1 

 2015 IL App (5th) 140069 

 NO. 5-14-0069 

 IN THE 

 APPELLATE COURT OF ILLINOIS 

 FIFTH DISTRICT 

________________________________________________________________________ 

SINCLAIR OIL CORPORATION, ) Appeal from the 

 ) Circuit Court of 

 Plaintiff-Appellee, ) Madison County.

 ) 

v. ) No. 08-MR-602 

 ) 

ALLIANZ UNDERWRITERS INSURANCE ) 

COMPANY, f/k/a Allianz Underwriters, Inc., ) Honorable 

 ) Donald M. Flack, 

 Defendant-Appellant. ) Judge, presiding. 

________________________________________________________________________ 

 JUSTICE MOORE delivered the judgment of the court, with opinion. 

 Justices Chapman and Schwarm concurred in the judgment and opinion. 

OPINION 

¶ 1 The defendant, Allianz Underwriters Insurance Company, formerly known as 

Allianz Underwriters, Inc. (Allianz), appeals, pursuant to Illinois Supreme Court Rule 

304(a) (eff. Feb. 26, 2010), the January 8, 2013, order of the circuit court of Madison 

County which granted a partial summary judgment in favor of the plaintiff, Sinclair Oil 

Corporation (Sinclair). In said order, the circuit court made a determination that Allianz 

breached its duty to defend Sinclair with respect to multiple underlying lawsuits and 

claims arising out of alleged environmental contamination of soil and groundwater in 

Hartford, as well as cleanup activities and alleged exposure to benzene-containing 

NOTICE

Decision filed 04/07/15. The 

text of this decision may be 

changed or corrected prior to 

the filing of a Petition for 

Rehearing or the disposition of 

the same.
2 

products as a result of such alleged contamination (the underlying lawsuits). We restate 

the issues necessary to resolve this appeal as follows: (1) whether an umbrella insurance 

policy issued by Allianz contained a "drop down" provision that required Allianz to 

defend Sinclair upon exhaustion of an underlying primary policy issued by the Home 

Indemnity Company (the Home policy); (2) whether the underlying policy contained 

aggregate limits of $500,000 for bodily injury and property damage; and (3) whether the 

information Sinclair provided to Allianz regarding payments under the Home policy and 

the nature of the claims set forth in the underlying lawsuits was sufficient to trigger 

Allianz's "drop down" duty to defend as a matter of law. For the following reasons, we 

affirm in part, reverse in part, and remand for further proceedings not inconsistent with 

this opinion. 

¶ 2 FACTS 

¶ 3 1. Undisputed Factual Background

¶ 4 A review of the record on appeal reveals the following facts, which are not in 

dispute. Sinclair owned and operated an oil pipeline near Hartford between 1979 and 

1990. During 1981 and 1982, there are four instances on record where the pipeline 

leaked or spilled. Sinclair ceased operation of the pipeline in 1984, but some petroleum 

remained dormant in the pipeline. When Sinclair evacuated the pipeline in 1990, Sinclair 

discovered that more petroleum had leaked from the pipeline during its dormant stage.1

 

 1

The parties agree that Sinclair's five discrete polluting events contributed to, at 

most, a tiny fraction of the contamination in the Hartford area when compared to the 
3 

¶ 5 Contamination in and around Hartford prompted multiple lawsuits filed in 

Madison County, beginning in 2003, which named Sinclair along with several other 

entities associated with pipelines and refineries in the area as defendants (the underlying 

lawsuits). The underlying lawsuits include claims for property damage2 and personal 

injury,3 as well as regulatory matters relating to administrative orders issued by the 

United States Environmental Protection Agency and the Illinois Environmental 

Protection Agency (EPA) for remediation of the contamination. 

¶ 6 The Allianz insurance policy at issue in this case is a commercial general liability 

umbrella policy with policy number AUL 5100556 (the Allianz policy), which was 

effective from July 31, 1981, to July 31, 1982. According to the schedule of underlying 

insurance appended to the Allianz policy, the primary commercial general liability policy 

 

contributions of other entities that owned and operated the large oil refineries around

Sinclair's pipeline. 

2

Sparks v. Premcor, No. 03-L-1053 (Sparks); Abert v. Alberta Energy, No. 04-L354 (Abert); Bedwell v. Premcor, No. 04-L-342 (Bedwell); Village of Hartford v. 

Premcor, No. 08-L-637 (Village of Hartford); Hopkins v. Premcor, No. 03-L-1053; and 

State of Illinois v. Premcor, No. 03-CH-459 (third-party complaint for contribution). 

3

Wright v. Apex Oil, No. 05-L-1210; Vostry v. Apex Oil, No. 07-L-1; 

Brzostowski v. Atlantic Richfield, No. 07-L-340; Schulte v. Apex Oil, No. 07-L-629; 

Jones v. A&E, No. 07-L-323; Smith v. Sinclair, No. 08-L-681; Peters v. Amoco, No. 09-

L-56 (Peters); and Johns v. Amoco, No. 09-L-136. 
4 

underlying the Allianz policy was issued by Home and was effective July 31, 1981, to 

July 31, 1984. It is the interplay between the Allianz policy, the Home policy, and the 

underlying lawsuits that is at issue on appeal. 

¶ 7 2. The Pleadings 

¶ 8 Sinclair initially filed a complaint for a declaratory judgment against Allianz in the 

circuit court of Madison County in 2008. However, the operative complaint for purposes 

of this appeal is the third amended complaint, filed September 20, 2011. The third 

amended complaint sets forth the details of each of the underlying lawsuits. With regard 

to the regulatory matters, the complaint alleges that Sinclair entered into an agreement, 

dated April 2004, to share the costs of remediating the contamination in and around 

Hartford with the other entities that had operated in the area. According to the complaint, 

between November 2005 and December 2006, Sinclair made payments pursuant to the 

agreement "in excess of $3,696,000." In addition, the complaint alleges that, as of the 

date of the complaint, Sinclair has "paid over $3 million" defending itself in the 

underlying actions. 

¶ 9 The complaint requests, inter alia, a declaratory judgment that Allianz has a duty 

to defend Sinclair with respect to the underlying actions, and that Allianz breached that 

duty by failing to defend Sinclair under a reservation of rights or seek a declaratory 

judgment with regard to coverage. Further, the complaint seeks a declaration by the 

circuit court that, because Allianz breached its duty to defend Sinclair with respect to the 

underlying actions, Allianz is estopped from asserting any defenses to coverage, and, as 

such, is required to indemnify Sinclair for all sums that Sinclair has or will become 
5 

legally obligated to pay as a result of the underlying actions. Alternatively, the complaint 

seeks a declaration that Allianz is legally obligated to indemnify Sinclair irrespective of 

its duty to defend. 

