                        N0. 4-07-0972          Filed:   8-27-08

                      IN THE APPELLATE COURT

                            OF ILLINOIS

                          FOURTH DISTRICT

THE CITY OF COLLINSVILLE, ILLINOIS;    )    Appeal from
and PAUL W. MANN,                      )    Circuit Court of
          Plaintiffs and Counter-      )    Sangamon County
          defendants-Appellants,       )    No. 07MR170
          v.                           )
THE ILLINOIS MUNICIPAL LEAGUE RISK     )
MANAGEMENT ASSOCIATION,                )
          Defendant and Counter-       )
          plaintiff-Appellee,          )
          and                          )
OSBORN HOMES, INC., JOSEPH E. OSBORN, )     Honorable
and DONALD P. OSBORN,                  )    Robert J. Eggers,
          Counterdefendants-Appellees. )    Judge Presiding.
_________________________________________________________________

          JUSTICE McCULLOUGH delivered the opinion of the court:

          Plaintiffs, the City of Collinsville, Illinois, and

Paul W. Mann, appeal from a summary judgment order entered in a

declaratory judgment action in favor of defendant, the Illinois

Municipal League Risk Management Association (Association).

          On October 15, 2007, the Sangamon County circuit court

granted the Association's motion and denied a similar motion by

plaintiffs.   The controversy arose out of litigation filed in the

Madison County circuit court against plaintiffs and removed to

the United States District Court, Southern District of Illinois.

The litigation alleged plaintiffs violated the constitutional

rights of Osborn Homes, Inc., Joseph E. Osborn, and Donald P.

Osborn (Developers), under section 1983 of the Civil Rights Act
(42 U.S.C. §1983 (2000)).    The Sangamon County circuit court

found the Association had no duty to defend or indemnify plain-

tiffs.

          Plaintiffs appeal, arguing that the trial court erred

by granting the Association's motion for summary judgment.      We

reverse and remand for further proceedings.

          The Association is a nonprofit association that pro-

vides self-insurance programs to municipalities.    The City is a

member of the Association.    As a member, municipal employees are

represented in, and indemnified against, claims arising out of

the performance of their jobs.    Mann is an employee of the City.

          Effective December 31, 2005, the Association issued

certain coverage grants to the City pursuant to an "Inter-Govern-

mental Cooperation Agreement" (Agreement).    RMA 1 (Illinois

Municipal League Risk Management Association General Liability

Coverage Form) provides general liability coverage.    RMA 2

(Illinois Municipal League Risk Management Association Comprehen-

sive General Liability Coverage Form) provides an endorsement to

RMA 1.   RMA 3 (Illinois Municipal League Risk Management Associa-

tion Liability Exclusions Form) sets forth certain specified

liability exclusions applicable to RMA 1 and 2.    RMA 4 (Illinois

Municipal League Risk Management Association Public

Officials/Employees Liability Coverage Form) provides public

officials and employees liability coverage.


                                 - 2 -
          RMA 1 sets forth the following:

          "Subject to the conditions of form RMA L

          [Illinois Municipal League Risk Management

          Association Liability Definitions, Exclusions

          and Conditions] and of this form and any

          endorsements that may be added, the Associa-

          tion agrees with the [m]ember to the follow-

          ing:

          I. COVERAGE

          The Association will pay on behalf of the

          [m]embers all sums which the [m]embers shall

          become legally obligated to pay as damages,

          defined as 'ultimate net loss', because of

          'bodily injury' or 'property damage' to which

          this form applies; caused by an 'occurrence'

          within the 'coverage territory'."

          RMA 2 is an endorsement to RMA 1 and sets forth a

coverage extension to include "ultimate net loss" because of

"personal injury" or "advertising injury."    RMA 3 is an endorse-

ment to RMAs 1 and 2, and sets forth exclusions.   RMA 4 is a

separate form that provides for payment by the Association, on

behalf of the City, for all loss which the members shall be

legally obligated to pay because of a "wrongful act" occurring

during the coverage period.


                              - 3 -
          On July 10, 2006, the Developers filed a complaint in

the Madison County circuit court against plaintiffs seeking

monetary damages for alleged violations of the Developers'

constitutional rights under section 1983 of the Civil Rights Act

(42 U.S.C. §1983 (2000)).   The Developers alleged (1) the City

wrongfully failed or refused to act upon or approve the Develop-

ers' proposed subdivision plat and (2) Mann approved and actively

participated in the violations of the Developers' rights.    The

Association engaged the services of Schrempf, Blaine, Kelly, Mapp

& Darr, Ltd., to serve as counsel for Mann.   On August 22, 2006,

Mann removed the action from the Madison County circuit court to

the United States District Court, Southern District of Illinois.

