       brief.
                                                            8
       No. 1-16-1465


          accordingly, we will do the same. “Although a trial court’s discovery order is ordinarily

          reviewed for a manifest abuse of discretion [citation], the proper standard of review depends

          on the question that was answered in the trial court [citation].” Norskog, 197 Ill. 2d at 70. “If

          the facts are uncontroverted and the issue is the trial court’s application of the law to the

          facts, a court of review may determine the correctness of the ruling independently of the trial

          court’s judgment.” Norskog, 197 Ill. 2d at 70-71. In the case at bar, the facts are

          uncontroverted and we are considering whether the trial court properly applied the law

          concerning privilege between an insured and its insurer to the uncontroverted facts.

          Accordingly, this is an issue of law that we review de novo. De novo consideration means we

          perform the same analysis that a trial judge would perform. Khan v. BDO Seidman, LLP, 408

          Ill. App. 3d 564, 578 (2011).

¶ 18                                       I. Waste Management

¶ 19         As the parties recognize, the primary case concerning this issue is our supreme court’s

          decision in Waste Management. Accordingly, we must consider the case, and its holding, in

          considerable detail. In Waste Management, the insureds owned and operated a hazardous

          waste disposal site that was the subject of a lawsuit alleging that the insured was responsible

          for personal injury and property damage arising from the migration of toxic waste (the Miller

          litigation). Waste Management, 144 Ill. 2d at 186. During the pendency of the Miller

          litigation, the prior owners of the hazardous waste disposal site filed suit against the insureds

          and the insureds filed a counterclaim, alleging negligent design, construction, and operation

          of the site (the Nunn litigation). Waste Management, 144 Ill. 2d at 186. The insureds

          obtained a $10.675 million judgment in their favor against the prior owners in the Nunn

          litigation and ultimately settled with some of them for $1.5 million. Waste Management, 144


                                                       9
       No. 1-16-1465


          Ill. 2d at 186. The insureds also retained counsel, defended, and settled the Miller lawsuit.

          Waste Management, 144 Ill. 2d at 186. After doing so, pursuant to their insurance policy, the

          insureds sought indemnification from their insurers for $2.15 million in settlement costs and

          $850,000 in defense costs, but the insurers denied coverage. Waste Management, 144 Ill. 2d

          at 186.

¶ 20         Both the insurers and the insureds filed declaratory judgment actions, seeking a

          determination of their respective rights and liabilities under the insurance policy. Waste

          Management, 144 Ill. 2d at 186. In their complaint, the insurers alleged that one reason for

          their denial of coverage for the Miller litigation was the insureds’ failure to advise them of

          the Nunn litigation, which the insurers alleged constituted a breach of the cooperation clause

          and other conditions of the insurance policy. Waste Management, 144 Ill. 2d at 187. The

          parties engaged in discovery and, during discovery, the insurers requested production of

          defense counsel’s files in the underlying Miller and Nunn litigations. Waste Management,

          144 Ill. 2d at 187. The insureds produced some of the requested documents from the Miller

          litigation but withheld others on the basis of the attorney-client privilege and work product

          doctrine; they did not produce any of the files from the Nunn litigation. Waste Management,

          144 Ill. 2d at 187. The trial court ordered the insureds to produce the files from the Miller

          litigation but denied the insurers’ request for production of the files from the Nunn litigation;

          the insureds refused to produce any additional documents, and the trial court found them in

          friendly civil contempt. Waste Management, 144 Ill. 2d at 187. The appellate court affirmed

          in part and reversed in part, and the supreme court granted the insureds’ petition for leave to

          appeal. Waste Management, 144 Ill. 2d at 187.




                                                       10
       No. 1-16-1465


¶ 21         The supreme court found that “the attorney-client privilege has no application in this

          case.” Waste Management, 144 Ill. 2d at 191. The court found both of the insurers’

          arguments to be equally significant and dispositive. Waste Management, 144 Ill. 2d at 191.

          The court first considered the insurers’ argument that the cooperation clause of the insurance

          policy rendered the attorney-client privilege unavailable. The court noted that “[t]he scope of

          the duties imposed upon an insurer and its insured are defined and controlled by the terms of

          the insurance contract. Any condition in the policy requiring cooperation on the part of the

          insured is one of great importance [citation], and its purpose should be observed [citation].”