¶ 10 Allianz filed a counterclaim for a declaratory judgment that it had no duty to 

defend or indemnify Sinclair with regard to the underlying lawsuits, asserting that its 

policy contains no such duty. In addition, Allianz asserted several defenses to coverage, 

including inadequate notice, failure to make a "definite claim," horizontal exhaustion, and 

a pollution exclusion. On October 4, 2011, Sinclair filed a motion for partial summary 

judgment, seeking a declaration that Allianz has a duty to defend Sinclair in the 

underlying actions and that Allianz breached that duty, resulting in its being estopped 

from asserting any defenses to coverage. In reviewing the supporting documentation 

appended to the motion for partial summary judgment, we begin by noting that both the 

Allianz policy and the Home policy are attached to the motion.4

 We will set forth the 

relevant language of each policy in detail below as it becomes necessary to analyze the 

issues on appeal. 

¶ 11 3. The Wyoming Lawsuits 

¶ 12 Our recitation of the facts that can be determined from a review of the remaining 

 4

Sinclair's copies of the Allianz and Home policies differ slightly from Allianz's 

copies of these policies. However, the provisions that must be interpreted in order to 

resolve this appeal are identical in each party's copy, and there is no dispute as to the 

wording of these provisions. 
6 

attachments to Sinclair's motion will be presented in order to place those facts in a 

chronological perspective, rather than as they were presented to the circuit court. The 

affidavit of David Stice, a corporate attorney for Sinclair since 1991, with the exception 

of three years beginning in July of 1999, was presented to provide proof that Allianz was 

aware that the Home policy had been exhausted by prior settlements Home paid on behalf 

of Sinclair for the same policy that is at issue in the case at bar. In the affidavit, Mr. Stice 

avers that there were several lawsuits filed against Sinclair and others in the 1990s 

concerning "claims of bodily injury and/or property damage allegedly resulting from 

prior operations at Sinclair's Wyoming refinery (the Wyoming lawsuits)."5

 According to 

Stice's affidavit, one of the Wyoming lawsuits6 alleged both personal injury and property 

damage from exposure to materials from Sinclair's Wyoming refinery, while the other 

Wyoming lawsuits alleged property damage only. Through correspondence and phone 

calls, Allianz was kept apprised of developments in the Wyoming lawsuits and was 

invited to participate in settlement discussions, but declined. Stice's affidavit sets forth 

the details of Sinclair's settlement of each of the Wyoming lawsuits7 and states that legal 

 5

Albertson v. Dow Chemical Co. (Albertson); People of the State of Wyoming v. 

Little America Refining Co. (People of Wyoming); KN Energy, Inc. v. Sinclair Oil Corp.

(KN Energy); and United States v. Sinclair Oil Corp. (U.S. v. Sinclair). 

6

Albertson, supra.

7

According to Stice, Sinclair settled Albertson for $5.25 million and settled KN 

Energy for $1 million, plus certain benefits valued at $1.25 million. Sinclair settled 
7 

defense costs and fees for the Wyoming lawsuits exceeded $5 million. 

¶ 13 The record contains intermittent correspondence between Sinclair and Allianz 

regarding the Wyoming lawsuits. In letters from Allianz to Sinclair dated March 28, 

1991, August 13, 1991, and August 29, 1991, Allianz admitted that the Wyoming 

lawsuits implicated three Allianz policies, including the Allianz policy at issue in this 

case, effective July 31, 1981, to July 31, 1982. In these letters, Allianz states its position 

with regard to the Wyoming lawsuits, that the Allianz policy at issue is an excess policy, 

requiring exhaustion of all underlying policy limits, and that, in any case, the Allianz 

policy at issue contains a pollution exclusion. On March 23, 1992, Allianz sent Sinclair a 

letter opting not to participate in a declaratory judgment action Sinclair was preparing to 

commence against other insurance companies that had issued commercial liability

policies to Sinclair that were potentially implicated by the Wyoming lawsuits. 

¶ 14 On April 17, 1996, Sinclair sent a letter to Allianz enclosing "a copy of page 3 of 

the Settlement Agreement" between Home and Sinclair resolving coverage of the 

Wyoming lawsuits, "confirm[ing] that Home paid $3.5 million in total to Sinclair and the 

allocation by policy of the $3.5 million." According to the enclosed excerpt from that 

settlement agreement, Home and Sinclair agreed to allocate $500,000 of the settlement to 

the underlying Home policy at issue for the 1981-1982 policy period. All of the 

$500,000 was allocated to claims for property damage. The settlement agreement 

 

People of Wyoming and U.S. v. Sinclair by agreeing to perform corrective action near the 

Wyoming refinery and spent approximately $6 million performing said corrective action. 
8 

specifically shows that none of the $500,000 was allocated to claims for bodily injury. 

¶ 15 The record contains a copy of the full settlement agreement entered into by Home 

and Sinclair in order to resolve coverage disputes over the Wyoming lawsuits. However, 

there is no indication as to whether or when the full settlement agreement was provided

to Allianz. The "Settlement Agreement" states that Sinclair "owns and operates" a 

refinery in or near Evansville, Wyoming, and that disagreements have arisen between 

Sinclair and Home as to the application, if any, of the Home policy to insurance claims 

"arising out of alleged pollution or contamination at and emanating from the Refinery." 

The "Settlement Agreement" states that "demands have been made on Sinclair by *** 

government regulatory agencies *** as well as individuals and non-governmental entities

*** in connection with alleged contamination of soil, groundwater and air at and 

emanating from the Refinery." However, the "Settlement Agreement" does not delineate 

whether all of the claims were for property damage or if any of them were for bodily 

injury. 

¶ 16 In a largely redacted letter dated August 9, 1996, from Sinclair to Allianz, counsel 

for Sinclair states as follows: 

"[W]e have provided you with specific evidence from the Settlement Agreement 

between Home and Sinclair demonstrating that the property damage limits were 

paid by Home for the 7/31/81-82 policy year. Accordingly, exhaustion of the 

Home policy underlying Allianz has occurred. You indicate that you need 

additional information concerning 'the nature of the claims that have been paid, 

and how settlement sums have been allocated to the various policy years...' We 
9 

do not understand what additional information you are requesting because the 

information you are requesting has already been provided to you. We are glad to 

entertain a more specific request. For example, during a meeting on January 5, 

1996, in which your representatives *** were present, the nature of the claims and 

how settlement sums have been allocated to various policy years were discussed in 

specific detail. After the meeting, [your representatives] requested additional 

information from Sinclair which was provided to them in a letter dated January 11, 

1996. Relevant portions of the Settlement Agreement between the primary carrier, 

Home Insurance Company and Sinclair Oil we [sic] provided in the January 11, 

1996[,] letter and the April 17, 1996[,] letter also references the actions being 

settled and how the payments by Home are being allocated. 

