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Rogers Cartage Co. v. Travelers Indemnity Co.

2018 IL App (5th) 160098 (Ill. App., 2018)

Words & Phrases

Bad Faith: Failure To Settle

Trial Judge

Brian A. Babka and Heinz M. Rudolf

Appellate Judge



Insurer’s actions in refusing to settle within policy limits were vexatious and unreasonable within meaning of Section 155 of Insurance Code.

Fact Summary

This appeal is a consolidation of two declaratory judgment actions related to insurance coverage for environmental contamination and cleanup at two United States Environmental Protection Agency (EPA) Superfund sites located mainly in the Village of Sauget (Sauget) and the Village of Cahokia (Cahokia). Claims were brought against plaintiffs, Pharmacia Corporation (Pharmacia) and Solutia, Inc. (Solutia) (formerly Monsanto Company), inter alia, in underlying litigation (United States v. Pharmacia Corp., No. 99-63-GPM (S.D. Ill.)) in federal court). The underlying litigation involves numerous direct claims and claims for contribution arising out of or relating to environmental response costs already expended, being expended, and/or to be expended in the future in connection with the two sites.

The instant appeal pertains to plaintiffs’ assertion that defendants,  The  Travelers Indemnity Company and Travelers Property Casualty Company of America (collectively, Travelers), were obligated to defend and indemnify Rogers in the underlying litigation pursuant to certain insurance policies issued by Travelers. Travelers disagreed and filed an action for declaratory judgment in the circuit court of Cook County (No. 10-CH-55238). Ultimately, a settlement in the amount of $7.5 million was reached in the underlying litigation without the consent of Travelers. After Rogers signed the settlement, plaintiffs filed suit for declaratory judgment in the circuit court of St. Clair County (No. 11-MR-27).

The Cook County and St. Clair County cases proceeded simultaneously. However, the bulk of the Cook County lawsuit was transferred to St. Clair County, where the trial court agreed with plaintiffs and granted partial summary judgments in favor of plaintiffs and against Travelers and granted Rogers’s petition for fees, costs, and penalties. Travelers now appeals. The specific issues raised in this appeal are (1) whether Travelers breached the duty to defend, (2) whether the pollution exclusions in the policies apply, (3) whether the settlement in the underlying litigation was reasonable, (4) whether Travelers breached the good faith duty to settle, (5) whether Travelers’ conduct was vexatious and unreasonable such that an award of attorney fees was proper, and (6) whether the award of $2,665,384.90 in attorney fees was proper. We affirm.