Court Opinion

ID: 3145986
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:12:16.915716+00
Date Added: 2024-06-11T11:47:23.015509
License: Public Domain

SIXTH DIVISION
                                                 December 8, 2006

No. 1-05-0606

THE NORTH RIVER INSURANCE COMPANY, )   Appeal from the
UNITED STATES FIRE INSURANCE       )   Circuit Court
COMPANY and SHELCO STEEL WORKS,    )   of Cook County.
INC.,                              )
                                   )
     Plaintiffs-Appellees          )
                                   )
(United States Fire Insurance      )
Company,                           )
                                   )
     Plaintiff-Appellee and Cross- )
     Appellant                     )
                                   )
     v.                            )   No. 00 CH 18557
                                   )
GRINNELL MUTUAL REINSURANCE        )
COMPANY, THE TOKIO MARINE AND FIRE )
INSURANCE COMPANY, LIMITED,        )
AMERICAN MISCELLANEOUS STEEL,      )
INC., KAJIMA CONSTRUCTION          )
SERVICES, INC., and BEVERLY        )
KNAUER, d/b/a, KNAUER INSURANCE    )
SPECIALISTS, f/k/a POTTER & KNAUER )
INSURANCE AGENCY,                  )
                                   )
     Defendants-Appellees          )
                                   )
Tokio Marine ane Fire Insurance    )   Honorable
Company, Limited, and Kajima       )   Richard J. Billik,
Construction Services, Inc.,       )   Judge Presiding.
                                   )
     Defendants-Appellants and     )
     Cross-Appellees).             )

     JUSTICE O'MALLEY delivered the opinion of the court:

     Plaintiff-appellee and cross-appellant United States Fire
1-05-0606

Insurance Company (US Fire) brought a declaratory judgment action

against defendant-appellant and cross-appellee Tokio Marine and

Fire Insurance Company (Tokio) seeking reimbursement of funds

from Tokio's primary insurance policy which were paid from US

Fire's excess policy to fund a settlement in an underlying

personal injury lawsuit.1     US Fire also sought equitable

contribution from Tokio's excess policy for funds paid by US

Fire's excess policy toward the settlement for which Tokio was

allegedly responsible.     The parties filed motions and cross-

motions for summary judgment.     The circuit court granted summary

judgment in favor of US Fire and against Tokio on US Fire's

reimbursement claim and granted summary judgment in favor of

Tokio and against US Fire on its claim for equitable contribution

from Tokio's excess policy.

     For the reasons that follow, we affirm the judgment of the

circuit court.

                               BACKGROUND

     In 1996, general contractor Kajima Construction Services,

     1
         Grinnell, AMS and Knauer Insurance Specialists were

dismissed from this case prior to this appeal.     We subsequently

granted Tokio's motion to voluntarily dismiss North River, Shelco

and Kajima from this appeal.     The only parties remaining in this

appeal are US Fire and Tokio.

                                   2
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Inc. (Kajima), commenced a building project in Bolingbrook,

Illinois.    Kajima entered into a subcontract with Shelco Steel

Works, Inc. (Shelco), to perform certain construction work on the

project.    Shelco, in turn, subcontracted its obligation with

Kajima to American Miscellaneous Steel, Inc. (AMS).    During

construction of the Bolingbrook project, Michael Farkas, an

employee of AMS, sustained serious and permanent injury when an

iron bar joist fell on him while he was performing his duties.

In 1997, Farkas filed suit against Kajima, Shelco and others

alleging negligence on their part which resulted in his injury.

     On the date of Farkas's injury, Kajima was insured under a

primary commercial general liability (CGL) insurance policy and

an excess umbrella policy, both of which were issued by Tokio.

Shelco was covered by a primary CGL insurance policy issued by

the North River Insurance Company (North River) and an excess

umbrella policy issued by US Fire.    AMS was covered by a CGL

primary policy and an umbrella policy, both of which were issued

by Grinnell Mutual Reinsurance Company (Grinnell).    Kajima,

Shelco and AMS had primary limits of $1 million on their

respective primary CGL policies and limits in excess of $2

million in coverage for each umbrella policy.

