1-05-0883 FIRST DIVISION Fi le d: 5-29-07 SBC H OLD INGS, IN C., ) Appe al fro m the ) Ci rcu i t Cou rt of Plai ntif f-A ppel la nt and Cross-Appel

le e, ) Co o k C o un t y.

) v. ) No. 03 CH 4009 ) TRAVELERS CA SUALTY A ND SURETY COMPANY, ) Honorable ) Nan

cy J. A rnol d, Def endan t-App el l ee a nd C ross-A ppel l an t. ) Judg e Pres i di ng. JUSTICE RO BERT E. GORDO N del i vered the opi ni on of the court: The c en tral i ss ue i n th i s c as e is w

h eth er de f en da n t Tra v el er s C as ual ty an d S ur ety Compan y (Trave le

rs) had a duty to defen

d its i nsured, plai

ntif f SBC Holdi ngs, Inc. (SBC), i

n an underl yi ng sui t again st SBC all

egi ng racial dis crim in ation. In 1987, Ci

ty an d Suburban Di stri butors ( C& S) sue d the

Stroh Bre

wery Co. (sub seq

uen tly renam ed SB C) i n the ci rcui t court of Co ok Co unt y. Fo llowing r emova l of t he ac t ion t o t he Unit ed S t at es D istr ict C ou rt for t he No r t he rn D ist r ict o f I llino is, C& S file d a se co nd ame nd ed co mpla int alle gin g t ha t SB C w r o ng fully rej ected two poten

tia l buy ers f or the C &S d

i stri butorsh i p be caus e nei

ther of the b uy ers was b l ack. In Ma rc h 19 97 , a l most n i n e y ea rsaf ter th e s ec on d a

men de d c om pl ai n t wa s f i l ed , SB C te

n dere d i ts def en se of the C &S s

ui t to t he Aetna C asual

ty a nd S urety Com pan y (prede ces sor to Trave l ers). Sixteen months later (July 1998), after S BC had wo n the C&S suit , Tr avelers refused SB C’s tender of def en se a nd d en i ed cov erage . In M arch

2003, S BC f

i l ed a c omp l ai

nt i n the ci rcui t court of Co ok Co unt y seek ing, a mong ot her t hings, a de clara t ion t hat Tr aveler s had a du t y to defendNo. 1-05- 0883

1 The und erl y i ng C &S c omp l ai

nt al l eged di scri m i na tion by Stroh i n Jan uary and Fe bruary 1987, w hi ch i s wi thi n the pol i cy peri od. 2 SBC in the C &S su it. In Fe bru ar y 2005 , t he circ uit co ur t held t hat t he disc riminatio n alleged by C&S w as no t co ver ed u nder t he T ra velers po licy, and T ra velers t her efo re had no dut y to defend SB C. T he co ur t en t er ed su mmar y jud gme nt in fa vo ro f T r av ele r s a nd ag ain st SB C. SB C t imely f i l ed a n oti ceof appe al . Tra

ve l ers f i l ed a n oti ceof cros s- appe al

f rom the ci rcu i t cou rt’ s den i al of Tr aveler s’ mot ion t o d ismi ss S BC’s co mplaint o n st at ut e- of- lim itat ion g ro unds . Fo r t he r eas ons set f orth be l ow, we a f

f i rm the j udgm

en t of the ci rcui t court. BACK GROUND Acco rd ing t o S BC’s co mplaint fo r d eclar at or y judgment , S BC w as fo rmer ly known a s t he Stro h Brewery

Compan y (Stroh) but change d its n am e to S BC i

n 1999. SBC’s

compl ai nt states that SB C i s an

Ari zona corporation wi

th i ts pri nc i pal pl ace of b usi ne ss i n D etroit, Mi chi gan . The i nsuran ce poli cy at issue in this case, exce ss i

ndem ni ty (um brel la ) poli cy No. 65 XS 255 1 S CA, w as issu ed t o t he St ro h Co mpanies, Inc ., by the Ae t na Ca sua lty and S ur et y Compa ny (Aetna) f or t he peri

od from A

pril 1, 1986 to April 1, 1987. 1 Aetna was subse quently

purchased b y Tra v el er s, an d i n 19 97 ch an ge d i ts n am e to Tra v el er s. The p oli cy

pr ov i de d, i

n perti n en t pa rt: "2
. 1 C OV E RAG E
. T he co mpa ny w ill pa y o n be ha lf o f t he insu r ed t he ult imat e n et lo ss in
excess of the appl

ic abl e underl yi ng l im it whi ch the i nsured sh al l b ecome l

egally obli gated t o pa y as d ama ge s be ca us e o f A. Pe rsonal Inj ury, B. Proper ty D am age, orNo. 1-05- 0883

3

C. Adve rtisi ng Of fen se to which the p oli cy appl i es, c aus ed b

y an occurre nc e an y wh ere i n the worl

d ***. * * * 2.3 DE FENSE OF SUI TS NOT COVERED BY 0T HER INSU RANCE (a) Th e c om

pa ny sh al l de f en d a ny sui t se ek i ng da mag eswh i ch are not p ay ab l e on be ha l f of t he insur ed u nder t he t er ms of t he po licies of Und er lyi ng I nsur ance des cr ibed in Sec t ion 1 or any other avai

la ble i nsuran ce (1) because suc

h dam ages are not covered thereunder *** bu t wh i ch are pa yab l e u nd er th e terms of Sec ti on 2 .1 * ** e

ve n i f an y of the al l eg ati ons of the sui t are gro undless, f

al se or fraudulent ***.

* * * Section 5. DEFINITIONS

* * * 5.10 'occ urrence’ means *** (2) with respect to advertisin g offens e and personal i

nj ury respectivel

y: an offense de sc r ibe d i n t he de finit io n o f t ho se t er ms in t his po licy; 5. 11 'p er so nal injury’ means bo dily i njury and injury arising o ut of o ne o r mo re of t he f ol l owi ng of f en se s c om

m i tted d uri ng the pol i cy pe riod: f alse arres t, deten

ti on or impriso nment, malicious p ro sec ut ion, wr ong ful ent ry o r e victio n or ot her invasion o f the ri ght of pri va te occupa ncy , hum i l i ati on or discrimination because of race , reli gion, age,No. 1-05- 0883

4

se x o rph ysic al d isa bilit y ( unless committed by or at the dir ection or the Insured

