Case Name: CENTRAL ILLINOIS PUBLIC SERVICE COMPANY, Appellee, v. ALLIANZ UNDERWRITERS INSURANCE COMPANY et al. (International Surplus Lines Insurance Company et al., Appellants)
Court: Illinois Supreme Court
Jurisdiction: Illinois
Decision Date: 1994-02-17
Citations: 158 Ill. 2d 218
Docket Number: Nos. 73731, 73732 cons.
Parties: CENTRAL ILLINOIS PUBLIC SERVICE COMPANY, Appellee, v. ALLIANZ UNDERWRITERS INSURANCE COMPANY et al. (International Surplus Lines Insurance Company et al., Appellants).
Judges: 
Reporter: Illinois Reports, Second Series
Volume: 158
Pages: 218–240

Head Matter:
(Nos. 73731, 73732 cons.
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY, Appellee, v. ALLIANZ UNDERWRITERS INSURANCE COMPANY et al. (International Surplus Lines Insurance Company et al., Appellants).
Opinion filed February 17, 1994.
McMORROW, J., dissenting.
John G. Campbell, Richard J. Geddes and Michael C. Cook, of McCullough, Campbell & Lane, of Chicago, for appellant International Surplus Lines Insurance Co.
Skadden, Arps, Slate, Meagher & Flom, of Chicago (Timothy G. Reynolds, Scott M. Seaman and Susan L. Cliff, of counsel), for appellant General Reinsurance Corp.
Margaret J. Orbon and Mark J. Seplak, of Clausen, Miller, Gorman, Caffrey & Witous, P.C., of Chicago, and Paul R. Koepff and Joseph E. Boury, of Mudge, Rose, Guthrie, Alexander & Ferdon, of New York, New York, for appellant California Union Insurance Co.
Eugene R. Anderson and Lester O. Brown, of Anderson, Kill, Click & Oshinsky, of Palo Alto, California, Stephen R. Kaufmann and Thomas H. Wilson, of Sorling, Northrup, Hanna, Cullen & Cochran, of Springfield, and Kevin M. Forde and Mary Anne Mason, of Kevin M. Forde, Ltd., of Chicago, for appellee.

Opinion:
JUSTICE HEIPLE
delivered the opinion of the court:
Defendants are insurance companies who filed this interlocutory appeal following the trial court's determination that a series of facts found by a jury in an earlier phase of this complex litigation could not be relitigated. For the reasons that follow, we reverse.
BACKGROUND FACTS
Central Illinois Public Service Company (CIPS) is a public utility corporation which provides electric and gas services to a large number of consumers in central Illinois.
CIPS had several plants where it manufactured gas from coal, including one in Taylorville, Illinois, and one in Du Quoin, Illinois. It owned and operated these, plants for several decades before it sold the Taylorville site in 1961 and parts of the Du Quoin site in 1978 and again in 1985.
To shield itself from liability, CIPS contracted with the 47 insurance companies named in this action for liability insurance. Three of these companies issued "Environmental Impairment Liability" (EIL) insurance policies, and the vast majority (and all of the appellants on appeal) issued "Comprehensive General Liability" (CGL) insurance policies. In the CGL policies issued after 1964, each of the carriers promised to indemnify CIPS for all claims against CIPS resulting from occurrences which CIPS neither expected nor intended. Before 1964 the policies used the term "accident" instead of "occurrence" and did not articulate an "unexpected and unintended" requirement, although this would certainly be anticipated from the term "accident." In addition, most CGL policies included a pollution exception, which specifically exempted coverage for damage caused by pollution, except to the extent that the pollution was sudden and accidental.
The EIL insurers agreed to indemnify CIPS for claims made against it for environmental impairment. Again, this basically provided coverage for unintended and unexpected damage to the environment.
In November 1985, the Illinois Environmental Protection Agency (Agency) notified CIPS that it was a "potentially responsible party" for violations of the Illinois Environmental Protection Act (the Act) (Ill. Rev. Stat. 1985, ch. 1111/2, par. 1001 et seq.) at the Taylor-ville site. This resulted in part from the rupturing of an underground tank by contractors of the owner of the Taylorville property in 1985. It also resulted in part from the buildup of by-products from coal-to-gas manufacturing.