     On July 1, 1997, after receiving notice of the Farkas

lawsuit, Kajima immediately tendered its defense and indemnity to

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North River and Grinnell, the primary insurers for Shelco and

AMS, respectively.    The tender also indicated that Kajima was

seeking an exclusive defense and indemnity from Shelco's and

AMS's insurers without the benefit of Tokio's assistance.      Kajima

also notified Tokio of the lawsuit and its selective tender to

Shelco and AMS's insurers by sending a copy of the July 1, 1997,

letter to Tokio for reference purposes.     Both North River and

Grinnell ultimately accepted Kajima's tender and shared the costs

of Kajima's defense.    Attorney David Nani was assigned to Kajima

as defense counsel and paid by North River to undertake Kajima's

defense.

     As the Farkas case proceeded through the various stages of

trial, North River and Grinnell attempted to negotiate a

settlement.    In October 2000, it became apparent that a

settlement within the limits of North River's and Grinnell's

primary insurance policies was not possible.     North River

informed Tokio that Kajima's liability in the lawsuit could

exceed North River and Grinnell's combined primary limits and

suggested that Tokio contribute $500,000 toward a settlement

package.    Tokio refused to contribute.   On November 13, 2000,

North River and Grinnell advised Tokio that each insurer was

tendering its full primary policy limits in an attempt to settle

the Farkas lawsuit and that Tokio should do the same.     Tokio

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again refused to contribute any amount on Kajima's behalf to the

settle the case.

     The Farkas lawsuit was settled for $4 million after the jury

began deliberating, but before a verdict was reached.     The

settlement was funded as follows:      North River and Grinnell each

contributed $1 million and US Fire contributed $2 million from

Shelco's umbrella policy.     Tokio did not contribute to the Farkas

settlement.     US Fire, Shelco and North River subsequently sought

declaratory relief in the circuit court against Grinnell and

Tokio, among others.2     In its fifth amended complaint, US Fire

alleged that Tokio was obligated to exhaust its primary insurance

policy to indemnify Kajima before the US Fire umbrella policy

would be obligated to contribute on Kajima's behalf.

     Motions and cross-motions for summary judgment were filed by

the parties.     Tokio argued that it was not obligated to

contribute to Kajima's defense and indemnity because its policy

was not an available policy since Kajima had selectively tendered

its defense and indemnity to Shelco and AMS and their respective

insurers.     As a result, the Tokio primary policy was not an

     2
         Although Shelco, North River and US Fire sought various

relief against several defendants, we will only address the

allegations against the parties germane to issues presented for

review by this court.

                                   5
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available policy for Kajima's defense and indemnity.   US Fire

responded that the selective tender rule does not apply to the

excess layer of insurance and despite the rule's applicability to

concurrent primary insurance policies, US Fire was not obligated

to indemnify Kajima until all primary insurance policies were

exhausted.   In addition, US Fire asserted that Kajima's and AMS's

excess insurers were obligated to equally contribute to the loss

at the excess level due to the policies' mutually repugnant

"other insurance" clauses.   In other words, the selective tender

rule should not apply to the excess policies issued by Grinnell,

Tokio and US Fire because each policy purported to be excess to

any other insurance.   Grinnell subsequently settled with US Fire

by paying $500,000 from its excess policy in reimbursement to US

Fire.

     The circuit court granted summary judgment in favor of US

Fire and against Tokio relative to US Fire's claim that the

horizontal exhaustion doctrine preempts the selective tender

rule.   On the issue of whether the selective tender rule applies

to multiple excess policies, the circuit court ruled that the

selective tender rule applies to multiple excess policies and

because Kajima selectively tendered its defense and indemnity to

its subcontractor's insurers, Tokio's excess policy was not

available for indemnity until the targeted insurers had exhausted

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their policy limits.   Tokio appealed and US Fire cross-appealed

the judgment of the circuit court.