With respect to damages, we have also previously provided you with a full 

breakdown. At this point, we do not understand what additional information you 

require. If you can be more specific, please let me know. In the January 5, 

1996[,] meeting and in subsequent letters we communicated to Allianz 

representatives the following dollar/damages information with extensive backup: 

 Defense costs...........................$3,656,100 

Litigation Liability.....................$10,449,000

 Future and past cleanup costs.........$14,761,272" 

Footnotes in the letter contain further breakdown of Sinclair's projected liability in the 

Wyoming lawsuits. According to the footnotes, Sinclair paid $5,250,000 "as settlement 
10 

in the toxic tort case of Albertson." The other figures are noted to be projections of 

defense, settlement, and remediation costs in the remaining Wyoming lawsuits. 

¶ 17 Other than the statements contained in the above-mentioned letters, the record 

contains no affidavit or other evidence indicating what information was provided to 

Allianz or any other specific details of the Wyoming lawsuits. In addition, the record 

contains no evidence showing a breakdown of payments made by Sinclair with respect to 

bodily injury versus property damage claims stemming from the Wyoming lawsuits. In a 

partially redacted letter dated October 29, 1996, from Allianz to Sinclair, counsel for 

Allianz stated, "Allianz does not necessarily agree with your analysis that the limits 

underlying the Allianz policy for the 1981-1982 term have been exhausted. We also do 

not necessarily agree with Home's position that their defense obligation has been relieved 

by their settlement." 

¶ 18 4. The Underlying Lawsuits 

¶ 19 We next set forth the evidence presented in Sinclair's motion for partial summary 

judgment which references the nature and status of the claims arising from the underlying 

lawsuits that were instituted as a result of the Hartford contamination. First, Sinclair 

attached the affidavit of its attorney, Joseph G. Nassif, who averred that Sinclair has 

provided "many updates" to Allianz regarding negotiations with other responsible parties 

and the EPA and "requested that Allianz pay the costs of Sinclair's participation." Mr. 

Nassif also attested to Sinclair's legal fees of "over 3 million" in the underlying lawsuits 

and provided an evidentiary foundation for numerous letters and emails between the 

parties that were also attached to the motion. Finally, Mr. Nassif's affidavit directed the 
11 

circuit court to a website that collaborated the fact that the underlying primary carrier, 

Home, was liquidated in 2003 and is insolvent. An order of liquidation for Home dated 

June 11, 2003, is also contained in the record. 

¶ 20 A review of the correspondence attached to the motion for partial summary 

judgment reveals that much of the communications contained therein are redacted. 

However, what follows are details that can be gleaned from these communications. On 

December 2, 2005, Sinclair sent a letter to AON Natural Resources Risk Services (AON) 

which provided information in relation to its pipeline leaks in Hartford. According to the 

letter, the EPA ordered many of the other entities affiliated with the contamination to take 

emergency response actions which commenced "as early as the Fall of 2003." Sinclair 

was added as a participant in the cleanup as of November 18, 2005. At the time of the 

letter, it appears there were two property damage lawsuits on file naming Sinclair as a 

defendant, one which was styled as a class action and one that was filed by a group of 

individuals, but not in class action form. However, from the letter itself, one is not able 

to discern to which specific lawsuits the letter is referring. 

¶ 21 On January 11, 2006, AON, on behalf of Sinclair, sent out a "Notice of 

Loss/Claim" to approximately 30 insurance companies, including Home and Allianz, 

listing five of the underlying lawsuits8 and stating that "these claims give rise to coverage 

under one or more of the insurance policies on the attached list" and purporting to be 

 8

Sparks, Bedwell, Abert, Village of Hartford, and EPA lawsuits; see footnote 2 for 

full names and case numbers. 
12 

"notice in accordance with the notice terms of each policy." The letter states that a 

compact disc is enclosed containing copies of the complaints in Sparks, Bedwell, and 

Abert, as well as the EPA administrative order and a document explaining the status of 

the litigation in Village of Hartford. According to the letter, a review of these documents 

shows that Sinclair has been named as a defendant in lawsuits by owners of property in 

Hartford who allege Sinclair contributed to cause a toxic plume which allegedly consists 

of an estimated four million gallons of petroleum and/or petroleum byproducts which lie 

beneath their property, and that said plume has caused property damage and bodily injury 

to persons living in Hartford. 

¶ 22 The remaining correspondence between the parties that is contained in the record 

took place between 2008 and 2010, between the time this action for declaratory judgment 

and the motion for partial summary judgment were filed. On November 12, 2008, 

Sinclair stated in a letter to Allianz that "[b]ased on the potential monetary exposure 

facing Sinclair and the money expended thus far, Allianz *** should step in and provide 

Sinclair the coverage afforded under the excess polic[y] identified in the enclosed 

complaint." On March 17, 2009, Sinclair stated in a letter that Allianz's umbrella 

coverage is triggered because the underlying Home policy was exhausted through 

payment of the policy limits, and enclosed a copy of the "Settlement Agreement" 

between Home and Sinclair in the Wyoming lawsuits. The letter states, "To date, no 

carrier has paid any amounts to or on behalf of Sinclair in connection with the underlying 

actions." 

¶ 23 A March 25, 2009, letter from Sinclair to Allianz attaches the complaint in the 
13 

Peters case and states that the complaint concerns the plaintiff's alleged workplace 

exposure to benzene. The letter states, "On behalf of Sinclair, we request defense and 

indemnification in the Peters case." A May 13, 2009, largely redacted email from 

Sinclair states, "We will provide what we believe to be consistent with our client's 

demand for coverage." On June 10, 2009, Sinclair provided Allianz with a report on 

settlement discussions with the Village of Hartford "[i]n our continuing effort to keep 

your clients informed of, and seek their participation in, settlement discussions with the 

underlying claimants." 

¶ 24 On November 11, 2009, Sinclair states, "We continue to request Allianz' *** full 

participation in defense and indemnification in the Wright case and, therefore, ask that 

you advise us as soon as possible of your client's position towards potential settlement." 

On May 7, 2010, Sinclair stated in a letter to Allianz, "It is particularly egregious that 

Allianz continues to refuse to pay Sinclair's defense costs, despite the fact that Sinclair 

has provided Allianz with clear evidence demonstrating that all coverage underlying the 

policy has been exhausted." (Emphasis in original.) On August 18, 2010, Sinclair asked, 

"[G]iven all the information we have provided to Allianz about the underlying actions as 

well as documents establishing Allianz' insurance obligations, what is Allianz' basis for 

not defending?" 

