Court Opinion

ID: 3132686
Source: CourtListenerOpinion
Date Created: 2015-10-19 22:04:36.853828+00
Date Added: 2024-06-11T12:27:07.804181
License: Public Domain

Illinois Official Reports

                                     Appellate Court

           Bartkowiak v. Underwriters at Lloyd’s, London, 2015 IL App (1st) 133549

Appellate Court         NANCY BARTKOWIAK, Individually and as Independent
Caption                 Administrator of the Estate of Joseph Bartkowiak, Plaintiff-Appellant,
                        v. UNDERWRITERS AT LLOYD’S, LONDON, Defendant-
                        Appellee.

District & No.          First District, Fourth Division
                        Docket No. 1-13-3549

Filed                   August 13, 2015
Rehearing denied        September 11, 2015

Decision Under          Appeal from the Circuit Court of Cook County, No. 12-CH-39995; the
Review                  Hon. Mary Anne Mason, Judge, presiding.

Judgment                Affirmed.

Counsel on              Robert J. Pavich, Ian H. Levin, and John J. Pavich, all of Pavich Law
Appeal                  Group PC, of Chicago, and Dwight B. Palmer, Jr., of Palmer &
                        Associates, of Skokie, for appellant.

                        Melissa A. Murphy-Petros and William S. Cook, both of Wilson Elser
                        Moskowitz Edelman & Dicker LLP, of Chicago, for appellee.
     Panel                     JUSTICE ELLIS delivered the judgment of the court, with opinion.
                               Justices Howse and Cobbs concurred in the judgment and opinion.

                                                OPINION

¶1          In this appeal, we must interpret a “Contingent Automobile Liability” insurance policy, in
       which the insurer provides some measure of secondary liability coverage in the event the
       insured’s primary liability insurance fails to cover the insured’s loss. Exactly what kind of
       secondary coverage it provides is the question before this court.
¶2          The contingent liability policy says that its coverage does not apply if the insured has
       “valid and collectible Automobile Liability insurance of any nature.” Defendant, the
       contingent insurer, says that means that if the insured has any primary insurance coverage at
       all, the contingent policy is not triggered. Plaintiff, on the other hand, says that the contingent
       liability insurance kicks in if the insured has primary insurance, but that primary insurance is
       inadequate to fully cover the loss to the insured–plaintiff reads it, in other words, as “excess”
       coverage if the primary insurance is insufficient. The trial court agreed with defendant. So do
       we. We thus affirm the trial court’s dismissal of the declaratory judgment action.

¶3                                          I. BACKGROUND
¶4         As often happens in insurance coverage cases, this matter began with an underlying
       tragedy. On October 31, 2009, a truck delivering road resurfacing materials struck and killed a
       road construction flagger, Joseph Bartkowiak. The decedent’s wife, plaintiff Nancy
       Bartkowiak, sued the truck driver, Stan Wdowikowski; the trucking company that employed
       him, Denise Wdowikowski Trucking, Inc. (DWT); and the truck broker that assigned the job to
       DWT, Jack Gray Services, Inc. (Jack Gray). It is worth noting that plaintiff’s wrongful death
       suit did not mention any insurance policies any of the defendants may have had.
¶5         The truck driver, Wdowikowski, had a $1 million automobile liability policy through
       Northland Insurance (Northland). Jack Gray, the truck broker, was an additional insured on the
       Northland policy for this delivery.
¶6         In addition to being covered as an additional insured under the Northland policy, Jack Gray
       had an insurance policy with defendant Underwriters at Lloyd’s, London. Defendant had
       issued Jack Gray a policy entitled “Contingent Automobile Liability” insurance for the period
       of July 1, 2009 to July 1, 2010, with a limit of $1 million per occurrence. Defendant agreed to
       pay “damages resulting from automobile liability that may arise on a contingent basis.”
       Specifically, defendant agreed to pay on Jack Gray’s behalf “all sums which [Jack Gray] shall
       become legally obligated to pay as damages” because of an individual’s bodily injury and
       death “caused by an occurrence and arising out of the transportation of merchandise” as part of
       Jack Gray’s truck brokerage. Defendant also agreed to pay the costs and expenses to defend
       any lawsuit alleging such bodily injury, including “such investigation, negotiation and
       settlement of any claim or suit as [defendant] deems expedient.”
¶7         Under defendant’s policy with Jack Gray, Jack Gray was required to obtain primary
       automobile liability insurance for any job it assigned. On the job that led to the death of

