
                              No. 2--96--0467

                                                  



                                                



                                  IN THE



                        APPELLATE COURT OF ILLINOIS



                              SECOND DISTRICT







THE CINCINNATI COMPANIES,       )  Appeal from the Circuit

                                )  Court of Du Page County.

     Plaintiff-Appellee,        )

                                )

v.                              )  No. 93--MR--407

                                )   

WEST AMERICAN INSURANCE         )

COMPANY,                        )  Honorable

                                )  Bonnie M. Wheaton,

     Defendant-Appellant.       )  Judge, Presiding.  







     PRESIDING JUSTICE GEIGER delivered the opinion of the court:

     The defendant, West American Insurance Company (West

American), appeals from the April 8, 1996, order of the circuit

court of Du Page County granting summary judgment in favor of the

plaintiff, the Cincinnati Companies (Cincinnati), on its

complaint

for declaratory judgment.  The trial court ruled that West

American

was liable to Cincinnati for an equitable share of Cincinnati's

expenses in the defense and settlement of a personal injury

action

filed in the circuit court of Will County.  West American's

equitable share was determined to be $29,384.50, and judgment was

subsequently entered against West American in that amount.  We

affirm.

     In 1989, Lorren Kessel filed a personal injury lawsuit in

the

circuit court of Will County (the underlying action).  The

underlying action arose out of injuries Kessel sustained while

performing construction work at the Lockport train station. 

Among

the defendants named in the underlying action were Baird Land

Surveyors (Baird) and William Grady, doing business as B&D Home

Repair and Builders (B&D).

     Cincinnati had issued an insurance policy to another

contractor on the project, Champion Drywall.  This policy named

Baird as an additional insured.  Upon receipt of service of

process

in the underlying action, Baird tendered the action to its own

insurer, which, in turn, tendered the defense to Cincinnati. 

Cincinnati then retained counsel to defend Baird in the

underlying

action.

     West American had issued an insurance policy to B&D. 

Pursuant

to this policy, West American retained counsel to defend B&D in

the

underlying action.  This policy also named Baird as an additional

insured.  Baird, however, was not aware that it was an additional

insured under the West American policy.

     During the course of litigation, Baird propounded

interrogatories to B&D which specifically requested that B&D

identify the name of each insured under the West American policy.



In response to this inquiry, B&D failed to disclose that Baird

was

named as an additional insured.  Baird also requested that B&D

produce a copy of the West American policy.  Although B&D

responded

to the production request, it did not provide a copy of the

policy

endorsement that named Baird as an additional insured.  B&D's

responses to these discovery requests were signed by the attorney

retained by West American to defend B&D in the underlying action.





     The underlying action was scheduled for trial on three

separate occasions.  On January 27, 1992, which was the third

trial

date, B&D's attorney turned over a document to Baird's attorney

which disclosed that Baird was named as an additional insured

under

the West American policy.  Following this disclosure, Baird's

attorney discussed the matter with Baird's president, Barbara

Baird, and then immediately tendered the defense to West

American. 

West American rejected the tender.

     On February 17, 1992, the underlying action was settled

between the parties.  Cincinnati paid Kessel $30,000 on Baird's

behalf, and West American paid Kessel $30,000 on B&D's behalf. 

Prior to settlement, Cincinnati and West American entered into a

stipulation reserving Cincinnati's right to pursue a contribution

action against West American for reimbursement of the settlement

amount, as well as its attorney fees in defending Baird in the

underlying action.

     On June 25, 1993, Cincinnati filed the instant action

against

West American seeking a declaration that, pursuant to the

doctrine

of equitable contribution, West American was obligated to

reimburse

Cincinnati for the defense costs and indemnity payments which it

made on behalf of Baird in the underlying action.  On January 4,

1995, Cincinnati filed a motion for summary judgment.  In support

of its motion, Cincinnati attached the affidavit of Barbara

Baird. 

In her affidavit, Barbara Baird averred that (1) a company named

AVA handled all of Baird's insurance matters; (2) she had never

had

any insurance training or classes dealing with insurance; (3) she

was unaware that Baird was listed as an additional insured under

the West American policy until January 27, 1992; and (4) she

considered B&D responsible for the accident at the construction

site and preferred to have B&D's insurance pay for Baird's

defense

and settlement.