                             ANALYSIS

                       I. STANDARD OF REVIEW

     Summary judgment is appropriate where "the pleadings,

depositions, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment

as a matter of law."   735 ILCS 5/2-1005(c) (West 2004); General

Casualty Insurance Co. v. Lacey, 199 Ill. 2d 281, 284 (2002).

We review an order granting summary judgment de novo.     General

Casualty Insurance Co., 199 Ill. 2d at 284; Travelers Indemnity

Co. v. American Casualty Co. of Reading, 337 Ill. App. 3d 435,

439 (2003).

      II. VERTICAL EXHAUSTION AND THE SELECTIVE TENDER RULE

     On appeal, Tokio contends that vertical exhaustion of

Shelco's primary and excess policies was proper because Tokio's

policy was not "triggered" pursuant to the selective tender rule.

Tokio's bases for application of vertical exhaustion are: (1)

Kajima notified Shelco's insurers that it would not seek

indemnification from Tokio; (2) the contract between Kajima and

Shelco required vertical exhaustion by Shelco's insurers; (3) US

Fire waived any policy defenses with regard to vertical

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exhaustion; and (4) Tokio received late notice that it would be

required to indemnify Kajima.    We disagree.

     This court has recently ruled that the selective tender rule

does not entitle an insured to vertically exhaust consecutive

insurance policies and deselected primary insurers must answer

for a loss before an excess insurance policy will be activated.

Kajima Construction Services, Inc. v. St Paul Fire & Marine

Insurance Co., No. 1-05-1248, slip op. at 14 (September 15,

2006).   In Kajima, we held that the selective tender rule, which

allows an insured covered by multiple concurrent policies the

right to choose which insurer will defend and indemnify it with

respect to a specific claim, applies to concurrent insurance

coverage.   Kajima, slip op. at 5.    See also John Burns

Construction Co. v. Indiana Insurance Co., 189 Ill. 2d 570, 574

(2000); Cincinnati Cos. v. West American Insurance Co., 183 Ill.
2d 317, 326 (1998); Institute of London Underwriters v. Hartford

Fire Insurance Co., 234 Ill. App. 3d 70, 78-79 (1992).

     We also explained the distinction between the horizontal and

vertical exhaustion doctrines.    Kajima, slip op. at 6-7.

Horizontal exhaustion requires an insured who has multiple

primary and excess policies covering a common risk to exhaust all

primary policy coverage before invoking excess coverage.     See

Illinois Emcasco Insurance Co. v. Continental Casualty Co., 139

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Ill. App. 3d 130, 134 (1985); United States Gypsum Co. v. Admiral

Insurance Co., 268 Ill. App. 3d 598, 652-53 (1994).    In contrast

to horizontal exhaustion, vertical exhaustion allows an insured

to seek coverage from an excess insurer as long as the insurance

policies immediately beneath that excess policy, as identified in

the excess policy's declaration page, have been exhausted,

regardless of whether other primary insurance may apply.     United

States Gypsum Co., 268 Ill. App. 3d at 653; see also T. Hamilton,

T. Stark, Excess-Primary Insurer Obligations and the Rights of

the Insured, 69 Def. Couns. J. 315, 320-21 (July 2002).

     We directly rejected the contention that perfecting a

selective tender entitles an insured to vertically exhaust

consecutive insurance coverage in Kajima, slip op. at 14.

Notwithstanding Kajima's selective tender to Shelco's and AMS's

insurers in this case, none of the arguments advanced by Tokio

constitute an exception to our holding in Kajima.     We will,

however, briefly address the arguments that are not based on the

selective tender rule which Tokio claims entitle it to vertical

exhaustion.

