No. 1-06-3339

STATE FARM FIRE AND CASUAL TY ) Appeal from the COMPANY, ) Circuit Court of ) Co ok Co un ty. Plaintiff-Appellee, ) ) v. ) ) UTICA NATI ONAL

INSU RANCE GROU

P, ) ) No. 04 CH 6466 Defendant-Appellant ) ) ) (State Farm Mutual Automobile Insuranc e ) Co mp an y, ) Honorab le

. ) David R. Donnersberger, Plaintiff). ) Judge Presi ding.

JUSTICE ROBERT E. GORDON d elivere d the opini on of the c ourt: Plaintiff State Farm Fire and Casualty Company (State Fa

rm) filed the case at bar seeking a declaratory

judgment that it owed no coverage in conne ction with two personal injury lawsuits. The circuit court of Cook County a lready f ound that State Farm owed coverag e for the underlying

lawsuits, and this court affirmed that finding in an order date d May 7, 2007 (No. 1- 06-0711, unpublished order under Supreme Court Rule 23). Defend ant Utica National Insu rance G roup (Uti ca) file d a counte rclaim a gainst St ate Farm seeking a declar

atory judg

ment that its umbrella policy was in excess of State F arm’s umbrella policy. State Fa rm filed a motion for summary judg ment pursuant to section 2-1005 of the Code of Civil Procedure (735 ILCS 5/2-1005 (West 2004)) claiming that Utica was required to contribute to the settlement of the underly ing lawsuits. In an order

dated October 27, 2006, theNo. 1-06-3339

2

trial court granted State Farm’s summary judgment motion. For the reasons stated below, we affirm. BACKGROUND In July 2002, a

n Audi automobile collided with a minivan, killing both the driver and passenger of the Audi. Title to the Audi was in the name of Francis Liedtke; and State Fa rm Mutual Aut

omobile I nsuranc e Company

carrie d the auto

insuranc e. I

n addition

to the aut

o insurance policy , there were two umbrella policies: State Farm F ire and Casualty Company had issued a personal umbrella insurance policy to Liedtke; and Utica had issued a c ommercial umbrella policy to Digital Imaging Solutions, I nc., a company

owned and operated by

Liedtke. State Fa rm sough t a decla ratory judgmen t that it wa s not oblig ated to pa y on the umbre lla policy beca

use Liedtke was not actually the owner of the vehicle at the time of the acc ident. After a trial on the issue of ownership, the trial court found that L iedtke was the owner and thus State Farm owed coverag e for the underly ing lawsuits under its umbrella policy . State Farm appeale d that find

ing, an d this cour

t affirmed (No. 1 -06-0711 , unpublished order under Supreme Court Rule 23). Utica and State Farm cooperated in the settlement of the underlying

lawsuits. In the agree ment, the insuranc e compan

ies agr eed to pa y $6 million as f

ollows: $1 m

illion by State Farm Mutual on the automobile insurance policy ; $3 million by State Farm on the personal

um br el la po li cy; an d $ 2 m il li on by U ti ca on it s c om me rc ia l u mb re ll a p ol ic y. Parag raph 5 of the settle ment ag reemen t expressly

reserved Utica ’s righ

t to pursue

its claim that its policy was in excess over the State F arm umbrella policy. Par agraph 6(a) providedNo. 1-06-3339

3

that in the event that a court determines that its policy was in excess over the State Farm policy then State Farm shall reimburse Utica in the amount of $2 million. Alternatively, Paragraph 6(b) provided that in the

event tha t a court determines that the

Utica pol icy

was not excess to the

State Farm policy, the

n Utica shall reimburse State Farm in the amount of $500,000. After the settlement, this action continued for the purpose of deter mining the respective liability of State F arm and U

tica unde r the sett lement ag reemen t. Each in surance

company has in its respe ctive umbrella po licy an “othe r-insura nce” cl ause tha

t provide s that the p olicy

is in “excess” over all other insurance policies. State Fa rm’s othe r-insura nce cla use provi des in ful l that: “Other Insuranc e. This policy is excess over all other va lid and collectible insurance.” Utica’s other-in surance

clause provides i

n pertine nt part: “5. Other Insuranc e – Coverage A. This insur

ance is e xcess over

any other va lid and co llectible insuranc e whethe

r primar y, e xcess, con

tingent or any other ba sis, except suc

h other in surance

as is writt

en speci fically

to be exce ss over this insurance.” State Fa rm moved f

or summar

y ju dgment c laiming t

hat Utica was req uired to c ontribute to the settlement, because their two other-insurance c lauses were incompatible, and thus cancelled each other out. Utica filed a cross motion for summary judg ment claiming that the twoNo. 1-06-3339

