No. 1-13-2350

SECOND DIVISION January 13, 2015 ______________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT _________________________________________________________________________________

ILLINOIS TOOL WORKS INC. AND ITW ) Appeal from the Circuit Court FINISHING LLC, ) of Cook County. ) Plaintiffs-Appellees, ) ) v. ) ) No. 04 CH 21325 TRAVELERS CASUALTY AND SURETY ) COMPANY, CENTURY INDEMNITY ) COMPANY, AND THE TRAVELERS ) INDEMNITY COMPANY OF CONNECTICUT, ) ) Honorable Kathleen Kennedy, Defendants-Appellants. ) Judge Presiding.

PRESIDING JUSTICE SIMON delivered the judgment of the court, with opinion. Justices Neville and Pierce concurred in the judgment and opinion.

OPINION

¶1 At issue in this case is whether defendants, plaintiffs' former insurers, have a duty to

defend plaintiffs in a multitude of cases brought by individuals that were allegedly injured as a

result of exposure to harmful materials while welding or engaging in other building or

maintenance activities. The trial court found that defendants have a duty to defend and that they No. 1-13-2350

should bear the entire cost. We agree and, accordingly, we affirm. 1

¶2 BACKGROUND

¶3 Plaintiffs Illinois Tool Works Inc. and ITW Finishing LLC (collectively, Illinois Tool) are

companies engaged in the manufacture and distribution of tools, equipment, finishing systems,

and consumables. Defendants Travelers Casualty & Surety Company and Century Indemnity

Company (collectively, Insurers) are companies in the insurance business that issued policies

to Illinois Tool as early as 1971, but no later than 1987. In the late 1980s, Illinois Tool

endeavored to expand its product line through a series of acquisitions. One market Illinois

Tool entered was the distribution of welding products, beginning with its acquisition of Miller

Electric in 1993. It is undisputed that Illinois Tool was not involved in the welding product

market prior to its acquisition of Miller Electric.

¶4 The underlying suits are toxic tort cases alleging that the plaintiffs therein were injured as a

result of exposure to asbestos, benzene, manganese, and other harmful materials. The suits

broadly allege that certain companies are liable and the typical case names dozens of

companies as defendants. Illinois Tool is named in different capacities in the underlying

cases: individually, as a successor in interest to the welding companies it later acquired, or

both. Illinois Tool has been successful in getting the claims against it dismissed or obtaining

summary judgment on the basis that it was not in the welding consumable business before

1993.

¶5 This dispute concerns 10 policies issued to insure Illinois Tool for certain periods between

1971 and 1987. The policies contain different language, but each covers Illinois Tool for

1 Illinois Tool filed a motion to strike alleged misstatements from the Insurers' opening brief. That motion is denied.

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claims resulting from bodily injury. All policies also contain a provision that requires the

Insurers to defend Illinois Tool in any suit brought against it for bodily injury even if the

allegations of the suit are false or groundless. The parties do not currently dispute whether the

injuries alleged in the underlying welding cases would be of the type covered by the policy.

Instead, the Insurers argue that they cannot be liable because the last policy they issued expired

in 1987 and Illinois Tool did not enter the welding product market until 1993.

¶6 Illinois Tool filed an action in the Circuit Court of Cook County seeking, among other

things, a declaration that the Insurers owed it a duty to defend the underlying suits. The

Insurers filed counterclaims. The parties proceeded to file cross-motions for summary

judgment on the duty to defend issue. In a 41-page written order, the trial court found in favor

of Illinois Tool. The trial court subsequently entered an order pursuant to Illinois Supreme

Court Rule 304(a) indicating that there was no just reason for delaying enforcement or appeal

of its summary judgment order. This appeal followed.

¶7 ANALYSIS

¶8 We review the grant of summary judgment de novo. Cook v. AAA Life Insurance Co.,

, ¶ 24. Summary judgment is appropriate when the pleadings,

depositions, admissions and affidavits, viewed in a light most favorable to the nonmovant, fail to

establish a genuine issue of material fact, thereby entitling the moving party to judgment as a

matter of law. 735 ILCS 5/2-1005 (West 2012); Progressive Universal Insurance Co of Illinois.

v. Liberty Mutual Fire Insurance Co.,

(2005). If disputes as to material

facts exist or if reasonable minds may differ with respect to the inferences drawn from the

evidence, summary judgment may not be granted. Associated Underwriters of America Agency,

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Inc. v. McCarthy,

(2005). However, when parties file

cross-motions for summary judgment, they agree that no genuine issues of material fact exist and

that the dispute involves only questions of law, which the court may decide based on the record.