¶ 25 5. Proceedings and Orders of the Circuit Court 

¶ 26 After full briefing by the parties, oral argument on Sinclair's motion for partial 

summary judgment was held in the circuit court, the Honorable Barbara J. Crowder 

presiding, on July 31, 2012. During argument, counsel for Sinclair represented to Judge 
14 

Crowder that both the property damage and bodily injury aggregate limits of the Home 

policy were exhausted by virtue of the Wyoming lawsuits. According to Sinclair's 

counsel, the property damage limits were paid by Home and the bodily injury limits were 

paid by Sinclair. Counsel for Allianz indicated that Sinclair sought coverage for the 

underlying lawsuits from Home up to the point of its insolvency in 2003. Judge Crowder 

took the motion under advisement, and on January 8, 2013, entered a detailed order that, 

inter alia, partially granted Sinclair's motion for summary judgment, as further detailed 

below. 

¶ 27 First, Judge Crowder found that Allianz had a duty to defend Sinclair in the 

underlying actions pursuant to a "drop down" provision in its policy once the Home 

policy limits were exhausted so long as the claims bring the underlying actions within the 

coverage of the policy, and that the "claims listed" by Sinclair were for bodily injury and 

property and fall within the definition of "occurrence" found in the Home policy. Judge 

Crowder defined the second issue as "whether Sinclair established that the underlying 

Home [p]olicy was exhausted, or at least that it advised Allianz that Sinclair thought the 

Home policy was exhausted." Judge Crowder then found that the aggregate limits of the 

Home policy were $500,000 for each type of liability, reasoning that "these limits are 

clearly stated on the Schedule of Coverage and on the Certificate of Insurance for the 

Home policy." 

¶ 28 With regard to exhaustion, Judge Crowder determined that the payment by Home 

pursuant to the settlement of the Wyoming lawsuits exhausted the property damage limits 

of the underlying Home policy. Judge Crowder then recognized Sinclair's claim during 
15 

oral argument that it made payments in settlement of the Wyoming lawsuits that 

exhausted the bodily injury limits of the policy. According to Judge Crowder, "[e]ven if 

there was a question concerning the exhaustion of the bodily injury limits, Sinclair's 

alerting Allianz to the possibility of exhaustion advised Allianz of the need to take action 

or to be prepared to fulfill its duty for claims covering the 1981-82 policy period." 

¶ 29 As to the duty to defend, Judge Crowder found that when Sinclair first provided 

Allianz notice of the underlying lawsuits in January 2006, Allianz was required to offer a 

defense, make a reservation of rights, or file a declaratory judgment. Because it took 

none of these actions, Judge Crowder determined that, "[a]t a minimum," Allianz is liable 

to pay Sinclair's defense costs and reasonable attorney fees in the underlying actions after 

the date Sinclair provided notice in January 2006. Judge Crowder declined to grant a 

request for fees incurred prior to that date "at this time." Finally, although Judge 

Crowder found that Allianz "inexorably" breached its duty to defend, she stated that she 

was not convinced that the law requires Allianz to be estopped from raising coverage 

defenses, and reserved ruling on that issue pending further briefing by the parties.9

 

Judge Crowder ordered Allianz to pay Sinclair's past legal fees and defense costs for all 

of the underlying actions incurred after January 11, 2006, and to reimburse Sinclair's 

 9

It is important to note that this court declines to deliver an advisory opinion as to 

this issue, as it was reserved by the circuit court, and therefore not within the scope of our 

review. See People v. Dunmore, 2013 IL App (1st) 121170, ¶ 12 (appellate court will not 

render an advisory opinion (citing People v. Campa, 217 Ill. 2d 243, 269 (2005))). 
16 

ongoing legal fees and defense costs on a timely basis for those underlying actions that 

have not yet been resolved. 

¶ 30 On February 8, 2013, Allianz filed a motion to reconsider the circuit court's order. 

The circuit court, the Honorable Donald Flack presiding, entered an order on July 19, 

2013, denying the motion to reconsider. On January 24, 2014, the parties filed a joint 

motion for a finding, pursuant to Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010), 

that there is no just reason for delaying either enforcement or appeal of the January 8, 

2013, order granting, in part, Sinclair's motion for a partial summary judgment. The 

parties also requested a stay of the proceedings pending the outcome of the appeal. Judge 

Flack granted that motion on January 24, 2014, and Allianz filed a timely notice of 

appeal on February 18, 2014. 

¶ 31 ANALYSIS 

¶ 32 1. Standard of Review 

¶ 33 Because this is an appeal from an order granting, in part, a motion for partial 

summary judgment, our standard of review is de novo. Outboard Marine Corp. v. 

Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992). A circuit court should only 

grant a motion for summary judgment when there are no genuine issues of material fact 

and the moving party is entitled to judgment as a matter of law. Id. Summary judgment 

is a drastic remedy and should only be granted when the movant's right to the judgment is 

clear and free from doubt. Id. Summary judgment is not appropriate in situations where 

a reasonable person could draw different inferences from the facts contained within the 

record. Id. With these standards for our review in mind, we move to the first issue 
17 

presented by this appeal. 

¶ 34 2. Allianz Policy Language Regarding "Drop Down" 

¶ 35 The first issue on appeal is whether the Allianz umbrella policy contained a "drop 

down" provision which requires it to defend Sinclair in the event the underlying Home 

policy is exhausted.

10 Before turning to the policy language at issue, it is important to 

note the basic principles we use in interpreting an insurance policy. First, in construing 

an insurance policy, it is the job of this court to ascertain the intent of the parties. 

Outboard Marine Corp., 154 Ill. 2d at 108. In order to determine the meaning of the 

language of the policy and the intent of the parties, we must read the insurance policy as a 

whole, while giving consideration to the type of risk involved, the subject matter that is 

insured, and the purposes of the insurance contract. Id. If the language of the policy is 

unambiguous, we must give the language its plain and ordinary meaning. Id. It is only if 

the words in the policy are susceptible to more than one reasonable interpretation that we 

will find the language to be ambiguous and construe them in favor of the insured. Id. at 

108-09. 

¶ 36 The provisions of the Allianz umbrella policy that must be construed in order to 

determine whether Allianz had a "drop down" duty to defend Sinclair upon exhaustion of 

the limits of the underlying Home policy are as follows. The Allianz umbrella policy, 

under the heading "Insuring Agreements," section I, entitled "Coverage," states that "[t]he 

 10Allianz conceded this issue at oral argument. However, because the issue was 

fully briefed, we will set forth our analysis for the sake of clarity. 
18 

Company hereby agrees, subject to the limitations, terms and conditions hereinafter 

mentioned, to indemnify the Insured for all sums which the Insured shall be obligated to 

pay by the reason of the liability *** for damages on account of: A. Personal Injuries; B. 