                                                    -2-
       plaintiff’s decedent, Jack Gray satisfied that requirement by being an additional insured on the
       Northland policy; Northland was the primary insurer.
¶8          Condition IV of defendant’s policy with Jack Gray stated:
                    “APPLICATION OF CONTINGENT LIABILITY. It is expressly understood and
                agreed that the coverage provided under this Certificate of Insurance shall not apply if
                there is valid and collectible Automobile Liability insurance of any nature.”
¶9          Jack Gray tendered its defense of plaintiff’s wrongful death lawsuit to defendant, seeking
       coverage under the policy. In a letter dated December 7, 2010, defendant denied that the policy
       covered the lawsuit, citing Condition IV and the fact that Jack Gray had “valid and collectible”
       liability insurance through Northland. Whether the Northland insurance would be sufficient to
       wholly cover Jack Gray’s liability did not matter, defendant claimed, because defendant had
       not promised to cover liability over and above the primary insurance–it only applied if Jack
       Gray effectively had no primary coverage due to some invalidity or complete failure of the
       primary insurance policy. Defendant acknowledged that other parts of its policy with Jack
       Gray did provide excess coverage in certain circumstances but claimed that this was not one of
       those instances.
¶ 10        On February 28, 2012, the court presiding over plaintiff’s wrongful death suit entered an
       order approving the parties’ settlement agreement. Pursuant to the settlement, plaintiff
       received $7.8 million, including the full $1 million from Northland. Jack Gray remained
       exposed in the amount of $4.2 million, so it agreed to assign to plaintiff its rights under Jack
       Gray’s insurance policy with defendant.
¶ 11        Plaintiff, now standing in Jack Gray’s shoes, filed this action, seeking a declaration that
       defendant owed a duty to defend and indemnify Jack Gray for its liability stemming from the
       truck accident. Plaintiff sought a declaratory judgment that defendant had breached its duties
       to defend and indemnify Jack Gray in the personal injury suit, that defendant was required to
       cover the excess $4.2 million referenced in the settlement, and that defendant acted in bad faith
       in denying coverage. In addition to recounting the above facts regarding the accident and the
       personal injury suit, plaintiff alleged that defendant denied coverage even though it “knew that
       Northland’s $1 million policy limits had been offered a number of times and [were] refused as
       woefully inadequate to settle the personal injury suit.” Plaintiff also alleged that, even if
       defendant could rely on Northland’s policy in assessing its duty, Condition IV did not apply to
       exclude the personal injury suit from coverage because Northland’s policy could not constitute
       “valid and collectible” insurance to the extent that it failed to wholly cover the loss.
¶ 12        Defendant moved to dismiss, raising essentially the same arguments it did to Jack Gray in
       initially refusing to defend or indemnify. Relying on Condition IV cited above, defendant
       argued that, because Jack Gray did, in fact, have “valid and collectible” automobile liability
       insurance, defendant owed no duty to plaintiff. Defendant emphasized that its policy was a
       contingent automobile liability policy, and the specific contingency it covered–the complete
       failure of the primary coverage–never occurred.
¶ 13        On June 5, 2013, the trial court granted defendant’s motion to dismiss. The court found that
       Northland’s insurance was “collectible” because plaintiff had collected $1 million from it. The
       court also stated, “[T]o accept the proposition that Northland’s policy was not collectible
       because the policy limits have been exhausted leaving a portion of the underlying settlement
       unsatisfied would require the court to transform the Contingent Automobile Liability coverage
       into excess coverage–something this court cannot do.” Plaintiff appeals.