          Waste Management, 144 Ill. 2d at 191. The court further noted that “[t]he basic purpose of a

          cooperation clause is to protect the insurer’s interests and to prevent collusion between the

          insured and the injured party.” (Emphasis in original.) Waste Management, 144 Ill. 2d at 191.

¶ 22         The court looked to the cooperation clause contained in the insurance policy at issue,

          noting that “[t]he cooperation clause in this case imposes upon insureds the duty to assist

          insurers in the conduct of suits and in enforcing any right to contribution or indemnity

          against persons potentially liable to insureds. Further, the policy provides that insurers are

          entitled to conduct any claim, in the name of insureds, for indemnity or damages against

          persons, and that insureds ‘shall give all such information and assistance as the insurers may

          reasonably require.’ ” Waste Management, 144 Ill. 2d at 192. The court found:

                       “Here, the cooperation clause imposes a broad duty of cooperation and is without

                 limitation or qualification. It represents the contractual obligations imposed upon and

                 accepted by insureds at the time they entered into the agreement with insurers. In

                 light of the plain language of the cooperation clause in particular, and language in the

                 policy as a whole, it cannot seriously be contended that insureds would not be


                                                      11
       No. 1-16-1465


                 required to disclose contents of any communications they had with defense counsel

                 representing them on a claim for which insurers had the ultimate duty to satisfy.”

                 Waste Management, 144 Ill. 2d at 192.

          The court rejected the insureds’ argument that their duty to cooperate was rendered moot

          once the underlying lawsuit was terminated, finding that the “[i]nsureds’ duty to cooperate

          concerning matters covered by the insurance agreement did not end with the termination of

          the underlying lawsuit, but rather continues for as long as insureds seek to enforce its terms,

          and certainly to the point when insurers were requested to perform their end of the bargain.

          The fact that the parties are now adverse concerning the interpretation of such terms does not

          negate insureds’ contractual duty.” Waste Management, 144 Ill. 2d at 192. The court

          concluded that “[a] fair reading of the terms of the contract renders any expectation of

          attorney-client privilege, under these circumstances, unreasonable. We conclude that the

          element of confidentiality is wanting and, therefore, the attorney-client privilege does not

          apply to bar discovery of the communications in the underlying lawsuits.” Waste

          Management, 144 Ill. 2d at 192-93.

¶ 23         The supreme court found the insurers’ second argument, that the attorney-client privilege

          is unavailable to insureds under the common interest doctrine, to be “equally compelling.”

          Waste Management, 144 Ill. 2d at 193. The court noted that “[e]vidence scholars have

          variously stated that under the common interest doctrine, when an attorney acts for two

          different parties who each have a common interest, communications by either party to the

          attorney are not necessarily privileged in a subsequent controversy between the two parties.

          [Citations.] This is especially so where an insured and his insurer initially have a common

          interest in defending an action against the former, and there is a possibility that those


                                                      12
       No. 1-16-1465


          communications might play a role in a subsequent action between the insured and his insurer.

          [Citations.]” Waste Management, 144 Ill. 2d at 193-94. The court found that, “[c]learly, here

          both insurers and insureds had a common interest either in defeating or settling the claim

          against insureds in the Miller litigation. We believe that the communication by insureds with

          defense counsel is of a kind reasonably calculated to protect or to further those common

          interests.” Waste Management, 144 Ill. 2d at 194.

¶ 24         The court rejected the insureds’ argument that the common interest doctrine did not apply

          because the insurers provided no defense in the underlying suits, finding that “we believe that

          the doctrine may properly be applied where the attorney, though neither retained by nor in

          direct communication with the insurer, acts for the mutual benefit of both the insured and the

          insurer. [Citations.] It is the commonality of interests which creates the exception, not the

          conduct of the litigation.” Waste Management, 144 Ill. 2d at 194. The court found:

                       “On these facts, a less flexible application of the doctrine effectively defeats the

                 purpose and intent of the parties’ agreement. Insureds and insurers share a special

                 relationship; they are in privity of contract. In a limited sense, counsel for insureds

                 did represent both insureds and insurers in both of the underlying litigations since

                 insurers were ultimately liable for payment if the plaintiffs in the underlying action

                 received either a favorable verdict or settlement. To deny discovery in this instance

                 would be to disregard considerations of public policy which require encouragement

                 of full disclosure by an insured to his insurer.” Waste Management, 144 Ill. 2d at 194-

                 95.