Property Damage; C. Advertising Liability." In section II, entitled "Limits of 

Liability−Retained Limit," the Allianz policy provides as follows: 

"In the event of *** exhaustion of the aggregate limits of liability 

applicable to the underlying insurance (listed in the Schedule of Underlying 

Insurance hereof) by reasons of losses paid thereunder, this policy shall, subject to 

the terms and conditions of the underlying insurance, 

 *** 

 (b) in the event of exhaustion continue in force as underlying 

insurance." 

¶ 37 In addition, an amendatory endorsement to the policy, entitled "ASSISTANCE 

AND COOPERATION," states: 

"EXCEPT AS PROVIDED IN INSURING AGREEMENT II WITH RESPECT TO 

THE EXHAUSTION OF THE AGGREGATE LIMITS OF UNDERLYING 

POLICIES LISTED IN THE SCHEDULE OF UNDERLYING INSURANCE, THE 

COMPANY WILL NOT BE CALLED UPON TO ASSUME THE 

SETTLEMENT OR DEFENSE OF ANY CLAIM ***." (Emphasis added.)

¶ 38 Allianz argues that because the "Coverage" provision only contains a promise to 

indemnify Sinclair, no duty to defend Sinclair exists in any instance. We agree with the 

circuit court that this position is untenable. We must look at the terms of the policy as a 
19 

whole, and the plain language of the above-quoted policy provision states that if the 

primary insurance in the underlying schedule is exhausted by reasons of payment of 

losses, the Allianz policy will, "subject to the terms and conditions of the underlying 

insurance, *** continue in force as underlying insurance." The parties do not dispute that 

the Home policy was the only comprehensive general liability insurance in the schedule 

attached to the Allianz policy, and they do not dispute that the terms of the Home policy 

contained a duty to defend. Accordingly, the circuit court was correct in its 

determination that there is a drop down provision in the Allianz policy which required 

Allianz to defend Sinclair in the event of exhaustion of the aggregate limits of the Home 

policy. 

¶ 39 3. Aggregate Limits of Underlying Home Policy 

¶ 40 Having determined that the Allianz policy required Allianz to defend Sinclair with 

respect to the underlying lawsuits in the event of exhaustion of the aggregate limits of the 

Home policy, we must determine what the aggregate limits of the Home policy were. 

The parties disagree as to the meaning of the policy schedule and terms defining 

aggregate limits. While the circuit court agreed with Sinclair's position that the aggregate 

limit for all claims was $500,000, Allianz argues that the Home policy contains aggregate 

limits for bodily injury and property damage resulting from certain types of occurrences, 

and that the underlying lawsuits do not fall into the category of claims that contain 

aggregate limits. For a determination of this issue, we examine the underlying Home 

policy. 

¶ 41 In examining the underlying Home policy, we must first set forth a description of 
20 

the page of the policy entitled "SCHEDULE." A preamble paragraph to a chart 

purporting to show "Coverages" and "Limits of Liability" for "Each occurrence" and 

"Aggregate," as well as "Description of Hazards," states that "[t]he insurance afforded is 

only with respect to such of the following Coverages as are indicated by specific 

premium charge or charges. The limit of the company's liability against each such 

coverage shall be as stated herein, subject to all the terms of this policy having reference 

thereto." (Emphasis added.) The chart provides that, with respect to "Coverage ABodily Injury Liability," the "Limits of Liability" for "each occurrence" is "$500,000," 

and for "aggregate" is "$500,000." With respect to "Coverage B- Property Damage 

Liability," the chart also provides that the "Limits of Liability" for "each occurrence" is 

"$500,000," and "aggregate" is "$500,000." The "Description of Hazards" showing a 

premium paid include "Premises-Operations" and "Innkeepers." However, the schedule 

notes that "Independent Contractors" and "Completed Operations-Products" are included 

in the premium. 

¶ 42 Having set forth in detail the information contained within the "Schedule," we 

move to the terms of the policy that have "reference thereto." These terms are set forth in 

the policy as follows, with our emphasis added as to language that is critical to our 

analysis of the issue of the aggregate limits: 

 "III. LIMITS OF LIABILITY 

Regardless of the number of (1) insureds under this policy, (2) persons or 

organizations who sustain bodily injury or property damage, or (3) claims made or 
21 

suits brought on account of bodily injury or property damage, the company's 

liability is limited as follows: 

Coverage A- The total liability of the company for all damages, including 

damages for care and loss of services, because of bodily injury sustained by one or 

more persons as a result of any one occurrence shall not exceed the limits of 

liability stated in the schedule as applicable to 'each occurrence.' 

Subject to the above provision respecting 'each occurrence,' the total 

liability of the company for all damages because of (1) all bodily injury included 

within the completed operations hazard and (2) all bodily injury included within 

the products hazard shall not exceed the limit of bodily injury liability stated in the 

schedule as 'aggregate.' 

Coverage B- The total liability of the company for all damages because of 

all property damage sustained by one or more persons or organizations as the 

result of any one occurrence shall not exceed the limit of property damage liability 

stated in the schedule as applicable to 'each occurrence.' 

Subject to the above provision respecting 'each occurrence,' the total 

liability of the company for all damages because of all property damage to which 

this coverage applies and described in any of the numbered subparagraphs below 

shall not exceed the limit of property damage liability stated in the schedule as 

'aggregate.' 

 (1) all property damage arising out of premises or operations rated on a 

remuneration basis or contractor's equipment rated on a receipts basis, 
22 

including property damage for which liability is assumed under any incidental 

contract relating to such premises or operations, but excluding property 

damage included in subparagraph (2) below; 

 (2) all property damage arising out of and occurring in the course of 

operations performed for the named insured by independent contractors and 

general supervision thereof by the named insured, including any such property 

damage for which liability is assumed under the incidental contract relating to 

such operations, but this subparagraph (2) does not include property damage 

arising out of maintenance or repairs at premises owned by or rented to the 

named insured or structural alterations at such premises which do not involve 

changing the size of or moving buildings or other structures; 

 (3) all property damage included within the products hazard and all 

property damage included within the completed operations hazard. 

Such aggregate limit shall apply separately to the property damage described in 

subparagraphs (1), (2) and (3) above, and under subparagraphs (1) and (2), 

separately with respect to each project away from premises owned by or rented to 

the named insured. 