, or unl ess i ns uran ce theref or is prohi bi ted b y l aw) ** *." (Em

phases adde d.) In the mid-1980 s, C&S wa s an independently owned wholesale distributo r o f Stro h’s pro duct s in the Chicago area. Accor ding to C&S’s seco nd amended complain t, sales of Str oh’s pr oducts con sti tute d a b out two-th

i rd s of C& S’ s to tal

sa l es . Th e f oll owi n g sum mar y of ev en ts lea din g t o t he filing o f C& S’ s s ec o nd ame nd ed co mpla int is ba se d, in p ar t , o n t he alle ga t io ns in th at c om pl ai n t. C& S di stri

bute d Stroh produ

cts pur sua

nt to a wri

tten wh ole sal er agr eem en t. In Se pt emb er 19 86 St r o h a t t emp t ed t o t er minat e t his a gr ee men t be ca us e o f an alle ge dly unauthorized c ontro l c

han ge at C&S. Foll

owing n egotiations b etween the parties, i t was agreed–pur suant to a letter ag reement dated S eptember 15, 1986 –that C&S would continue as a Str oh di str i b utor f or 9 0 day s w h i l e a ttem pti n g to s el l i ts b us i n es s to a pur ch

as er ac ce pta b l e to Str oh. Dur in

g the fall of 1986, C&S solicited a numb er of bids f rom pot ential

purchasers, in cl udin g Vie rk Distributi

ng Com pany and Nelson Carlo Enterprises, Inc. Vierk and Carl o each off ered $ 5 m i l l i on f or all of C &S’ s distri

butorsh i p ri ghts
. Acco rd ing t o t he se co nd amend ed c omp laint, C&S s ubmitt ed t he pr op os als t o S t ro h, which r eject ed t hem even t hou gh Vier k wa s alre ady a S t ro h dist ribut or and ha d bee n app ro ved by Stroh. In a letter dated

Feb ruary 4, 1987 , Stroh group v

i ce pre siden

t Ken ne th A . Ti ppery
ex pl ai ne d Stroh’ s obj ections to Vi erk, C arl o and a thi rd poten tia l purch ase r, Arc hi e Mi tche l l
. W i th re ga rd to Vi er k, t h e l ette r s tate d, i n perti n en t pa rt:No. 1-05- 0883

5

"As y ou have kn

own from the begi nni ng of the C &S l

iqui dation process, we hav

e required three characteris

tics of prospects for consideration: *** (2) mi nority -owned and operated, i f not wholl

y at l east to a ma

j or exten t." The letter added that Str oh had "j ust to day " recei ved C& S’s latest Vierk proposal, whi ch was "u na cc ep t ab le" fo ra n umbe ro f r ea so ns . "F ir st , we r eq ui r e a n a ct ive , inv o lve d m ino r it y ownerope rator ***." (Emphasi s i

n origi nal .) The letter, whi ch was pri nted on Stro h letter head, f urther sta ted "f or th e re cord " th

at on e of the pos i ti ve ch ara cteri sti csof the onl y ca nd i da te that Str

oh deemed acceptable (Thomas Ran d, o wner of Beverage Af

fi li ates, I nc.) was that he was a "[m]em ber of the domin

ant po pulation i

n the C&S market." Ac co r din g t o C& S’ s s ec o nd ame nd ed co mpla int , St r o h ins ist ed t ha t C& S n eg o t iat e t o se ll to Beve rag e Af f i l i ate s ( Ra nd ). C &S f urth er a l l eg ed tha t, i f C& S di d n ot se l l to Ra nd , Stroh threa tene d to exe

rci se i ts rights und er the l etter agre em

en t to buy back i ts produc ts f

or $2.9
m i l l i on a nd term i na te C &S ’s f ran ch i se . A s a res ul t, C& S f i l ed sui t i n th e c i rcu i t cou rt of Cook Co un t y se ek ing inju nc t ive r elie f t o ba rSt r o h fr o m t er minat ing C& S’ s d ist r ibu t o r ship
. T he cir cu it
cou rt i ss ue d a tem porar y re strai n i n g order p roh

i b i ti n g S troh f rom ter m i n ati n g or i n terf eri n g w i th C& S’s ri ghts as a f ranchi see or taki ng a cti on to und

erm i ne C& S as th

e di stri butor f or its terri tory. As prev iousl y n ot ed, the case was sub sequentl y m oved to federal c ourt . On March 12, 198 7, t he dist rict co ur t gr ant ed a pr elimi nar y injunct ion bar ring S t ro h "fro m pro cee ding wit h a race-based s el ection." In reach in g this deci si on, the distri ct court found, am ong ot her thi

ngs, that "race was clearly

the do mi nant factor in the selection process."No. 1-05- 0883

6

C&S al le ged further that, after the prelim in ary i nj unction was i ssued, C&S n egotiated a dea l with Ra nd fo r sa le of t he dist ribut or ship. Ho weve r, Rand re fused t o g o fo rw ar d wit h t he pu rc h as e. A cc ordi

n g to C & S, a

t th i s p oi n t prosp ec ti

v e b uy er s w er e r el

uc tan t to n eg oti ate

wi th C&S, f earin g rejec tion by Stro h or pot entia

l i nvol vem ent in li tigation. A s a resul

t, C&S all

eged, i ts s al esde cl i ne d, a l ong wi th th e val ueof i ts f ran ch i se . Even tua l l y , af ter m ore th an a y ea r of negotiations , C&S sold i

ts distri bution ri ghts to Vierk for an am

ount t hat was al

le gedl y a bout $1 million les s t ha n V ier k w o uld ha ve pa id b efo r e S t r o h r eje ct ed t he ea r lier bid
. Du r ing t ha t int er va l, C& S cl ai med th at i t was f orced to borrow s

ubs tantial sum s to keep i ts bu si ne ss ope n. The second amended compl ain t, which was f

il ed on June 9, 1988 , cont ain ed four co unts,
ea ch o f wh ich wa s ba se d o n a lleg ed r ac ial d isc r iminat io n. Co un t I cla imed a b r ea ch o f co nt r ac t in that SBC used a race-base d factor in rejecting the Vi

erk and Carl

o offers, i n vi olation of the le tt er agr eement wit h C&S. Co unt II alleged t hat St ro h violat ed t he I lli nois B eer Ind ust ry Fair D ealing Act (now see 815 ILCS 720/1 et seq . ( West 200 4) ) by unr eas ona bly (based on r ace ) w ithho lding its approval

of the sal e of C& S’s asse

ts. In count II I, C&S alle ged that St roh to rtiously in terfered wi th th e f orm ati on of con tract by wron gf ul l y rej ec ti ng the Vierk an d C arl o of f ers on th e b as i s of
rac e. C oun

t IV a l l eg ed a c i vi l righ ts v i ol ati on i n th at Str oh r ej ec ted the sa l e to e i the r Vi erk or Ca rlo base d on

the rac e of the pote nti al bu yers . Wi th reg ard to Vierk , cou

nt IV s tate d: " Stroh dis approved the C&S sal

e of som e or all of i ts assets to Vie

rk on the ground[] t hat Ri chard Vi erk, presi dent and owner of Vi erk Dis tributi ng Com pany , is a w hi te person." A si

mi la r all egation was mad e r eg ar din g C ar lo : " St r o h d isa pp r o ve d C &S ’ s ale o f so me o rall o f it s a ss et s t o Ne lso n C ar lo E nt er pr ise s, I nc . , o n t he gr o un d t ha t Ne lso n C ar lo , pr es ide nt an d o wn er o f Ne lso n C ar loNo. 1-05- 0883