          In a letter dated August 26, 2006, Martin Boyer Com-

pany, Inc., the claims administrator for the City on behalf of

the Association, advised plaintiffs that "this complaint involves

allegations which are clearly excluded from the coverage grants

[and] the Association will not become involved in either the

defense or indemnification of this case."   In a letter to Mann

dated May 21, 2007, CCMSI identified itself as the claims admin-

istrator for the City, on behalf of the Association, and advised

Mann it would cease payment for legal services (in the Develop-

ers' case) effective June 12, 2007.

          On September 28, 2006, plaintiffs filed a complaint for

declaratory judgment asserting the Association had a duty to


                               - 4 -
defend or indemnify plaintiffs in the section 1983 action.   On

April 20, 2007, the Association filed its counterclaim for

declaratory judgment asserting it had no duty to defend or

indemnify plaintiffs in the section 1983 action because RMA 1 and

RMA 2 were subject to exclusions set forth in RMA 3 applicable to

RMAs 1 and 2.   The Association relied upon the following exclu-

sion found in RMA 3:

                  "This coverage does not apply:

                                 * * *

                  (L) To actions for or arising out of

          condemnation; reverse or inverse condemna-

          tion; zoning and land use determinations; the

          taking, in whole or in part, of any real or

          personal property or any interest therein, or

          the right to the possession, benefit, use or

          enjoyment thereof; adverse possession; dedi-

          cation by adverse possession; trespass; or

          similar actions[.]"

          Further, the Association asserted that the coverage

granted to the City under RMA 4 was subject to the following

additional exclusions:

                  "The following additional exclusions

          apply only to coverages provided by this

          form.    The Association should not be liable


                                 - 5 -
          to make payments for 'loss' in connection

          with any claim made against the [m]embers

          based upon or arising out of the following:

                               * * *

                (7) actions for or arising out of con-

          demnation; reverse or inverse condemnation;

          the taking, in whole or part, of any real or

          personal property or any interest therein or

          the right to the possession, benefit, use of

          enjoyment thereof; adverse possession; dedi-

          cation by adverse possession; trespass; or

          similar action;

                               * * *

                (15) any violation of civil or constitu-

          tional rights."

          The Association asserted that the Developers sought

relief based upon "actions for or arising out of zoning and land

use and/or the right to the possession, benefit, use or enjoyment

of real or personal property and/or similar actions" excluded by

paragraph (L) contained in RMA 3, and paragraph (7) contained in

RMA 4.   Further, the Association asserted that any claim "deemed

to arise" under RMA 4 was also excluded by paragraph (15) con-

tained in RMA 4.   Additionally, the Association asserted that the

Developers' allegations did not involve an occurrence and did not


                               - 6 -
allege advertising injury, bodily injury, property damage, or

personal injury as defined in RMA L-1.

          Upon motions for summary judgment, the circuit court

entered declaratory judgment in the Association's favor.    This

appeal followed.

          Before addressing the merits of this appeal, we first

address the Association's motion to strike and dismiss, which we

ordered taken with the case.    The Association argues that this

court should strike plaintiffs' brief and dismiss this appeal

because plaintiffs "omit the key facts that are completely

devastating to their case" in violation of Supreme Court Rule

341(h)(6) (210 Ill. 2d R. 341(h)(6)).    Specifically, the Associa-

tion argues plaintiffs "make no mention, in the facts or argu-

ment, of the exclusions in [the Agreement]."

          "The striking of an appellate brief, in whole or in

part, is a harsh sanction" and is "appropriate only when the

alleged violations of *** procedural rules *** interfere with or

preclude review."   People v. DeRossett, 237 Ill. App. 3d 315,

325, 604 N.E.2d 500, 507 (1992).    We find that our review is not

hindered by the alleged error and decline to strike the Associa-

tion's brief.   The record on appeal contains all of the documents

necessary for our review.   Accordingly, defendants' motion to

strike and dismiss is denied.

          Plaintiffs argue the trial court erred by granting the


                                - 7 -
Association's motion for summary judgment because the Association

has a duty to defend or indemnify plaintiffs in the section 1983

action.