                  A. Subcontractor's Agreement

     Contrary to Tokio's assertions, the underlying construction

contract between Kajima and Shelco did not require Shelco to

vertically exhaust its consecutive insurance coverage.    The

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agreement required that Shelco maintain primary and umbrella

commercial liability insurance.    The primary insurance policy was

to have a $1 million per-occurrence limit and have Kajima named

as an additional insured.   The contract also required Shelco to

obtain a $5 million umbrella liability policy.   Tokio argues that

vertical exhaustion is required pursuant to the construction

contract because Kajima required Shelco to "maintain an umbrella

liability policy providing the same coverage and with the same

additional insureds as the basic policy."   We agree with US Fire

that it is difficult to make sense of Tokio's argument that

vertical exhaustion is required based on the language cited here.

The contract makes no reference to vertical exhaustion.    After

reviewing the record, we find nothing in the subcontractor

agreement that can be construed as requiring Shelco's insurers to

vertically exhaust consecutive insurance coverage.   Consequently,

Kajima was not entitled to vertically exhaust consecutive

insurance coverage based on the underlying construction contract.

                     B. Waiver and Estoppel

     Next, Tokio argues that US Fire has waived its right to seek

reimbursement or should be estopped from asserting the same

because it did not issue a reservation of rights letter.

Specifically, Tokio asserts that the insurance broker, Crum &

Forster, accepted Kajima's selective tender on behalf of North

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River and US Fire and failed to notify Tokio in a timely manner

that US Fire would not agree to vertical exhaustion.    We reject

this argument.

     First, we are of the view that Tokio's claims regarding

waiver and estoppel are misplaced.    Waiver and estoppel apply

only where an insurer has breached its duty to defend.    Thus, a

court inquires whether the insurer had a duty to defend and

whether it breached that duty.   Montgomery Ward & Co. v. Home

Insurance Co., 324 Ill. App. 3d 441, 450 (2001), citing Employers

Insurance of Wausau v. Ehlco Liquidating Trust, 186 Ill. 2d 127,

151 (1999).   "It is the duty to defend that gives rise to the

duty to reserve rights when defense of a claim is undertaken, and

without such a duty an insurer has no obligation to issue a

reservation of rights letter."   Montgomery Ward & Co., 324 Ill.

App. 3d at 450, citing International Insurance Co. v. Sargent &

Lundy, 242 Ill. App. 3d 614, 633 (1993).    An excess insurer that

has no duty to investigate coverage issues or to defend its

insured will not be estopped from later asserting coverage

defenses by a failure to issue a reservation of rights letter.

Sargent & Lundy, 242 Ill. App. 3d at 632.

     Here, it is undisputed that US Fire is an excess insurer and

that North River and Grinnell provided Kajima with a defense for

the Farkas litigation.   As a result, US Fire was not required to

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defend Kajima, although it was required to and did indemnify

Kajima.   Under these circumstances, the principles of waiver and

estoppel are inapplicable to US Fire.

     Second, the basis of Tokio's argument is that Kajima's

tender was communicated on Crum & Forster letterhead and did not

specifically exclude US Fire from the acceptance of the tender

even though Crum & Forster represented both insurance carriers.

Due to Crum & Forster's communication on behalf of North River,

Tokio claims that it was under the impression that both insurers

would exhaust their coverage for Kajima's defense and indemnity.

Tokio urges this court to simply ignore the distinction between

North River as a primary insurer and US Fire as an excess insurer

because Crum & Forester did not mention that US Fire was an

excess insurer and would not activate its policy until all

primary insurance had been exhausted.

     There is no legal authority cited by Tokio to support the

theory that a letter from an insurance broker accepting a tender

of defense and indemnity on behalf of a primary insurer must also

expressly exclude any excess insurers.   The record is replete

with evidence that Kajima and Tokio were well aware that North

River was the primary insurer and undertook Kajima's defense and

US Fire was an excess insurer that did not participate in

Kajima's defense.   In fact, Tokio acknowledges in its brief that

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the August 18, 1997, acceptance letter stated, "The North River

Insurance Company is in receipt of *** [Kajima's tender of

defense in the underlying case].       Please accept this as our

acknowledgment and agreement to the same."       The suggestion that

Tokio and Kajima were somehow tricked into believing that North

River and US Fire were one in the same based on an insurance

broker's letterhead, when viewed in light of the record, is

simply not believable.