7

Enterprises, In

c.: a. is n ot a bl ack person; b . is an

His pani c-Am erica n." The s econd am

ended compl ai nt sought $3.25 mill

ion i n dam ages bas ed on the fol

lowi ng two all egations: (1) "C& S was f orce d to s el

l i ts b us i ne ss f or ap prox i mate l y $1 m i l l i on l es s th an i t woul d have re ce i

ve d if Stroh ha d n ot wron gf ul l y rej ec ted the Vierk an d C arl o of f ers ," a nd (2) "C &S wa s f

orce d to b orrow appro xi mately $2.25 mil

li on to remai

n i n busi ness i n order t o negot iate a subsequent sale." On March

11, 1997, alm

ost nin e y ears af ter t he f il in g of C&S’ s second am

ended
co mplaint, St ro h t ende re d it s de fense o f the C&S s uit t o Ae t na. Tw o mo nt hs lat er , S t ro h wo n t he C& S sui t. City & Suburban Distributors-Illinois, Inc. v. Stroh Brew ery Co. , No. 87 C 1409 (N .D . I ll. 199 7) . T he dist rict co ur t gr ant ed s ummary judg ment in favo r o f St ro h on t he gr ou nd t ha t C& S s uffe r ed no da mag es as a r es ult o f r ac ial d isc r iminat io n. T his d ec isio n w as su bse qu en t ly af f i rmed. City &

Suburban Distributors Illinois, Inc. v. Stroh Brew ery Co. , 14 2 F . 3d

43 9 8 (7 th Ci r. Apri l 30, 199 8). In a let te r da te d July 27, 199 8, T raveler s dec li ned St ro h’s te nder of de fense in the C&S sui t. With regard to t he i

nsuran ce poli cy at issue , excess i

ndem ni ty (um brel la ) poli cy No. 65 XS 25 51 SC A, T r av ele r s s t at ed t ha t C& S, in it s s ec o nd ame nd ed co mpla int , "d o [ es ] no t cla im da mag es o n a cc o un t o f ** * p er so na l injur y ** * c au se d b y an o cc ur r en ce as ea ch o f t ho se t er ms is defi ned withi n the policy." On Ma rch 4, 2 003 , SB C f

i l ed i ts c om pl ai nt f or de cl ara tory j udg men t i n th e c i rcu i t cou rt of Cook Coun

ty. In i ts com pl ai nt, SBC sough t, am ong othe r thi ngs , a dec l aration tha

t Trave l ers owed an d br eache d a du

ty to def end SBC i n the un derl y i ng f edera l action brough

t by C& S. According to S BC, it spent at least $1,039, 009 for its successful defense of

the C&S suit. SBCNo. 1-05- 0883

8

f urth er a l l eg ed tha t (1) i t wa s a na med i ns ure d un de r th e u m br el l a p ol i cy at i ss ue"b ec au se

Stroh [su bseq uent ly renamed S BC] was a who lly ow ned s ubsidiar y of The St ro h Co mpanies, Inc . [ t he
na med i ns ured] d uri ng th e pol i cy peri od"; (2) the

pol i cy cove red " di scri

m i na tion be caus e of

race ,"
and C& S’s

al l egati ons of raci al di scri m i na tion (i n the se cond

am ended c omp l ai

nt) the ref ore tri gg er ed Tra v el er s’ du ty to de f en d S BC i n th e u n derl y i n g sui t; an d ( 3) Tra v el er s b re ach ed i ts duty to def end. On Apr il 18, 2 003 , T ra velers fil ed a mot ion t o d ismi ss S BC’s co mplaint o n t he gr ou nd that i t was u nti mel y f i l ed. Tra ve l ers p oin

ted to secti

on 13- 206 of

the C ode of

Ci vi l Procedu re (735 ILCS 5/13-206 (West 2002)), which provides , in

pertinen t part : "actions on *** wri tt en contr acts *** shall

be comm enced withi

n 10 years n

ext after t he cause of action accrued." A cc ordi n g to Tra v el er s, SB C’ s c au se

of ac ti on on th e T ra v el er s p oli cy (a wri tten con tra ct)
ac crued when SB C re ce i

ve d C &S ’s

se con d a men de d c om pl ai nt. Th e C &S com

pl ai nt wasf i l ed on Ju ne 9, 19 88 , bu t SB C’ s d ec lar at o ry jud gme nt co mpla int ag ain st T r av ele r s w as no t filed un t il Marc h 4, 2 003, " 14 y

ears and 9 m onths af ter accrual ." In

Septem ber 2003 the c i

rcui t court den i ed Tra ve l ers’ motion

to dis m i ss a nd f ound th at SBC ’ssui

t was ti mel y f i l ed. Tra ve l ers subse quently

move d to certif

y f or interl ocuto ry appea

l, pursuan t t o Supreme Court Rule 308(a) (155 Il l . 2d R. 3 08(a)) , the q

ues tion of w hether Tra

ve l ers’ motion

to dis m i ss was properl

y den i ed. In D ecem ber 2003 the c i

rcui t court den

i ed Tra ve l ers’ Rul

e 308 motion
. In Ma y 20 04 Tra v el er s m ov ed f or sum mar y j udgm en t. In i ts m oti on , Trav

el er s p oi n ted to its p olicy langua ge d efining "per so nal injury" as "injur y arising o ut of o ne o r mo re of t he fo llowing off enses comm itted durin

g the policy

period: *** discrimination because of race , reli gion, age,No. 1-05- 0883

9

se x o rph ysic al d isa bilit y ( unless committed by or at the dir ection of the Insured , or unl ess i ns uran ce theref ore i s proh

i bi ted b y l aw)." (Em

phasi s ad ded.) B ase d on th

i s languag e, Trav

elers
asser te d t hat it was ent itled t o su mm ary judgment as a mat te r o f law "because the under ly ing C&S Sec ond Amended Co mplaint d oe s no t allege a 'per so nal injury’ offense which is co ver ed by t he Travelers poli

