## I L L I N O I S 

## O F F I C I A L 

## R E P O R T S

Appellate Court

Illin ois Ins uran ce G

uaran ty Fun d v. Liberty Mutual In suran ce Co.

, 2013 IL App (1st) 123345

Appellate Court Caption I L L I NOI S I NSURANCE GUARANTY F UN D

, Plaintiff-Appellant, v.
L I BERTY MUTUAL I

NSURANCE COMPA NY

, Def endant, and

Z URI CH AMERI CAN I

NSURANCE COMPANY, and I NTERL AKE

MATERI AL

HANDL I

NG, De fenda

nts-Appellee s.

District & N o. First District, Second D ivision

Docke t No. 1-12-3345

Filed November 12, 2013

Held

( Note : Thi s syl lab us

con st i t u te s no par t of

the opi nio n of the cour t
but has bee n pre

par ed

b y the Repo rt er o

f

D e c i s i o n s f

o r t h e

c o n v e n i e n c e o

f t h e

rea der

. ) I n an action arising from the worke rs’ compensa tion benef its rec eived by

a loane d employ ee a fter the lending employ er’ s worke rs’ compensa tion

insurer was liquidated, the trial court proper ly dismiss ed the action filed by the I llinois I nsuranc e Guar anty Fund seeking reimburse ment from the borrowing employ er’ s worke rs’ compensa tion insurer for the benef

its the

Fund paid to the injured worke r afte r the liquidation, since the liquidated

insurer had no rig hts ag ainst the borrowing employ er’ s insurer that could

have been pa s s ed t o t h e Fund; further more, due to the passag e of time,

any action the liquidated insurer could have had ag ainst the b o rrowing employ er’ s insurer would have expired.

Dec ision Under

Review Appea l from the Circuit Court of Cook County

, No. 11-L -6510; the Hon.

Michae l B. Hy

man, J udg e, pre siding.

J udg ment Affir med.Counsel on

Appea l L ocke L ord, L L P (Rowe W. Snider and Ma rga re t M. Schuchar dt, of counsel), and Stone & J ohnson, Chtrd. (J. M u rr a y Pinkst on I I I

, of counsel), both of

Chicag o, for a

ppellant.

Cremer

, Spina, Shaug hnessy

, J ansen & Siege rt, L L C, of Chicag o (B rian

A. O’G allag her a

nd Br andt W. Allen, of counsel) , for a ppellees.

Panel PRES I DI NG J USTI CE QUI

NN delivere d the judgme nt of the court, with opinion.

J ustices Har

ris and Pierc e conc urre d in the judgme nt and opinion.

OP INION

¶ 1 I . I NTRODUCTI ON

¶ 2 The circ uit court corr ectly ruled in favor of the borrowing employ er’ s insurance company

on its motion to dismiss for failure to state a claim in an action broug ht by the I llinois

I nsuranc e Guar anty Fund (I I GF) seeking reimburse ment from the borrowing in s u ranc e

company f

o r worke rs’ compensa tion benef its I I GF paid to an injured worke r afte r the

insurance comp an y fo r the lending employ er that was obliga ted to make pay

ments was liquidated. The additional defe nse of the ex piration of t he st atute of limit ations, as well as other defe nses raised by the borrowing employ er’ s insurance company , wer e also valid bases

for dismissal.

¶ 3 I I . BA CKGROUND
¶ 4 Plaintiff, I I GF, was statutorily cre ated in 1971 to provide protec ti o n for cer tain claims

of policy ho l d er s under cer

tain insurance policies issued by I I GF member companies that

become insolvent. 215 I L CS 5/532 et seq. (West 2010). Skokie Casting s

, In c. v. Illinois

Insurance Guaranty Fund

, 2013 I L 1 1 3 8 73, ¶ 1. This action conce rns I I GF’ s eff orts to

at t em p t to be reimburse d for worke rs’ compensa tion pay ments from a company that

borrowe d an emplo y ee afte r the insurance company for the employ ee’ s lending employ er beca me insolvent.