                                                   -3-
¶ 14                                            II. ANALYSIS
¶ 15       A motion to dismiss under section 2-615 challenges the legal sufficiency of a complaint.
       Kanerva v. Weems, 2014 IL 115811, ¶ 33. In reviewing a trial court’s decision to grant a
       section 2-615 motion, we ask whether the allegations of the complaint, when construed in the
       light most favorable to the plaintiff, state a cause of action. Id. We take as true all well-pleaded
       facts in the complaint, as well as any reasonable inferences arising from those facts. Id. We
       apply de novo review. Id.
¶ 16       Plaintiff raises three issues regarding the trial court’s decision to grant defendant’s section
       2-615 motion to dismiss. First, plaintiff contends that the trial court erred in looking outside the
       underlying personal injury complaint and the policy to determine that defendant was not
       obligated to provide coverage. Second, plaintiff argues that the policy covers this loss or at
       least is ambiguous and, as such, must be construed in favor of coverage. Third, plaintiff argues
       that defendant was estopped from raising Condition IV as a reason to deny coverage because it
       failed to either defend Jack Gray under a reservation of rights or seek a declaratory judgment
       that the policy did not cover Jack Gray’s loss. We address each of plaintiff’s arguments in turn.

¶ 17                                    A. The “Eight Corners” Rule
¶ 18       Before reaching the question of defendant’s duties under the policy, we address plaintiff’s
       argument that the trial court employed an improper procedure in dismissing her complaint.
       Plaintiff claims that the circuit court erred in looking beyond the pleadings in the wrongful
       death suit and the policy to determine that defendant properly denied coverage. The basis for
       the trial court’s ruling was the existence of the Northland policy, but that policy was not
       mentioned in the underlying lawsuit’s pleadings nor was it specifically mentioned in
       defendant’s policy with Jack Gray. Plaintiff says the trial court’s review should have been
       confined to those two documents in determining the duty to defend.
¶ 19       In a declaratory judgment action regarding an insurer’s duty to defend, “a court ordinarily
       looks first to the allegations in the underlying complaint and compares those allegations to the
       relevant provisions of the insurance policy.” Pekin Insurance Co. v. Wilson, 237 Ill. 2d 446,
       455 (2010). If the facts alleged in the underlying complaint fall within, or potentially fall
       within, the policy’s coverage, the insurer’s duty to defend is triggered. Id. This general rule has
       been referred to as the “ ‘eight corners rule.’ ” Geisler v. Everest National Insurance Co., 2012
IL App (1st) 103834, ¶ 70.
¶ 20       But in evaluating an insurer’s duty to defend, the trial court may look beyond the
       underlying complaint as long as the trial court does not determine an issue critical to the
       outcome of the underlying lawsuit. Wilson, 237 Ill. 2d at 459-60. The ultimate outcome of the
       underlying lawsuit is relevant to an insurer’s duty to indemnify its insured, not to its duty to
       defend. Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384, 398
       (1993) (“The duty to indemnify arises only if the facts alleged actually fall within coverage.”
       (Emphasis in original.)). Allowing the trial court to inquire into the merits of the underlying
       case, in determining the duty to defend, risks merging the two duties, when in fact the duty to
       defend is much broader. Id.
¶ 21       But provided that the trial court is not, in effect, adjudicating a critical issue in the
       underlying case, there is no reason why the trial court could not consider relevant, objective,