cy , but rather all

eges di scri

mi nation b ecause of race

whi ch was c omm

itted by or at th e d i re cti on of Str oh s. " In

i ts m em ora n du m i n su pp ort of i ts m oti on f or sum mar y j udgm en t, T r av ele r s e lab o r at ed o n it s a r gu men t t ha t t he alle ga t io ns in C& S’ s s ec o nd ame nd ed co mpla int did not t rigg er Tr aveler s’ du t y to defend . T ra velers st at ed: "[E ]a ch ca use of a ct ion in t he Se co nd Am ended C& S Compl

ai nt is based upon a de li

berate busi

ness deci sion by

Stro h to empl

oy a racebased selection criteri[on] in connection wi th C&S’s att empted sale of i ts St roh franchi se." Tr aveler s po inted aga in to t he insur ance po licy’s definition o f "per so nal injury" as "injur y arising
ou t of, " amo ng o t her t hings, "discr imi nat ion bec aus e o f rac e ** * unles s co mmi t t ed by o r a t t he direct ion o f the I nsure d." Tr avelers st at ed: "The a ll egat ions o f the S eco nd Amended C&S Complai nt clearly fal l outside of that defini

tion." On September 24, 2004, SBC fi led a cross-motion for summ ary j udgment. SBC
ackn owl ed ge d th at " th er e a

ren o m ate rial f ac t qu esti on s" an

d a rgue d th at S BC wa s e n ti tl ed to j udg men t asa m atte r of l aw "b ec au se Tra ve l ers br each ed i ts d uty to de f en d a nd so m us t pa y f or al l of Str oh ’s de f ense costs i n th e u n derl y i n g C & S sui

t." SB C rep ea

ted i ts a l l eg ati on f rom i ts de cl ara tory j udg men t com pl ai nt th at C &S sough

t da mag esag ai

ns t Stroh f or raci al di scri m i na ti on and that t hi s triggered T ravelers’ duty to defend the C&S suit. SBC also all eged that Travelers’ i n su ra n ce f or di scri m i n ati on wa s a m b i gu ous an d th er ef ore"m us t b e c on str

ue d i n f av or of th e d utyNo. 1-05- 0883

10

t o de fen d. " Ac co r din g t o SB C, T r av ele r s " pr o mise s ins ur an ce fo rdis cr iminat io n bu t t he n t ak es it al l a way for di scri mi nation ' comm

itted by or at the direction of the i nsured.’" SBC

al so all eged that Mi chi gan i ns uran ce l aw ap pli ed to Stroh’ s coverage and tha t, unde r Mi chi gan l aw, Tra ve l ers
was "re quir ed t o p ay for all $1. 1 mill ion o f St ro h’s de fense c os t s incur re d fro m the filing of t he C&S suit." Pu rsu ant t o a n agr eed or der ent er ed in No vember 2 004 , t wo que st ions w er e at issue in t he summary judg ment mo t ions: (1 ) w het her t he allega t ions in t he und er lyi ng C&S co mplaint tri gg er ed Tra v el er s’ du ty to de f en d S BC i n th e C & S sui

t, a n d ( 2) wh eth er Tra v el er s w as l i ab l e to SBC f or def en se c osts wh

i ch SBC i nc urred pri or to notif

y i ng Tr av elers of the C &S s

ui t. On Fe br ua ry 24, 200 5, th

e c i rcu i t cou rt h ea rd a rgu men ts on the cros s- moti ons

f or summary judg ment, and e nt er ed s ummary judg ment in favo r o f Tr aveler s and aga inst S BC. The
co ur t explained t hat it had co mpar ed C &S’s sec ond amende d co mplaint w ith "t he insur ing agree men t coveri ng pe rs ona l i njury " a nd con cl ude d that " on i

ts f ac e there i s n o pote nti al f or coverage of that un

derl y i ng [C& S] acti on und

er thi s poli cy ." The c ourt stated: "What we ha ve her e t hat ’s clea rly show n by the s eco nd amend ed c omp laint in t he unde rlying act ion and its e xhibits, which include s t hat [Fe bru ar y 4, 1 987 ,] lett er fro m the vi ce president, is that that was an a ction, an action of discri

mi nation c omm

itted by and at t he dir ect ion [ of S t ro h] * ** it was a co rp or at e ac t , a co rp or at e po licy of affirmative action." Th e c i rcu i t cou rt ex pre ss l y he l d that Travel

ers ha d n o duty to de f en d the C &S sui

t. Be ca us e of t his dec ision, t he co ur t did no t add re ss t he se co nd qu est ion at issue in t he su mmary judgmentNo. 1-05- 0883

11

mot ions: whet her Tr aveler s wa s liable for defens e co st s incur re d by SBC pr ior t o S BC’s not ify ing Travelers of

the u nde rl y i ng C &S s ui t. SBC t im ely fi led a not ice of appeal. Tr avelers cro ss-app ealed from the circuit c our t’s Septem be r 20 03 d en i al of Tra ve l ers ’ m oti on to d i sm i ss SB C’ s c om

pl ai nt on sta tute- of -l i m i tation grounds. AN AL YSIS On ap pe al, SB C a r gu es , as it did be lo w, t ha t : ( 1) t he alle ga t io ns o f r ac e d isc r iminat io n in C&S’ s sec ond amende d co mplaint t rigg er ed T ra velers ’ du t y to defend SBC in the C &S su it, and (2) Travelers

is required to pay SBC

the defe nse costs whi

ch SBC i ncurred prior

t o no t ify ing Tr aveler s o f the C&S s uit , a s we ll as the defens e co st s incur re d aft er t his not ifi cat ion. Wi th reg ard to SBC ’sf

i rst argu men t, the ci rcui t court, as n

oted, gran

ted sum mary j udgm en t in f av or of Tra

ve l ers, c oncl

udi ng th at Travelers owe d no du

ty to def end SBC
. "S um mary j udg men t i s a ppr opri atewhere the pleadi ng s, d ep osi ti ons , ad m i ss i ons , an

d a f f i da vi ts on fil e, when t ake n t og et her in the light most favo ra ble to t he no nmovant , sho w t hat t her e is no genuin e issue of m

aterial f act and t he m

ovant is entitled to judgmen t as a matt er of law." Gaw ryk v. Firemen’s Annuity &

