THIRD DI VISI ON March 30, 2007 No. 1-06-0990 ALL STATE INSURANCE COMPANY, ) Appeal from the ) Circuit Court of Plaintiff-Appellee, ) Cook County. ) v. ) No. 04CH8274 ) JON AMATO, ) The Honorable ) Peter J. Flynn, Defendant-Appellant ) Judge Presiding. ) (Lea Goldblatt and the Estate of Noel ) Goldblatt, ) ) Defendants). )

JUSTICE GREIMAN deliv ered the opinion of

the cour t: Plaintiff Allstate Insurance Company (Allstate) filed a complaint seeking declar atory judgment that it did not owe a duty to def end or indemnify its insured, def endant Jon Amato, in a civil law suit filed

agains t him by

defenda nts Le a Goldbla

tt and the estate o f Noel Go ldblatt. Amato answered the complaint and filed an affir mative defense and several counterc laims. The trial court entered summary judgment orders in Allstate’s favor on its complaint and on the affirma tive def enses an d counter claims. A

mato appe als those

orders c ontending

that, unde

r his personal umbrella policy

(PUP) with Allstate, he was entitled to defense and indemnification of the under lyin g suit an d that he i s entitled

to reimbur

sement for costs a

nd fees he incurr

ed in defendi ng the u nderly ing suit w hile a determinat

ion of cov erage

was pend

ing. We affirm. Lea Goldblatt and the estate of Noel Goldblatt filed the underly ing suit against Amato and eight other defendants. The lawsuit alleg ed that various officers, directors, and af filiates of1-06-0990

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Goldblatt ’s Bargain Store s, Inc. (Gold blatt’s) , includin

g Amato , induced

Lea and Noel Goldblatt to pay $1.2 million in exchange for certain ownership interests in certain org anizations controlled by the office

rs, directors and affiliates. According to the underlying

complaint, Lea and Noel Goldblatt never r eceive d any

thing in r eturn for their pa

yme nts. More

specific ally , the Gold

blatts allege d that Ama

to fraud ulently induced t hem to inve st $375,00 0 by making i ntentiona l false statemen ts and misr

eprese ntations c oncerni

ng the so undness o f the inve stment; tha t Amato breached a con

tract whereby

the Goldb latts wer

e to rec eive a 25 % ownership inter est in a c ertain limited lia

bility company (the L LC) in exchang e for the ir $375,00 0 investme nt; that Ama

to breached his fiduciary

duty to the Goldblatts when, as a membe r and manager of the L

LC, he failed to deliver the Goldb latts’ 25%

ownersh ip intere st in that or

ganizat ion and re fused to provide the Goldblatts with access to that organization’s books and recor ds; that Amato violated certain Illinois secur

ities laws in schemin

g to def raud the Goldblatt s, making

untrue st atements and engaging in pra

ctices that deceived the Goldblatts; and that Amato committed common law fraud. The Goldblatts further requested dec laratory judg ment of their ownership interest in the LL C, the imposition of a constructive trust over all profits arising from Amato’s unlawful retention of that interest and an accounting of the LL C’s transactions. At the time

that the u nderly ing comp laint was

filed, Amato was c overed b y two separa

te insuranc e policie s issued by Allstate, a condomi

nium owne

r’s polic y a nd the PUP. A

t issue in this case is the la nguage o f the P UP, wh ich pr ovid es the follo wing: “Allstate will pay damag es which an insured person becomes legally obligated to pay beca

use of bodily injury , personal injury or property damage , subject to1-06-0990

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the terms, conditions and limits of this policy. Bodily injury , personal injury and property damagemust arise from a covered occurrence . We will not pay any punitive or exemplary damages, fines and penalties.” (Empha sis in original.) The PUP further provides that Allstate “will defend an insured person sued as the result of an

occurrencecovere d by

this policy .” (Empha sis in original.) The PUP defi nes occu rrence as: “an accident during the Policy period, including continuous and repeated exposure to substantially the same ge neral harmful conditions during the policy period, resulting in bodily injury , personal injury , or property damage .” (Empha sis in original.) Whether the occurrence giving rise to the underlying

complaint resulted in bodily injury or propert y da mage, a s define d by

the PUP, wa s not at issu

e in the de clarato

ry judgmen t action in the trial court and is not at issue in this appeal. Whether the occurrence resulted in personal injury , howeve

r, is at iss ue. Personal injury

is define d the PUP as

follows:

“ Personal injurymeans da mages r esulting from: (a) fa lse arre st; imprison

ment; wrongful de

tention; (b) wron gful en try ; invasion

of righ ts of occ upancy ; (c) libe l, slande

r, humilia tion, def amation o f chara

cter; inv asion of r

ights of privacy .” (Emphasis in original.) Th e P UP al so pr ov id es th at it do es no t a pp ly:

“1 . T o a ny occurrencearising out of any act or failure to act by

any person in performing f

unctions o f that pe

rson’s business

.1-06-0990

4 2. To an y occurrence arising out of a business or business property .” (Emphasis in original.) Amato tendered the underly ing complaint to Allstate seeking defense and inde mnification under the PUP. In Decembe r 2003, Allstate advised Amato that it did not owe any duty to defend or indemn

ify him under

the PUP. All state ass erted th e alleg ed injurie s were not cover ed beca use they did not arise fr

om an “occurrence” that re sulted in “bodily injury,” “property damage,” or “personal injury.”

Moreover, Allstate also raised several exclusions that barred c overage under the PUP, inc luding the exclusion of cove rage f or liabili ty a rising f rom an ins

ured’s b usiness activitie s. In March 2005, Allstate filed an a mended complaint for declaratory judgment alleging that it had no duty to defen d or indem

nify Amato for

the under

lyin g compla int. Aga in, Allsta te referred to the languag e of the PUP as justification for its denial of coverage. Amato answer ed All state ’s ame nded c ompl aint, allegi ng that he was e ntit led to covera ge under the PUP becau se a “pe

rsonal in jury ,” speci fically

“wrong ful dete

ntion” of the Goldb latts’ property, a

rose from his conduct. In addition, Amato ra ised an affirmative defense and seve ral counterclaims. The trial court granted Allstate’s motion for summary judgment on its declaratory judgment action on January 11, 2006, after concluding that the alleg ations in the underlying complaint did not trigger coverag e under the PUP. The court stated that it is “quite clear that what the policy wa s endeavoring to get at is wrong ful detention of the person, not wrongful detention of the property .” The court reasoned that each of the three categories of da mages of1-06-0990

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“person al injury ” is cent ered ar ound a co mmon theme . The tria l court c oncluded

that bec ause wrongful detention was included in the same cate gory as false arrest and imprisonment, wrongful detention was intended to cover wrongful dete ntion of a person and not wrongful detention of pr op er ty. Allstate’s motion for summary judg ment regarding Amato’s counte rclaims was granted on March 8, 2006. Amato appealed. Appeals from summary

judgment orders are reviewe d de novo

. Outboard Marine Corp. v. Liberty Mutual Insurance Co. , 154 Ill. 2d 90, 102 (1992). I n reviewing summary

judgment orders, appellate courts inquire “ ‘whether the pleadings, together with all other matters of record, pose any

genuine issue of material fact.’ ” Emtech Machining & Grinding, I nc. v. Transcontinental Insuranc e Co. , 296 Ill . App. 3d 626 , 628 ( 1998) , quot ing Dixon Distributing Co. v. Hanover Insuranc e Co. , 244 I ll. App. 3d 837, 840 ( 1993). “ Summary judgmen t is appropr iate whe n there i s no issue o f materi al fact a nd the movi

ng par ty’ s right to

judgmen t is clear and free from doubt.” Espinoza v. Elgin, Joliet & Eastern Ry. Co. , 165 Ill. 2d 107, 113 (1995). “ [I]f an

y is sue of ma

terial f act exists, then the t

rial cou rt will be d

eemed to have er red in granting summary

judgment.” Emtech , 296 Ill. App. 3d at 628. The court must consider the pleadings on file and construe them strictly against the movant and liberally in favor of the nonmoving party. Espinoza , 165 Ill. 2d at 113. “The appellate c ourt may aff irm the grant of summary judgmen t for any reason t hat appe ars in the

record , rega

rdless of whether that rea son is the reason relied upon by the circuit court.” Geary

v. Telular Corp. , 341 Ill. App. 3d 694, 702 (2003).1-06-0990

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Amato first contends that the court’s determination that the languag e “wrongful detention” in the PUP was not ambiguous and referred only to wrongful detention of a person and not to w

rongfu l detention of prope

rty was err oneous. A

mato arg ues that the langu

age is susceptible to two interpretations and should be construed in favor of cover age and that the court improperly based its dete rmination that the language was not ambig uous on the doctrine of ejusdem generis