          The Association argues it has no duty to defend or

indemnify plaintiffs in the section 1983 action because the

section 1983 action "arise[s] out of zoning and land use determi-

nations, the taking in whole or in part of any real or personal

property, or any interests therein, the right to the possession

benefit, use or enjoyment of real or personal property, or

similar actions" for which exclusions apply.   The Association

does not challenge plaintiffs' use of section 1983 as a vehicle

to present plaintiffs' claims.    Instead, the Association contends

that various exclusions apply that relieve the Association of its

duty to defend or indemnify plaintiffs in the section 1983

action.

          Initially, the Association contends that plaintiffs

waived "any argument before this court that [plaintiffs] may have

had with respect to the applicability of the exclusions to the

[Developers'] suit" because plaintiffs (1) failed to "mention"

the exclusions in their appellate brief, (2) failed to "discuss

them" in their motion for summary judgment, and (3) did not

respond to the Association's motion for summary judgment.    The

Association cites no authority for the proposition that it is the

insured's burden to affirmatively demonstrate an exclusion is not


                                 - 8 -
applicable, and we have found none.     But see Pekin Insurance Co.

v. Miller, 367 Ill. App. 3d 263, 267, 854 N.E.2d 693, 697 (2006)

(the insurer has the burden to affirmatively demonstrate the

applicability of an exclusion).   Accordingly, we reject the

Association's argument.

          In support of the Association's argument that it has no

duty to defend or indemnify plaintiffs in the section 1983

action, it relies upon the following exclusion set forth in RMA

3:

               "This coverage does not apply:

                                * * *

               (L) To actions for or arising out of

          condemnation; reverse or inverse condemna-

          tion; zoning and land use determinations; the

          taking, in whole or in part, of any real or

          personal property or any interest therein, or

          the right to the possession, benefit, use or

          enjoyment thereof; adverse possession; dedi-

          cation by adverse possession; trespass; or

          similar actions[.]"

          Further, the Association relies upon the following

exclusion set forth in RMA 4:

               "The following additional exclusions

          apply only to coverages provided by this


                                - 9 -
           form.    The Association should not be liable

           to make payments for 'loss' in connection

           with any claim made against the [m]embers

           based upon or arising out of the following:

                                  * * *

                   (7) actions for or arising out of con-

           demnation; reverse or inverse condemnation;

           the taking, in whole or part, of any real or

           personal property or any interest therein or

           the right to the possession, benefit, use of

           enjoyment thereof; adverse possession; dedi-

           cation by adverse possession; trespass; or

           similar action[.]"

           The Association cites in support of its argument "a

number of Illinois decisions interpreting similar language" as

found in the Agreement in this case.      However, none of the cases

the Association cites allege a valid claim under section 1983.

           A trial court's grant of summary judgment is subject to

a de novo review upon appeal.      Outboard Marine Corp. v. Liberty

Mutual Insurance Co., 154 Ill. 2d 90, 102, 607 N.E.2d 1204, 1209

(1992).   Under Illinois law, an insured contracts for and has a

right to expect two separate and distinct duties from an insurer:

(1) the duty to defend him if a claim is made against him; and

(2) the duty to indemnify him if he is found legally liable for


                                 - 10 -
the occurrence of a covered risk.   Conway v. Country Casualty

Insurance Co., 92 Ill. 2d 388, 394, 442 N.E.2d 245, 247 (1982);

Empire Fire & Marine Insurance Co. v. Clarendon Insurance Co.,

267 Ill. App. 3d 1022, 1026, 642 N.E.2d 790, 793 (1994).    The

duty to defend an insured is much broader than the duty to

indemnify.   Crum & Forster Managers Corp. v. Resolution Trust

Corp., 156 Ill. 2d 384, 393-94, 620 N.E.2d 1073, 1079 (1993).      An

insurer may be required to defend its insured even when there

will ultimately be no obligation to indemnify.    Zurich Insurance

Co. v. Raymark Industries, Inc., 118 Ill. 2d 23, 52, 514 N.E.2d

150, 163 (1987).

           A liability insurer's duty to defend arises when the

insured tenders defense of a suit against him that alleges facts

which, when taken as true, raise the potential for coverage

occurring during the effective policy period.    Empire Fire &

Marine, 267 Ill. App. 3d at 1026, 642 N.E.2d at 793.   In

determining whether it has a duty to defend a suit, an insurer is

limited to comparing the bare allegations of the complaint with

the face of the policy of insurance.   Crum & Forster, 156 Ill. 2d

at 393, 620 N.E.2d at 1079.