 Coverages A and B- For the purpose of determining the limit of the 

company's liability, all bodily injury and property damage arising out of 

continuous or repeated exposure to substantially the same general conditions shall 

be considered as arising out of one occurrence." (Emphasis added.) 
23 

¶ 43 Our reading of the above-quoted language from the Home policy leads us to 

conclude that in order to determine how a "per occurrence" limit is identified, as well as 

which claims have an "aggregate" limit as stated in the schedule, one must turn to the 

explanation of those terms which is contained within the policy itself. The schedule itself 

contains this caveat, directing the reader to "the terms of the policy which make reference 

thereto." Turning to the terms of the policy, it is clear that the language making reference 

to the schedule is intended to set forth the circumstances under which the "per 

occurrence" limit applies and the circumstances under which the "aggregate" limit 

applies. It is also clear that while the "per occurrence" limit is subject to the same 

definition for bodily injury and property damage, the language setting forth the 

circumstances under which the "aggregate" limit applies contains substantially different 

language. From this differing language, we invariably conclude that only certain types of 

claims are subject to an aggregate limit under the policy, and that there is a distinction 

made between the types of bodily injury claims and the types of property damage claims 

that are subject to an aggregate limit. Accordingly, Sinclair is incorrect in its position 

that all claims are subject to a $500,000 aggregate limit. However, as outlined in detail 

below, and illustrated in the chart that follows, Allianz is also incorrect in its 

interpretation of the language governing aggregate limits. 

¶ 44 Under the terms of the Home policy which specify the types of claims that have an 

aggregate limit, we first turn to the terms explaining the types of claims for bodily injury, 

under "Coverage A," that have aggregate limits. The language explaining the limits of 

liability for "Coverage A," which is bodily injury, states that liability for bodily injury 
24 

included within the "completed operations hazard" and "products hazard" is not to exceed 

the limits set forth in the schedule as "aggregate." "Completed operations hazard" and 

"products hazard" have meanings that are specified in the definitions section of the 

policy. In contrast, the language explaining the limits of liability for "Coverage B," 

which is property damage, states that "all damages because of all property damage to 

which this coverage applies and described in any of the numbered subparagraphs below 

shall not exceed the limit of property damage liability stated in the schedule as 

'aggregate,' " and that the aggregate limit "shall apply separately to the property damage 

described in subparagraphs (1), (2) and (3) above, and under subparagraphs (1) and (2), 

separately with respect to each project away from premises owned by or rented to the 

named insured." 

¶ 45 From a comparison of the provisions governing "aggregate" limits with respect to 

bodily injury and property damage, we conclude that the only claims for bodily injury 

that are subject to an "aggregate" limit are claims arising under the "completed operations 

hazard" and "products hazard," as defined in the policy. All other claims for bodily 

injury are subject to the "per occurrence" limit. In contrast, all property damage claims 

are subject to an "aggregate" limit, with some types of property damage claims having a 

separate "aggregate" limit, as enumerated in the subparagraphs. As such, in order to 

determine which "aggregate" limit applies to a particular claim for property damage, one 

must determine the type of occurrence from which the claim for property damages arises. 

¶ 46 Based on the foregoing, potential aggregate limits for property damage under the 

Home policy can be broken down as follows: (1) property damage arising out of premises 
25 

or operations rated on a remuneration basis or contractor's equipment rated on a receipts 

basis, with a separate aggregate limit for such damage with respect to each project taking 

place away from the insured's premises; (2) property damage occurring in the course of 

operations performed by independent contractors, subject to some specified limitations, 

with a separate aggregate limit for such damage with respect to each project taking place 

away from the insured's premises; (3) property damage included within the products 

hazard and completed operation hazard; and (4) all other property damage. Accordingly, 

the circuit court erred in its determination that the underlying Home policy contained 

aggregate limits of $500,000 for all claims. Instead, the only construction of the Home 

policy that accounts for all of the policy language and construes the policy as a whole 

(see Outboard Marine Corp., 154 Ill. 2d at 108-09) requires a determination of whether 

any particular claim is subject to an aggregate limit according to the analysis set forth 

above, and as summarized in the following table: 

Bodily 

Injury: 

Bodily Injury arising 

from "Completed 

Operations Hazard"

$500,000 Aggregate 

Limit

Bodily Injury arising 

from "Products Hazard" 

$500,000 Aggregate 

Limit

All other Bodily 

Injury claims 

subject to "Per 

Occurrence" 

Limit Only

Property 

Damage: 

"Property damage 

arising out of 

premises or 

operations rated on a 

remuneration basis or 

contractor's 

equipment rated on a 

receipts basis"

$500,000 Aggregate 

Limit with a separate 

$500,000 Aggregate 

Limit for each project 

taking place away 

"Property damage 

occurring in the course of 

operations performed by 

independent contractors" 

subject to limitations 

specified in subparagraph 

(2) of section III "Limits 

of Liability"

$500,000 Aggregate 

Limit with a separate 

$500,000 Aggregate 

Limit for each project 

taking place away from 

Property Damage 

arising from 

"Completed 

Operations 

Hazard" and 

"Products 

Hazard"

$500,000 

Aggregate Limit

All other 

Property 

Damage

$500,000 

Aggregate 

Limit
26 

from insured's 

premises

insured's premises

¶ 47 4. Duty to Defend of Umbrella Carrier Under "Drop Down" 

¶ 48 Having made the foregoing analysis of the aggregate limits under the Home 

policy, we must decide whether the information Sinclair provided to Allianz regarding 

payments under the Home policy, as well as the nature of the claims set forth in the 

underlying lawsuits, was sufficient to trigger an excess carrier's "drop down" duty to 

defend as a matter of law. In Illinois, the duty to defend is much broader than the duty to 

indemnify. Outboard Marine Corp., 154 Ill. 2d at 125. Our courts have held that in 

order to determine whether an insurer's duty to defend has arisen, the court must compare 

the allegations of the underlying complaint to the policy language. Id. If the court 

determines, after construing the allegations of the complaint liberally in favor of the 

insured, that the allegations fall within, or potentially within, the policy's coverage, the 

insurer has a duty to defend the insured against the underlying complaint. Id. As such, 

this court has stated as follows: 

"When a complaint against an insured alleges facts that bring the action within or 

potentially within the scope of insurance policy coverage, the insurer taking the 

position that the complaint is not covered by the policy must defend the suit under 

a reservation of rights or seek a declaratory judgment that there is no coverage." 

