Illinois Tool Works Inc. et al. v. Travelers Casualty & Surety Co. et al.,
Circuit Court of Cook County, Illinois
In this insurance coverage action from the Circuit Court of Illinois, the plaintiffs, Illinois Tool Works, Inc. and ITW Finishing LLC (ITW) brought action against their insurers Travelers Casualty & Surety Co., the Travelers Indemnity Co. of Connecticut and Century Indemnity Co., (defendants) for insurance coverage in thousands of underlying toxic tort claims allegedly arising from exposure to harmful chemicals contained in the plaintiffs’ welding products such as asbestos, benzene, and other chemicals. Both parties subsequently moved for summary judgment.
In arguing that there was no duty to defend ITW under the subject policies, the defendants, who insured ITW between 1972 and 1987, claimed that the underlying plaintiffs could not have been injured by ITW’s products because ITW did not manufacture or sell them until after the alleged exposure and after the policy period. Thus, since ITW did not manufacture welding products at the time that the underlying plaintiffs were exposed to the harmful chemicals, there was no chance that their policies covered any judgments or settlements in the underlying litigation.
The court rejected these arguments and held that the insurers had a duty to defend ITW in the underlying toxic tort claims, even if the underlying claims were groundless. The court noted that it could not decide the duty to defend on the basis of extrinsic evidence that tends to determine an “ultimate fact” in the underlying cases. The court pointed out that the validity of the underlying claims against ITW hinges on whether the plaintiffs “designed, manufactured, sold or distributed” the products to which the underlying plaintiffs were allegedly exposed. Thus, the defendants could not avoid their defense obligations by relying on this outside extrinsic evidence.
The court also rejected the defendants request to allocate defense costs based on the time that insurers spent covering ITW. The court held that all triggered policies were jointly and severally liable for defense and could not limit their coverage based on the time they spent covering ITW.