          The court also found that, despite the fact that the insureds were not seeking attorney fees or

          settlement costs in the Nunn lawsuit, the insurers were still entitled to the files in that suit


                                                        13
       No. 1-16-1465


          because the insureds’ position “overlooks insurers’ interest in any potential recovery for

          contribution from the prior owners of the site. Moreover, insureds’ duty to cooperate with

          insurers is not limited solely to situations where insureds seek recovery of costs. We believe

          insurers and insureds shared a common interest in the conduct and outcome of the Nunn

          litigation as well as in the Miller litigation. Thus, insurers are entitled to the Nunn files.”

          Waste Management, 144 Ill. 2d at 195.

¶ 25         The supreme court concluded: “In sum, insurers’ entitlement to production of the files

          arises out of the contractual obligations and the common interest doctrine. Their right to

          complete disclosure is not only necessary to proper resolution of the pending lawsuit, but

          exists irrespective of the now adversarial nature of the parties’ relationship. The attorney-

          client privilege simply has no application in this case.” Waste Management, 144 Ill. 2d at

          195.

¶ 26                                      II. Cooperation Clause

¶ 27         In the case at bar, we agree with plaintiff that Waste Management does not encompass the

          situation present in the instant case, as Waste Management involved a factual scenario in

          which the insurers were seeking documents from the litigation for which the insureds were

          seeking indemnification. By contrast, in the case at bar, defendants have not sought the files

          from the litigation in the underlying clean room cases; instead, they are seeking files that

          were created years prior to any litigation. The difference this distinction makes becomes

          apparent when examining the cooperation clause of the Zurich policy, which Zurich claims is

          “virtually identical” to the one at issue in Waste Management. The cooperation clause

          requires plaintiff to “cooperate with the company and, upon the company’s request, assist in

          making settlements, in the conduct of suits and in enforcing any right of contribution or


                                                      14
       No. 1-16-1465


          indemnity against any person or organization who may be liable to the insured ***.” In

          Waste Management, this clause applied to the files the insurers sought, as they were files that

          concerned the conduct of the suits and the enforcement of rights of contribution or

          indemnity. By contrast, nothing in this cooperation clause touches on the disclosure of the

          contents of plaintiff’s CRSP documents, which were created by different attorneys over a

          decade before any lawsuit was filed. It is thus unclear how the reports created under the

          CRSP would assist defendants in “making settlements, in the conduct of suits, [or] in

          enforcing any right of contribution or indemnity against any person or organization who may

          be liable to the insured.” At most, such documents would help defeat plaintiff’s claims

          against defendants, which is not a subject included in the cooperation clause. The same is

          true of the S-1 documents, which are even further removed from the defense of any litigation

          for which plaintiff seeks coverage, as they are related to securities filings.

¶ 28         The language of the cooperation clause in the instant case further distinguishes the

          situation here from that present in Sharp v. Trans Union L.L.C., 364 Ill. App. 3d 64 (2006), a

          case that defendants rely on to expand the holding of Waste Management to encompass the

          present situation. In Sharp, after a number of lawsuits were filed against the insured based on

          allegations that the insured improperly sold consumer information to third parties in violation

          of the Fair Credit Reporting Act (FCRA) (15 U.S.C. § 1681 et seq. (2006)), the insurers filed

          a complaint for declaratory judgment, seeking a declaration that the lawsuits were not

          covered under the insurance policy. Sharp, 364 Ill. App. 3d at 69. Prior to the inception of the

          policy, the insured had been the subject of an administrative complaint filed by the Federal

          Trade Commission (FTC) based on alleged FCRA violations, and had also been the subject

          of several lawsuits containing similar allegations. Sharp, 364 Ill. App. 3d at 66-68. The


                                                        15
       No. 1-16-1465


           insurers claimed that the new lawsuits were based on the same acts, errors, violations, and

           omissions that were known prior to the inception of the policy because they were based on

           the same allegations as the prepolicy suits. Sharp, 364 Ill. App. 3d at 69. During discovery,

           the insurers sought “pre-policy documents that reflect, potentially reflect, or pertain to [the

           insured’s] and/or its general counsel’s knowledge and/or analysis of the FCRA, the FTC

           litigation, and private litigation arising from the same allegations as the FTC litigation.”

