No. 2-- 06--0777 Fil ed: 8-8-08

______________________________________________________________________________ IN THE APP ELL ATE C OURT

OF IL LINO IS SECOND DI STRICT

______________________________________________________________________________ ILL INOIS IN SURA

NCE G UA RA NTY ) Appeal

f rom th e Ci rcui t Court FUND, i n the Place and Stead of Statewide ) o f Ka ne Co un t y. Insu ra nce C omp any, in Liquida t ion, ) ) Pl ai n tif f -A pp el l an t, )

) v. ) No. 05-- MR--346 ) PAT SANTUCCI and STATE FARM ) MUTUAL AUTOMOBILE INSURANCE ) CO MP ANY , a /s /o Lind a D uff, ) Ho no r ab le ) Mic ha el J
. Co lwe ll, Defendan ts-Appellees. ) Judge, Presi din g.

______________________________________________________________________________ JU STI CE Mc LA REN d el i v ered th e op in i on

of th e c our t: Pla int iff, the Ill

in ois Insurance Guaran

ty Fun d (IIGF), in the pl

ace and s t ea d o f S tatewide Insuranc e Co mpany, in liquidat ion, appea l s f rom the tri al court' s order gr an

ting the m oti on f or sum mary j ud gm en t b rou gh t b y de f en da n ts, Pa t Sa n tu cc i an d S t at e F ar m Mu t ua l Au t o mo bile Insuranc e Company , as su br oge e of Lind a D uff. Pla int iff's co mpla int so ug ht a d ec lar at io n t ha t it did not owe a d

uty to def en d an d/or i nde m ni f y San tucci wi th reg ard to an

acc i den t that occurr

e d when t wo hor ses c ollided wit h a vehicle t hat was ow ned by Du ff and insur ed by State Fa rm . We
reverse b ec au se

th e u n de rl yin g c l ai m wa s n ot a c ov ered

cl ai m un de r th e I ll in ois Insurance Code (Insuran ce C ode) (215 ILCS 5/534 .3(a) (W est 200 4)). FA CTSNo. 2-- 06--0777

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In No vember 2 001 , S ant ucc i li ve d at 45 We st Plank Ro ad, Hamps hire, Illinois. T he Plank Ro ad p ro per t y cons iste d o f 23 a cr es c ont aining t hre e o ut building s, a b arn , a nd a house trail er. Sa

n tuc ci l i v ed in th e house trail

er. He personall

y own ed a num ber of h orses that he kept at hi s propert y. He operated a busi ness , P.S. Co yote, Inc., on the premi ses that wa s e ng ag ed in
con stru cti on (e xcava tion and w at er and sewer work). Santucci was the president of that busi ness. P.S. Co yote, I nc., had no involvem ent with the horses. On or about Nov

em be r 29 , 20 01, two of

Sant ucc i's horses escaped f rom hi s Pl ank Road pr ope rty an d c oll i de d w ith D uf

f 's ve hi cl e. D uf f wa s i nsure d by State Fa rm . Sa ntu cc i di d not have a hom

eowner's pol

icy on the propert y a

t t he tim e of the coll

is ion. Ho wev er, o n th

e d ate of t he co llisio n, S t at ew id e in su r ed P
. S
. Co yo t e u nd er a c o mmer cia l g en er al li ab ilit y po licy. In Decem ber 2003 , Sta

t e Far m, as D uff's insur er and s ubr og ee, fil ed a t wo -c ou nt
co mplaintagai

nst Santucci , seeki

ng recompe

nse f or damag es to Du ff's vehicle as a r esu lt o f the hor se/ ve hic le co llisio n. Co un t I alle ge d t ha t Sa nt uc ci b o ar de d a nd ha r bo r ed t he ho r se s a t his pr ope rty on P lank Ro ad a nd th at Santucci v iolated the Ill

in ois Dom estic A ni ma ls Runn in g at Large Act (Domestic An im al s Act) (510 ILCS 55/1 et seq. (West 200 4)). Co unt II of t he
co mplaintal

