No. 2-21-0175 Opinion filed March 4, 2022 ______________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT ______________________________________________________________________________

ILLINOIS UNION INSURANCE COMPANY, ) Appeal from the Circuit Court ) of Lake County. Plaintiff and Counterdefendant- ) Appellee, ) ) v. ) No. 19-MR-1026 ) MEDLINE INDUSTRIES, INC.; KATHLEEN ) KOCH; CHANDRA SEFTON; PATTY ) BENNETT; DAWN REX, on Behalf of Her ) Minor Son, Samuel Dolcimascolo; and ) DENNIS BREBNER, ) ) Defendants ) ) Honorable (Medline Industries, Inc., Defendant and ) Luis A. Berrones, Counterplaintiff-Appellant). ) Judge, Presiding. ______________________________________________________________________________

JUSTICE ZENOFF delivered the judgment of the court, with opinion. Presiding Justice Bridges and Justice Hutchinson concurred in the judgment and opinion.

OPINION

¶1 Defendant and counterplaintiff, Medline Industries, Inc. (Medline), appeals an order of the

circuit court of Lake County granting judgment on the pleadings in favor of plaintiff and

counterdefendant, Illinois Union Insurance Company (Illinois Union). Medline also appeals the

dismissal with prejudice of its second amended counterclaim. We affirm.

¶2 I. BACKGROUND

¶3 A. Introduction

¶4 This is an insurance-coverage dispute. In 2019, defendants Kathleen Koch; Chandra

Sefton; Patty Bennett; Dawn Rex, on behalf of her minor son, Samuel Dolcimascolo; and Dennis

Brebner (collectively the underlying plaintiffs) sued Medline in Cook County for injuries allegedly

caused by emissions of ethylene oxide gas (EtO) from Medline’s medical instruments sterilization

facility in Waukegan (the Waukegan facility). Medline tendered those lawsuits to its insurer,

Illinois Union, for defense. Illinois Union declined to defend or indemnify Medline.

¶5 On November 1, 2019, Illinois Union filed in the circuit court of Lake County a complaint

for declaratory judgment, which it later amended. Illinois Union contended that it did not owe a

duty to either defend or indemnify Medline in the underlying lawsuits. Illinois Union joined the

underlying plaintiffs as defendants in the declaratory judgment action solely because they had an

interest in whether Medline’s insurance coverage was available to them. Illinois Union sought no

relief against the underlying plaintiffs. The underlying plaintiffs are not parties to this appeal.

¶6 B. The Insurance Policy

¶7 At the Waukegan facility, Medline sterilizes medical instruments. In this process, Medline

emits EtO, which is a carcinogenic and mutagenic gas. Medline purchased a claims-made premises

pollution liability insurance policy (the policy) from Illinois Union. The “retroactive date” of the

policy was September 29, 2008, which is also when Medline acquired the Waukegan facility. The

“retroactive date” in such a policy specifies the date of the earliest occurrence to be covered,

regardless of when the claim is made. Medical Protective Co. v. Kim,

(7th

Cir. 2007). This is in contrast to “full retroactive” coverage, which places no limitations on

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coverage for past occurrences and would cover occurrences predating Medline’s acquisition of the

facility. See Kim,

.

¶8 In section IA of the policy, Illinois Union agreed to pay claims arising out of a “pollution

condition” on, at, under, or migrating from a “covered location.” It is undisputed that the

Waukegan facility is a covered location.

¶9 The policy defined “pollution condition” as

“[t]he discharge, dispersal, release, escape, migration, or seepage of any solid, liquid,

gaseous or thermal irritant, contaminant, or pollutant, including soil, silt, sedimentation,

smoke, soot, vapors, fumes, acids, alkalis, chemicals, electromagnetic fields (EMFs),

hazardous substances, hazardous materials, waste materials, ‘low-level radioactive waste,’

‘mixed waste,’ and medical, red bag, infectious or pathological wastes, on, in, into, or upon

land and structures thereupon, the atmosphere, surface water, or groundwater.”

Section IA further provided that coverage applied only to “pollution conditions” that “first

commence, in their entirety, on or after the retroactive date *** and prior to the expiration of the

‘policy period.’ ” Section IIIA of the policy provided that Illinois Union had the duty to defend

Medline against a claim to which “this insurance applies.”