¶ 5 I I GF’ s second amende d complaint alleg es J ohn Earle y (Ear ley ) was hired by TGI

Group

on Dec ember 2, 2000. I t further alleg es that on Dec ember 19, 2000, Earle y was perf orming

work as a borrowe d em p l o y ee for I nterlake Materia l Handling (I nterlake ) pursuant to a written contra ct betwee n TGI Group and I nterlake

, althoug h I I GF did not have any contra ct
in its possession betwee n TGI Group and I nterlake

. On that day

, Earle y was involved in a workplac e acc ident which resulted in a wor k er s ’ c ompensation claim. Earle y ’s employ er,

-2-T G I Group, had a worke rs’ compensa tion policy issued by L eg ion I nsuranc e C o m p an y

(L eg ion). L eg ion made cer tain worke rs’ compensa tion p aym en t s t o Earle y on behalf of

Ear l e y ’s employ er, TGI Group, until L eg ion’s date of liquidation on J uly 28, 2003. I I GF stepped in and beg an pay ing Earle y his worke rs’ compensa tion benef its and continues to pay Earle y to the prese nt time.
¶ 6 On J uly 17, 2008, almost five y ear s a f ter it took over Earley ’s pay ments, I I GF filed

its orig inal complaint, which was amende d on Fe bruar y 9, 2009. Almost three y ear s afte r that,

on J anuar y 19, 2012, I I GF filed a second amende d complaint, which is the subject of this

appea l. No alleg ations wer e made ag ainst the named defe ndant, L iber t y M utual I nsuranc e Company

, in the second am ended complaint althoug h I I GF named it in the caption. The

second amende d complaint s o u gh t reimburse ment from defe ndants Z urich Americ an
I nsuranc e Company (Z urich) and I nterlake under a worke rs’ compensa tion policy Z urich

issued to I nterlake

, Earle y ’s alleg ed borrowing employ er on the date of the acc ident. Specifica lly

, I I GF soug ht reimburse ment for all worke rs’ compensa tion pay ments I I GF had

made to Earle y , reimburse ment for I I GF’ s defe nse in Earle y ’s worke rs’ compensa tion claim,

and a judgme nt that Z urich is responsible for all worke rs’ compensa tion benef its pay able to
Earle y in connec tion with the injuries Earley sustained on Dec ember

19, 2000.

¶ 7 I I GF further alleg ed in t h e s ec o n d am en d e d complaint that both Earle y ’s presumed lending employ er, TGI Group, a n d h i s b o rrowing employ er, I nterlake

, are jointly and

sever ally liable for Earle y ’s worke rs’ comp e n s a ti o n benef its. I t further alleg ed that the Z urich policy issued to I nterlake is “other insurance ” as that term is define d under the I llinois

I nsuranc e Code (215 I L CS 5/546(a) (West 2010)) and is, there fore

, primary cover ag e that

must be exhausted before I I GF be comes re sponsible to Earley for a ny pay ments.
¶ 8 Z urich filed a combined motion to dismiss under sections 2-615 and 2-619 of the Code

of Civil Proce d u re. 735 I L CS 5/2-615, 2-619 (West 2012). Z urich’s motion to dismiss
pursuant to se ction 2-615 asser ted that I I GF’ s second amende d complaint was reple te with conclusory statements rathe r than alleg ations of fac t. Specifica lly

, Z urich cites to (1) I I GF’ s failure to adequa

tely alleg e the identity of Earle y ’s employ er, (2) I I GF’ s failure to adequately alleg e a borrowing employ er rela tionship, (3) I I GF’ s failure to cite any statutory basis for the

relief it seeks, and (4) I I GF’ s failure to even mention the word “subro gat i o n ” or any subrog ation rig hts it might have or its basis to maintain such a claim. The basis for Z urich’s

section 2-619 m otion to dismiss was that I I GF’ s second amended complaint was unti mely

as ag ainst Z urich beca

use Z urich was not added as a defe ndant until the filing of I I GF’ s first

amende d complaint of F ebrua ry 9, 2009, more than six y ear s after any claim ac crue d.

¶ 9 On J une 1, 2012, the circ uit court ruled that I I GF did not plead a subrog ation claim in its

second amende d complaint. The circ uit court further noted that I I GF’ s brief in opposition to
dismiss al made clear that I I GF’ s reque st for reimbursement is a claim for subrog ation and

the second amende d complaint failed to plead fac ts to support the elements of such a claim.