                                                    -4-
       undisputed facts in deciding the duty to defend, even if those facts fall outside the pleadings of
       the underlying lawsuit. In fact, “ ‘[t]he only time such evidence should not be permitted is
       when it tends to determine an issue crucial to the underlying lawsuit.’ ” (Emphasis added.)
       Wilson, 237 Ill. 2d at 461 (quoting Fidelity & Casualty Co. of New York v. Envirodyne
       Engineers, Inc., 122 Ill. App. 3d 301, 304-05 (1983)).
¶ 22        Here, there was no dispute that the truck driver’s policy with Northland served as the
       primary insurance, and that Northland provided a defense to Jack Gray in the underlying suit.
       Plaintiff admitted as much in her declaratory judgment complaint. We see no reason why the
       trial court should have been required to ignore these objective, undisputed facts in evaluating
       defendant’s duties under the policy. There was no risk that doing so would require the trial
       court to determine an issue critical to the underlying case; the fact that Northland provided
       insurance and a defense to Jack Gray had no effect on the issues of the underlying case, which
       concerned the defendants’ negligence for the death of plaintiff’s husband. To demand that the
       court simply ignore basic, uncontroverted facts such as these would impose the kind of
       “judicial blinders” that the Illinois Supreme Court has decried. (Internal quotation marks
       omitted.) Id. at 460-61.
¶ 23        Plaintiff recognizes that a trial court may look beyond the pleadings, under certain
       circumstances, when assessing coverage but contends that the trial court could not do so in this
       case, because defendant did not file a declaratory judgment action or defend Jack Gray under a
       reservation of rights. Plaintiff cites Employers Insurance of Wausau v. Ehlco Liquidating
       Trust, 186 Ill. 2d 127 (1999), in support of its contention. But the issue in Ehlco was whether
       the insurer was estopped from raising policy defenses, not whether the trial court committed
       error in considering facts beyond the underlying complaint when evaluating coverage. Id. at
       150-55. Ehlco does not support plaintiff’s contention.
¶ 24        Plaintiff also cites Illinois Tool Works Inc. v. Travelers Casualty & Surety Co., 2015 IL
       App (1st) 132350, but that case is distinguishable as well. That case involved a slew of
       toxic-tort cases where the plaintiffs claimed they were exposed to hazardous chemicals while
       performing work as welders. Id. ¶ 4. The plaintiffs sued Illinois Tool Works (ITW) and other
       manufacturers of welding tools over that exposure. Id. The parties all agreed that ITW did not
       begin manufacturing welding materials until 1993, but some of the lawsuits blamed ITW for
       exposure that occurred prior to 1993. Id. ¶ 12. The insurance company refused to defend ITW
       on those lawsuits alleging pre-1993 exposure because they were groundless. Id. ¶ 10. The
       court, noting that the underlying complaints were clearly within the language of the policy,
       said that the insurer could not rely upon its extrinsic information–the fact that ITW did not
       manufacture welding products until 1993–to deny coverage. Id. ¶¶ 14-21. The court
       emphasized, in particular, that the language of the policy with ITW stated that the insurer
       would defend ITW on personal-injury actions “even if the allegations of the suit [were] false or
       groundless.” Id. ¶ 5. Just as importantly, the extrinsic fact on which the insurance company
       relied spoke directly to the merits of the underlying lawsuit, which, as we have explained
       above, is precisely the type of determination a court is not permitted to make in considering the
       duty to defend. See Wilson, 237 Ill. 2d at 460-61 (court should not consider extrinsic evidence
       when doing so requires determination of issue central to underlying case).
¶ 25        This case is different. Here, in determining that defendant owed no duty to defend, the trial
       court relied on certain facts–the existence of the Northland policy, and the fact that Northland
       provided a defense and at least partial indemnification to Jack Gray–that were not only

                                                   -5-
       objective and undisputed, but which also did not require the trial court to delve into the merits
       of the underlying suit and determine a critical issue in that lawsuit. The trial court committed
       no error here.