Progressive Insurance Co. v. Universal Casualty Co.,

(2004).

¶9 The construction of an insurance policy and the determination of the parties' rights and

obligations thereunder are questions of law. Cook,

. To

determine whether an insurer has a duty to defend the insured, a court must compare the

allegations in the underlying complaint to the relevant provisions of the insurance policy. G.M.

Sign, Inc. v. State Farm Fire & Casualty Co.,

. When determining

whether an insurer has a duty to defend an insured, the allegations in the underlying complaint

must be liberally construed in favor of coverage.

The duty to defend is broader than the duty

to indemnify. American Country Insurance Co. v. Cline,

(1999). An

insurer's refusal to defend an insured is justified only if it is clear from the face of the underlying

complaint that the allegations fail to state facts which bring the cause within or potentially within

coverage. Rosalind Franklin University of Medicine & Science v. Lexington Insurance Co.,

. When the underlying complaint alleges facts within or potentially

within the policy's coverage, the insurer's duty to defend arises even if the allegations are

groundless, false, or fraudulent. Illinois Emcasco Insurance Co. v. Waukegan Steel Sales Inc.,

.

¶ 10 The Insurers argue that they have no duty to defend because there are no allegations made

in the underlying complaints that Illinois Tool caused injuries to any underlying plaintiff during

the periods covered by their policies. That assertion is incorrect. While it is clear from the

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record, and the parties do not dispute, that Illinois Tool is unlikely to actually be found liable in the

underlying suits, that question is not before us. Our inquiry must focus on whether the facts pled

by the underlying plaintiffs, if true, would potentially bring the claims within coverage. Lorenzo

v. Capitol Indemnity Corp.,

(2010); Illinois Emcasco,

. We must even consider false and groundless allegations.

When we analyze

the underlying complaints under that standard, it is clear that the Insurers have a duty to defend.

¶ 11 Throughout the proceedings in the trial court, the parties relied upon representative

examples of the underlying complaints rather than insisting on an examination of thousands of

complaints. To some extent, the parties continue that process in their appellate briefs. However,

the parties do not clearly set forth which underlying complaints in the appellate record are

considered representative examples of the different categories of complaints. Accordingly, we

have examined the complaints that are attached as exhibits to Illinois Tool's fifth amended

complaint, the complaints discussed in the parties' briefs, and a number of other complaints that

are in the record.

¶ 12 Also during the trial court proceedings, the parties categorized the underlying complaints

as follows: (1) complaints with no exposure dates; (2) complaints with first exposure prior to

1972; (3) complaints with first exposure between 1972 and 1976; and (4) complaints with first

exposure between 1976 and 1987. In this appeal, the parties do not consistently adhere to a

categorization scheme that is conducive to explaining their respective duties. After examining

the record, we have determined that we can best address the merits of this appeal by dividing the

underlying complaints into groups based on whether they contain allegations of: (1) direct

liability with exposure dates during a policy period; (2) direct liability with unstated injury or

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exposure dates; (3) pure successor-in-interest liability claims; and (4) a combination of direct

liability and successor-in-interest claims. We will address the parties' arguments concerning

allocation where it is warranted.

¶ 13 Direct Liability Claims, Exposure During a Policy Period

¶ 14 The first category of complaints we address is the group in which the underlying plaintiff

alleges that he was exposed to an Illinois Tool product during at least some point within a relevant

policy's period.

¶ 15 In Steinberg v. BP Amoco Chemical Co., No. 05 L 857 (Cir. Ct. Madison Co.), the

plaintiffs named Illinois Tool individually as a defendant. Steinberg specifically alleges that he

was "exposed to and inhaled, ingested or otherwise absorbed benzene which was contained in

products which were designed, manufactured, sold or distributed by *** Illinois Tool." Steinberg

alleges that his exposure to benzene occurred during his employment as a machinist, maintenance

and mechanical worker from 1963 to 1972, and as a millwright and machinist from 1973 to 2002.

For the rest of the complaint, the defendants are lumped together and the allegations are against the

group as a whole. Steinberg goes on to allege how his exposure to benzene caused the leukemia

he developed.