The court further noted that I I GF did not arg ue in its response to Z urich’s motion to dismiss

that it could asser

t fac ts to supp o rt a s ubrog ation claim if it was g iven leave to amend its complaint y et a third time. There fo re , i t dismiss ed the second amende d complaint with

p re j u d i ce

. T he circ uit court ruled that other arg uments made by Z urich in its motion to
dismiss wer e moot beca

use the second amende d complaint was dismiss ed for failure to state

-3-a cla im. On J uly 2, 2012, I I GF f

iled a motion for re consideration.
¶ 10 On October 11, 2012, the circ uit court ruled on I I GF’ s tim el y fi l ed an d fu l l y briefe d

motio n fo r rec onsideration. I t stated that I I GF violated the purpose of a motion for

rec onsideration, which is to apprise the court of newly discovere d evidenc e or a chang e in

the law or err ors i n t h e co u rt ’s ear lier application of the law. Be cause I I GF’ s motion for

r e c o n s id era tion acc omplished none of these purposes, the circ uit court denied I I GF’ s motion

. ¶ 11 I I GF fi l ed a t i m el y n o t i ce o f appea l from the circ uit court’s adver se decision o n November

9, 2012. I ll. S. C t. R. 303(a) (e ff. June 4, 2008).

¶ 12 I I I . STANDARD OF REVI EW
¶ 13 The appell an t

, I I GF

, d i d n o t s u b m i t a standard of revie w in its appellate brief as is require d by the rules. Rule 341(h)( 3) states that “[t] he appellant must i n cl u d e a concise

statement of the applicable stand a rd of revie w for eac h issue, with citation to authority .” (Emphasis added

. ) I ll. S. Ct. R. 341(h)( 3) (ef f. Fe b. 6, 2013). The defe ndant-a ppellee, Z urich,

submits that this case should be revie wed de novo , but failed to cite any case s in support of

its submi ssion.

¶ 14 We note that the question prese nted by a section 2-615 motion to dismiss is whether the alleg ation s o f t he complaint, when viewed in the light most favor able to the plaintiff, are sufficie nt to state a cause of action upon which relief can be g rante d. Hough v. Kalousek

, 279

I ll. App. 3d 855, 862 (1996). I llinois is a fact-plea ding jurisdiction that require s a plainti ff

to file both a leg ally and fac tually sufficie nt complaint. Id. at 863. When ruling on a section

2 -6 15 motion to dismiss

, the circ uit court must admit all well-plea ded fac ts as t ru e an d disreg ard any leg al and fac tual conclusions that are unsupported by alleg ations of fac t. Lake County Grading Co. of Libertyv ille, I nc. v. Advanc e Mec hanical Contractors, Inc.

, 275 I ll. App. 3d 452, 456-57 (1995). The standard of revie w on a section 2-615 dismiss al is de novo

. T& S Signs, Inc. v. V

illage of W

adsworth , 261 I ll. App. 3d 1080, 1083-84 (1994).
¶ 15 Additionally

, Z urich’s motion to dismiss was broug ht pursuant to section 2 -6 1 9

. 7 3 5

I L CS 5/2-619 (West 2012). All well-plea ded fac ts and rea sonable infere nces are acc epted as

true by the circuit court when ruling on a section 2-619 m otion to dismiss

. In re Marriage of Sullivan

, 342 I ll. App. 3d 560, 562 (2003). Conclusions of law ar e not acc epted as true.
Id. at 563. “A revie wing court should conduct an independe nt revie w of the pro p ri et y of

dismiss ing the complaint and is not require d to defe r to the trial court’s rea soning.” Id. The

standard of revie w for a dismiss al based on section 2 -6 1 9 m o t i o n i s also de novo

. In re Marriage of Morreale

, 351 I ll. App. 3d 238, 240 (2004). Theref ore, this court will look at
this entire ca se de novo

. ¶ 16 W e al s o n o t e t h at t h i s court can aff irm the circ uit court’s dismiss al on any g rounds

s upplied by the rec ord and applicable case law, reg ardle ss of the circ uit court’s rea sons. Gatreaux v . DKW

Enterprises, LLC , 2011 I L App (1st) 103482, ¶ 10.