¶ 26                                      B. The Term “Collectible”
¶ 27       We now turn to plaintiff’s contention that defendant breached its duty to defend Jack Gray
       in the lawsuit arising from Wdowikowski’s accident. When determining whether a lawsuit
       triggered an insurer’s duty to defend, the question is whether the allegations of the lawsuit fall
       within, or potentially within, the policy’s coverage. Outboard Marine Corp. v. Liberty Mutual
       Insurance Co., 154 Ill. 2d 90, 125 (1992). If they do, then the insurer has a duty to defend its
       insured. Id. An insurer’s duty to defend is “much broader” than its duty to indemnify. Id. Thus,
       where an insurer has no duty to defend, it necessarily has no duty to indemnify. Crum &
       Forster Managers Corp., 156 Ill. 2d at 398.
¶ 28       When construing the language of an insurance policy, we apply the same principles as
       when we construe the language of a contract. Hobbs v. Hartford Insurance Co. of the Midwest,
       214 Ill. 2d 11, 17 (2005). Our primary goals are to determine the parties’ intent in agreeing to
       the terms of the policy and to give effect to that intent, as expressed through the language of the
       policy. Id. In determining the parties’ intent, we construe the policy as a whole and take into
       account the type of insurance provided and the purposes of the entire contract. Crum & Forster
       Managers Corp., 156 Ill. 2d at 391; Outboard Marine Corp., 154 Ill. 2d at 108.
¶ 29       If the language of the policy is unambiguous, the policy is applied as written unless it
       contravenes public policy. Hobbs, 214 Ill. 2d at 17. Where a policy is ambiguous, an insurer’s
       liability will be liberally construed in favor of coverage. Id. A policy is ambiguous where it is
       susceptible to more than one reasonable interpretation; we will not strain to find ambiguity
       where the policy contains none. Id.
¶ 30       The parties’ dispute centers on Condition IV of the policy: “[T]he coverage provided under
       this Certificate of Insurance shall not apply if there is valid and collectible Automobile
       Liability insurance of any nature.” (Emphasis added.) Defendant cites this provision as its
       reason for denying coverage of the wrongful death suit, noting that Northland, the truck
       driver’s automobile liability insurer, covered the loss. In defendant’s view, Condition IV
       applies if the insured procures any automobile insurance policy, of any amount and kind, as
       long as that insurance policy is valid and the insured is capable of collecting on it–even if that
       policy does not wholly cover the insured’s loss.
¶ 31       Plaintiff, on the other hand, reads “collectible” as implying a monetary limit. In plaintiff’s
       view, if the insured has a valid policy but it does not wholly cover the insured’s loss, that policy
       is “collectible” only to the extent it covers that loss and is otherwise “uncollectible.” Thus, to
       the extent that the underlying automobile insurance failed to fully cover the insured’s loss in
       this matter, that insurance was “uncollectible,” and defendant remained obligated to cover the
       remaining portion of the loss. Plaintiff’s back-up argument is that, even if defendant’s
       interpretation is reasonable, so is plaintiff’s, and any ambiguity should be resolved in favor of
       coverage for the insured. See id.
¶ 32       As we have noted, a more fundamental way to look at plaintiff’s position is that plaintiff
       views Condition IV as “excess” coverage–coverage for any loss that exceeds the limit of the
       underlying insurance’s coverage. See 1 Steven Plitt et al., Couch on Insurance 3d § 219:5, at
       219-12 (1995) (noting that excess insurance “provides that an insurer will pay a loss only after

                                                    -6-
       other available primary insurance is exhausted”). Defendant views Condition IV (and indeed,
       the heading of Condition IV suggests as much) as providing only “contingent”
       coverage–coverage only if a certain event does or does not happen, here if the insured has other
       “valid and collectible” automobile liability insurance. That provision is sometimes referred to
       as an “escape clause.” See Home Insurance Co. v. Liberty Mutual Insurance Co., 266 Ill. App.
3d 1049, 1052 (1994).
¶ 33       The policy does not define the term “collectible.” Therefore, we must give that term its
       “plain, ordinary and popular” meaning as it appears in the dictionary. Founders Insurance Co.
       v. Munoz, 237 Ill. 2d 424, 436 (2010); Valley Forge Insurance Co. v. Swiderski Electronics,
       Inc., 223 Ill. 2d 352, 366 (2006). Webster’s Third New International Dictionary 444 (1993),
       defines “collectible” as, “1 : suitable for a collection : fit for being collected *** 2 : due for
       present payment : capable of being collected : exchangeable for cash.” On the other hand,
       Black’s Law Dictionary 257 (7th ed. 1999) defines “collectability” as, “The relative ability of a
       judgment creditor to make a judgment debtor pay the amount of the judgment; the degree to
       which a judgment can be satisfied through collection efforts against the defendant.”
¶ 34       So the dictionaries are not much help; they offer support for both parties’ positions. In
       accord with defendant’s view, the Northland policy was certainly “suitable” or “fit for being
       collected,” as plaintiff actually collected from that policy. However, in accord with plaintiff’s
       view, the judgment against the insured could not be satisfied through Northland’s policy, and
       plaintiff thus lacked the ability to receive “the amount of the judgment” from Northland alone.
¶ 35       So in isolation, the word “collectible” is not clear. But that does not necessarily render it
       ambiguous. Among our commands in interpreting insurance policies is not only to examine the
       words in controversy but to examine them in light of the policy as a whole. Crum & Forster
       Managers Corp., 156 Ill. 2d at 391; Outboard Marine Corp., 154 Ill. 2d at 108. Reviewing the
       policy as a whole, we find that another provision in this insurance policy sheds significant light
       on the matter.
¶ 36       That provision is Condition VIII of the policy, which governs the policy’s coverage in the
       event that the insured obtains other contingent automobile liability insurance (the same kind it
       obtained from defendant). The relevant first sentence of Condition VIII reads as follows:
                    “OTHER INSURANCE. The coverage provided herein is excess over and above
               any other valid Contingent Automobile Liability Insurance that provides coverage for
               any loss that otherwise would be covered by the terms and conditions of this
               Certificate.”
¶ 37       Again, by comparison, Condition IV, which governs the policy’s coverage when the
       insured obtains standard automobile liability insurance, reads in full:
                    “APPLICATION OF CONTINGENT LIABILITY. It is expressly understood and
               agreed that the coverage provided under this Certificate of Insurance shall not apply if
               there is valid and collectible Automobile Liability Insurance of any nature.”
¶ 38       A comparison of these two provisions supports defendant’s position that Condition IV is
       not an excess coverage provision but rather an escape hatch. The parties knew how to express
       their desire to contract for excess liability coverage, because they clearly did so in Condition
       VIII. The language “excess over and above any other” insurance in Condition VIII is so clear
       as to be, if anything, redundant. The absence of such language in Condition IV is conspicuous.
       Indeed, Condition IV not only fails to contain any language suggesting that it serves as