     On January 12, 1996, West American filed a response to

Cincinnati's motion for summary judgment, along with its own

cross-

motion for summary judgment.  On January 17, 1996, West American

also filed a motion to strike the affidavit of Barbara Baird,

alleging that is was conclusory and without foundation.

     On April 8, 1996, after a hearing on these motions, the

trial

court granted Cincinnati's motion for summary judgment and denied

West American's cross-motion for summary judgment.  As to West

American's motion to strike Barbara Baird's affidavit, the trial

court stated that it would only utilize "those aspects of the

affidavit that complied with the rules."  The trial court's order

provides, in pertinent part:

               "(1)  The court, aware of defendant's motion to

dismiss

     the affidavit of Barbara Baird and the [r]esponse thereto,

     utilized those aspects of the affidavit that complied with

the

     applicable rules.

               ***

               (3)  The [a]nswers to [i]nterrogatories provided

to Baird

     made no reference to the West American *** policy and

     foreclosed Baird's opportunity to make a reasonable judgment

     as to tender.

               (4)  The lack of tender must not be attributed to

Baird

     but to West American through the actions of *** B&D['s]

     attorney in the [underlying action].

               (5)  West America should share equitably in

settlement

     costs and for reasonable attorney fees incurred in [the

     underlying action] from the date of service of the

     [i]nterrogatories: January 2, 1991."

               On April 18, 1996, Cincinnati filed a motion

seeking the entry

of a money judgment against West American for its equitable share

of the settlement and defense costs of the underlying action. 

Cincinnati sought judgment in the amount of $15,000, which was

one-

half of the $30,000 settlement paid by Cincinnati in the

underlying

action, in addition to attorney fees in the amount of $14,384.50,

which represented one-half of the total attorney fees incurred by

Cincinnati in defending the underlying action after the date of

January 2, 1991.  On April 24, 1996, the trial court entered

judgment in favor of Cincinnati in the amount of $29,384.50. 

West

American filed a timely notice of appeal as to the trial court's

ruling on the cross-motions for summary judgment, as well as the

money judgment entered on Cincinnati's behalf.

     West American's first argument on appeal is that the trial

court erred in finding that, as a matter of law, it was liable to

Cincinnati for an equitable share of Cincinnati's settlement and

defense costs.  West American argues that an insurer has no

obligation to an insured absent tender of the claim by the

insured. 

West American contends that Baird never made such a tender in the

underlying action and that the trial court erred in attributing

this lack of tender to the conduct of B&D's attorney.

     The purpose of a motion for summary judgment is to determine

whether a genuine issue of triable fact exists (Purtill v. Hess,

111 Ill. 2d 229, 240 (1986)) and should be granted only when "the

pleadings, depositions, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment

as a matter of law" (735 ILCS 5/2--1005(c) (West 1994)). An order

granting summary judgment should be reversed if the evidence

shows

that a genuine issue of material fact exists or if the judgment

was

incorrect as a matter of law.  In re Estate of Herwig, 237 Ill.

App. 3d 737, 741 (1992).  The disposition of a summary judgment

motion is not discretionary and the standard of review is de

novo. 

Quinton v. Kuffer, 221 Ill. App. 3d 466, 471 (1991).        

     In the context of insurance law, the doctrine of equitable

contribution permits an insurer who has paid the entire loss to

be

reimbursed from other insurers who are also liable for the loss. 

Aetna Casualty & Surety Co. v. James J. Benes & Associates, Inc.,

229 Ill. App. 3d 413, 417 (1992).  This rule is applied in cases

where one insurer has paid a debt equally owed by other insurers.



Benes, 229 Ill. App. 3d at 417.  The fact that an insurer

undertakes the burden of a full settlement payment prior to a

possible judgment does not mean that the insurer is a volunteer

and

the insurer, therefore, is not precluded from recovering

contribution from other insurers liable for the same loss. 

Benes,

229 Ill. App. 3d at 417.

     West American does not contest the fact that Baird was named

as an additional insured under the West American policy and was

covered for the construction accident alleged in the underlying

action.  Rather, West American argues that the doctrine of

equitable contribution does not apply in the instant case because

Baird never tendered the defense in the underlying action to West

American.  Relying on Institute of London Underwriters v.