¶ 17 I V. ANAL YSI S
¶ 18 “Subrog ation has been define d as the substitut i o n o f an o t h er * * * i n t h e place of a

-4-claimant whose rig hts [i t] succe eds to in rela tion to the debt or claim asser ted, which [i t] has paid involuntarily .” W

ausau Insurance Co. v. All Chicagoland Moving & Storage Co.

, 333

I ll. App. 3d 1116, 1121 (2002). The purpose of a subrog ation claim is traditionally g rounded

in equity to work out an adjustment betwee n the parties “by secur ing the ultimate discharg e of a debt by the person who in equity and g ood conscie nce oug ht to pay it.” 16 L ee R. Russ

& T homas F. Seg alia, Couch on I nsuranc e § 222:8 (3d e d. 1997).

¶ 19 I n this case , to establish a valid cause of action of equitable subrog ation, I I GF must alleg e the following : (1) that the named defe ndant insurer, Z urich, is primarily liable to the insured

for the injured worke r’s loss under its worke rs’ compensa tion policy ; (2) that I I GF, throug h an assig nment from L eg ion, is secondar ily liable to the injured employ ee for the sa me loss

under L eg ion’s policy ; and (3) that I I GF discharg ed its liability to the insured and, in doing

so, exti ng uished the liability of Z urich. Home Insurance Co. v. Cin ci n n a t i In surance Co.

, 213 I ll. 2d 307, 316-17 (2004).

¶ 20 Our supreme court has held t hat an insured, such as L eg ion, by its co n d u ct m ay waive rig hts ag ainst another insurer, such as Z urich. Id. at 327. I t explained that an insurer, such as
L eg ion, desiring to rese rve any rig hts it may have ag ainst a second insurer must m a ke thi s position clea

r in its corr espondenc e with the insurance company it may believe to be another

insurer. Id. There are no alleg atio n s i n I I GF’ s second amende d complaint that L eg ion

believed that Z urich or I nterlake was in any way responsible to TGI Group or L eg ion for its employ ee’ s injuries. There are no alleg ations in the complaint that L eg ion believed it had any valid claim aga inst either Z urich or I nterlake to seek a

full reimburseme nt for the amounts
it paid out under its worke rs’ compensa tion insurance policy it had with TGI Group. Our

supreme c ourt has held that a ny insurer, like L eg ion, is “pre sumed to know the contents of

its own policy ” and whether any other insurance company must assume or share in the liability

. Id.

¶ 21 I I GF is statutorily obliga ted to provide worke rs’ compensa tion cover ag e for the injured employ ee in the e vent L eg ion beca me i nsolvent, which it did. Illinois Insurance Guaranty

Fund v. Virginia Surety Co.

, 2012 I L App (1st) 113758, ¶ 4; see g ener ally Skokie Castings

, Inc. v. Illinois Insurance Guaranty Fund

, 2 0 1 3 I L 113873. I I GF arg ues it can relieve its obliga tion by pursuing another insurance compa n y that provided worke rs’ compensa tion

cover ag e to the injured employ ee’ s borrowing employ er, reg ardle ss of passag e of time a nd

lack of actions by

the primary

insurer, L eg ion, at the time liability was e stablished.

¶ 22 Aside from a leg al conclusion alleg ed by I I GF in its second amende d complaint that both

L eg ion and Z urich are jointly and seve ra l l y liable to the injured employ ee, there are no fac tual alleg ations in I I GF’ s s ec o n d am e nded complaint that satisfy the first element of a subrog ation claim–that the defe ndant Z urich is leg ally responsible to compensa te the injured employ ee for his injuries. More importantly

, the re ar e n o fac tual alleg ations that Z urich is primarily liable for the loss rathe r than L eg ion, the insurance company which was pay ing on the clai m p ri o r t o its insolvency