     Relative to Tokio's claim that it was notified late that US

Fire would not activate its policy until Tokio's primary policy

was exhausted is similarly without merit.       Tokio and Kajima took

the position, from the time it was notified of the litigation in

1997, that it would be entitled to vertically exhaust its

subcontractors' consecutive insurance policies based on the

selective tender rule.    Illinois law does not allow an insured to

vertically exhaust consecutive insurance coverage (Kajima, slip

op. at 14) and Kajima's contract with Shelco did not require

vertical exhaustion.     Thus, it was unnecessary for US Fire to

notify Tokio that it would have to exhaust its primary policy

before the excess insurance would become available.

                       C. Conflict of Interest

     Finally, Tokio makes a fleeting reference to a conflict of

interest relative to its assigned counsel in its brief on appeal.

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Tokio implies that "a potential for conflict" existed because

Shelco moved for summary judgment in the Farkas lawsuit, which,

if successful, would have relieved Shelco and its primary

insurer, North River, from all liability.   The conflict existed

because North River funded Kajima's defense and paid for attorney

Nani's services.   After reviewing the record, we find these

allegations to be meritless and without evidence to support them.

The record clearly establishes that attorney Nani provided Kajima

with a vigorous, competent and effective defense at all stages of

the Farkas litigation.   There is not a shred of evidence in the

record that supports Tokio's allegation that attorney Nani

labored under a conflict of interest or that attorney Nani, North

River or Shelco was involved in any plan to provide substandard

representation to Kajima.

     We, therefore, hold that the circuit court correctly ruled

that the selective tender rule did not preempt the horizontal

doctrine and that vertical exhaustion was not appropriate based

on Tokio's other arguments.   The circuit court's judgment that

Tokio should contribute its primary policy to the Farkas

settlement before the excess policies would be activated was

correct.

               III. WAIVER OF ARGUMENTS ON APPEAL

     Tokio next argues that the circuit court erred when it

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ordered it to reimburse US Fire its entire $1 million policy

limits.   Specifically, Tokio contends that the circuit court made

a de facto finding of fact with regard to Tokio's allocation of

fault by requiring it to pay the full amount without first

conducting a hearing on Tokio's proportionate liability.

However, Tokio raised this argument in the circuit court for the

first time in a motion for reconsideration.

     US Fire argues that Tokio has waived any such argument,

since it did not raise the issue of liability apportionment until

its motion to reconsider.     US Fire correctly contends it is not

proper to raise a new legal theory or factual argument in a

motion for rehearing and, thus, waiver applies to the parties

with respect to this legal issue.      Coles-Moultrie Elec.

Cooperative v. City of Sullivan, 304 Ill. App. 3d 153, 166

(1999).   "The decision to grant or deny a motion for

reconsideration lies within the discretion of the circuit court

and will not be reversed absent an abuse of that discretion.

[Citation.]   The intended purpose of a motion to reconsider is to

bring to the court's attention newly discovered evidence, changes

in the law, or errors in the court's previous application of

existing law.   [Citation.]

     'Newly discovered' evidence is evidence that was not

available prior to the hearing on the motion for summary

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judgment.   [Citation.]   'Trial courts should not allow litigants

to stand mute, lose a motion, and then frantically gather

evidentiary material to show that the court erred in its ruling.'

[Citation.]"   Landeros v. Equity Property & Development, 321 Ill.

App. 3d 57, 65 (2001).    Tokio did not bring any newly discovered

evidence to the circuit court's attention.   It had been aware of

the Farkas lawsuit since July 1997, and also knew that Kajima was

named as a defendant and could potentially be found liable for

Farkas' injuries.   Further, Tokio did not cite to any changes in

the law or errors in the court's previous application of the law

in its motion for reconsideration.    Thus, Tokio's claim that the

circuit court erred in "allocating fault" on appeal is waived.