Hartford

Fire Insurance Co., 234 Ill. App. 3d 70, 80 (1992), West American

argues that an insurer's coverage obligations under an insurance

policy are not triggered until the insured actually tenders the

defense in an action that falls within the policy's coverage.

     In Institute of London, Great Lakes was the named insured on

a policy of insurance issued by Hartford, and an additional

insured

on a policy issued by the Institute.  234 Ill. App. 3d at 71. 

After a lawsuit was filed against Great Lakes, Great Lakes

tendered

the defense of the suit to the Institute.  Institute of London,

234

Ill. App. 3d at 72.  Great Lakes never tendered the defense of

the

suit to its own insurer, Hartford.  Institute of London, 234 Ill.

App. 3d at 72.  After Institute defended Great Lakes and settled

the underlying action, it filed a declaratory judgment action

against Hartford for reimbursement of 50% of the settlement

amount. 

Institute of London, 234 Ill. App. 3d at 71.  The trial court

granted summary judgment in favor of Hartford.  Institute of

London, 234 Ill. App. 3d at 71.

     On appeal, the appellate court affirmed the trial court's

decision, finding that Hartford was not obligated to contribute

to

the settlement because Great Lakes had tendered the defense to

the

Institute, rather than Hartford.  Institute of London, 234 Ill.

App. 3d at 78-80.  The court held that, in instances where two

insurance policies potentially apply to a loss, the insured may

elect which insurer it desires to defend and indemnify the claim

by

tendering the defense to that insurer and not the other. 

Institute

of London, 234 Ill. App. 3d at 78-80.  Such an election

forecloses

the settling insurer from obtaining contributions from the

nonsettling insurer.  Institute of London, 234 Ill. App. 3d at

80. 

The court also held that coverage cannot be triggered by tender

from a rival insurer.  Institute of London, 234 Ill. App. 3d at

80.

     This court has rejected the holding in Institute of London

and

has adopted a different test for determining when an insurer's

coverage obligation is triggered.  In Federated Mutual Insurance

Co. v. State Farm Mutual Automobile Insurance Co., 282 Ill. App.

3d

716, 726 (1996), we held that an insurer's duty to defend claims

potentially falling within the terms of a policy is triggered

when

the insurer has actual notice of the lawsuit, regardless of

whether

there has been an actual tender of defense by the insured.

     In Federated Mutual, Federated issued an insurance policy

covering a fleet of automobiles that a car dealership permitted

its

service customers to use while their vehicles were being

repaired. 

282 Ill. App. 3d at 718.  An employee of the car dealership

permitted her friend, Kathleen Gallagher, to drive one of these

vehicles.  Federated Mutual, 282 Ill. App. 3d at 718.  Gallagher

was subsequently involved in an accident and sued.  Federated

Mutual, 282 Ill. App. 3d at 718.  Gallagher contacted her own

automobile insurance carrier, State Farm, who in turn sent a

letter

to Federated notifying it of the suit and tendering the defense. 

Federated Mutual, 282 Ill. App. 3d at 718-19.  Federated then

filed

a declaratory judgment action seeking a determination that it had

no duty to defend Gallagher because she did not tender defense of

the lawsuit to Federated.  Federated Mutual, 282 Ill. App. 3d at

719.  The trial court granted summary judgment in favor of

Federated, ruling that actual tender of the insured was a

prerequisite to any duty to defend or indemnify.  Federated

Mutual,

282 Ill. App. 3d at 719.

     On appeal, we reversed the trial court's ruling and held

that

an insured need not tender the defense of a lawsuit to the

insurer

in order to trigger the insurer's duty to defend, noting:

     "If it has actual notice a lawsuit has been filed against

one

     of its insureds, the insurer understands its insured will

     require a defense.  Furthermore, based on its experience,

the

     insurer should assume its insured will desire the insurer

     provide such a defense. ***

     * * *

                                        *** [A]n insurer's duty

to defend claims potentially

     falling within the terms of a policy is triggered by actual

     notice of a lawsuit, regardless of whether the insured is

     sophisticated or unsophisticated--provided the insured has

not

     selected one insurer to provide an exclusive defense and

there

     is no prejudice to the insurer."  Federated Mutual, 282 Ill.