. I n order for I I GF to have a valid, timely cause of action sounding in subrog ation, L eg ion must have h ad an ex isting cause of action aga inst Z urich

that L eg ion could have asser ted for its own benef

it had I I GF not compensa ted the injured employ ee for his loss by continuing to pay his worke rs’ compensa tion benef its. There are no fac tual or leg ally sound alleg ations in I I GF’ s second amen d ed complaint that descr ibe the

-5-situation wher e I I GF fulfilled an exis ting leg al obliga tion that Z urich had to pay the worke rs’

compensa tion benef

its to the injured employ ee and, as a result, has a rig ht to reimburse ment
fro m Zu ri ch

. I n fac t, I I GF made the conclusory alleg ation that it was under a statutory

co mpulsion to continue worke rs’ compensa tion pay ments to the injured employ ee fo r t h e insolvent insurance company L eg ion, not to fulfill any leg al obliga tions on behalf of Z urich.

Wit hout such fac tual and leg al alleg ations in I I GF’ s complaint, I I GF fails to state a claim and
cannot pr ocee d ag ainst Z urich a s subrog ee of L eg ion.
¶ 23 I I GF arg ue s t h at b y t ak i n g o v er L egi on’s obliga tion to pay the injured employ ee’ s worke rs’ compensa tion benef its, it was automatically assig ned any rig hts L eg ion had to

pursue the amounts I I GF paid direc tly from Z urich. I t arg ues that any other insurance policy

in exis tence at the time of the injury is fair g ame as Z urich’s equitable position is inferior to
that of I I GF. The rele vant question here is wh ether L eg ion had any exis ting, assig nable

cause s of action ag ainst Z urich on the date I I GF filed its complaint naming Z urich. Given the

fac ts of this case , we hold that L eg ion had no assig nable rig hts ag ainst Z urich it could have passed onto I I GF when it beca me insolvent. Given the passag e of time, any applicable statute
of limit ations for any cause of action, equitable or leg al, that L eg ion could have possibly had

ag ainst Z urich has expired. The employ ee was injured on Dec ember 18, 2000, then I I GF took

over pay ments on J uly 28, 2003, but I I GF did not file sui t ag ainst Z urich unti l Fe bruar y 9,

2009.

¶ 24 I I GF arg ues that the statutory fra mework cre ated by both the I nsuranc e Code (215 I L CS

5/532 et seq. (West 2010)) and the Workers’ Compensat i o n Ac t (8 2 0 I L CS 305/1 et seq. (West 2010)) require s that when a worke rs’ compensa tion car rier for a lending employ er that

is pay ing for an injury for its employ ee become s ins o lv ent, the worke rs’ compensa tion car rier

for the employ er tha t borrowe d the employ ee on the date the employ ee was injured must beg in pay ing the worke rs’ compensa tion benef its to the lending e mp lo y e r ’ s in ju red employ ee befor e I I GF is require d to pay

. I n prese nting this arg ument in its opening brief, I I GF ignor es this court’s ruling in Illinois Insurance Guaranty Fund v. Virginia Surety Co.

, 2012 I L App (1st) 113758, which held that when a lending employ er maintains wor k er s ’ co m pensation

insurance for its employ ees and the worke rs’ compensa tion car rier become s insolvent, I I GF

cannot compel the borrowing employ er’ s insurance car rier to pay the lending employ ee’ s benef its. Id. ¶ 22.

¶ 25 Aside from failing to distinguish the instant case from the Virginia Surety holding, supra , I I GF’ s theory that it is entitled to reimburse ment fails to focus on the most basic issue of who

is rea lly the insured for both L eg ion and Z urich and how the rela tionship, if any exit s at all,

betwee n the two insurance car riers and how I I GF’ s subrog ation clai m for reimburse ment depends on I I GF’ s ability to est ab l i s h that Z urich is a primary insurer. I I GF’ s second

amende d complaint contains unsupported asser tions reg arding to who m L eg ion owed

cover ag e, none of which include Z urich’s insur ed

, I n t erla ke. There is no alleg ation that

Z urich contra cted with L eg ion’s client. I n fac t, L eg ion’s cl i en t was never definitively identified by

I I GF.