l eg ed th at S ant uc ci

wa s n eg l i ge n t i n th at h e f ai l ed to: ( a) "prov

i de an adeq ua te
en cl osure f or th e h ors esto pr

ev en t th em f rom es ca pi n g th e prop er ty wh er e har bor ed" ; (b) "i nspect and reasonab

ly ma in tain the encl osure where the horse was [ si c ] boarded i n ord er to det er mine whether any def

ects existed in the en

closure that posed a r isk of the horses' escape"; (c) "fi nd an d repair any

defects or breeches [ sic ] in the enclosure where the hor se was ha rb ore d
orboarded when

the Defe ndan t knew or in the ex

e rci se of rea sonab l e c are

wou l d h ave k

nown of
an d repa ired said d efect "; and (d ) "e re ct and maint ain fences of a height and s t re ngt h sufficient to prevent t he horse from j umpi ng over the fence." S tate Fa rm al so all eged that Santucci owed aNo. 2-- 06--0777

-3-

du ty to prov i de , m ai nta in, an d re pa i r th e h ors e e nc l osu

re s o as t o preve

nt h i s h ors es f rom esc aping an d r un ning at lar ge . St at e F ar m fur t he rall eged t hat Sant ucc i breac hed his d ut y and th at, as a resul

t, Duff' s veh

ic le was dam

aged. P.S . Coy

ote w as not a

pa rty de f en da nt or
re f eren ce d i n an y re ga rd in th e c om pl ai n t. Ab out Fe b ru ar y 20 02 , Sta

te wi de lea r ne d o f t he cla im fo rt he da mag es t o Du ff's ve hic le and began

in vestigating to determi

ne wh ether coverage should be provi ded. On Jan

uary 6, 2004, Stat ewi de informed Sant ucc i tha t it agre ed to def en d h i m in th e S tate

Fa rm ca se , w ith out a
res ervati on o f r ig ht s. On t he sa me d ay, a C o o k C o un t y t ri al cou rt f ou nd S t at ewide insolvent and ordered liqu ida t io n o f t he c o mpa ny pu rs ua nt t o ar t icle V II I o f t he Insurance Code (2 15 ILCS 5/187 et seq . (We st 2004 )). On May 24, 200 4, f oll owing l i qui dation, the

IIGF took over th e defense of

Santucci's case pursuant to a reservation of rights. On Au gust 30 , 2005, th

e IIGF f il ed a c omp l ai

nt f or d ecl ara to ry j udgment again st Sa nt uc ci. The c om

pl ai nt al le ged t hat t he I IG F d id no t hav e a du t y t o de fend and /o r ind emnify Santucci wi th reg ard to the S tate Fa rm action, becaus e Santucci did n ot qual if y a s an i nsured under the Stat ewi de/P.S. Coyote po li cy for the al

legations contai

ned in t he State Fa

rm com plai nt. In hi s ans wer and af

fi rmati ve def ense to the I I GF 's c o mp l ai n t, Sa n tuc ci al l eg ed th at, when he r et ur ned t o his P lank Ro ad p ro per t y on t he da t e o f the hor se incide nt , he was ac t ing in his ca pa ci ty aspres i de n t of

P.S . C oy ote. Sa

n tuc ci al l eg ed th at " h e i n ad v er ten tl y l ef t op en a nd

/or fai led t o lo ck t he ga t e t ha t en clo se d t he ho r se s. " S an t uc ci a r gu ed t ha t , be ca us e h e w as ac t ing in his "corpor ate capacity ," the Stat ewi de poli cy is sued to P. S. Coyote should p rov ide him with a de f en se in th e S tate Fa rm suit ev en th oug h P.S . C oy ote w asn ot a n

am ed pa rty in th e c om pl ai n t.No. 2-- 06--0777

-4-

T he II GF f

il ed a m ot ion f or summ ary j udgme

nt, arguing that: (1) t he Statewide pol icy did not app ly to Sant ucc i in h is individua

l l i ab il ity ; an d ( 2) Sta tew i de wa s ob l i ga ted b y sta tute
o nly for "covered cl

ai ms ," whi ch are def

in ed as l osses wi thin the scope of a l

iqui dated
co mpany's pol

i cy ag ai n st an insur ed. The II GF also ar gue d t hat , since St at e Far m's co mplaint
was ag ai nst San tuc ci ind i vi dua ll y , an d not as a P. S. C oy ote of fi cer, Santuc ci