Benefit Fund of Chicago , 356 Ill . App. 3d 38, 41 (2005). Where, as her e, "t he pa rt ies have filed c ro ss- mot ions fo r su mmary judgment , t hey agr ee t hat no g enuine issue a s t o a ny mater ial fact e xists and t hat only a qu est ion o f law is involved, and t hey invite t he
cour t t o decide the issue based on the recor d." Gaw ryk , 356 Ill . App. 3d at 41. We review a ci rc ui t cou rt’ s r ul i n g on a m oti on f or sum mar y j udgm en t de novo
. Gaw

ryk , 356 Ill . App. 3d at 41.No. 1-05- 0883

12

In d et er mini

ng whe t her an insur er has a dut y to defend its insu re d, a co ur t loo ks t o t he allegat ions in t he und er lyi ng co mplaint and co mpar es t hem to t he r elevant pr ovisio ns o f the i ns uran ce pol i cy . Outboard Marine Corp. v. Liberty Mutual Insurance Co. , 154 Ill . 2d 90, 107- 08 ( 199 2) . " If t he fact s allege d in t he und er lyi ng co mplaint fall within, or po t ent ially wit hin, t he policy ’s coverage, t he i

nsurer’s duty to defend ari ses." Outboard Marine , 154 Il l . 2d at 10 8. However, if

it i s clear from

the fac e of the compl

ai nt that t he al

le gations f

ai l to state facts which brin g the case within, or pot ential ly withi n, the po li

cy’ s coverage, an i

nsurer may

pro perly refuse to def end. United States Fidelity & Guaranty Co. v. Wilkin Insulation Co. , 144 Ill . 2d 64, 73 (1 991 ), quo t ed in State Farm Fire & Casualty Co. v. Hatherley , 250 Ill . App. 3d 333, 336 (1993). "[W]here the language of an i nsuran ce poli cy is cl ear and un

am bi guous, it wil

l b e applie d as written." Hatherley , 25 0 I l l . A pp . 3d at 3 37 . Th

e c on str uc ti on of an i n su ra n ce pol i cy pr es en ts a question of

la w that is rev

ie wed de novo
. Outboard Marine , 154 Il l . 2d at 10 8. In t he seco nd amended co mplai nt, C&S alleged t hat , du ring t he fall of 19 86, C&S
so licited a number of bids fr om p ot ent ial pur chas er s o f C&S’s dist ribut or ship. Inc luded among the se bi dde rs we re th e V i erk Di stri bu ti ng Com pa ny an d N elson Ca rlo En terpri se s, I

nc ., e ac h of wh ich o ffer ed $5 million fo rall o f C& S’ s d ist r ibu t o r ship r igh t s. C& S fu r t he ralle ge d t ha t it
su bmit t ed t he se pr o po sa ls t o S t r o h, bu t S t r o h r eje ct ed t he m ev en t ho ug h V ier k w as alr ea dy a Stroh distri

butor an d ha d be en approv ed b y Stroh. In a l etter to C&S d

ated F ebruary

4, 1987 , Stroh group v

i ce pre siden

t Ken neth A . Ti

ppery
ex pl ai ne d Stroh’ s obj ections to Vi erk, C arl o and a thi rd poten tia l purch ase r, Arc hi e Mi tche l l
. W i th re ga rd to Vi er k, t h e l ette r s tate d, i n perti n en t pa rt:No. 1-05- 0883

13

"As y ou have kn

own from the begi nni ng of the C &S l

iqui dation process, we hav

e required three characteris

tics of prospects for consideration: *** (2) mi nority -owned and operated, i f not wholl

y at l east to a ma

j or exten t." The letter added that Str oh had "j ust to day " recei ved C& S’s latest Vierk proposal, whi ch was "u na cc ep t ab le" fo ra n umbe ro f r ea so ns . "F ir st , we r eq ui r e a n a ct ive , inv o lve d m ino r it y ownerope rator *** ." (E mphasis in o riginal.) The lett er furt her st at ed " for t he r eco rd " t hat one of t he positi ve ch aracteristi cs of the onl

y c andi date that St roh deeme d acceptable (Thomas R and, owner of Beve rag e Affi

li at es, Inc. ) wa s t hat he was a "[m]ember of t he do mi nant p op ulatio n in the C&S market." C& S’ s s ec ond

am en de d c om pl ai nt c onta i ne d f our c oun ts, e ac h of

wh i ch wa s b as ed

on al le ged raci al

dis crim in ation. Speci fi

cally , each count was predicated on Str oh’s al le ged i mproper
us e o f a r ac e- ba se d fa ct o rin r eje ct ing t he Vie r k a nd Ca r lo o ffer s. Co un t I V, wh ich cla imed a c ivil rig hts v i olation, stated: "21 . S t ro h disap pr ove d t he C&S sale o f some o r a ll of its a sset s t o V ierk on t he gro und[] t hat Richard Vierk, pr esiden t and o wner of Vierk Di stributing Compan y, i s a whi te pers on. 22
. St r o h d isa pp r o ve d C &S ’ s ale o f so me o rall o f it s a ss et s t o Ne lso n C ar lo E nt er pr ise s, I nc . , o n t he gr o un ds t ha t Ne lso n C ar lo , pr es ide nt an d o wn er o f Ne lso n C ar lo Enterpri ses, In

c.:
a. is not a black per so n;No. 1-05- 0883

14 b. is an Hispan ic-Am erican." Under the relevan

t po li cy la nguage, Travel

ers promi sed to co ver personal in jury "to which this policy applie s, caused by

an occurrence an

yw here i n the world." A

n "occurrence," as

related t o "p er so na l injur y," wa s d efin ed as "a n o ffen se de sc r ibe d in t he de finit io n[ ] o f [ pe r so na l injur y] in thi s p ol i cy ." " Per son

al i njury ," i n tu rn , wa s def

i ne d a s " i njury ari si ng out of *** di scri

m i na ti on be ca us e of rac e, rel i gi on, ag e, s ex

or ph y si cal di sa bi l i ty (un l es s c om m i tted b y or at th e di recti on of the Insured, or u nless in

surance therefor is prohibi ted by law)." C&S’s second am

ended com

pla in t appears to al le ge delib erate, busin ess-dri ven racia l dis crim in ation com mi tt ed by Stro h. It seems

cl ear that such di scri

mi nation f al ls out si de the scope of the rel evan t pol i cy l an gua ge , wh ose pl ai n, ordi na ry mea ni ng i s th at there i s n o covera gef or di scri m i n ati on com m i tted b y or a t th e d i re cti on of Str oh . Th

i s w as th e v i ew of th e c i rc ui t cou rt, whi ch, af ter hearin g argumen

t o n the parties ’ cross-motions for sum ma ry j udgme nt, stat ed: "I am going to grant the insurer’s mot ion for summary j udgment and d eny the in sured ’s [ mo t io n] o n t he ba sis t ha t by r ea din g t he se co nd ame nd ed co mpla int an d it s a t t ac hme nt s in the underl yi ng acti on, and compari

ng that to the in

surin g agreem ent coverin

g personal in jury , that o n i ts face there is no potential for coverage of that underl yi ng acti on under this poli cy." No t wit hst an din g t he fo r eg o ing , SB C c o nt en ds t ha t T r av ele r s’ r ele va nt po licy la ng ua ge is amb iguous and therefore must be const rued in f avor o f coverage. Accord in g to SBC, Tr avelers’ i ns ura nc e p ol i cy

prom i se s c ove rag e f or discri m i na ti on b ut then , b y

proh i bi ti ng covera gef orNo. 1-05- 0883

2 SB C ack n owl ed ge s th at North Bank "is t he o nly Mi chigan a ut hor ity o n po int" r ega rd ing thi s i ssue. 15 dis crim in ation "com

mi tt ed by or at the direction of the Insured," takes b ack what the poli cy had prom i se d. In S BC ’s

vi ew , Tra ve l ers i s e ss en ti al l y sa y i ng : " [W]e c ove

r y ou f or discri m i na ti on unl ess you do i t." SBC argue s tha

t thi s i s con

tradictory and am bi guous. In mak ing t his arg ument , S BC r elies pr imarily on North Bank v. Cincinnati Insurance Cos. , 12 5 F .3d