                                                   -7-
       “excess” coverage but also contains language indicating that it does not–it states that coverage
       under the policy “shall not apply” in the event there is other valid, collectible insurance. Saying
       that coverage “shall not apply” if there is certain other insurance is markedly different than
       saying that coverage will apply only in excess of the primary coverage, or to the extent that the
       primary coverage is insufficient, or any other way one might convey the concept of excess
       coverage. And it is glaringly different when we see that, in Condition VIII, the policy had no
       trouble expressing the concept of excess coverage quite clearly. If the intent of the policy was
       to provide excess coverage above and beyond any standard automobile liability insurance that
       the insured procured, we can think of no reason why the policy would not have expressed that
       intent in Condition IV in precisely the same way it expressed that concept in Condition VIII,
       concerning other contingent liability insurance.
¶ 39       We find further support for defendant’s position in Home Insurance Co., 266 Ill. App. 3d
       1049. Neither of the parties have called this case to our attention, perhaps because the facts
       were more convoluted and the positions of the parties somewhat reversed compared to this
       case. But among the questions presented to the court was the interpretation of a provision
       nearly identical to Condition IV here–and we determined that it was not an excess clause but an
       escape clause. Id. at 1054-55. An endorsement in that policy provided that the policy “ ‘[did]
       not apply to that portion of the loss for which [the insured] has other valid and collectible
       insurance.’ ” Id. at 1052. We interpreted that provision as excluding coverage where any other
       insurance policy applied, not as providing excess coverage. Id. at 1054-55. Here, we are
       presented with similar language and reach the same conclusion.
¶ 40       We find additional support for our conclusion in Northbrook Property & Casualty
       Insurance Co. v. United States Fidelity & Guaranty Co., 150 Ill. App. 3d 479, 483 (1986),
       where, in an admittedly different context, we wrote that “[t]he terms ‘valid and collectible’ are
       directed to an insurance policy which is legal and valid, as distinguished from one which was
       procured by fraud or cannot be collected due to insolvency of the company.” This language
       further supports defendant’s position that, in order to disclaim coverage under Condition IV,
       defendant was only required to demonstrate the existence of a valid insurance policy, not
       procured by fraud or rendered worthless by virtue of the insurance company’s insolvency–it
       did not depend on whether that primary insurance coverage did or did not cover the loss in
       whole.
¶ 41       Reading the policy as a whole, the parties’ intent is clear. Pursuant to Condition IV,
       defendant undertook to provide primary coverage where, for some reason, the automobile
       liability insurance for the trucks brokered by the insured, Jack Gray, completely failed due to
       invalidity or insolvency. If Jack Gray could collect at all from that primary insurance, then
       defendant’s policy would not apply. A complete reading of the policy does not permit us to
       convert Condition IV into an excess coverage provision.
¶ 42       Plaintiff contends that our interpretation of the policy renders it illusory. As we previously
       noted, the policy required that Jack Gray obtain proof of the automobile liability insurance
       carried by the trucks it brokered. Thus, plaintiff argues, by requiring Jack Gray to obtain valid
       automobile liability insurance but then denying coverage if plaintiff has valid automobile
       liability insurance, the policy effectively covers nothing at all. But as we have explained above,
       we agree with defendant that the point of the policy was to cover the insured’s loss in the very
       specific contingency that the underlying insurance failed, either because it was invalid for