did n ot qual if y a s an in sured under the Statewide pol icy, an d the cl ai m wa s not covered. Santucci an d Sta te F arm (col l ec ti ve l y , Sa ntu cc i ) f il ed a c ros s- m

oti on f or sum ma r y j ud gm en t, argui ng tha t: (1 ) t he I I GF wa ive d it s d en ial o f co ve r ag e w he n S t at ew ide pr ev io us ly agreedto defen

d Santucci

in the Stat e Farm

case wi thout a re se rv at io n o f ri

gh ts;(2 ) P. S. C oy ote
was li abl e for Santucci 's h

orses; and (3) a conf

li ct of i nter est exist ed be t wee n t he I IG F and Santucci tha t es topped the II GF

f rom se ek ing to ab an don its def

ense of hi m. San tucci attached po rt ions of h

i s deposi tion to the m

otion f or sum mary j udgm ent. Santuccistated du r ing his depos i ti on that, on the night of the in cident, he was a cting a s presi de nt of P .S . C oyo t e whe n he l eft the ga te open and returned equi pme nt used by

that company

to the si te. Further, he stated that t he Plan

k Road pr oper ty and trail er were used 8 0% o f the tim e for P.S . Coyot e busi

ness. The II GF r eplied t o S ant ucci 's cr oss-m otion f or sum mary j udgm en t. The trial

court granted Sa

n tuc ci ' s c ros s- m oti on f or s um mar y j ud gm en t an d d en i ed th e IIGF 's

m oti on f or su mmar y jud gme nt . T he I I GF filed t his t imely a pp ea l. AN AL YSIS Sum mary judgm ent is proper where there are no genui ne issues of mat er ial fact a nd t he moving pa

rty i s e n ti tled to j ud gm

en t asa m atte r o f la w. 735 ILCS 5/2--1 005(c ) (We st 2004 ). Th e t r ia l court m us t con si der th e p l eadi

ng s, d ep osi ti ons , ad m i ss i ons , ex

hi bi ts, a nd af f i da vi ts on f ile an d con strue th

em in f av or of the n onm

ovi ng p arty . Murray v . Chi cago Yout h Cen

ter , 224No. 2-- 06--0777

-5-

I ll. 2d 213, 2 28 (2007 ). We review the trial court's dec ision t o gr an t sum mar y j ud gm en t de
novo . Murray , 22 4 I l l . 2d at 22 8. A

l th oug h sum mar y j ud gm en t i s e n cou ra ge d a s a

n ai d to
ex pe di te t he disposi ti on of

a l aw su it, i t i s n everth el es s " a d ras ti c m ea ns of di sp osi ng of l iti ga ti on and, t her efo re , sho uld be a llowed only wher e t he r ight of t he movi ng par ty i s c l ea r an d f ree f rom doubt ." Bagent v. Bl

essi ng Care Corp. , 224 Il

l . 2d 154 , 163 (2 007). The I I GF ar gu es t ha t t he t r ial c o ur t er r ed by d en ying it s mot ion f or summary judg ment and gran tin g San tucci 'scross -m

otion f or sum mary j udgm en t. Acc ording to the

II G F, S ant ucc i's cla im is not a "covered clai

m," because S ant ucci

is not a "person in sured" under section 534.3(a) of t he I nsur ance Co de ( 215 ILC S 5 /5 34. 3( a) (Wes t 200 4) ), as he was not co ver ed by th e Stat ewi de po licy. T he I I GF co nc lud es , t he r efo r e, t ha t it is no t o blig at ed t o de fen d S an t uc ci i n the underl yi ng case. "A court's pr imar

y ob j ec tiv e i n con str ui n g th e l an gu ag e of an in su ra n ce pol i cy i s to
asc er t ain and g ive effect t o t he inte nt ions o f the par t ies as e xpr esse d by t he langu age of t he pol i cy ." Val l ey Forge Ins uran ce C o. v. Swi

ders ki El ect ronics , Inc. , 223 Il

l . 2d 352 , 362 (2 006). We give the po li

cy' s wo rds th

ei r pl ai n, ordi na ry , an d popul

ar m ean ing. Val le y F orge Insurance , 223 Ill . 2d at 366. Eve ry state in the n