     Even if waiver were inapplicable, we would affirm the

circuit court's denial of Tokio's motion to reconsider.   First,

we note that North River notified Tokio during the Farkas trial

that a settlement would exceed both North River's and Grinnell's

primary limits.   Tokio did not request an allocation of fault;

instead, it demanded that North River and Grinnell settle the

lawsuit without any contribution from Tokio.   To the extent that

an allocation of fault was necessary as Tokio claims, it should

have been sought prior to or during settlement negotiations.

Tokio instead rested on its belief that it was entitled to

vertical exhaustion based on its selective tender and that it

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would not be required to defend or indemnify Kajima in the Farkas

litigation.    It was not, in our view, proper for Tokio to sit

idle throughout the Farkas settlement negotiations only to raise

its objections in a motion for reconsideration.    This is

especially true because North River and Grinnell indicated that a

settlement would not be possible within the limits of the primary

insurers' policies prior to settling the case.

     Second, Tokio does not put forth any evidence to suggest

that its insured was less culpable than any other named

defendant.    The possibility exists that Kajima could have been

found mostly or entirely at fault in the underlying lawsuit,

perhaps explaining why Tokio did not seek an allocation of fault

at the appropriate time.    Thus, we agree with the circuit court

that Tokio's allocation argument was untimely, highly speculative

and self-serving and find that the circuit court properly denied

Tokio's motion to reconsider.

       IV. THE SELECTIVE TENDER RULE AND EXCESS COVERAGE

     US Fire cross-appeals the circuit court's decision to apply

the selective tender rule to the excess insurers of a common

insured.    In its declaratory judgment action against Grinnell and

Tokio, US Fire sought equitable contribution from Tokio and

Grinnell's umbrella policies.    Grinnell settled with US Fire for

$500,000 which was paid from its excess policy.    The circuit

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court later ruled that the insurers selected by Kajima to defend

and indemnify it, including the excess insurers, must do so up to

their coverage limits before Kajima's excess policy will be

activated.

     US Fire points out that there is no published authority in

Illinois that specifically addresses how or whether a common

insured may selectively tender its indemnity to an excess insurer

after exhausting concurrent primary insurance coverage.   All

published cases related to the selective tender rule have

involved fact scenarios where the loss was less than or equal to

the available primary concurrent coverage.   We additionally note

that US Fire supplemented the authority upon which it relies to

include this court's recent decision in Kajima.   However, in that

case, the issue of whether the selective tender rule could be

applied to excess insurers was not before us and we did not

decide whether the selective tender rule could be applied to the

excess layer of coverage.   Because the issue is now properly

before this court, we hold that once an insured has exhausted its

concurrent primary insurance coverage, it may selectively tender

its indemnity to concurrent excess insurers.

     The selective tender rule, as recognized by Illinois courts,

gives an insured covered by multiple concurrent policies the

right to choose which insurer will defend and indemnify it with

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respect to a specific claim.   John Burns Construction Co. v.

Indiana Insurance Co., 189 Ill. 2d 570, 574 (2000); Cincinnati

Cos. v. West American Insurance Co., 183 Ill. 2d 317, 326 (1998);

Kajima, slip op. at 2; Institute of London Underwriters v.

Hartford Fire Insurance Co., 234 Ill. App. 3d 70, 78-79 (1992).

In Institute of London, this court held that when two insurance

policies potentially apply to a loss, an insured may designate

one insurer to undertake its defense and indemnity and thereby

foreclose the settling insurer from obtaining contribution from

the nonsettling insurer.   Institute of London, 234 Ill. App. 3d

at 78-79.   Our supreme court has clearly established an insured's

right to select exclusive coverage from among multiple concurrent

insurance policies.   John Burns, 189 Ill. 2d at 574; Cincinnati,

183 Ill. 2d at 326.   This court and our supreme court have also

held that once an insured instructs an insurer not to involve

itself in the defense or indemnification of a claim, that insurer

" 'would then be relieved of its obligation to the insured with

regard to that claim.' "   Bituminous Casualty Corp. v. Royal

Insurance Co. of America, 301 Ill. App. 3d 720, 724 (1998),

quoting Cincinnati, 183 Ill. 2d at 326.   The insured may choose

to forego an insurer's assistance for various reasons, including

the insured's fear that premiums would increase or that the

policy would be canceled in the future.   Cincinnati, 183 Ill. 2d

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at 326 (1998).