In 1987, the Agency notified CIPS that it was a potentially responsible party for environmental violations at the Du Quoin site. Again, these violations occurred from the buildup of by-products from coal-togas manufacturing. CIPS notified its insurers of these events.
On August 21, 1987, CIPS filed a complaint in the circuit court of Morgan County. It named the 47 insurance companies as defendants and sought a declaration of coverage. A defense raised by all CGL insurers was that the damage was expected or intended, and therefore there was no coverage.
In June of 1989, CIPS added two more sites and pled separate causes of action against each defendant. Eventually, CIPS expanded the complaint to its present form. As presently constituted, the action involves 15 former gas manufacturing sites.
On June 28, 1989, CIPS filed a motion for partial summary judgment directed at the EIL policies issued by American Empire Surplus Lines (American Empire), Evanston, and First State Insurance Companies concerning the Taylorville site.
On July 10, 1989, the circuit court entered its first case management order, requiring defendants to conduct discovery jointly by submitting joint document requests, joint interrogatories, and jointly designating a lead questioner for each deposition. Parties were to "avoid or minimize" duplicative motions, briefs and discovery to the extent consistent with the parties' individual interests; in other words, join in or adopt pleadings with which they agreed.
On March 22, 1990, Judge J. David Bone recused himself from the case due to its size and the limited resources of the Morgan County court. On June 26, 1990, this court entered an order transferring the cause to Cook County, where the case was assigned to Judge Warren D. Wolfson.
On October 19, 1990, the trial court entered an order establishing a discovery committee, which was to coordinate all defense discovery efforts and to lead each deposition. On that day it also entered an order allowing insurers whose liability would attach after $25 minion the option of being placed on inactive status. If an insurer exercised this option, it could not participate in further discovery but no order, decision or finding entered after October 19, 1990, would be binding on that insurer.
Also on that day, CIPS expressed a desire to go forward at one time against all insurers with respect to the Taylorville site. The trial court complied with this request and entered a case management order one week later which limited discovery to matters'relevant to the Taylorville site so that priority could be given to the claims as to that site.
A number of summary judgment motions relating to the CGL policies were filed and briefed through the spring and into the summer of 1991. On June 12, 1991, the circuit court ruled on cross-motions for summary judgment regarding the EIL policies as to the Taylor-ville site. It found that several issues of material fact would require determination at trial. Several days later, the court scheduled a trial to begin on September 30, 1991, which was to be confined to the EIL issues. The trial judge reserved ruling on whether any findings at the EIL trial would be binding on the non-EIL defendants, and also stated that he would not allow the non-EIL defendants to take part in the trial.
On July 12, 1991, several CGL defendants moved for leave to participate in the EIL trial. In the alternative, they moved for complete severance of the actions against the CGL insurers from the actions pending against the EIL insurers. In that motion, the CGL defendants recognized that "the coverage issues pertaining to the EIL carriers and the coverage issues pertaining to the non-EIL carriers are in some ways similar and will probably involve some of the same evidence," but argued that the differing interests of the parties required that the CGL insurers should not be bound by findings adjudicated only by the EIL insurers. The trial court denied the motion.
Shortly before the trial, the Evanston and First State insurance policies were dismissed from the Taylorville action. Those policies indemnified CIPS for damages in excess of the American Empire coverage, and it became clear that the American Empire coverage would not be exhausted. The trial between CIPS and American Empire lasted 12 days. At its conclusion, special interrogatories were tendered to the jury.
In Special Interrogatory A, the jury was asked:
"Was a liquid containing irritants, contaminants, or pollutants emitted, discharged, disposed of, dispersed or released directly from the separator to the surface area of Area A of the Taylorville site in 1912 or thereafter?"
The jury's answer was "NO," thus ending its inquiry into contamination of "Area A" of the Taylorville site. The second set of questions concerned the "gas plant site area" of the Taylorville site. The questions and the jury's answers were:
"1. Did CIPS know the water gas tar was an irritant, contaminant, or pollutant at the time it was emitted, discharged, disposed of, dispersed, released, seeped or escaped from the separators or holder at the gas plant site area of the Taylorville site in 1912 or thereafter?