98 3 ( 6th Ci r. 1997), a federal

court of appeals case that predi cts Mic hi gan l aw with regard to the type of l ia bi li ty l im itation at i ssue h

ere. 2 North Bank found am bi guous an insura nce p olicy pr ovisio n bar ring c ove ra ge fo r d iscriminatio n "co mmi t t ed by o r a t your [t he
nam ed insured’s] direction." North Bank, 123 F. 3d at ___. According to defen dant in the case at ba r, North Bank held "t hat t he exc lusion fo r 'd iscriminatio n co mmi t t ed by o r a t your dire ct ion’ f orf ei ts a l l cov erag e f or ' i n ten ti on al ’ a n d ' un i n ten ti on al ’ d i scri m i n ati on , lea v i n g th e i n su re d w i th nothi ng." We di sag ree wi th thi s i nterpretati on of

the l anguag e i n qu esti on. He re, Trav elers
ac kn owl edge s th at, u nd er i ts v ers i on of thi s l an gua ge , th ere i s p oten ti al covera gef or neg l i ge nt or vi carious discri

mi nation. In

its b rief to this court , Travele

rs asserts: "Corporat e lia

bi li ty ba sed ***
o n it s 'n eg lige nt su pe r visio n’ o r[ impo se d] 'vic ar io us ly’ fo rt he ac t s o f it s p er so nne l wo uld pote nti al l y f al l wi thi n th e ' pe rs ona l i njury ’ def i ni ti on, be ca us e the di scri

m i na ti on i tse l f wa s n ot 'c o mmit t ed by o rat t he dir ec t io n o f t he I nsu r ed
. ’" T r av ele r s a dd s t ha t "d isp ar at e imp ac t " c laims agai nst the i ns ured a l so woul d poten tia l l y f al l wi thi n i ts poli cy ’s"personal

i nj ury " de f i ni tion . In
ou r view , T ra velers ’ po licy l angu age bar ring c ove ra ge fo r d iscriminatio n "co mmi t t ed by o r a t t he di rection of the In sure d" doe s n

ot eli m i na te cove rage f or all typ es of uni nten tion al di scri m i na tion
.No. 1-05- 0883

16

We re ject SBC ’s ar gument , ba sed on North Bank, that Trav elers’ l i ab i l i

ty l i m i tation i s am bi guous. SBC next points to the rule of the last antecedent, which provides: "[R ]el ati ve or qual i f y i ng word s or ph ras esi n a sta tute s erv e on l y to modif y word s or phr ase s wh i ch are i m medi atel y prece di ng. Th ey do not m odi f y those w hi ch are m ore remote. " People

v. Davis , 199 Il

l . 2d 130 , 138 (2 002). SBC appl ie s thi s rule

to the Travelers poli

cy ’s def in ition of "personal

in jury ," which l is ts several types of off enses and en ds wi th the restrictiv

e parentheti cal

at issue : "(unless com

mi tt ed by or at t he di r ec t io n o f t he I ns ur ed ** * )
. " S BC no t es t ha t di sc r imina t io n be ca us e o f "p hys ica l d isa bilit y" is the last t ype o f discr imi nat ion liste d befo re t he pa re nt het ical, a nd co nclude s t hat , ba sed on t he rul e of the l as t an tec ed en t, th e l i m i ti ng pa ren the ti cal the ref ore a ppl i esonl y to di scri m i na ti on because of phy si cal dis abi li ty an d not t o t he f

our prior t ype s of discri

mi nation, i ncl udin g race discr imi nat ion. SBC ack now ledge s t hat t he circ uit co ur t below inter pr et ed t he limi t ing paren thetical as a ppl y i ng to al l f i ve typ es of di scri m i na tion , rathe

r than si m pl y to the l ast ty

pe. SBC asserts that the circui t cour t erred in i

ts in terpret ation. SBC adds that, regardles s of wh ic h in terpret ation i s correct, the rule of the last antecedent "shows that Travel ers’ wordin

g can
r ea so na bly be r ea d e it he rwa y," an d t he pa r en t he t ica l limit at io n t hu s is amb igu o us . We find t his argum en t unpe rsua si ve . As p r ev io us ly indic at ed , t he de finit io n o f "p er so na l injur y" in T r av ele r s’ po licy s t at es , in perti n en t pa rt:No. 1-05- 0883

17 "'[P ]e rso nal injury’ means bo dily i njury and injury arising o ut of o ne o r mo re of t he f ol l owi ng of f en se s c om

m i tted d uri ng the pol i cy pe riod: f alse arres t, deten

ti on or impriso nment, malicious p ro sec ut ion, wr ong ful ent ry o r e victio n or ot her invasion o f the righ t o f pri vate occupancy

, hum il ia tion or discri

mi nation b ecause of race , reli gion, age, sex or p hysical

disab il ity (unl ess comm itted by or at the direction of the Insured *** )." We agree wi

th the ci rcuit court t hat the l ast antecedent i n thi s i nstance i s "di scri mi nation," wh

ic h i s th e l ast i n a s eri es of of f ense s l i ste d i n th e def i n i ti on pri or to th

e p ar en th eti ca l . If we wereto adopt S BC’s readi

ng, we would b e forced to conclude, ill ogical ly , that Tr avel

ers chose to pro vi

de
co ver age for discr imi

nat ion bec aus e o f rac e, re ligion, a ge, or sex, even if co mmi t t ed by o r a t t he di recti on of the i ns ure d, b ut neverth

el es s chos e n

ot to prov i decovera

gef or discri m i na ti on beca use of p hysical disability if t he disc riminatio n wer e co mmi t t ed by o r a t t he dir ect ion o f the i ns ured. N o pl aus i