Korte Construction Co. v. American States Insurance, 322 Ill. App. 3d 451, 457 

(2001) (citing State Farm Fire & Casualty Co. v. Martin, 186 Ill. 2d 367, 371 

(1999)). 
27 

¶ 49 In addition to the foregoing, this court has held that if an insured tenders to an 

insurer the defense of a cause that meets the above-quoted "four corners of the 

complaint" rule, and the insurer refuses to participate in the litigation, instead waiting for 

the insured to institute litigation against the insurer to determine the insurer's rights and 

duties, the insurer is estopped from raising noncoverage as a defense in that litigation. Id.

at 458. However, it is important to note that these rules and standards have been set forth 

in cases involving a primary insurer, in which the policy at issue contains a "first dollar" 

duty to defend.11 Accordingly, the test that has been set forth by our courts regarding the 

duty to defend assumes that the only prerequisite to the duty to defend is "coverage." 

Pursuant to this test, we find that Allianz's arguments related to whether a limitation or 

exclusion in its policy applies to bar coverage of the underlying lawsuits, including its 

arguments regarding timeliness of notice, horizontal exhaustion, the pollution exclusion, 

and whether Sinclair made a "definite claim," are the types of coverage questions of 

which, if the "drop down" duty to defend were triggered, Allianz was required to seek a 

judicial determination. As such, these arguments are irrelevant to our disposition of this 

appeal. However, in a case such as this, where the issue concerns an umbrella carrier, 

and the duty to defend under the policy is only triggered by the exhaustion of an 

 11Although the policy at issue in Korte had an "other insurance" clause that stated 

that " '[t]his insurance is excess over: [a]ny other insurance provided to you on a primary 

basis,' " the policy in Korte was not an "umbrella policy," but was a primary policy 

containing a first line duty to defend. Korte, 322 Ill. App. 3d at 454. 
28 

underlying policy pursuant to a "drop down" provision, we find that an additional 

threshold standard concerning exhaustion should be required before the umbrella insurer 

comes under a legal obligation to defend under a reservation of rights or to file a 

declaratory judgment action. 

¶ 50 In determining an appropriate threshold standard for triggering an umbrella 

carrier's duty, under a "drop down" provision, to defend its insured under a reservation of 

rights or to file an action for a declaratory judgment, we seek to balance Illinois public 

policy, which places the burden on the insurer to have coverage defenses adjudicated, 

with the expectations of the parties to an umbrella insurance contract such as the one at 

issue here. In so doing, our focus is on the information that must be provided to the 

umbrella carrier concerning the exhaustion of the underlying policy limits. We find our 

supreme court's decision in Cincinnati Cos. v. West American Insurance Co., 183 Ill. 2d 

317 (1998), to be instructive. In that case, the court was called upon to consider whether 

an insurer had a duty to defend its insured without a specific request for a defense. Id. at 

323-24. The supreme court held that "where the insured has not knowingly decided 

against an insurer's involvement, the insurer's duty to defend is triggered by actual notice 

of the underlying suit, regardless of the level of the insured's sophistication." Id. at 329. 

The court further defined "actual notice" as "notice sufficient to permit the insurer to 

locate and defend the lawsuit" (internal quotation marks omitted), in that "the insurer 

must know both that a cause of action has been filed and that the complaint falls within or 

potentially within the scope of the coverage of one of its policies." Id. at 329-30. 
29 

¶ 51 We find that a similar standard is appropriate in order to impose a duty on an 

umbrella carrier to defend the insured upon exhaustion of the underlying limits under a 

"drop down" provision. Accordingly, we hold that, in order to trigger such a duty to 

defend, the umbrella carrier must have "actual notice" of the exhaustion of the aggregate 

limits of the underlying insurance policy. We find that "actual notice" is notice sufficient 

to allow the insurer to make a preliminary determination that the limits of the underlying 

insurance policy have been exhausted as to the specific claim or claims for which the 

insured is seeking coverage. The umbrella insurer is entitled to more than an insured's 

allegation of exhaustion. At a minimum, the insurer must be in possession of some 

evidence of actual payments, made by the underlying insurance company or the insured, 

that meet or exceed the specific aggregate limits of the underlying policy that is 

applicable to the claim for which the insured is seeking coverage.12 Once the umbrella 

carrier is in possession of such evidence of payments made, the burden is on the insurer 

regarding exhaustion. At that point in time, if the complaint comes within the potential 

coverage of the excess policy, the umbrella insurer has a duty to defend the insured. 

 12It is important to emphasize that payments by the insured that exceed the 

underlying policy limits are also to be considered exhaustion. To require the payments to 

be made out of the primary insurer's coffers would preclude excess coverage under an 

umbrella policy when the primary insurer has become insolvent or has wrongfully 

withheld payment. See Emhart Industries, Inc. v. Home Insurance Co., 515 F. Supp. 2d 

228, 244 (D.R.I. 2007). 
30 

Accordingly, if the umbrella carrier wishes to litigate the issue of underlying exhaustion 

or assert any other defense to coverage, it must defend the insured under a reservation of 

rights or seek a declaratory judgment. See Korte, 322 Ill. App. 3d at 457 (citing Martin, 

186 Ill. 2d at 371). 

¶ 52 Having determined the appropriate standard to be employed in this case, we turn 

to the record to determine whether summary judgment in favor of Sinclair regarding 

Allianz's duty to defend is appropriate at this stage of the proceedings. We note at the 

outset that because we have found that the underlying Home policy contains aggregate 

limits for specific types of claims, and that we must differentiate the types of claims 

containing aggregate limits as between bodily injury and property damage, we must 

separate our analysis of Allianz's duty to defend accordingly. As such, we will first 

determine whether there is evidence in the record to determine, as a matter of law, that 

Allianz had some evidence of payments, either by Home or by Sinclair, of the aggregate 

limits of the bodily injury coverage of the Home policy so as to trigger Allianz's duty to 

defend upon notice of the underlying lawsuits containing claims of bodily injury.13 

Then, we will conduct the same analysis as to the underlying lawsuits containing claims 

for property damage. 

 13If it is determined that Allianz did have the duty to defend, there must also be 

evidence in the record to determine when the duty was triggered and when it received 

"actual notice" of each lawsuit in order to determine those defense costs for which 

Allianz is liable. 
31 

¶ 53 Having carefully considered the record, it is clear that there is insufficient 

evidence, at this stage in the proceedings, to determine whether Allianz had possession of 

some evidence of payments, either by Sinclair or by Home, of the $500,000 aggregate 

limits of the policy for claims of bodily injury. As set forth above, bodily injury claims 

only have an aggregate limit if they are included in the "completed operations hazard" or 

"products hazard," as those terms are elsewhere defined in the policy. The parties have 

not briefed the issue of whether the bodily injury claims arising from the Wyoming 

lawsuits fit within these definitions such that they would even have an aggregate limit. In 

addition, it is clear that the Home settlement covering the Wyoming lawsuits was 

allocated to property damage claims only. Further, although there is evidence that 

Sinclair made substantial payments of its own to settle the Wyoming lawsuits, there is no 

evidence of which payments were made for claims of bodily injury and whether Allianz 

was provided evidence of any such payments. Accordingly, there are genuine issues of 

material fact that must be resolved in order to determine whether the Wyoming lawsuits 

exhausted bodily injury limits contained within the underlying Home policy. 