                                                    -8-
       some reason or because it had become wholly uncollectible for some reason such as the
       insurance company’s insolvency. That is the deal the parties struck, and we will not alter it.
¶ 43        Plaintiff cites O’Neal v. Argonaut Midwest Insurance Co., 415 S.W.3d 720 (Mo. Ct. App.
       2013), but we do not find this case persuasive. In O’Neal, the policy at issue contained a
       “contingency clause” stating that the policy only applied when the other required insurance on
       the leased automobile was “ ‘not in effect or [was] not collectible.’ ” Id. at 722, 725. While the
       court, applying the dictionary definition of the term “collectible,” found that that term meant
       “due for present payment,” it ultimately held that the other policy was not collectible because
       the driver of the car was expressly excluded as an insured in the other policy. (Internal
       quotation marks omitted.) Id. at 725. Because the driver was not an insured under the other
       policy, the parties could not collect from that policy, and the contingency clause was satisfied.
       Id. In this case, unlike the driver in O’Neal, it is undisputed that Jack Gray was able to collect
       under the Northland policy. Thus, the holding of O’Neal is inapplicable.
¶ 44        As there was other “collectible” insurance available to Jack Gray, defendant did not have a
       duty to defend Jack Gray in the lawsuit. And defendant thus had no duty to indemnify Jack
       Gray for any losses it incurred, either. Crum & Forster Managers Corp., 156 Ill. 2d at 398.
       Accordingly, the trial court did not err in dismissing the complaint.

¶ 45                                             C. Estoppel
¶ 46       Plaintiff’s final contention is that defendant is estopped from raising its arguments
       regarding coverage because it denied coverage without seeking a declaratory judgment that it
       was not obliged to cover the accident or defending the suit under a reservation of rights.
       Plaintiff contends that, because defendant simply denied coverage, it could not later claim that
       the policy did not cover the accident.
¶ 47       The doctrine of estoppel holds that an insurer may not simply deny coverage when a
       complaint alleges facts potentially covered by a policy. Ehlco, 186 Ill. 2d at 150. Instead, the
       insurer must either seek a declaratory judgment that the policy does not cover the suit or defend
       the suit while reserving its rights under the policy. Id. If the insurer fails to take these steps, and
       is subsequently found to have wrongfully denied coverage, then it may not later assert policy
       defenses to avoid coverage. Id. at 150-51; Waste Management, Inc. v. International Surplus
       Lines Insurance Co., 144 Ill. 2d 178, 208 (1991). For example, an insurer may not wrongfully
       deny coverage and then raise defenses such as the insured’s failure to provide timely notice of
       a lawsuit (Ehlco, 186 Ill. 2d at 154), waiver (Statewide Insurance Co. v. Houston General
       Insurance Co., 397 Ill. App. 3d 410, 424 (2009)), or cancellation of the policy (American
       Standard Insurance Co. of Wisconsin v. Gnojewski, 319 Ill. App. 3d 970, 978 (2001)).
¶ 48       But estoppel does not apply where the insurer ultimately prevails in its argument that it has
       no duty to defend. Ehlco, 186 Ill. 2d at 151 (“Application of the estoppel doctrine is not
       appropriate if the insurer had no duty to defend, or if the insurer’s duty to defend was not
       properly triggered.”). In other words, the estoppel doctrine cannot create coverage where none
       existed in the first place. Ismie Mutual Insurance Co. v. Michaelis Jackson & Associates, LLC,
       397 Ill. App. 3d 964, 974 (2009). As stated above, the policy did not provide coverage for the
       loss in this case. Because defendant had no duty to defend, estoppel does not apply.

                                                      -9-
¶ 49                                      III. CONCLUSION
¶ 50       For the reasons stated above, we affirm the judgment of the trial court. Defendant owed its
       insured no duty to defend or indemnify where its contingent liability policy only provided
       coverage if there was no other collectible insurance, and the policy did not suggest that
       defendant would provide excess coverage for this loss.

¶ 51      Affirmed.

                                                 - 10 -