. “A contract is ambiguous when its languag e is ‘ “susceptible to more than one meaning [citation] or is obscure in meaning through indefiniteness of expression.” ’ ” Berry man Transfer & Storage Co., I

nc. v. New Prime, Inc. , 345 Ill . App. 3d 859 , 862 ( 2004) , quot ing Shields Pork Plus, Inc. v. Swiss Valley Ag Service , 329 Ill . App. 3d 305 , 310 ( 2002) , quot ing Wald v. Ch icago Shippers Ass’n , 175 Ill. App. 3d 607, 617 (1988). “ ‘Ambig uous provisions or equivocal expressions where

by a n insurer seeks to l imit its liab ility will be construed most strongly a gainst the insurer and liberally

in favor of the insured.’ ” T.H.E. Insurance Co. v. Chicago Fireworks Manufacturing Co. , 311 Ill . App. 3d 73, 78 (19 99), q uoti ng Carrao v. Health Care Service Corp. , 118 I ll. App. 3d

417, 425 ( 1983). Nonethele ss, this pri nciple mu st y

ield to rul es of re asonable construction. Emtech , 296 Ill. App. 3d at 628. “When an insurance c ontract is unambiguous, the court must not consider any e vidence bey

ond the four corners of the policy for construing the contract.” T.H.E. Insurance Co. , 311 I ll. App. 3d at 77. Mor

eover, w hen the c ontract

is unambiguous, it should be enforced as written and this court will not speculate on the pur poses underlying

the provision. Coley v. State Far m Mutual Automobile Insurance Co. , 178 Ill. App. 3d 1077, 1082 (1989). In addition, langua ge of an insurance policy

“is not considered ambiguous1-06-0990

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merely bec ause a term is not defined within the policy or because parties can suggest creative possibilities for the term’s meaning.” Board of Education of Maine Township High School District No. 207 v. International I nsurance Co. , 344 Ill. App. 3d 106, 112 (2003). Again, the PUP provides coverage for “bodily injury

,” “property

damage” and “persona

l injury .” “Pers onal injur

y” includes damage s resultin

g from: “(a) false arrest; imprisonment; wrongf ul detention; (b ) w ro ng fu l e nt ry; in va si on of ri gh ts of oc cu pa nc y; (c) libe l, slande

r, humilia tion, def amation o f chara

cter; inv asion of r

ights of privacy .” Becau se the te

rm “wron gful de tention” is not def ined in the

PUP, Amato a

rgues t hat it is not speci fically

limited to w

rongfu l detention of a per

son, and that the tri al court improper ly adopted the construction most favorable to Allstate when it concluded that the use of “wrongful de te nt io n” in th e P UP wa s n ot in te nd ed to me an th e w ro ng fu l d et en ti on of pr op er ty. Reviewing the PUP as a whole, we find that the trial court was c orrect that the term “wrongful detention” unambiguously refers only

to wrongful detention of a person, not wrong ful detention of property . Each of the three groups of da mages under the heading of “personal injury” is center

ed around a common theme. By placing wrongful detention in the same g roup as false a rrest an d imprisonment, two te

rms which

are dir ectly related to the re straint of

a person , it is clear that the la

nguag e was inte

nded to me an the wr

ongful d etention of a per son and no t to mean wrongful detention of property . Furthermore, “property damage” is specifically

covered elsewhere in the PUP. If the PUP wer e indeed intended to apply to the wrongful detention of1-06-0990

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property, it is more logical that wrongful detention of property would be mentioned under the category of “property

damage,” rather than unde r the category

of “personal injury .” We observe that Amato is correct that the doctrine of ejusdem generis did not app ly in this case. See City

of East St. Louis

v. East St. L

ouis Fina ncial Adv isory Authority

, 188 Ill. 2d 474, 484 (1999) (the doctrine of ejusdem generis applies when a statute lists several classes of persons or things but also specifically provides that the list is not exhaustive). Nonetheless, we find that regardless of the doctrine of ejusdem generis , the unam biguous langua ge of the PUP did not apply to Amato’s alleg ed wrongful detention of the Goldblatts’ property