¶ 26 Gene rally

, when an action is broug ht for reimburse ment, it involves an insurance car rier claiming to be an

excess insurer w ho is suing a pr imary insurer. I n that circ umstance, both

the excess car

rier and p ri m ar y car

rier must have contra cted with the same insured. See

-6-Thomas M. Hamilton & Troy A. Stark, Exc ess-Primary Insurer Obligations and the Rights

of the Insured

, 69 Def

. Couns. J

. 315 (2002) (“[i] n a ty pical excess-primar

y rela tionship, both

the excess and primary car rier[s] contra ct independe ntly with the policy holder to perf

orm the obliga tions of their

insuring a g ree ments”). I n the instant case , I I GF is a ttempting an action

for reimburse ment b r o u g h t o n b e h a lf o f th e n o w

- insolvent L eg ion insurance company ag ainst

another insurance company , Z urich, but the policies cover differ ent insureds. Such a c laim

cannot be based on the doctrine of reimburse ment (the only rec overy reque st I I GF makes in

its second amende d complaint) betwee n excess and primary insurers. I nstead, such an action

would require I I GF to alleg e a rig ht of indemnity based on the doctrine o f r es p o n dea t superior or based on the rig ht of joint tortfe as o rs t o rec over from eac h other. Bituminous Casualty Corp. v. American Fidelity & Casualty Co.

, 22 I ll. App. 2d 26, 32 (1959); 15 L ee R. Russ & Thomas F. Sega lia, Couch on I nsuranc e § 217:16 (3d ed. 1997) (an action may

be broug ht by an insurer who was compelled to pay a cl ai m o n b eh al f of its insured even though its insured bor e only vicar ious liabili ty

); Russ & Seg alia, supra § 217:4 (there may b e a rig ht to contribution wher e an insurer of a joint tortfea sor has paid more than i t s fa i r share of the loss).
¶ 27 I t is not disputed that Z urich’s policy cover ed only I nterl ak e, an d n o t T G I Group or

any one else L eg ion may have insured for worke rs’ compensa tion c la im s

. T h e r e f o r e , L eg ion’s policy with its insured (TGI Group) cannot form the b as i s o f a cause of action for

reimburse ment ag ainst Z urich’s insured party

. At the time of the employ ee’ s injury

, there is

no alleg ation that th e insurance companies contested that L eg ion’s insured was leg ally responsible for

the employ ee’ s injuries and, there fore , cover ed by L eg ion’s policy

alone.

¶ 28 I f L eg ion’s policy wer e a true excess insurance policy

, it would ex p l i ci t ly require the

e x istence of a primary policy as a condition of cover ag e. 15 L ee R. Rus s & T h o m as F

. Seg alia, Couch on I nsur an ce § 220:2 (3d ed. 1997). I I GF does not alleg e that L eg ion is an

excess insurance car

rier as it fails to a l l eg e that L eg ion’s policy had any such condition.

I nstead, I I GF appea

rs to asser

t that it has a status as an ex ce s s i n s u r er, reg ardle ss of what

status it inherited f

ro m L egi o n , based upon the “other insurance ” clause contained in its enabling statute which outlines I I GF’ s obliga tion when two or more insurance policies are

available . The portion of the statute I I GF r elies on for its arg ument states as follows:

“An insure d or cla imant shall be required first to exhaust all covera g e provide d by any other insurance policy

, *** if t h e cl a im under such other policy arises from the same fac ts, injury

, or loss t h at g ave rise to the cover ed claim ag ainst the Fund. The Fund’ s

o b l i g ation *** shall be reduc ed by the amount rec overe d or rec overa ble, whicheve r i s

g rea ter, unde r such other

insurance policy .” 215 I L CS 5/ 546(a) (West 2010).

This clause does not establish I I GF’ s status as excess ove r al l other insurers and does not
support I I GF’ s arg

ument that the statute conver ts Z urich’s insurance as primary over I I GF’ s funds. Illinois Insurance Guaranty Fund v. Virginia Surety Co.

, 2012 I L App (1st) 113758; Doug las R. Richmond, Rights and Responsibiliti es of Exc ess Insurers

, 78 Denv. U. L

. Rev. 29, 103 (2000). There is no alleg ation that Z urich was a primary insurance car rier in the fac ts
of this case

. The lang uag e in I I GF’ s enabling statute cannot alter the t er m s o f Z urich’s

insurance policy by inserting a new insured and conver ting the policy into a primary one for

that new insure d.