¶ 16 In Ramsey v. Anchor Packing Co., No. 07C-08-279 (Del. Super. Ct. New Castle Co.),

Illinois Tool is named individually as a defendant. Ramsey alleges that his exposure occurred

during his employment from 1960 to 2001 at which times he was "wrongly exposed to and inhaled,

ingested, or otherwise absorbed asbestos fibers *** [that] were manufactured, sold, distributed,

installed by *** [Illinois Tool]." Again, the plaintiff goes on to allege how his exposure to the

aforementioned products caused his injuries, but generally states that it was "Defendants" that

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caused the harm. The plaintiff does differentiate among the defendants in the other counts of his

complaint, but he divides the defendants between manufacturers and distributors of asbestos

products and his former employers. Illinois Tool is categorized as an asbestos manufacturer and

distributor and Ramsey claims that Illinois Tool is liable in that capacity.

¶ 17 In Andre v. A.O. Smith Corp., No. 03-11573 (La. Civ. Dist. Ct. Orleans Parish), the

plaintiffs named Illinois Tool individually as a defendant and included it in the group of "welding

defendants." The plaintiffs named other corporations in their capacity as successors in interest,

but made no such distinction for Illinois Tool. Each of the plaintiffs in the case alleges exposure

to welding fumes sometime from 1950 to 1987. The plaintiffs allege that "the Welding

Defendants, and each of them, were manufacturers, suppliers and/or distributors of

manganese-containing welding products ***" that proximately caused the plaintiffs' injuries.

¶ 18 In Jones v. A&E Products Group LP, No. 07 L 323 (Cir. Ct. Madison Co.), the plaintiff

named Illinois Tool as an individual defendant. Jones alleges, among other things, that "from

1972 to 2001, he was exposed to and inhaled, ingested or otherwise absorbed benzene and other

hazardous products which were designed, manufactured, sold or distributed by *** Illinois

Tool[.]" Jones further alleges that his exposure to benzene resulted in him developing leukemia.

¶ 19 Again, while only being representative of a much larger group, the complaints discussed

above allege direct liability against Illinois Tool for injury resulting from exposure to Illinois

Tool's products during at least some portion of the relevant policy periods. If we compare the

allegations in the underlying complaints with the relevant policy provisions as our precedent

requires (Illinois Emcasco,

), the Insurers clearly have a duty to

defend this category of cases, even if the allegations are, in fact, groundless. In this category of

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cases, the underlying complaints do not even mention Illinois Tool as a successor company,

despite making that distinction for other named defendants. The unequivocal claims made in

these complaints is that Illinois Tool, itself, made or distributed harmful materials during the

policy periods that caused the underlying plaintiffs' injuries.

¶ 20 To accept the Insurers' position on this category of cases would be to equate the duty to

defend with the duty to indemnify. But it is well-settled that an insurer's duty to defend is broader

than its duty to indemnify and an insurer may be obligated to defend against causes of action and

theories of recovery that are not in fact covered by the policy. Illinois Masonic Medical Center v.

Turegum Insurance Co.,

(1988). The threshold that an underlying

complaint must meet to trigger a duty to defend is minimal. Continental Casualty Co. v. Donald

T. Bertucci, Ltd.,

(2010). The insurer's knowledge that extrinsic facts

not pled in the complaint will ultimately defeat any coverage obligation does not negate its duty to

defend in the first place if the complaint, on its face, presents a claim potentially within the

insurance policy's coverage. Chandler v. Doherty,

(1998); Lorenzo v.

Capitol Indemnity Corp.,

(2010).

¶ 21 It is true that in the majority of the underlying complaints in this category the plaintiffs use

"group pleading" or "shotgun pleading" to implicate Illinois Tool. But the insurer bears the

burden of the underlying plaintiffs' broad drafting. See Empire Indemnity Insurance Co. v.

Chicago Province of the Society of Jesus,

(the underlying

complaints should be liberally construed in favor of a duty to defend); Lyons v. State Farm Fire &

Casualty Co.,

(2004) (ambiguities in the underlying complaint should be

resolved in favor of a duty to defend); International Insurance Co. v. Rollprint Packaging

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Products, Inc.,

(2000) (questions of coverage should not hinge

exclusively on the draftsmanship skills of the plaintiff in underlying action). Irrespective of

whether or not Illinois Tool will ultimately be found liable in these underlying cases, the Insurers

agreed to bear the burden of defending against the putatively groundless allegations. Only with

knowledge of an extrinsic fact does it become apparent that, contrary to the express allegations in

the underlying complaints, Illinois Tool was not in the business of manufacturing or distributing

welding products before 1993. That extrinsic fact is akin to an "affirmative matter" in Illinois

practice, a dispositive fact that must be proved to obtain a finding of no liability. The Insurers

agreed to provide a defense for cases based on groundless allegations and, thus, to bear the cost of

disproving groundless allegations on Illinois Tool's behalf. The Insurers have a duty to defend

this category of cases.