           Sharp, 364 Ill. App. 3d at 70. The trial court found that the policy’s cooperation clause

           required the insured to produce the documents, and the appellate court affirmed.

¶ 29           The appellate court looked to Waste Management and noted that, while Sharp involved

           documents that were created prior to the inception of the policy, it nevertheless found the

           Waste Management court’s analysis “instructive” (Sharp, 364 Ill. App. 3d at 72) because

           “[t]he broad policies articulated by the supreme court in Waste Management are equally

           applicable to our interpretation of the insurance contract at issue here” (Sharp, 364 Ill. App.

           3d at 72). The court found that “[o]ur application of principles of contract interpretation and

           the policies articulated in Waste Management reveals that the parties’ manuscripted

           insurance policy was negotiated and written to require the disclosure of [the insured’s]

           general counsel’s knowledge, work product, and communications regarding the pre-policy

           litigation.” Sharp, 364 Ill. App. 3d at 72.

¶ 30           The court pointed to exclusion (g) of the policy, which excluded “ ‘any Claim arising out

           of acts, errors, violations or omissions that took place prior to the effective date of this

           Insurance, if the [general counsel 4] of the Named Assured on the effective date knew that

           such acts, errors, violations or omissions might be expected to be the basis of a Claim.’ ”

               4
                The policy originally stated “Chief Financial Officer,” but the policy was amended to change the
       term to “General Counsel.” Sharp, 364 Ill. App. 3d at 68.
                                                          16
       No. 1-16-1465


          Sharp, 364 Ill. App. 3d at 68. The court found that the policy protected the insurers from

          insuring a known loss and “effectively defines known losses in terms of the general counsel’s

          knowledge by excluding errors and omissions that [the insured’s] general counsel knew

          might be the basis of a future claim. The only way to determine whether [the insured’s]

          general counsel knew that a particular act might be the basis of a claim would be to look at

          the general counsel’s legal reasoning and analysis of that act.” Sharp, 364 Ill. App. 3d at 73.

          The court further pointed to the policy’s cooperation clause, which provided that “ ‘[t]he

          Assured shall co-operate with the [insurers] in all investigations, including investigations

          regarding the application and coverage under this Policy.’ ” Sharp, 364 Ill. App. 3d at 68.

          The court found that reading the specific language of the cooperation clause together with

          exclusion (g), the insured “agreed to share the legal reasoning and analysis of its general

          counsel regarding whether there might be future claims based on its sale of target marketing

          information.” Sharp, 364 Ill. App. 3d at 73. The court noted that, “[a]lthough such

          information may be privileged because it is legal advice given by the general counsel to the

          corporation about whether its actions could result in liability [citation], [the insured], in

          agreeing to a policy with such particular language, has agreed to share this information with

          [the insurers] under these circumstances.” Sharp, 364 Ill. App. 3d at 73.

¶ 31         The court further found that its reading of the insurance contact was supported by Illinois

          public policy, which, as the Waste Management court had found, “encourag[ed] disclosure

          between insurer and insured, ‘with an eye toward ascertaining that truth which is essential to

          the proper disposition of a lawsuit.’ ” Sharp, 364 Ill. App. 3d at 73-74 (quoting Waste

          Management, 144 Ill. 2d at 190). Additionally, “[t]he supreme court has also emphasized that

          the purpose of an insurance contract is to protect the insured against loss, damage, or liability


                                                       17
       No. 1-16-1465


          arising from an unknown or contingent event and is applicable only to some contingency or

          act to occur in [the] future.” (Emphases in original and internal quotation marks omitted.)