ation ha s establ

ished an insu r an ce gu ar an t y fun d t o pr o t ec t insu r ed s in t he eve n t t ha

t an i ns uran ce c omp an

y be com es i ns olv en t. Ha se man n v . W h ite , 177 Ill . 2d 414, 417 (1997). The IIGF was created a s a not-for-pro fi t associati on designed to li mi t t he l osses ar isingout of i

nsuran ce compan

ie s ' i ns olv enci es. Gines v. Ivy , 358 Il

l . App. 3d 607, 609 ( 2005)
. Eve ry insu r an ce co mpa ny t ha t is a ut ho r ize d t o do bu sin es s in I llin ois is a member o f, and contri bute s to, the IIG

F. Has emann , 177 Ill . 2d at 417.No. 2-- 06--0777

-6-

However, the

IIG F l im its i ts obl i ga ti ons onl y to "covered cl ai ms." S ect ion 5 37. 2 o f the In su ra n ce Cod e prov i de s i n pa rt: "The Fund shal

l b e obli gated t o t he ex

tent of the co ve r ed cla ims ex i sti n g p ri or to t he ent ry o f an Or der of Liqu idat ion ag ainst an inso lve nt co mpany and ari si ng wi thin 30 da ys aft er t he ent ry o f such O rd er , o r be for e t he po licy expirat ion d ate if le s s than 30 da ys after the entry

of such Order, or bef

ore t he i nsu red replaces the po li

cy or on request ef f ec ts ca n cell ati on , i f h e d oes so within

30 da y s a f te r th e e n tr y

of s uch Order ." (Em pha si s added.) 2 15 IL CS 5/5 37.2 (W est 200 4). Se cti on 53 4.3 (a ) d ef

in es"c ov ered

cl ai m ," pr ov i di

n g i n pe rti n en t pa rt:

" 'Covered cl

ai m' me ans an

unpai d cl ai m f or a loss ari si ng ou t of a nd wit hin the coverage of

an i nsuran ce po licy to which t his Art icle app lies and w hich is in forc e at t he t ime of t he o ccu rr ence giving rise t o t he unp aid claim, inc lud ing claims pre sent ed d ur ing anyextended discovery

peri od wh i ch waspurch

ase d f rom th e com pan y be f ore the e ntry of a li quidation order or which i s p urch ase d or obtai ne d f rom th e l i qui dator af ter the e ntry of a l iqui dation orde r , mad e b y a person i nsured un

der such pol

icy or b y a p ers on suffer ing injury or damag e fo r w hich a pe rso n in sur ed under such poli cy is legal ly li abl e, an d f or une arned pre

m i um ***[.]" (Em

phasi s added.) 2 15 IL CS 5/5 34.3(a ) (We st 2004 ). The St at ewide po licy was issue d t o P .S . C oyo t e, a co rp or at ion en gag ed in t he constr uction busin

ess. The St atewide policy defi ned an i nsured, in rel

evant part , as foll

ows: "If y ou ar e designated in

the Declarations as: * * * (d) an o r ga niz at io n o t he rt ha n a pa r t ne r ship , jo int ve nt ur e o rlim ited l i ab i l ity
co mp an y, you are an

in sured. Your 'executiv e off ic ers' an d direc to rs ar e i

nsureds, b

utNo. 2-- 06--0777

-7-

o nly with respe ct to their duties as your offi cers or director s. You r sto ckholders are also ins ured[s ], but onl

y wi th respect to thei

r l i ab il ity a s stockh

old ers." To det er mine whet her an insur er 's du t y to defend ha s ar isen, a co ur t must co mpar e t he allegat ions of

the underl ying com plai nt to th e l an gua ge of the insura nc e p oli cy . General