¶ 10 C. The Coverage Dispute

¶ 11 Illinois Union denied coverage on the basis that the underlying complaints alleged that the

Waukegan facility (whether owned by Medline or its predecessors) released EtO since 1994. Thus,

Illinois Union interprets the underlying complaints as alleging that the emissions first commenced

prior to the retroactive date of the policy. Medline, however, interprets the underlying complaints

to allege many discrete emissions that occurred both before and after the retroactive date. Medline

interprets “pollution condition,” as defined in the policy, to mean that each discrete emission is a

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new “pollution condition.” Therefore, Medline reasons, pollution conditions occurring on or after

the retroactive date would be covered because they did not commence in their entirety prior thereto.

¶ 12 Medline filed a second amended answer, affirmative defenses, and a second amended

counterclaim to Illinois Union’s amended complaint for declaratory judgment. Attached to and

incorporated into this second amended counterclaim were copies of complaints filed in 19 lawsuits,

alleging that numerous plaintiffs sustained injuries as a result of Medline’s EtO emissions. These

19 lawsuits included those filed by the underlying plaintiffs. Medline sought a declaration that

Illinois Union owed Medline a defense and indemnification for all of these underlying lawsuits.

¶ 13 D. The Underlying Lawsuits

¶ 14 Eighteen of the lawsuits were filed against Medline in 2019 in the circuit court of Cook

County. The nineteenth suit, a class action, was filed in 2020 in federal district court. Each of the

complaints made similar allegations.

¶ 15 Pertinent to this appeal, the underlying complaints’ common allegations included the

following. “Medline and its predecessors have used, and Medline continues to use, EtO in

industrial medical device sterilization since approximately 1994 ***.” “Medline’s predecessors

consistently released over 4000 pounds of EtO between 1996 and 2001, including approximately

17,000 pounds between 1999 and 2001.” “While some EtO emissions are from controlled sources,

the majority of these emission estimates are ‘fugitive emissions’ that have been escaping, and

continue to escape, the facility.” “[I]ndividuals [living within a radius of Medline’s Waukegan

facility] have been inhaling EtO on a routine and continuous basis for decades.” “While ***

Medline [has] been knowingly and continuously releasing EtO for decades, people living and

working in the surrounding community were unaware that [Medline] routinely and continuously

exposed them to a dangerous, toxic, carcinogenic, and mutagenic gas.” “Now [persons living near

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the Waukegan facility] are suffering from a variety of cancers, miscarriages, birth defects, and

other life-altering health effects from continuous exposure to [EtO].” “Local residents and workers

in the area have unknowingly been exposed to carcinogenic ethylene oxide for decades ***.”

“[A]ccording to self-reported emissions data submitted to the Illinois [Environmental Protection

Agency], Medline continued to release large amounts of EtO into the surrounding community for

years ***.”

¶ 16 The underlying complaints described Medline’s sterilization process as follows.

“The EtO sterilization process begins by placing medical equipment in a gas chamber.

After air is pumped out of the room, ethylene oxide is introduced and allowed to diffuse

into the products for several hours. Once the medical equipment is sterilized, the ethylene

oxide is pumped out of the chamber and the remaining EtO is allowed to slowly dissipate.”

¶ 17 The above-quoted allegations were contained in introductory, or prefatory, paragraphs of

the underlying complaints, preceding counts alleging negligence, willful and wanton conduct,

public nuisance, and strict liability. The specific acts or omissions allegedly committed by Medline

were: (1) emitting dangerous volumes of EtO into the air from the Waukegan facility,

(2) disregarding safe methods to adequately control EtO emissions, (3) failing to warn or advise

those who live or work in the community that they were being exposed to EtO, (4) failing to

adequately record test results of high levels of EtO, (5) ignoring test results of high levels of EtO,

(6) underreporting EtO levels, and (7) subjecting those who live or work near the Waukegan

facility to increased cancer risks. The underlying complaints did not allege specific dates or times

when the EtO emissions occurred.

¶ 18 E. Illinois Union’s Motion for Judgment on the Pleadings

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¶ 19 On February 20, 2020, Illinois Union filed a motion for judgment on the pleadings. For

coverage to exist, Illinois Union argued, the alleged emissions of EtO “ ‘must first commence, in

their entirety, on or after the retroactive date’ ” of September 29, 2008. Illinois Union contended

that, because the underlying complaints alleged that the Waukegan facility had released EtO since

1994, there was no potential for coverage.