. Furthermore, we find that even if the dama ge incurred in the underly ing complaint were

covere d as a per

sonal inju ry resulting from Ama

to’s wron gful de tention of the Goldb latts’ property, both exclusions one and two of the PUP, which e xclude coverage for occur rences arising out of business matters, apply to the facts of the underly ing complaint. Therefore, Allstate had a duty neither to defend nor indemnify

Amato. In reaching

this conclusion, we must first address Amato’s contention that the exclusions only excuse Allstate from indemnify ing Amato but do not excuse Allstate from defending Amato. This contention requires us to interpret the languag e of the PUP. Similarly to other contracts, the c onstruction to be given to insurance contracts should be a natural and reasonable one. Coley v. State Far m Mutual Automobile Insurance Co. , 178 I ll. App. 3 d 1077 , 1081 (1989 ). “A co urt sh ould consi der th e plai n mean ing of t he pol icy langua ge and should not search for a nonexistent ambiguity .” Emtech , 296 Ill. App. 3d at 629. A court must construe an insurance policy as a whole in order to ascertain the meaning of an insurance1-06-0990

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policy’s words and the

intent of the parties. American Alliance I nsurance Co. v. 1212 Restaurant Group, L .L.C. , 342 Ill. App. 3d 500, 505 (2003). A court must read the provision in its entire factual context and not in isolation. Glidden v. Farmers Automobile Insur ance Ass’n , 57 Ill. 2d 330, 336 (1974). “An insur er’s dut y to defend i ts insured arises f rom the un

dertaki ng to de fend as s tated in the policy.” Zurich Insura nce Co. v. Raymark I

ndustries, Inc. , 118 Ill. 2d 23, 55 (1987). “[W]hen considering whether an insurer ha s a duty to defend, both the unde rlying c omplaint's allegations and the relevant policy

provisions must be liberally construed in the insured' s favor.” United Services Automobile Ass'n v. Dare , 357 Ill. App. 3d 955, 965-66 (2005). In su pport of h is argu ment, Ama

to points to t

he lang uage o f three

provision s of the PU

P. Under th e headin

g of “I nsuring Agree ment,” th e PUP provi des:

“ Allstate agrees to provide the covera ges indicated on the Policy Declarations.” (Emphasis in original.) Under th e headin

g of “D efense

We Will Provid

e,” the PU

P provides :

“ Allstate will defend an insured per son sued as a result of an occurrence covered by

this policy. ” (Emphasis in origina l.) Amato con

trasts the langua ge of those provi sions with t he provis ion that:

“ Allstate will pay damag es which an insured person becomes legally obligated to pay beca

use of bodily injury , personal injury or property damage , subject to the terms, conditions and limits of this policy. Bodily injury , personal injury and property damagemust arise from a covered occurrence .” (Empha sis in1-06-0990

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original.) Specific ally , Amato no tes that the third pr ovision pr

ovides tha

t indemnity

is subjec t to the ter

ms, conditions and limits of the policy. He arg ues that because the first two of the above-quoted provision s do not sta

te that Al lstate’s

duty to defen d is subject to the ter

ms, condit

ions and li

mits of the policy, the duty

to defend is not limited by the exclusions and any “occurrence” must be defended even if Amato will not be indemnified for it. Viewing the PUP as a whole, we find Amato’s rea ding to be entirely

unnatural and unreasonable. Under the exclusions heading the policy , the PUP specifically provides tha t the policy “will not apply

” under certain circumstances, such a s when an occurrence ar ises out of a business matter. Even liberally construing the provisions in Amato’s favor, clearly , the parties did not intend for the PUP to require Allstate to defend Amato in cases that fall into one of the excluded categories. Amato further contends that, even if the exclusions do apply to Allstate’s duty to defend Amato, the first and second PUP coverage e xclusions do not apply because Amato’s “involve ment with the Goldbla

tt’s entiti es arose

out of an i

nvestmen t and did no t arise ou

t of his occupation, trade or profession.” If an underly

ing complaint alleges facts which, if true , would exclude coverage, the potentiality of covera

ge is not present and the insurer does not have a duty to defend. Fragman Construction Co. v. Preston Construction Co. , 1 Ill. App. 3d 1002, 1005 (1971). “The insurer bears the burden of establishing that a claim fa lls within a provision that limits or excludes coverage.” Sears Roebuck & Co. v. Acceptance I nsurance Co. , 342 Ill. App. 3d 167, 172 (2003).1-06-0990