¶ 22 Direct Liability Claims, Unstated Exposure or Injury Date

¶ 23 The second category of complaints we address is the group in which the underlying

plaintiff alleges that exposure to an Illinois Tool product resulted in an injury, but does not set forth

when the exposure occurred or when the injury manifested.

¶ 24 In Grubbs v. Lincoln Electric Co., No. 1:04 CV 18608 (N.D. Ohio 2004), the plaintiff

named Illinois Tool individually as a defendant. Grubbs then alleged that "[a]ll of the Defendants

are or were manufacturers, sellers, suppliers or large industrial consumers of welding products or

conspiracy defendants." Grubbs never differentiates between the defendants again, but continues

on to explain that "the defendants" are liable for their involvement in the manganese production

and distribution industries. Grubbs does not allege any specific dates of exposure or injury.

¶ 25 In Hilton v. American Optical Corp., No. 05 CV 520 (Dist. Ct. Col.), Illinois Tool is named

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individually as a defendant. In the complaint, Hilton cursorily alleges that he was exposed to

dangerous chemicals and other materials from paint. He does not allege when the exposure

occurred. He concludes that his injuries were caused by the negligence of defendants. There are

no specific allegations regarding Illinois Tool's role or the time of exposure, but it is simply

grouped along with all other defendants as a proximate cause of his injury.

¶ 26 No Illinois cases directly address the question presented by this category of cases, but we

are guided by a well-settled principle followed by Illinois courts: that vague, ambiguous

allegations against an insured should be resolved in favor of finding a duty to defend.

¶ 27 An insurer can only refuse to defend if the allegations of the underlying complaint preclude

any possibility of coverage. American Zurich Insurance Co. v. Wilcox & Christopoulos, L.L.C.,

. An insurer may not refuse to defend its insured unless it is clear

from the face of the underlying complaint that the allegations fail to state facts which bring the

case within, or potentially within, the policy's coverage. United States Fidelity & Guaranty Co. v.

Wilkin Insulation Co.,

(1991). In the underlying cases here, the ambiguous or

unstated time period must be resolved in favor of a duty to defend. The bare allegations of the

underlying complaints leave open the possibility that the plaintiffs' exposure or injury occurred

during the policy periods. Accordingly, the underlying allegations do not foreclose coverage.

¶ 28 A few nonbinding but persuasive cases likewise guide our analysis. In Hugo Boss

Fashions, Inc. v. Federal Insurance Co.,

(2d Cir. 2001), the court discussed

examples of uncertainty in underlying claims and how those uncertainties influence an insurer's

duty to defend. The court went on to explain how there are at least three kinds of uncertainty that

can give rise to a duty to defend.

. One such uncertainty, the court explained, is factual:

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did the injury occur in a time, place, or way that is covered by the policy?

Each of these

factual uncertainties will ultimately be resolved, but until they are, the insurer cannot avoid its duty

to defend.

¶ 29 The time of the injury is the factual question in this case. Based on the allegations against

Illinois Tool in this category of cases, the time of the injury is a factual uncertainty that, until

resolved, gives rise to the duty to defend.

¶ 30 The Hugo Boss court continued, "[w]here, for instance, a complaint alleges harm caused by

an insured's negligence in maintaining a building, and the insurance contract covers damages

resulting from negligent maintenance generally, but excludes damages due to negligent

maintenance of elevators, if the complaint does not specify where in the building the injury

occurred, there will be uncertainty as to whether coverage is required."

. From this,

the court found that a duty to defend exists.

. The court then explained that the insurer

could expediently eliminate its duty to defend by demanding a bill of particulars and resolving the

ambiguity in the underlying action.

However, the court made clear, the duty to defend lasts

"until the factual ambiguity is resolved in favor of the insurer."

¶ 31 In Maxum Indemnity Co. v. Eclipse Manufacturing Co.,

(N.D. Ill.

2012), one of the insurers argued that it did not have a duty to defend because the underlying

complaint contained no allegation that the wrongful conduct occurred during its policy period.

The court found that although the two expressly stated occurrences of wrongful conduct were not

within the policy period, the indications that the wrongful conduct began in 2001 and occurred on

other occasions "raised the possibility" that the wrongful conduct occurred while the insurers'

policies were in effect.