A ge n ts Insuranc e Co. of A

m eri ca, In c. v . M i dwest Sp orti

ng Good s C o. , 215 Il

l . 2d 146 , 154-5 5 (200 5). The alle ga t io ns in th e underl yi ng com pla in t must be l

ib erall y c onstrued in

fav or o f the i

nsured. General Ag en ts Insuran

ce C o. of A

m eri ca , 215 Ill . 2d at 1 55. If the al l eg ati ons f al l wi thi n, or po t en t ially withi

n, the p olicy's co ver age , t he insur er has a dut y to defend t he insur ed a gainst t he und erl ying c omp l ai

nt. General

Agen ts Insurance Co. of A

me rica , 215 Ill . 2d at 155. In the instant case, the underl yi ng com pla in t had two co unts: count I al le ged that S antucci vi olat ed the Domesti

c An im al s Act (510 ILCS 55/1 et seq. (W es t 200 4)) . Cou nt II of t he compl

ai nt all eged general

ly that Santucci was n

egl ige nt by fai li ng to: (a) pro vi

de an adeq

uat e en cl osure fo rt he ho r se s; ( b) insp ec t an d ma int ain t he en clo su r e; ( c) r ep air any defec t s in the
e ncl osure; and (d) erect and m ain tain suf fi cien tly stro ng fen

ces that wo uld prevent the horses'
esc ape. Af ter re viewing S t at ewide 's de fini t ion o f "ins ur ed" and the underl yi ng com pla in t, we det er mine t hat Sant ucc i was no t a "p er so n insure d" w ithin t he meaning o f sect ion 5 34. 3( a) of t he Ins urance Code . 2 15 I LCS 5/ 534 .3 (a ) ( West 200 4) . Fir st , t he "p er so n insure d" u nder t he Stat ewi de poli

cy was P.S. Coyote and, according to the policy , its exe c ut ive dire ct or s and off i cerswi th r es pe ct to t he ir d ut ie s. Second, the complai nt nam es Santucci , in

div idua ll y, b ut does not name

e i ther P. S. Co yot e o r S ant ucc i in his ca pac ity as a n officer or dire ct or of t he
co rp or at ion. Thi

rd, the hors es w ere own

ed by San tucci indi vi dual l y , a nd n ot by

P.S. Coyot e. Santucci co nt ends t hat he was "wear in g hi s corporat e hat" when he al legedl y l eft the gate openNo. 2-- 06--0777

-8-

allowing the horses t o esc ape. H owev er, thi s does n ot ch an ge th e f ac t th at n ei th er P.S . C oy ote
n or S an tuc ci , a s a n of f i ce r or d i re ctor th ereof , w as n am ed in th e c om pl ai n t. Citing Un

ited States F

i del ity & Guara nty Co. v. W il ki n In sul ati on Co., 144 Il

l . 2 d 64, 73

- 74 ( 19 91 ) , fo rt he br o ad r ule s a pp lica ble t o du t y-t o - de fen d c as es , Sa nt uc ci a rgues that the IIGF ha d a duty to defend b

ecause, under the n

egl ige nce count, it was possi

bl e that P.S. Coyote woul d be nam ed as a def

endan t. Defendan

t ignores that we are b ou nd no t by the gene ra l rules o f the du ty to defen d in in sur ance l aw

ca se s, b ut b

y th e I n su ra n ce Cod e i tse lf , w h i ch l im its r ec ov er y to "covered cl ai ms ." See 2 15 ILC S 5/

537 .2 ( W es t 200

4). Th ere

f ore, the br oad rul es of duty-todefend st anda rd s fou nd in Un ited Sta tesFi de l ity & Gu ar an

ty do not appl

y h ere. Ne x t, as a m

atter of f i rs t im pre ss i on i n Ill inoi s, S an tuc ci con ten ds tha t the IIG F' s p olic y defenses were wai

ved b ecause Statewide ac ce pte d Sa ntu cc i 's tender wi

thou t a re se rv ati on of ri gh ts and the IIGF also agreed t o defend Santucci (alb eit subj ect t o a reser vation of righ ts) but then waited 15 months bef

ore fil in g its complai

nt seeking decl

arato ry rel

ief . Santu cci f

irst argues that t he IIGF i s bound b y Statewide 's agr ee m

en t to def en d h im wi thou t a re se rv ati on of
r igh ts. Santucci

correct ly notes that, in typi

cal in surance cove

rage cases, i

n the ab sence o f a res ervati on of ri ghts , a n insurer

waives al

l que stions of

poli cy coverage when

it assum es an insure d's defense. See A m er i ca n Sta tesIn su ra n ce Co. v . N ati