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clauses were not incompatible and that Utica’s clause made its policy in excess to State Farm’s policy. In an order date d October 27, 2006, the trial court granted State F arm’s summary judgment motion and denied Utica’s motion, and this appeal followed. For the r easons stated below, we

affirm. ANAL YSIS The stand ard of r eview in t he case at bar is de novo . “Since the construction of an insuranc e policy

is a quest ion of law , our rev

iew is de novo .” Ohio Casualty I nsurance Company v. Oak Builders, Inc

. , No. 1-05-2279, slip op. at 5 (June 1, 2007). In addition, we review de novo an order granting summary judgment. North River Insurance Co. v. Grinnell Mutual Reinsurance Co. , 369 Ill. App. 3d 563, 568 (2006). There are gener

ally three ty

pes of other-insurance clauses: the pro-ra ta clause; the exces s clause; and the escape clause. Ohio Casua lty , slip op. at 6. The Illinois Supreme Court defined the thre e ty

pes of cl auses as

follows: “The ty pical pro-ra

ta clause provides that when an insured has other insurance available, the company will be liable only for the proportion of the loss represented by the ratio between its policy limit and the total limi

ts of all a vailable insuranc e. The excess clause allows coverage only ‘over and above’ other insurance . The escape clause holds the policy null and void with respect to any hazard as to which other insurance exists.” Putnam v. NewNo. 1-06-3339

5 Amsterdam Casualty Co. , 48 Ill. 2d 71, 76 (1970), quoted in Ohio Casualty , slip op. at 6. Both par ties conc ede that

the other -insura nce cla uses in the ir respe ctive pol icies ar e both exce ss clauses

. The Illinois Supreme Court has stated that “when two policies c ontain the same sort of ‘other-insurance’ clause, the cla uses will be deemed incompatible.” Padilla v. NorwegianAmerican Hospital, Inc. , 266 Ill. App. 3d 829, 836 (1994), quoted in Ohio Casua lty , slip op. at 7. When two clauses are "he same sort" and hence incompatible, they "cancel each other out" and the insurance companies must “share the costs associate d with defending and indemnify ing the suit.” Ohio Casua

lty , slip op. at 8-9. Although Utica concedes in its appellate brief tha t the two clauses are both excess clauses and thus both the same

typ e, it clai

ms that the

two claus es are still not of the “same sort” be cause the two cl auses do n

ot contai n identic al lang

uage. Utica not

es that its clause i s more spe cific than State Farm’s clause. State Farm’s cla use states only that its policy is excess “over all other valid and collectible insurance.” By contrast, Utica’s clause states that its policy is excess over all other insurance “whether primary , excess, contingent or any other basis, except such other insurance as is written specifically to be excess over this insurance.” In Ohio Casua

lty , we were recently

presented with almost the exact same argument and rejected it. Ohio Casua

lty , slip op. a

t 9-10. L ike the c lause in St

ate Far m’s policy

, the cla use in the American Family

policy in Ohio Casua

lty was short. It stated only

that it was excess overNo. 1-06-3339

6

“ ‘[a]ny other primary

insurance.’ ” Ohio Casua lty , slip op. at 7. By contra st the clause in the Ohio Casua

lty p olicy was long er, more

specific and with la

nguag e very

similar to t

he claus e in Utica’s policy. The

Ohio Casualty clause state d that the policy was excess over all other insurance “ ‘whether primary , excess, contingent or on any other basis unless a contract specifically r

equires that this insurance be primary .’ ” Ohio Casua lty , slip op. a

t 8. Li ke Utica in

our case , Ohio Casu

alty asserte d that it sho

uld not have to shar

e the inde mnificat ion costs because the two excess clauses were “ not identical.” Ohio Casua lty , slip op. at 10. In Ohio Casua

lty , we rejected the “not identical” arg ument. Ohio Casua

lty , slip op. at 10. Although Ohio Casua

lty was dec ided appr

oximately a month af

ter Utic a submitte d its brief in this appeal, the Ohio Casua lty opinion wa s merely

an applic ation of long-sta nding pr eceden t, such as Putnam , decided over 40 y ears ago, and Padilla , decided over 10 y ears ago. Putnam , 48 Ill. 2 d at 76; Padilla , 266 Ill. App. 3d at 836. I n Ohio Casua

lty , we stated: “[T]he Putnamcourt described the three differe nt types of ‘other insurance’ clauses and concluded that whe re ‘other insurance’ clauses of the same ty

pe are in conflict, it is ‘impossible to give effect to the intent of all parties.’ [Citation.] Indeed, in Padilla , relying on our decision in Putnam , we confirmed that ‘when two policies contain the same sort of ‘other insurance’ c lause, the clauses will be de emed inc ompatible .’ [Citation .]” (Emphasis omitted.) Ohio Casua

lty , slip op. at 10.No. 1-06-3339

7

Based on our above analy sis of Putnamand Padilla , we held in Ohio Casua lty that since the policies at issue contained the “same ty pe” of insurance clause, namely an excess clause, the clauses were incompatible and cance led each other out and thus the two insurance companies ha d to share in the loss on a pro-rated basis. Ohio Casua lty , slip op. at 11. Like we did a few months later in Ohio Casua

lty , the trial court in the case at bar relied on Putnamand Padilla in its opinion to reach the same conclusion. CONCLUSIO N For the reasons stated above, we affirm the decision of the trial court that the two otherinsurance clauses canceled e ach other out and thus Utica was required to contribute to the settleme nt. Affirmed. McBRIDE, P.J. and GARCI A, J., concur.