Thus, the Maxum court found the insurers had a duty to defend. Id.;

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see also Colony National Insurance Co. v. Unique Industrial Product Co.,

(5th Cir. 2012) (vague underlying allegations as to when an injury was caused do not

clearly and unambiguously demonstrate that the claim falls outside the scope of coverage so a duty

to defend exists). Based on the foregoing, the Insurers have a duty to defend this category of

cases.

¶ 32 However, this category of cases brings the issue of allocation into focus. After the final

policy issued by the Insurers expired in 1987, Illinois Tool chose to self-insure. Thus, where

there is no exposure date alleged, we cannot know whether the underlying plaintiff is claiming that

he was exposed to the harmful materials or that the injury manifested during a policy period or

instead during the time Illinois Tool was self-insured. The Insurers argue that for the period after

1987, Illinois Tool assumed the risks of litigation and, therefore, if we require them to bear the full

burden of defending these cases, we would be imposing obligations on them for a period of time

that they never agreed to provide coverage or a defense.

¶ 33 The relevant policies provide that the Insurers will defend Illinois Tool against "any suit"

and pay "all sums" for claims of personal injury against it, but the policies also state that the injury

must take place during the policy period in order to be covered. The trial court rejected the

Insurers' request for a pro-rata allocation of the burden of providing a defense and concluded that

"all triggered policies are jointly and severally liable for defense for the particular period in which

the duty to defend arises" and found that the Insurers must bear the burden of all defense costs.

¶ 34 The Illinois Supreme Court rejected a pro-rata allocation approach in Zurich Insurance

Co. v. Raymark Industries, Inc.,

(1987), and we followed the reasoning therein in

John Crane, Inc. v. Admiral Insurance Co., 2013 IL App (1st) 1093240-B. In those cases, the

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courts held that once a policy was triggered, the insurer was obligated to pay the total defense costs

without proration. Raymark,

; John Crane, 2013 IL App (1st) 1093240-B, ¶

56. Under Raymark, when the policies are "all sums" policies as they are here, any insurer that

has a duty to defend is jointly and severally liable for the defense costs. As set forth above, the

Insurers have a duty to defend this category of cases and, under the policies at issue, that duty

remains until the factual ambiguities in the underlying complaints are resolved in favor of the

insurer.

¶ 35 Pure Successor-in-Interest Claims

¶ 36 The third category of complaints we address is the group in which the underlying plaintiff

alleges that Illinois Tool is liable for the conduct of another company. In these cases, the

companies that Illinois Tool is called to answer for were acquired by Illinois Tool after the policy

periods. The underlying plaintiffs allege that Illinois Tool is liable as a successor in interest to

those companies.

¶ 37 In Park v. Akzo Nobel Coatings, Inc., No. BC350703 (Cal. Super. Ct. Los Angeles Co.

Cent. Dist. 2006), the plaintiffs allege that Illinois Tool is liable as a successor in interest to LPS

Laboratories. Park alleged that during his employment from 1979 to 2004, he was exposed to

LPS 1 greaseless lubricant. He generally alleges that the lubricant was one of the chemical

products that contained toxic chemicals that caused his leukemia. There are no allegations made

against Illinois Tool individually.

¶ 38 In Stark v. Air Products & Chemicals, Inc., No. 03 L 15593 (Cir. Ct. Cook Co.), Illinois

Tool is named individually as a defendant. Like many of the other underlying complaints

examined above, Stark grouped Illinois Tool with the other named defendants to link it to the

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wrongdoing. However, Stark seeks to hold Illinois Tool liable for its alleged role in a purported

conspiracy perpetrated by the National Electric Manufacturers Association (NEMA), and as a

successor for the conduct of companies it acquired beginning in 1993. Stark then proceeded to

allege that Illinois Tool became a member of NEMA beginning in 1993 when it acquired Hobart

Brothers Company.

¶ 39 Illinois Tool has essentially conceded that it is not entitled to a defense in this category of

cases. In its brief in this court, Illinois Tool explains that it "did not seek a defense for cases

alleging solely successor liability." In the successor cases, the underlying allegations make clear

that Illinois Tool could not be found liable for its own conduct. Illinois Tool is only alleged to be

liable based on its affiliation with companies it acquired after the policy periods, and the

underlying plaintiffs specifically allege that they seek to hold Illinois Tool liable for the conduct of

those after-acquired companies. In these cases, the underlying plaintiffs pled the Insurers out of

any duty to defend by making clear that their claims were only directed at predecessor companies

or activities beginning in 1993. Illinois Tool did not bargain for a defense for claims made against

it by way of any after-acquired companies or for conduct occurring after 1987. Accordingly,

Illinois Tool is not entitled to a defense in this category of cases.