on al Cycle, Inc. , 260 Ill . App. 3d 299, 305-06 (1994). Ho wever, Santucci ign ores that t he IIGF i s not aninsura nc e co mpany and that Stat ewi de's deci

si on to de fend wit hou t a rese rvat ion o f rights d oe s not bind the I IGF. Rat he r, b y

sta tute , the I IGF a ss um

ed th e p ol i cy ob l i ga ti on s of Sta tew i de on l y to th e ex ten

t t ha t those obl i ga ti ons we re s tatutor

i l y de f ined " cover ed cla im

s." See 215 ILCS 5/537.2, 534.3(a) (We st 2004) . We

ha ve al ready determ ine d tha t Santuc ci 'sclai

m was not a "c overe d c laim, " because he was n ot a "person i

nsured" un

der the Insuranc e Code.No. 2-- 06--0777

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Further, the Insurance Code expr essly li mi ts t he IIGF's l

iab il ity as foll ows: "The Fund shal

l n ot be bound by

a se ttl em

en t, rel ea se , com

prom i se , wa ive r, or fi nal j ud gm en t executed or ent er ed w ithin 12 mont hs pr ior t o a n or der of liquida t ion and sha ll h av e th e r i gh t to as se rt a ll de f en se s a v ai l abl e to th

e F un d i n cl udin g, b ut no t limit ed to, defenses ap pl

i ca b l e to d ete rm in in g a n d e n f orc in g i ts s tatu tory ri gh ts a n d obl i ga ti on s to
an y clai m ." 215 ILCS 5/537 .7(b ) (We st 2004 ). In t his case , S t at ewide assu med t he de fense o f Sant ucc i on o r a bou t Janu ar y 6, 2 004 , a nd
was found i

nsol ven t t hat sam

e day . Therefore, pursuant to section 537.7(b) of the Insuran ce Code, the II GF ca nnot b e b oun d by an y purp orte d w ai

v er , a s S tatewi

de ' s w ai v er of its
res ervati on o f r igh ts fel l wi t hin the 1 2 mo nt hs pr ior t o t he o rd er of liquida t ion. St at ewide 's fai lure to reserve i

ts rights does not constitute waiv er under establ

ished case la w or t he statute. We f ind support f

or ou r d ecisio n h ere i

n th e dec i si

on s of our siste r s tate s. Mos t sta

te in surance gu ar ant y st at ut es , in clu ding t hat o f I ll in oi s, are v er y si m il ar to th e S tate

Pos tAsses sment Ins uran

ce Gu ara nt y As soc i ati

on Mode l Bi ll , propos ed

by the Na ti ona l A ss ociati

on of Insuranc e Comm

is si oners. See Urban v . Loham , 227 Ill . App. 3d 772, 776 ( 1992); 19 A J. Appl em an & J. Appl em an, Insuran ce Law &

Practice §10801, at 365 n.2 (1982)
. Ac co r di ng ly, in a con structi

on of the IIG F prov i si ons, d eci si ons of other stat es cons truing s im il ar laws are entitl edto re sp ect an

d con si derati on. Loham, 227 Ill . App. 3d at 776. With thi s i n m in d, we consider Lo pez v. T exas Pr op er t y & Casu alty I nsur ance Gua ra nt y Ass'n , 990 S. W.2 d 50 4 ( Te x. App. 1999 ). In Lopez , a n ins ur er

as su m edth e d ef

en se of a d ri ve r of a veh i cl e th roug h th e ti m e of judg m en t, a nd th en the i ns uran ce c omp an

y waspl ace d i

n l i qui dation. Lopez , 990 S.W.2d at 505. The insure r ne ver issued a r ese rva t ion o f right s, a nd t he in su re d a rg ue d that th

e T ex asGu ar an

tyNo. 2-- 06--0777

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A ss ociati on was estopped from den

y i ng cov era

ge , b ec au se

the insure r h ad wa ived i ts re se rv ati on of ri ghts
. Lopez , 99 0 S. W .2d at 5 05. Th e C ourt of