          Sharp, 364 Ill. App. 3d at 74 (quoting Outboard Marine Corp. v. Liberty Mutual Insurance

          Co., 154 Ill. 2d 90, 103 (1992)). “If the insured knows that a loss will occur, it is not a

          contingency and would not be covered under an insurance contract absent an express

          agreement to do so. [Citation.] Thus, public policy would favor requiring an insured to share

          information with its insurer that would reveal whether a risk was known. The provisions of

          the insurance contract between [the insurers] and [the insured] promote these policies by

          requiring [the insured] to share information regarding whether its general counsel knew of

          particular losses. Accordingly, public policy supports enforcing the policy as written.” Sharp,

          364 Ill. App. 3d at 74.

¶ 32         In the case at bar, as noted, the insurance policy at issue is significantly different than that

          present in Sharp. The policy itself does not define a “known loss” in terms of plaintiff’s

          general counsel’s knowledge, nor does the cooperation clause expressly require plaintiff’s

          cooperation in investigations of coverage questions. Defendants do not even acknowledge the

          extremely different language of the policies in the two cases, despite the fact that the Sharp

          court expressly relied on the policy’s language in finding that disclosure was required.

          Furthermore, as plaintiff notes, the coverage issue in Sharp was the “known loss” exclusion,

          while the issue in the instant case was whether there was a timely notice of occurrence.

          Accordingly, we find Sharp of limited usefulness to the instant case.

¶ 33         As noted, in the case at bar, the factual situation is quite different from that present in

          Waste Management because, here, defendants are not seeking the files of the attorneys

          engaged in litigation of the underlying cases, as was the case in Waste Management. Instead,


                                                       18
       No. 1-16-1465


          defendants are seeking documents created well before any litigation had commenced. While

          “[a]ny condition in the policy requiring cooperation on the part of the insured is one of great

          importance [citation], and its purpose should be observed [citation]” (Waste Management,

          144 Ill. 2d at 191), this duty is not boundless. It must remain tied to the language of the

          cooperation clause itself. Here, the cooperation clause requires plaintiff to “cooperate with

          the company and, upon the company’s request, assist in making settlements, in the conduct

          of suits and in enforcing any right of contribution or indemnity against any person or

          organization who may be liable to the insured.” Defendants have not explained how either

          the CRSP documents or the S-1 documents would “assist in making settlements, in the

          conduct of suits and in enforcing any right of contribution or indemnity against any person or

          organization who may be liable to the insured.” Instead, defendants are seeking the

          documents to determine whether they can defeat plaintiff’s request for coverage as a result of

          a late notice. Consequently, we cannot find that Waste Management encompasses the

          situation in the case at bar with respect to the cooperation clause contained in the insurance

          policy.

¶ 34                                  III. Common Interest Doctrine

¶ 35         We also find that the Waste Management court’s discussion of the common interest

          doctrine is inapplicable to the instant case. In Waste Management, as noted, the supreme

          court found that “[c]learly, here both insurers and insureds had a common interest either in

          defeating or settling the claim against insureds in the Miller litigation. We believe that the

          communication by insureds with defense counsel is of a kind reasonably calculated to protect

          or to further those common interests.” Waste Management, 144 Ill. 2d at 194. The court

          further found that “[i]nsureds and insurers share a special relationship; they are in privity of


                                                      19
       No. 1-16-1465


          contract. In a limited sense, counsel for insureds did represent both insureds and insurers in

          both of the underlying litigations since insurers were ultimately liable for payment if the

          plaintiffs in the underlying action received either a favorable verdict or settlement. To deny

          discovery in this instance would be to disregard considerations of public policy which require

          encouragement of full disclosure by an insured to his insurer.” Waste Management, 144 Ill.

          2d at 194-95.

¶ 36          In the case at bar, however, as noted, there was no “underlying litigation” from which

          defendants are seeking disclosure. Instead, they are seeking documents prepared years before

          the first lawsuit was filed. While an insurer would certainly have an interest in

          communications concerning ongoing litigation against its insured, it would be straining the

          Waste Management court’s reasoning to stretch that commonality of interest to the situation

          that presents itself in the instant case. Consequently, we agree with plaintiff that Waste

          Management is inapplicable to the instant case.

¶ 37          We note that our decision does not necessarily mean that all of the documents withheld

          by plaintiff are properly shielded by the attorney-client privilege. “[I]t is the privilege, not the

          duty to disclose, that is the exception. [Citation.] Therefore, the privilege ought to be strictly

          confined within its narrowest possible limits.” Waste Management, 144 Ill. 2d at 190. Any

          documents withheld by plaintiff will need to be evaluated to determine whether they are

          privileged, as would ordinarily be done. In other words, our decision only means that the

          attorney-client privilege may apply, not that it does apply to each document withheld by

          plaintiff. That is a question more properly considered by the trial court in the first instance, as

          the trial court should conduct an in camera examination of the documents.