bl e argu men t is off ered to ex pl ai n s uch a dec i sion on th

e part of Travelers. Ou rco nc lu sio n he r e is su pp o r t ed by People v. Davis , 199 Ill . 2d 130 (2002), a case cited by SBC. In Davis , o ur sup re me co ur t app lied t he r ule o f the last ant ece dent t o s ect ion 3 3A- 1( b)
o f t he Cr imina l Co de o f 1 96 1 ( 72 0 I LC S 5/ 33 A- 1( b) ( We st 19 92 ) ) , wh ich de fine d a ca t eg o ry I
wea po n: "A c at eg o ry I w ea po n is a pis t o l, r ev o lve r , r ifle, sho t gu n, sp r ing gu n, o ran y o t he rfire ar m,
sa we d- o ff sh o t gu n, a s t un gu n o rt as er as de fine d in pa r ag r ap h ( a) o f Se ct io n 2 4- 1 o f t his Code, knif

e wi th a bl ade of at le ast 3 in

ches i n length, dagger, dirk, swi tchbl ade kni fe,No. 1-05- 0883

18

stil etto , or any other deadl

y or dangerous weapon or i nstrume nt of like character." 720 ILCS 5/33A

-1(b ) (We st 1992 ). Th e supr em e c ourt i nte rprete d the c onc l

udi ng word s, " or an

y othe r de adl y or da ng erou s w ea

pon
or instr ument of like c har act er ," as a pplying t o t he ent ire clas s o f blade- t ype we apo ns liste d in t he stat ute ( "kni fe wi

th a blade of at least 3 in

ches i n length, dagger , dirk, switchblade knif e, stiletto ") and not just t o "st il

ett o." Davis , 199 Ill . 2d at ___. In su m , we con cl ude tha t the Tra ve l ers pol i cy ’s li ab i l i ty l i m i tati on b arr i ng covera gef or discr imi nat ion "c ommitt ed by o r a t t he dir ect ion o f the Insu re d" is no t ambiguo us. Anticipa t ing
our decisi on on t hi s iss

ue, SBC arg ued, in i

ts briefs to this court , t hat Michi

gan had the most sign if ican t co ntacts with t he i

nsurance policy at is sue and that, under Ill in ois choice of l

aw rules, Mich igan law therefore cont rolled Travel ers’ policy coverage in this

case. According to SBC, "Michi gan h olds that Travelers’ di scri mi nation i nsuran ce i s am bi guous and so mus

t be construed in fav or o f SBC’s ri

ght t o a defense of the underly in g C&S suit." Be f orea c our

t ca n appl y a ch oi ce -of

-law an al y sis to de ter

m i n e w h i ch sta te’ s l aw appl i es to the d i spute, i t mu st f i rst determ

i ne i f there i s a c onf l i ct i n the lawsof the two states . McGrew v. Pearlman , 30 4 Ill. App. 3d 6 97, 701 (19 99) ; Malatesta v. Mitsubishi Aircraft International, Inc. , 275 Ill. App . 3 d 37 0, 374 (1 995 ). A co nfli ct exist s if the d iff

er ence in laws will resu lt in a di f f eren ce i n outcom e. McGrew, 30 4 Ill. App. 3d at 701 ; Malatesta , 275 Il l . Ap p. 3d a t 374. If t he law o f the jurisd ictio ns in que st ion is es sent ially t he sa me on t he disp ut ed p oint , t her e is no
ne ed to appl

y a ch oic e-of -l aw an al y si s. Wreglesw

orth v. Arctco, Inc. , 316 Ill . App. 3d 1023, 1028No. 1-05- 0883

19

(2000 ). In th

e ab sen ce of a conf l i ct, Ill i noi s law ap

pli es a s the

l aw of the f orum . Dearborn Insurance Co. v. International Surplus Lines Insur ance Co. , 308 Il

l . Ap p. 3d 36 8, 373 ( 1999)
. SBC a rgues that i t has suf f i ci en tly al l eged a conf l i ct between

Il l i noi s an d Mi chi gan l aw. In
su ppor t of thi s c onte nti on, SB C p oi

nts to North Bank v. Cincinnati Insurance Cos. , 125 F.3d 983 (6 th Ci r. 1 99 7) , a

f ederal cou rt of appe als c as e p re di

cti n g M i ch i ga n l aw wi th re ga rd to th e l i ab i l i ty l i m i tation wordi ng a t is sue i n the ca se a

t bar. As previ

ousl y noted, North Bank

found am bi guous a p ol i cy excl us i on worde d s i

m i l arl y to Tra ve l ers ’ provi si

on b arr i ng covera gef or discri m i na ti on "com m i tted by or at the di

rection of the In sure d." In reachi ng th i s con cl usi on, North Bank pointed t o t he do ct rine o f rea so nable exp ect at ions. Unde r t his do ct rine, a co ur t gr ant s co ver age if the pol i cy hol der, up on rea

di ng th e con tract l anguag e, has a

reas onab l e ex

pectati on of cove rage. North Bank, 1 25 F .3 d at 987 . Ac co rd ing t o t he co ur t of a ppe als in North Bank, t he plaint iff bank "r ea so na bly ex pe ct ed t ha t t he [ un de r lying] dis cr iminat io n c laim w o uld be co ve r ed by t he umb r ella policy." North Bank, 1 25 F .3 d at 987 . I n t he co ur t ’s view, "t he de fendant insura nce c omp any should not be permi

tt ed to sell

the bank a policy coveri

ng dis crim

in ation clai ms an d then to refuse to cover gar den vari ety discri mi nation cl aim

s." North Bank, 125 F .3d at 98 7. To th e exten t th at North Bank predicted Mi chi gan l aw wi th regard to the policy

la nguage at iss ue he r e, it ha s b ee n u nd er mine d b y Wilkie v. Auto-Owne rs Insurance C

o. , 469 Mich . 41, 664 N. W. 2 d 77 6 ( 200 3) . I n Wilkie , t he Mic hig an Su pr eme Co ur t ab an do ne d t he rule o f r ea so na ble expectat ions, concludi

ng that it was "inv

ali d as an approach t o co ntract in terp retat ion." Wilkie , 469 Mich. a t 52, 664 N. W.2 d at 782 . I n view o f the dec ision in Wilkie , w e c on cl ud e th at NorthNo. 1-05- 0883