     App. 3d at 725-26.

     We therefore held that Federated's duty to defend had been

triggered at the time that it received actual notice of the

lawsuit

from State Farm.  Federated Mutual, 282 Ill. App. 3d at 727.  We

further concluded that there was no evidence that Gallagher made

a

coverage choice between State Farm and Federated, commenting:

     [T]he facts of this case do not indicate that Gallagher made

     a choice between State Farm and Federated.  There is no

     evidence in the record indicating that Gallagher knew she

     might be insured under the Federated policy.  The record

does

     not indicate that Gallagher investigated the matter,

concluded

     that she also might be insured by Federated, and then made

the

     decision to choose State Farm to defend her instead of

     Federated."  Federated Mutual, 282 Ill. App. 3d at 724.

               Our holding in Federated Mutual specifically

considered and

rejected the rule of law articulated in Institute of London,

commenting:

     "Unlike the court in Institute of London ***, we conclude

     that--despite any special experience, competence, or

resources

     the insured may possess--actual notice of a claim against

the

     insured may be sufficient to trigger the insurer's duty to

     defend.  ***  [A]ctual notice means notice sufficient to

     permit the insurer to locate and defend the lawsuit." 

     Federated Mutual, 282 Ill. App. 3d at 726.

     We therefore declined to follow Institute of London except

in those

instances where the insured has specifically selected one insurer

to provide an exclusive defense and there is no prejudice to the

insurer.  Federated Mutual, 282 Ill. App. 3d at 726.  Accord

Continental Casualty Co. v. Security Insurance Co., 279 Ill. App.

3d 815, 821 (1996).

     In light of the principles articulated in Federated Mutual,

we

conclude that West American had actual notice of the underlying

action so as to trigger its duty to defend and indemnify Baird. 

At

the time that the underlying action was filed, B&D tendered

defense

of the action to West American.  In response to this tender, West

American retained counsel to represent B&D.  Therefore, from the

very onset of the underlying action, West American was aware that

both of its insureds, Baird and B&D, were named as defendants. 

Such information provided sufficient notice for West American to

locate and defend the lawsuit on Baird's behalf.

     Furthermore, the facts herein demonstrate that at no time

did

Baird affirmatively select either Cincinnati or West American to

provide an exclusive defense.  As was the case of the insured in

Federated Mutual, there is no evidence in the record indicating

that Baird knew that it might be insured under the West American

policy.  The record does not indicate that Baird investigated the

matter, concluded that it might be insured by West American, and

then selected Cincinnati to defend it rather than West American. 

Moreover, we note that Baird may have been deprived of making

such

a choice due to the manner in which B&D responded to Baird's

discovery requests.  As noted above, such discovery responses

failed to disclose that Baird was named as an additional insured

on

the West American policy.  As soon as this fact was disclosed,

Cincinnati made an immediate tender of defense to West American

on

behalf of Baird.

     Furthermore, we do not believe that triggering West

American's

coverage obligation to Baird will result in undue prejudice. 

West

American had actual notice of the lawsuit from the very beginning

of the litigation in the underlying action.  Through its retained

counsel for B&D, West American actively participated in the

litigation and settlement of the underlying case.  Indeed, the

defense of Baird was tendered before West American settled the

underlying action.  The sole reason that the defense of Baird was

not tendered sooner was due to B&D's incomplete responses to

discovery.

     The existence of insurance is properly ascertained through

the

use of discovery procedures.  People ex rel. Terry v. Fisher, 12

Ill. 2d 231, 238-40 (1957).  In responding to Baird's discovery

requests, B&D's attorney was therefore under an obligation to

thoroughly investigate the records available and inquire as to

the

knowledge of all corporate agents.  Chicago Park District v.

Chicago & North Western Transportation Co., 240 Ill. App. 3d 839,

865-66 (1992).  An attorney retained by the insurer represents

both

the insurer and the insured.  Rogers v. Robson, Masters, Ryan,

Brumund & Belom, 74 Ill. App. 3d 467, 471 (1979).