¶ 40 Combination, Direct Liability and Successor In Interest Claims

¶ 41 The fourth category of complaints we address is the group in which the underlying plaintiff

alleges that Illinois Tool is directly liable, but is also liable as a successor in interest.

¶ 42 In the various cases that make up the multidistrict federal litigation, In re: Welding Fume

Products Liability Litigation, No. 1:03-CV-17000, MDL Docket No. 1535 (N.D. Ohio 2003),

Illinois Tool is named individually and as a successor in interest to Miller Electric Manufacturing

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Company and Hobart Brothers Company. The multidistrict litigation plaintiffs sought to hold

Illinois Tool directly liable under six different theories. The district court found that Illinois Tool

was entitled to summary judgment on those claims because, despite claiming that Illinois Tool

should be individually liable, the plaintiffs could not produce any evidence that there was a causal

connection between anything done by Illinois Tool and the plaintiffs' injuries. The predominant

shortfall in the underlying plaintiffs' claims directly against Illinois Tool was that Illinois Tool was

not in the welding product industry or any of the relevant trade associations prior to 1993. In its

order granting summary judgment in Illinois Tool's favor, the district court explained that the

direct liability claims against Illinois Tool "cannot succeed because there is no evidence that

plaintiffs were harmed by an [Illinois Tool] product or that [Illinois Tool] had a duty to plaintiffs."

However, Illinois Tool defeated the direct claims against it on an evidentiary basis, despite the fact

that claims were, in fact, made directly against it. The multidistrict litigation plaintiffs also

sought to hold Illinois Tool liable as a successor to Hobart Brothers and Miller Electric. In the

same motion that it sought and was granted summary judgment on the direct liability claims,

Illinois Tool sought and received summary judgment on the successor liability claims.

¶ 43 In Taylor v. Engineered Polymer Solutions, Inc., No. 07-6225 (Fla. Cir. Ct. 13th Dist.), the

plaintiff named Illinois Tool individually as a defendant. Taylor alleged that he was exposed to

harmful materials "manufactured and/or supplied and/or distributed by each of the collective

defendants" during his employment "for many years preceding May 24, 2005." The plaintiff also

alleges that Illinois Tool did business in Florida "by manufacturing and/or supplying and/or

distributing industrial products for use by the Citizens of the State of Florida including the

decedent." The plaintiff then proceeds to identify the Illinois Tool products to which he was

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exposed. In that section, he indicates that Illinois Tool is formerly known as LPS Laboratories

and Uni-Chem Corporation. Taylor goes on to generally allege that the defendants' products

proximately caused him to develop leukemia.

¶ 44 In these cases, Illinois Tool is alleged to be directly liable and in each there is, based on the

allegations, the possibility it could be found directly liable. As set forth previously in this

opinion, where there are allegations of direct liability against Illinois Tool and the bare allegations

leave open the possibility that the loss could be covered, the Insurers have a duty to defend. That

principle applies to this category of cases. However, in each of these cases there are also claims

seeking relief against Illinois Tool as a successor for which there would not ordinarily be a duty to

defend. But under Illinois law, when an insurer has a duty to defend against one claim in a suit, it

has a duty to defend against all claims, even if some of the claims standing alone would be beyond

the scope of the policy. Maryland Casualty Co. v. Peppers,

(1976).

Accordingly, in this category of cases, because the Insurers are required to provide a defense for

the direct claims against Illinois Tool, they are required to provide a defense for the claims based

on successor liability as well.

¶ 45 CONCLUSION

¶ 46 The duty to defend has been referred to as litigation insurance (Perdue Farms, Inc. v.

Travelers Casualty & Surety Co. of America,

(4th Cir. 2006)), because it

protects the insured from the expense of defending suits brought against it. From all indications,

Illinois Tool should not be named as a defendant in the underlying cases. But it was insured

against being wrongly sued. The Insurers here are responsible for defending Illinois Tool from

the allegations against it, however groundless.

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¶ 47 To summarize our holding, the Insurers must provide a defense for all cases where the bare

underlying allegations, if proved, would render Illinois Tool individually liable. If Illinois Tool is

alleged to be individually liable or liable both directly and as a successor, there is a duty to defend.

The duty to defend is joint and several. If Illinois Tool is alleged to be liable solely as a successor,

there is no duty to defend.

¶ 48 Accordingly, we affirm.

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