20

Bank is insufficient au t hor ity t o s upp or t SBC ’s allega t ion o f a co nfli ct bet wee n Michigan a nd I llino is la w. We r eje ct SB C’ s a r gu men t t ha t Mic hig an law co nt r o ls T r av ele r s’ po licy c o ve r ag e in thi s ca se. SBC argues, i

n the al ternative, that the C&S se cond am ended com

pla in t alleged vi

carious dis crim in ation an d that t hi s alle gation triggered Trave le rs’ duty to defen

d. SBC asserts that Travelers h

as a dm i tted cove rage f or vi cari ous l i ab i l i ty. Accordin g to SBC, "[t]he C&S al

le gations target the personal bia s of Stroh’s group vi cepresident (Kenneth Tipper y)," the a ut hor o f the Februar y 4, 1987, lett er explaini ng St ro h’s objections to t he propo sed purchasers submi tt ed by C&S, incl

uding Vi erk and Carlo. SBC conten ds there is ev

i den ce i n the rec ord that Ti

ppery , i n expl ai ni ng th e rea sons f or rej ecti ng V i erk
and Car l o, was a cti ng on his own , i

n c ontraven

tion of Stroh corporate pol

i cy . The F eb ru ar y 4 l ette r s tate d, i n perti n en t pa rt: "As y ou have kn

own from the begi nni ng of the C &S l

iqui dation process, we hav

e required three characteris

tics of prospects for consideration: *** (2) mi nority -owned and operated, if not who ll

y at leas t t o a major extent." The letter added that "we have j ust to day recei ved" C& S’s latest Vierk proposal, whi ch, the letter stated, "is una

cceptable to us" for a num ber of reasons . "Fi

rst, we require an acti

ve, i nvol ved mino r it y own

er- ope rator

*** ." ( Em

phas i s i n or i gi na l .) Th e l ette r, w hi ch wa s p ri nte d on Stroh let t er he ad , fur t he rst at ed "fo rt he r ec o r d" t ha t o ne o f t he po sit ive ch ar ac t er ist ics o f t he o nlyNo. 1-05- 0883

21

candi date who was deem

ed acceptabl

e (Thomas R

and, owner of Bev

erage Af fi li ates, Inc.) was that he was a "[m]ember of the domi nant population in the C&S m arket ." SB C c on ce de s th

at " Mr . Ti pp er y ’s Fe b ru ar y 4 c orre sp on den ce

sa y s ' we ’ req ui rem i n ori ty
own er sh i p." In oth er words , the l

ette r u se s th e th i rd -p er son pl ur al "we" ra th er th an th e f i rs tperson si ngul ar "I." SBC attempts to avoi d the obvi ous im pli cations of the use of "we " by

stating: "M r. T i pp er y us ed th e p ron oun ' we ’ b ut does n ot s ay wh o sh ar es h i s m oti v e f or m i n ori ty
own ers hi p." SB C adds

tha t Ti ppe ry doe s n ot sa y i n th e l ette r th at m

i nor i ty own ers hi p " i s a Stroh corpo rate policy

[or] a St roh corpo rate requirem ent." Fi nal ly , SBC acknowl edges that the letter "i s wri tt en on Stroh stationery," b ut adds that it is " si

mpl y s ign ed 'K enn eth A. Ti ppery, Group Vice Presi dent.’" We f in d SBC’s argum

ent that Tippery

was actin g in contravention of

corpo rate policy
un pe rs ua si ve , as di d the c i rcu i t cou rt. D uri ng the he ari ng on th e p arti es ’ cros s- moti ons

f or summary judg ment, t he circ uit co ur t re ject ed a ny arg ument t hat t he disc riminatio n alleged by C& S w as v i ca rious . Th e c our t sta ted , i n perti n en t pa rt: "This w as a co mpany po licy. That lett er came r ight ou t and s aid o ur co mpany policy ; m e, the vice president speaki ng on be hal f of the compan

y, I’m tell in g you that our compan y pol ic y i s to base these thi

ngs on race. That’s n

ot the supervisor who fi

res
som eb ody be caus e h e doesn’ t li

ke s ome body be caus e h e’s

bl ack. Th i s i s a c orporate act. This i s an expressi

on of cor por ate po li

cy."No. 1-05- 0883

22

In su m, we co nclude t hat , in t he ca se a t bar , T ra velers ’ lim iting p ar ent het ical denying coverage f

or discri mi nation " comm

itted by or at the direction of the Insured" is not ambi guous and mus t be ap plied as wr itt en ( Wilkin , 1 44 I ll. 2d a t 74) ). C&S’ s sec ond amende d co mplaint clear ly all ege d, on it s face , d eliberat e, business -d riven r ace discr imi nat ion "c ommitt ed by o r a t t he direction of" Stroh. The facts al le ged do not fall, even potential ly , withi n the poli cy ’s coverage, and Travel

ers therefore had n

o dut y to defen

d SBC i n the un derly in g C&S sui

t. See Outboard Marine , 1 54 I ll. 2d a t 108 . T ra velers was ent itled , a s a mat t er of law , t o s ummary judg ment. We af f i rm the c i rcui t court’s a

wardi ng of sum mary j udgm en t in f av or of Tra

ve l ers a nd a gai nst SBC. Because of

our disposi

tion i n thi s case, we n

eed not address SBC’s argum ent that Travelers m

ust pay the def

ense costs whi

ch SBC i ncurred prior

to not ify ing Tra velers o f the C&S suit, as well

as the cost s in

curred after this notif

ication. We also need not consider Travelers’
cros s- appe al

f rom the ci rcu i t cou rt’ s den i al of Tra ve l ers ’ m oti on to d i sm i ss SB C’ s c om

pl ai nt on statute-of -l i m i tation groun ds. Fin all y, we not e that Tra velers fi led a motion re quest ing that we str ike por tions o f SBC’s open i ng a ppel l an t brief f or vi ola tion of Su prem e Court Ru

l e 341 (h)(2 ) (210 Il

l . 2d R. 3 41(h

)(2)). Rule 341(h) (2) spells out w hat is to be in cluded in the intro duct or y paragra ph in an appellant’s bri ef des cri bi ng th e nature of

the acti on. In

i ts m otion , Travelers a

rgues that the i ntroductory "n at ur e o f t he ac t io n" se ct io n o f SB C’ s br ief imp r o pe r ly inclu de s " ar gu men t at ive mat t er s" in vi ol ati on of Rul e 3 41(

h) (2) . W e agre e w i

th Trav el ers tha t porti ons of thi s i ntr oduc tory se cti on of SBC ’s br ief cont ain arg ument t hat sho uld no t have be en include d in t his sect ion. To t he ext entNo. 1-05- 0883

23

t hat any impro per ar gument was included , w e have not co nsider ed it in reac hing o ur dec ision. We there f ore den y Travelers’ motion

to strik e as moot. CONCLUSION T he cir cu it co ur t ’s en t er ing o f su mmar y jud gme nt in fa vo ro f T r av ele r s a nd ag ain st SB C is af f i rmed. Af f i rmed. McB RIDE, P.J . and CA

HILL , J., con

cur.