     An insured has the right to selectively tender its defense

and indemnification to one of several common insurers.   Kajima,

slip op. at 3.   The "right" to selectively tender, despite its

criticism, has been characterized as "paramount."   Legion

Insurance Co. v. Empire Fire & Marine Insurance Co., 354 Ill.

App. 3d 699, 703 (2004) (explaining that an insured has the

paramount right to choose or knowingly forego an insurer's

participation in a claim); Alcan United, Inc. v. West Bend Mutual

Insurance Co., 303 Ill. App. 3d 72, 79 (1999), quoting Institute

of London, 234 Ill. App. 3d at 79 (recognizing the paramount

right of the insured " 'to seek or not to seek an insurer's

participation in a claim as the insured chooses' ").   See also

Chicago Hospital Risk Pooling Program v. Illinois State Medical

Inter-Insurance Exchange, 325 Ill. App. 3d 970, 987 (2001)

(Quinn, J., specially concurring) (stating "[i]n the vast area of

legal jurisprudence, there are undoubtedly many instances where

being the first, or only, jurisdiction to grant rights to persons

or entities may rightly be a source of pride.   While it is still

very early, the doctrine of 'selective tender' does not appear

*** to be one of those instances");   American National Fire

Insurance Co. v. National Union Fire Insurance Co. of Pittsburgh,

343 Ill. App. 3d 93, 109 (2003) (Quinn, J., specially concurring)

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(suggesting that the selective tender rule be tailored in a

manner that "will not blindside the insurer" and maintain "the

important distinction between primary and excess insurers").

     Whether we agree or disagree with the wisdom behind the

selective tender rule, our supreme court has clearly indicated

that an insured has the right to choose from among its concurrent

insurers.   We can articulate no reason why this rule cannot or

should not be applied to concurrent excess insurance coverage.

Neither the John Burns case, nor any other published authority,

prohibits an insured's right to select or deselect a particular

policy when it has concurrent coverage.   In addition, because the

selective tender rule is applied only concurrently at either the

primary or excess level and not consecutively, the concerns about

blurring the line between primary and excess insurance policies

is not applicable.   Hence, our ruling here maintains the critical

distinction between primary and excess insurance policies which

we sought to preserve in Kajima slip op. at 5.   Moreover,

contrary to US Fire's contention, the fact that an excess policy

contains an "other insurance" clause does not preempt the

selective tender rule.   It is not relevant that Tokio or US

Fire's policy contains an "other insurance" clause.   This was

made clear in John Burns.   The purpose of an "other insurance"

clause is to provide a method of apportioning coverage among

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triggered concurrent policies.   John Burns, 189 Ill. 2d at 576,

citing Institute of London, 234 Ill. App. 3d at 77 ("if the

policy is never triggered, the issue of liability under the

'other insurance' clause does not arise").

     After reviewing the record and considering the authority, we

agree with the circuit court that Kajima perfected its selective

tender to US Fire.   Thus, the circuit court correctly ruled that

the selective tender rule applies to the excess layer of

insurance coverage and that US Fire could not seek contribution

from Tokio in this case.

                           IV. CONCLUSION

     For the foregoing reasons, we hold that Kajima was not

entitled to vertically exhaust consecutive primary and excess

policies notwithstanding its proper selective tender to other

concurrent insurers; the circuit court properly denied Tokio's

motion for reconsideration; and the selective tender rule was

applicable to concurrent excess insurance coverage.   Accordingly,

the judgment of the circuit court is affirmed.

     Affirmed.

     FITZGERALD-SMITH, PJ., and JOSEPH GORDON, J., concur.

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