     In the instant case, West American retained an attorney to

represent B&D in the underlying action.  As this attorney was

retained by West American, he was necessarily West American's

agent.  See Rogers, 74 Ill. App. 3d at 471.  B&D's attorney

therefore acted on West American's behalf when he responded to

Baird's discovery requests.  For this reason, we agree with the

trial court that Baird's inability to make a reasonable judgment

as

to tender can be attributed to West American and conclude that

West

American is liable for its equitable share of Cincinnati's

settlement and defense costs in the underlying action.

     West American's next argument is that the trial court erred

in

denying its motion to strike Barbara Baird's affidavit.  As

detailed above, the affidavit avers that Barbara Baird did not

know

that Baird was named as an additional insured under the West

American policy and that she would have preferred that West

American pay for Baird's defense and settlement.  West American

argues that these statements were conclusory and without

foundation.

     The sufficiency of an affidavit in support of a motion for

summary judgment is governed by Supreme Court Rule 191 (145 Ill.

2d

R. 191).  Rule 191 is satisfied " 'if from the document as a

whole

it appears the affidavit is based on the personal knowledge of

the

affiant and there is a reasonable inference that the affiant

could

competently testify to its contents.' "  Allied American

Insurance

Co. v. Mickiewicz, 124 Ill. App. 3d 705, 708 (1984), quoting

Burks

Drywall, Inc. v. Washington Bank & Trust Co., 110 Ill. App. 3d

569,

576 (1982).  The granting of a motion to strike a Rule 191

affidavit is within the sound discretion of the trial court. 

Lake

County Trust Co. v. Two Bar B, Inc., 238 Ill. App. 3d 589, 599

(1992).

     Contrary to West American's assertions, it appears that the

trial court did not consider the portions of the affidavit that

were improper under Rule 191.  The trial court made the following

ruling:  "Rather than strike the affidavit, I think what I would

prefer to do is simply disregard those provisions which do not

comply with the statute."   West American therefore essentially

received the relief it sought by filing the motion to strike. 

Rather than striking an affidavit in its entirety, a trial court

should only strike those matters which are improper.  Rinchich v.

Village of Bridgeview, 235 Ill. App. 3d 614, 622 (1992).  As West

American only objected to two of the affidavit's five paragraphs,

there was no need for the trial court to strike the entire

document.

     We additionally note that, even excluding Barbara Baird's

affidavit, the remaining pleadings and evidentiary materials

support the trial court's entry of summary judgment on behalf of

Cincinnati.  See Tower Oil & Technology Co. v. Buckley, 99 Ill.

App. 3d 637, 645 (1981).  As we have noted above, West American's

coverage obligations were triggered by its actual knowledge of

the

lawsuit.  See Federated Mutual, 282 Ill. App. 3d at 726. 

Notwithstanding the content of Barbara Baird's affidavit, the

record demonstrates that West American received actual knowledge

of

the lawsuit at the time that B&D made its tender of defense. 

     As its final argument, West American contends that, if it

does

owe Cincinnati reimbursement for indemnity and expense costs, it

should not be liable for costs incurred by Cincinnati prior to

January 28, 1992, the day on which Cincinnati formally requested

contribution.  As noted above, the trial court ruled that West

American was responsible for all costs incurred after January 2,

1991, which was the date that B&D's attorney served responses to

Baird's discovery requests.  West American argues that it should

not be held responsible for litigation costs incurred prior to

Cincinnati's tender, as it had no control over the determination

of

how these costs were incurred.  We disagree.

     West American's coverage obligations were not triggered at

the

time of Cincinnati's tender of defense, but at the time it had

actual knowledge of the underlying action.  Federated Mutual, 282

Ill. App. 3d at 726.  As we have already discussed, West American

possessed such actual knowledge at the time B&D tendered defense

of

the underlying action, as well as the time B&D's attorney

responded

to Baird's discovery requests concerning coverage under the West

American policy.  We therefore agree with the trial court's

determination that West American's obligations to defend and

indemnify also began at this time.  If West American desired to

have input or control over the manner in which litigation funds

were expended, it certainly could have become involved once it

was

aware of its coverage obligations to Baird under its policy. 

West

American's failure to do so, however, will not excuse its

obligations under the law.  

     For the foregoing reasons, the judgment of the circuit court

of Du Page County is affirmed.  

     Affirmed.

     THOMAS and RATHJE, JJ., concur.