[Answer:] YES.
2. Did CIPS expect the emission, discharge, disposal, release, seepage, or escape of irritants, contaminants, or pollutants from the separators or holder at the gas plant site area of the Taylorville site in 1912 or thereafter?
[Answer:] NO.
3. Did CIPS intend the emission, discharge, disposal, release, seepage, or escape of irritants, contaminants, or pollutants from the separators or holder at the gas plant site area of the Taylorville site in 1912 or thereafter?
[Answer:] NO."
On November 1, 1991, the trial court directed briefing on the issue of whether the CGL defendants could relitigate the jury's finding in the EIL trial that CIPS had no expectation of or intention to cause the damage. The appellants in this cause unfairly characterize this decision as a sua sponte order. In fact, it was issued in response to a comment made by CIPS's attorney, who stated that "[w]hen we pursued discovery against the defendants, we were foreclosed from a lot of discovery because this was one offense. And now they had a joint defense and they all participated in that defense and so we think that all defendants are precluded from questioning the jury's verdict. They're bound by it having participated in it."
On January 16, 1992, after considering the briefs and oral arguments, the trial court entered an order finding that the jury's verdict was binding on those CGL defendants which had not elected to take inactive status pursuant to the October 19, 1990, order. The court's ruling was based, in part, on the defendants' inability to articulate what issues or evidence not considered in the EIL trial they wished to present to a second jury. The court found that "[t]here were general representations of more and better but no new evidence, no uncon'sidered legal principles, no real assurance that another trial would be anything but a replay." Recognizing that there was room for disagreement and the importance of this issue to the ultimate outcome of this complex lawsuit, the trial court certified its order for interlocutory appeal. The appellate court denied leave to appeal, but this court granted the defendants' petition for leave to appeal (315 Ill. 2d R. 315).
ANALYSIS
Ultimately we are called upon to decide whether the trial court erred in its issue preclusion ruling. Appel lants have framed the issue on appeal as whether the doctrine of collateral estoppel was properly applied. One appellant, in trying to equate issue preclusion with collateral estoppel, cites this court's recent case Cirro Wrecking Co. v. Roppolo (1992), 153 Ill. 2d 6, 19, where the court recognized that collateral estoppel has been referred to as issue preclusion. Appellants thus fill their briefs with the requirements of collateral estoppel and argue that they were not met.
However, these discussions are misplaced. "The doctrine of collateral estoppel applies when a party or someone in privity with a party participates in two separate and consecutive causes arising on different causes of action and some controlling fact or question material to the determination of both causes has been adjudicated against that party in the former suit by a court of competent jurisdiction." (Emphasis in original.) Housing Authority v. Young Men's Christian Association (1984), 101 Ill. 2d 246, 252.
Thus, the most rudimentary threshold requirement for the application of collateral estoppel is the existence of two separate proceedings. Collateral estoppel is wholly irrelevant in the context of relitigating facts found in the earlier part of the same proceeding.
The appellants ask this court to allow them to relitigate the issues resolved in the very proceeding in which they were parties. While this request seems to fly in the face of that fundamental rule that an issue once resolved is binding on the parties, this case has a special circumstance. The special circumstance is that the trial court barred the appellants from participation in the trial process. Thus, we are compelled to reverse the trial court on general due process grounds under both the Illinois and Federal Constitutions. The due process clause requires, at a minimum, that a party have a full and fair opportunity to litigate an issue before he is bound by that issue's resolution. No such opportunity was provided to appellants in this case. To the contrary, appellants were barred from participation.
The appellants' due process rights would have been satisfied by granting either of the alternatives which they requested. That is, participation or severance. We express no opinion as to which alternative is to be favored, leaving that to the sound discretion of the trial court. That may be considered anew by the trial court upon remand, which we now direct.
Since defendant American Empire was accorded a complete trial on the issue of its coverage, it was properly bound by the jury's verdict. The judgment as to the remaining defendants is vacated, and this cause is remanded to the circuit court of Cook County.
Circuit court affirmed in part and vacated in part; cause remanded.
subsequent to our taking this case under advisement, all appellants, with the exception of Columbia Casualty Company, were dismissed from this appeal due to settlements with the plaintiff.