A ppe al s of Texas h el d that, under general contract l aw , w ai

v er wou l d hav

e oc cu rre d; h owev er , pu

rs ua n t to the Texas In surance Code, th ere co uld be no coverage , be caus e the ins ured w as n

ot a cover

ed pe rson . Lopez , 990 S.W.2d at 506. Thus, the Texas In suran ce Code pr ev ai l ed ov er gen

eral ins uran ce c ontract wa

ive r rul es. Lopez , 990 S.W.2d at 506. Li ke L opez , we determi

ne that articl

e XXXIV of the Ins urance Code, contain in g the IIGF pr ovisio ns (215 ILCS 5/532 et seq. ( We st 20 04 ) ) , pr ev ails o ve rge ne r al i ns urance contract waiver rul

es. Theref

ore, Santucci's w aiver argum ent is not appli cabl e i n thi s IIGF case. Nor do th e I IGF' s own

ac ts- -a greein g to def

en d S an tuc ci an d c on du cti

n g that de f

en se f or overa year -- co ns titute wa i v er un de r e sta b l i sh ed ge n er al in su ra n ce ca se l aw . Th e I IGF a gree d to defend Santucci 's cl

ai m un der a reservati on of ri ghts. It is axi omatic that , where an

in surer agrees to def

en d an ins ured unde

r a res erv ati on of

ri ghts , it prese

rv es its ri

ght to seek a decl aratory judgm ent denyin g cov erage . IM C Gl oba l v. Con tine nta l In su ran ce Co. , 378 Ill . App. 3d 797, 80 9 (200 7). In such a c ase, estoppel can

not apply to the in surer. See IMC Global , 378 Ill . App. 3d at 809. In this case, the IIGF agreed to defend San tucciunder a reservat ion of rights. Therefore, u nder general i nsurance l aw, it cannot be est opped fro m assertin g its defens es. La st ly, Sa nt uc ci c o nt en ds t ha t a c o nflic t o f int er es t be t we en him and t he II GF es t op s t he II G F f rom ab an don in g i ts d ef en se of h im . Sa

n tuc ci con ten ds th at, wh

en th e I IGF f

il ed its decl aratory

judgm ent action, i

t was obli

gated to advi se hi

m to fi le a contribution cl ai

m a ga ins t P.S. Co yo t e. Ac co r din g t o Sa nt uc ci, a c o nflic t ar o se be ca us e, alt ho ug h it wa s in hi s i n ter es t to file a c ontr

i bu ti on c l ai m , doi ng so w ou ld h

ave b een av

erse to t he i

nterest of the IIGF, whi chNo. 2-- 06--0777

-11-

wo uld ha ve ha d to d efend the

cl ai m . Sa ntu cc i con cl ude s that th

e II GF 's f ai l ure to advi se hi m of hi s righ ts now estops it from den yi ng coverage. The IIGFass ert s, h

owe ve r, th at th ere wa s n o prop er b as i s f

or an y su ch con tri bu ti on cla im. San

tuc ci doe s n ot con tend otherwi se , i

nstead s ay

ing onl y tha t the propri ety of an y such cla im "is a n i ss ue to b e dec i de d by

th e tr i al cou rt i n th e S ta t e F ar m la ws ui

t." W e f ai l to se e h ow Sa n tu cci can fault t he I IG F for faili ng t o a dvise him to fil

e a c laim when he ca nnot say t hat t he cla im would ha

ve b een proper. In any

even t, Santuc ci

cites n o re l ev an

t au thor ity in supp ort of hi s argum en t, and thuswe ad

dres s i t no f urthe r. See 2 10 Il

l . 2d R. 3 41(h

)(7). Because t here ar e no genu ine issues of mat er ial fact a nd t he I IG F is ent itled t o ju dgment
as a mat t er of law , w e r ever se t he trial co ur t 's o rd er gr ant ing summary jud gment in Sant ucc i's favo r a nd de nying the I IG F's su mmary judgment mot ion. For these reasons, the j udgme nt of the ci

rcuit court o f K

ane County

is reversed. Reversed. GILL ERA N JO HNSO N, P.J., a

nd G ROMETER, J., c oncu

r.