-7-¶ 29 Another issue raised by I I GF is that I I GF now has L eg ion’s rig ht to rec over from its coob l i go r, Zu r ich, which share s the same liability under a theory of equitable contribution.

Fireman’s Fund Insurance Co. v. Mary land Casualt y Co. , 77 Cal. Rptr. 2d 296, 303 (Cal.

Ct. App. 1998). Howeve r, this is not a case wher e multipl e insurance car riers i n sured the

same insured and cover ed the same risk. I t is only in that situat i o n wh e re an insurance

company has standing to alleg e a cause of action for equitable contribution ag ainst what is, by definition, its co-insure rs for e quitable contribution bec ause it has indemnifie d them by

underta king the defe nse or pay ing on the claim. Id. A fair rea ding of I I GF’ s second amende d complaint does not enc ompass the doctrine of equitable contribution.
¶ 30 F inally

, as a matter of policy

, the rec og nition of I I G F’ s t h eo ry o f re co v er y wo u l d

undermine curr ent established insurance law, which g overns both equitable subrog ation and

worke rs’ compensa tion law as it app l i e s to a lending employ er/borr owing employ er rela tionship. I f I I GF wer e able to rec over from Z urich under the “other insurance ” clause of

its enabling statute, then all the e x i sting laws reg arding how worke rs’ compensa tion laws apply to these employ ers would be circ umvented, and I I GF would be abl e t o obtain

reimburse ment from an insurance company for monies I I GF paid out to an injured employ ee without the require d statements by the insolvent insurer, L eg ion, that it had a g ood-fa ith

belief that Z urich had a duty and obliga tion to share in the cover ag e. Be cause I I GF failed to alleg e L eg i o n ’ s compliance with its obliga tion to fulfill a condition prec edent of proper ly

asser ting a claim with Z urich, it has failed to state a claim for relief

. I n other words, I I GF’ s

arg ument that Z urich is “other insurance ” that it can rec over from must fail beca use L eg ion

did not comply with any conditions prec edent to t rig g ering cover ag e, including notify ing

Z urich it believed it should provide primary cover ag e or share in c overa g e. 15 L ee R. Russ

& Thomas F. Seg alia, Couch on I nsuranc e § 219:9 (3d ed. 1997) (a policy that never comes into eff ect beca use cer tain prec onditions are never met is not valid and collecti b l e “other

insurance ”). A basic prec ondition, at a minimum

, would be to file a lawsuit befor e the statute
of limit ations expires. Cincinnati Cos. v. W est American Insurance Co.

, 183 I ll. 2d 317, 324-

3 2 9 (1 9 9 8 ). I I GF makes no such claim of notice to Z urich of a claim ag ainst it within t h e

statute of limit ations. This additional omission by I I GF is f u rt h er s u p port of the circ uit

court’s dismissal of I I GF’ s second amended c omplaint for fa ilure to state a c laim.

¶ 31 I I GF nev er u s es t h e wo rd “subrog ation” in its second amende d complaint, nor does it identify the parties as subrog ee and subrog or. I I GF’ s arg ument is that althoug h its second

amende d complaint does not specific ally identify the claim with the word “subrog ation,” it

arg ues that it contains t he elements of such a claim. This court disagr ees and holds, for all

the fore g oing rea sons , t h at I I GF’ s second amende d complaint fails to alleg e the elements

nece ssary for a subrog ation c l ai m. There fore

, I I GF cannot proce ed ag ainst Z urich as the subrog ee of the primary insurance company cover ing the worke rs’ compensa tion cl ai m,
L eg ion, which bec ame insolvent.

¶ 32 V. CONCL USI ON

¶ 33 For all the fore g oing rea sons, this court aff irms the circ uit court order that I I GF’ s claim

be dismissed for fa ilure to state a claim. This c ourt also finds that any applicable statute of

-8-limit ations expired and Z urich’s policy is not “ other insurance ” available to I I GF to pursue

for r eimbursement.

¶ 34 Affir

med.

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