           The threshold a complaint must meet to present a claim

for potential coverage, and thereby raise a duty to defend, is

minimal.   West Bend Mutual Insurance Co. v. Sundance Homes, Inc.,

238 Ill. App. 3d 335, 337-38, 606 N.E.2d 326, 328 (1992).    Any


                              - 11 -
doubts about potential coverage and the duty to defend are to be

resolved in favor of the insured.      West Bend, 238 Ill. App. 3d at

338, 606 N.E.2d at 328.

           In this case, the Developers sought to redress viola-

tions of constitutional rights.   Had the suit been based solely

on "zoning and land use determinations, the taking in whole or in

part of any real or personal property, or any interests therein,

the right to the possession benefit, use or enjoyment of real or

personal property, or similar actions" as the Association con-

tends, it would have involved purely state law questions and

would not have been cognizable in federal court, absent diver-

sity.   The Developers' suit against plaintiffs is a suit to

vindicate constitutional rights and was not excluded by paragraph

(L) set forth in RMA 3 or paragraph (7) set forth in RMA 4.

           In support of plaintiffs' argument, RMA 2 sets forth

the following:

                 "II. 'PERSONAL INJURY' *** LIABILITY

                 COVERAGE EXTENSION.

                 The Association will pay on behalf of

           the [m]embers all sums which the [m]embers

           shall become legally obligated to pay, de-

           fined as 'ultimate net loss', because of

           'personal injury' *** to which this coverage

           applies, sustained by any person or organiza-


                               - 12 -
          tion and arising out of the conduct of the

          [m]ember's business during the 'coverage

          period', within the 'coverage territory'."

          RMA L defines "personal injury" as an injury arising

out of "discrimination against an individual or group on any

basis prohibited by the law of Illinois or of the United States

of America" and committed during the coverage period.

          In further support of plaintiffs' argument, RMA 2 also

sets forth the following:

               "VIII. CIVIL/CONSTITUTIONAL RIGHTS ***

               COVERAGE EXTENSION.

               The Association will pay on behalf of

          the [m]embers all sums which the [m]embers

          shall become legally obligated to pay, de-

          fined as 'ultimate net loss', because of:

               (1) *** 'personal injury' *** arising

          out of a violation of civil or constitutional

          rights *** but only if such damages are

          sought in a civil suit brought under one or

          more of the following civil rights statutes:

          United States Code Title 42 [section] 1981,

          1982, 1983, 1985, or 1986[.]"

As stated above, RMA L defines "personal injury" as an injury

arising out of "discrimination against an individual or group on


                             - 13 -
any basis prohibited by the law of Illinois or of the United

States of America" and committed during the coverage period.

In this case, the Developers filed a complaint against plaintiffs

seeking monetary damages for alleged violations of the Develop-

ers' constitutional rights under section 1983 of the Civil Rights

Act.   See 42 U.S.C. §1983 (2004).

           The Association admits "there is no civil or constitu-

tional rights act violation exclusion that applies to [RMA 1 and

RMA 2] coverage grants."    However, the Association argues an

exclusion set forth in RMA 4 applies and "[f]or this reason, the

trial court's decision should be affirmed."

           RMA 4 is a separate form and not an endorsement to RMA

1, 2, or 3.    RMA 3 is an endorsement to forms RMA 1 and 2, but

not RMA 4.    RMA 4 provides for payment by the Association on

behalf of the City because of a "'wrongful act' occurring during

the 'coverage period'."    In this case, plaintiffs do not argue

the Association has a duty to defend or indemnify plaintiffs in

the section 1983 action because the Developers alleged a "wrong-

ful act" as contained in RMA 4.    Plaintiffs argue the Developers

alleged a "personal injury" or "property damage" as contained in

RMA 1 and 2.    An exclusion set forth in RMA 4 does not apply to

RMA 1 and 2; nor does an exclusion set forth in RMA 3 apply to

RMA 4.

           Because we have found the Developers alleged a "per-


                               - 14 -
sonal injury" as defined by the Agreement, which, if taken as

true, raises the potential for coverage during the effective

policy period and thus, the Association's duty to defend plain-

tiffs against the claims of the Developers, we need not discuss

whether the Developers also alleged "property damage" as defined

by the Agreement.

          For the reasons stated, we reverse the trial court's

judgment and remand for further proceedings consistent with the

views expressed herein.

          Reversed and remanded.

          APPLETON, P.J., and TURNER, J., concur.




                             - 15 -