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In other words, “[i]t is the insurer's burden to a ffirmatively demonstra

te the applicability of an exclusion.” Pekin Insurance Company v. Miller , 367 Ill. App. 3d 263, 267 (2006). “Exclusion provisions that limit or exclude coverage must be construed liberally in favor of the insured and against the insurer.” Pekin , 367 Ill. App. 3d at 267. Ag ai n, th e f

ir st an d s ec on d e xc lu si on s p ro vi de th at th e P UP wi ll no t a pp ly: “1 . T o a ny occurrencearising out of any act or failure to act by

any person in performing f

unctions o f that pe

rson’s business

. 2. To an y occurrence arising out of a business or business property .” “Busine ss” is def

ined in the

PUP as: “a) any full of part-time activity of a ny kind: 1) arising out of or relating to an occ upation, trade or profession of an insured person ; and 2) engaged in by

an insured person for economic ga in, includ ing the u se of any par t of any pre

mises for such purposes.” (Emphasis in original.) The underlying

complaint alleges that Amato was a shareholder and director of Goldblatt’s at all times relevant to the counts against him. I n addition, the underlying complaint alleges that Amato was a “control person” who exercised control over the gener al operations of Goldblatt’s and had the ability and power to direct and prevent the allege d fraudulent conduct. All counts alleged against Amato arose from his actions as a shareholder and director of Goldblatt ’s. Given

these al leged f

acts, we find that A

mato’s ac tivity would qua

lify as a business activity and there fore, under the business exclusions, Allstate did not have a duty to defend or1-06-0990

12

indemnify Amato. Finally , Amato contends tha

t Allstate had a duty

to defen d him for the period

of time in which coverage was unc ertain. Accordingly , Amato avers that he is entitled to reimbursement for fee s and cost s he incur red in de fending

the under

lyin g compla int during the peri od of time that coverage remained unc ertain. In arguing

this point, Amato relies on the inapplicable case of General Agents I nsurance Co. of America, Inc. v. Midwe st Sporting Goods Co. , 215 Ill. 2d 146 (2005). I n General , in responding to its insured’s request for defense in a n underlying

action, the insurer indicated that “the claim may not be

covered under the policy .” (Emphasis omitted.) General , 215 Ill. 2d at 165. Nonetheless, the insurer defended its insured under a reservation of rights and also filed a declar atory judgmen t action se eking a

determination of n

o covera ge. The insurer subseque ntly sought reimbursement of defense costs afte r the trial court entered summary judgment in favor of the insurer, declaring that the insurer ha d no duty to defend the insure d in the underlying litigation. The supreme court found that the insurer was not entitled to reimburseme nt and “refuse[d] to permit an insurer to recover defense costs pursuant to a reservation of rights absent an express provision to that effect in the insurance contract be tween the parties.” General , 215 I ll. 2d at 166. We find tha

t General is inapposite to the instant case. Here, instead of agr eeing to defend Amato through a reservation of rig hts letter, Allstate opted to seek a declaratory judgment stating Amato’s conduct was not covered under the PUP. Moreover, in its correspondence with Amato, Allstate explicitly told Amato that his conduct was not covered by the PUP and that he was not1-06-0990

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entitled to a defense. Clearly , the holding of General does not apply to this case. Because the languag e of the PUP unambiguously did not provide c overage for wrong ful detention of property

and because the exclusions in the PUP applied to the facts alleged in the underlying

complaint against Amato, we find that Allstate did not have a duty to defend or indemnify

Amato und

er that p olicy . We furth er find that Allstat e is not en

titled to reimburs ement of

costs or f ees incu rred in d efendin g the un derly ing comp laint while

the disput

e concerning coverag e under the PUP was pending. We observe that Amato raise s several other contentions; however, in light of these conclusions, those contentions need not be addr essed. Accord ingly, we aff

irm the tr ial cour t’s entry of summar

y ju dgment i n favor o f Allstate

on its complaint for declaratory judgment and on Amato’s affirmative counterc laims. Affirmed. KARNEZIS and CUNNI

NGHAM, JJ., concur.