¶ 54 Assuming that there was proof in the record that payments made for bodily injury 

claims arising from the Wyoming lawsuits concerned the "completed operations hazard" 

or "products hazard," in order for Allianz to have a duty to defend bodily injury claims 

out of the underlying lawsuits in Hartford, the oil spill leaks would have to also have 

arisen from the "completed operations hazard" or "products hazard." Otherwise, under 

the terms of the Home policy, bodily injury claims are subject only to a "per occurrence" 

limit. Again, the parties have not briefed the issue of whether the bodily injury claims 
32 

arising from the underlying lawsuit fell within these definitions such that they were 

subject to an aggregate limit. The only way in which there can be a finding that Allianz 

breached its duty to defend Sinclair with regard to the bodily injury claims is if Sinclair 

can prove that the bodily injury claims arising from the Wyoming lawsuits and the 

underlying lawsuits were subject to an aggregate limit under the Home policy, and that 

Allianz had possession of some evidence of payments made by either Sinclair or Home of 

$500,000 or more.14 There is insufficient evidence in the record to make these findings at 

this time. 

¶ 55 The facts in the record are much different with regard to the claims for property 

damage. Under our interpretation of the underlying Home policy, all property damage 

claims are subject to the $500,000 aggregate limit. The only caveat is that some property 

 14We note that there is evidence in the record that Sinclair has expended over $3 

million to defend the underlying lawsuits. Under the standards set forth in this opinion, 

Allianz would be required to defend Sinclair once it had possession of some evidence that 

Sinclair's payments on bodily injury claims exceeded the $500,000 "per occurrence limit" 

of the underlying policy. However, it is unclear from the record as to what part of 

Sinclair's payments have been for bodily injury claims, whether said payments exceed 

$500,000, and if so, whether Allianz had some evidence of said payments in its 

possession prior to filing its counterclaim for a declaratory judgment. If all of these 

conditions were met, a breach of the duty to defend would have occurred within a 

reasonable time after the information came into Allianz's possession. 
33 

damage claims have separate aggregate limits, as set forth above. The parties do not 

dispute that Home made a $500,000 payment in settlement of its coverage dispute with 

Sinclair over the Wyoming lawsuits, and specifically allocated that entire amount to 

claims of property damage. The record shows that Sinclair sent Allianz some evidence of 

this payment in the form of the settlement agreement in 1996, claiming that the 

underlying limits had been exhausted. Allianz does not dispute that it was in possession 

of this information. Accordingly, when Allianz received "actual notice" of the 

underlying lawsuits, which included claims for property damage, the only question that 

needed to be answered in order to ascertain exhaustion was whether the underlying 

lawsuits fell within one of the categories of claims listed in the Home policy as having a 

separate aggregate limit. Despite having possession of evidence of payments of the 

$500,000 aggregate limits for property damage, Allianz did nothing to seek information 

from Sinclair that would indicate whether this was the case. Accordingly, we find that 

Allianz breached its duty to defend Sinclair with regard to the property damage claims 

arising out of the underlying lawsuits.15 Thus, the circuit court was correct in finding that 

 15The circuit court reserved ruling on whether Allianz would be estopped from 

asserting policy defenses to coverage by virtue of its breach of the duty to defend. We 

decline to set forth an advisory opinion on this issue. See People v. Dunmore, 2013 IL 

App (1st) 121170, ¶ 12 (appellate court will not render an advisory opinion (citing People 

v. Campa, 217 Ill. 2d 243, 269 (2005))). 
34 

Allianz was liable for defense costs from the time it received actual notice of the lawsuits 

in 2006, but only those defense costs related to the claims for property damage. 

¶ 56 CONCLUSION 

¶ 57 In conclusion, and for the foregoing reasons, we find that the circuit court erred 

when it found adequate evidence in the record to prove, as a matter of law, that Allianz 

breached its duty to defend Sinclair on any claims for bodily injury arising from the 

underlying lawsuits. However, for the reasons stated herein, we affirm the circuit court's 

determination that Allianz breached its duty to defend Sinclair with respect to the 

property damage claims, and as such, is liable for defense costs Sinclair has incurred 

defending the property damage claims from the time it gave Allianz notice of said claims 

in 2006. Accordingly, we affirm in part, reverse in part, and remand for further 

proceedings not inconsistent with this opinion, in which the circuit court, inter alia, 

determines the amount of attorney fees attributable to the property damage claims in the 

underlying actions, and makes a determination, after further development of the record 

based on the analysis set forth above, regarding Allianz's duty to defend Sinclair with 

regard to the bodily injury claims. 

¶ 58 Affirmed in part and reversed in part; cause remanded. 
2015 IL App (5th) 140069 

NO. 5-14-0069 

IN THE 

APPELLATE COURT OF ILLINOIS 

FIFTH DISTRICT 

_______________________________________________________________________ 

SINCLAIR OIL CORPORATION, ) Appeal from the 

 ) Circuit Court of 

 Plaintiff-Appellee, ) Madison County.

 ) 

v. ) No. 08-MR-602 

 ) 

ALLIANZ UNDERWRITERS INSURANCE ) 

COMPANY, f/k/a Allianz Underwriters, Inc., ) Honorable 

 ) Donald M. Flack, 

 Defendant-Appellant. ) Judge, presiding. 

________________________________________________________________________ 

Opinion Filed: April 7, 2015

________________________________________________________________________ 

Justices: Honorable James R. Moore, J. 

Honorable Melissa A. Chapman, J., and 

 Honorable S. Gene Schwarm, J., 

 Concur 

________________________________________________________________________ 

Attorneys Daniel L. Bradley, DeFranco & Bradley, P.C., 141 Market Place, 

for Suite 104, Fairview Heights, IL 62208; Kristi S. Nolley, David M. 

Appellant Alt, BatesCarey, LLP, 191 North Wacker Drive, Suite 2400, 

 Chicago, IL 60606 

________________________________________________________________________ 

Attorneys Bernard J. Ysursa, Cook, Ysursa, Bartholomew, Brauer & Shelvin, 

for Ltd., 12 West Lincoln Street, Belleville, IL 62220; Joseph G. Nassif, 

Appellee Ron Hobbs, Husch Blackwell, LLP, 190 Carondelet Plaza, Suite 

 600, St. Louis, MO 63105 

________________________________________________________________________