                                                        20
       No. 1-16-1465


¶ 38                                        IV. Peppers Doctrine

¶ 39         Plaintiff also argues that the trial court’s order requiring it to produce the documents is

          especially inappropriate because defendants are attempting to litigate facts that overlap with

          the facts at issue in the underlying litigation in contravention of the “Peppers doctrine,”

          which was set forth by our supreme court in Maryland Casualty Co. v. Peppers, 64 Ill. 2d

          187 (1976). Even though we have determined that the attorney-client privilege remains

          available to shield these documents, a discussion of plaintiff’s Peppers argument is

          nevertheless useful.

¶ 40         “Under the Peppers doctrine, ‘it is generally inappropriate for a court considering a

          declaratory judgment action to decide issues of ultimate fact that could bind the parties to the

          underlying litigation.’ ” Landmark American Insurance Co. v. NIP Group, Inc., 2011 IL App

          (1st) 101155, ¶ 59 (quoting Allstate Insurance Co. v. Kovar, 363 Ill. App. 3d 493, 501

          (2006)). “This proscription specifically precludes determination of any ultimate facts upon

          which liability or recovery might be predicated in the underlying case.” NIP Group, Inc.,

          2011 IL App (1st) 101155, ¶ 59. Thus, it is an abuse of discretion for a trial court in a

          declaratory judgment action to make such a determination. Peppers, 64 Ill. 2d at 196; Empire

          Fire & Marine Insurance Co. v. Clarendon Insurance Co., 267 Ill. App. 3d 1022, 1027

          (1994).

¶ 41         In the case at bar, we agree with defendants that the Peppers doctrine is inapplicable to

          the instant situation. The trial court is not being asked to “ ‘decide issues of ultimate fact that

          could bind the parties to the underlying litigation.’ ” NIP Group, Inc., 2011 IL App (1st)

          101155, ¶ 59 (quoting Kovar, 363 Ill. App. 3d at 501). Instead, the question before the trial

          court is simply whether defendants are permitted to view certain documents that plaintiff


                                                        21
       No. 1-16-1465


          claims are privileged in order to oppose plaintiff’s motion for summary judgment. As

          defendants note, “ ‘[t]he purpose of summary judgment is not to try an issue of fact but ***

          to determine whether a triable issue of fact exists.’ ” Schrager v. North Community Bank, 328

          Ill. App. 3d 696, 708 (2002) (quoting Luu v. Kim, 323 Ill. App. 3d 946, 952 (2001)). Thus, in

          deciding plaintiff’s motion for summary judgment, the trial court is asked only to determine

          whether there is a question of fact as to the issue of notice and is not asked to determine the

          issue of notice as a matter of law. We acknowledge that, in the future, the trial court may be

          asked to decide whether plaintiff provided a timely notice of occurrence. However, that is not

          the issue before this court today and, despite plaintiff’s urging to the contrary, we will not

          speculate as to whether the future issues that the trial court will be asked to determine violate

          the Peppers doctrine.

¶ 42         We also note that, in situations where the Peppers doctrine is at issue, a court will often

          order a stay of the coverage litigation pending the resolution of the underlying litigation. See,

          e.g., Sentry Insurance v. Continental Casualty Co., 2017 IL App (1st) 161785 (appeal of a

          trial court’s stay of insurance coverage litigation due to Peppers concerns). In the case at bar,

          however, neither party at oral argument indicated that it desired a stay. Furthermore, a stay

          would not seem to be in the parties’ best interest, as the resolution of the underlying litigation

          would have no effect on the late notice defense asserted by defendants, which concerns

          whether plaintiff timely provided notice of occurrence.




                                                       22
       No. 1-16-1465


¶ 43                                         CONCLUSION

¶ 44         For the reasons set forth above, we find that the situation present in the case at bar is not

          encompassed by our supreme court’s holding in Waste Management. Accordingly, the

          attorney-client privilege is available to shield any appropriate documents from discovery.

¶ 45         Reversed; contempt finding vacated.




                                                      23