¶ 20 On July 8, 2020, the court denied the motion on the ground that there was a genuine issue

of fact as to whether the pollution condition existed before the retroactive date. Illinois Union then

filed a motion to reconsider, arguing that whether a duty to defend the underlying lawsuits was

triggered must be determined solely by comparing the allegations of the underlying complaints

with the policy language. On September 30, 2020, the court granted the motion to reconsider,

vacated the July 8 order, and granted Illinois Union’s motion for judgment on the pleadings. The

court found that Illinois Union had no duty to defend and, therefore, no duty to indemnify Medline

regarding the underlying lawsuits. 1

¶ 21 F. Medline’s Motion to Reconsider the Grant of Judgment on the Pleadings

¶ 22 On October 30, 2020, Medline filed a motion to reconsider the grant of judgment in Illinois

Union’s favor. Medline noted that it had moved in Cook County to strike the underlying

complaints’ references to the “continuous” release of EtO. Medline argued that its motion to strike

portions of the underlying complaints constituted a change of facts. Medline included, as an exhibit

to its motion to reconsider, a copy of its motion to strike filed in Cook County.

1 The underlying lawsuits referenced in the September 30, 2020, order were those filed by

the underlying plaintiffs.

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¶ 23 Medline argued in Cook County that allegations of continuity in the underlying complaints

were “immaterial to the claims being asserted” and were “cited prejudicially by [Illinois Union]

*** to defeat coverage *** based on an incorrect interpretation of [the words ‘constant’ or

‘continuous’ or ‘took place continuously’].” The underlying plaintiffs agreed to Medline’s motion

to strike. On March 5, 2021, Medline supplemented its motion to reconsider with a copy of a

February 25, 2021, order entered by the circuit court of Cook County striking language “describing

the release of ethylene oxide at the Waukegan sterilization facility as constant, continuous, or

taking place continuously.” On March 10, 2021, the Lake County court denied Medline’s motion

to reconsider the grant of judgment on the pleadings. The court found that striking allegations of

continuity from the underlying complaints did not alter the allegation that emissions of EtO from

the Waukegan facility preceded the retroactive date of the policy.

¶ 24 G. Illinois Union’s Motion to Dismiss Medline’s Second Amended Counterclaim

¶ 25 On October 23, 2020, while Medline’s motion to reconsider was pending, Illinois Union

moved to dismiss Medline’s second amended counterclaim on the ground that the court had

already determined that the policy afforded no coverage. On March 10, 2021, the court dismissed

Medline’s second amended counterclaim with prejudice, finding that Illinois Union had no duty

to defend or indemnify Medline in any of the 19 underlying lawsuits. Medline filed a timely notice

of appeal.

¶ 26 II. ANALYSIS

¶ 27 A. Standard of Review

¶ 28 A court may properly enter judgment on the pleadings only where no genuine issue of

material fact exists and the movant is entitled to judgment as a matter of law. Gillen v. State Farm

Mutual Automobile Insurance Co.,

(2004). A motion for judgment

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on the pleadings tests the sufficiency of the pleadings by determining whether the plaintiff is

entitled to the relief sought by his or her complaint. Pekin Insurance Co. v. Allstate Insurance Co.,

(2002). The trial court is required to examine the pleadings to determine

whether there is an issue of fact or whether the controversy can be resolved as a matter of law.

Pekin,

. Our standard of review is de novo. Gillen,

.

¶ 29 B. Construction of Insurance Policies

¶ 30 The court’s primary objective in construing an insurance policy is to ascertain and give

effect to the parties’ intent. Travelers Insurance Co. v. Eljer Manufacturing, Inc.,

(2001). The court must construe the policy as a whole, considering the type of insurance

purchased, the nature of the risks involved, and the overall purpose of the contract. Travelers,

. If the policy language is clear and unambiguous, the court must give the words their

plain, ordinary, and popular meanings. Travelers,

. Conversely, if the words

are susceptible to more than one meaning, they are ambiguous and will be strictly construed against

the insurer and in favor of the insured. Travelers,

. The construction of an

insurance policy is a question of law, which we review de novo. Travelers,

.

¶ 31 In a declaratory judgment action, where the issue is whether the insurer has a duty to

defend, courts ordinarily first look to the allegations in the underlying complaint and compare

those allegations with the relevant provisions of the insurance policy. Pekin Insurance Co. v.

Wilson,

(2010). If the facts in the underlying complaint fall within, or

potentially within, the policy’s coverage, the insurer’s duty to defend is triggered. Wilson, 237 Ill.

App. 3d at 455. An insurer can refuse to defend only if the allegations of the underlying complaint

preclude any possibility of coverage. Illinois Tool Works Inc. v. Travelers Casualty & Surety Co.,

. Where a factual uncertainty exists, such as whether the injury

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occurred at a time that is covered by the policy, an insurer cannot avoid its duty to defend. Illinois

Tool Works,

. An insurer’s duty to defend is broader than its duty

to indemnify. Wilson, 237 Ill. App. 3d at 456.

¶ 32 C. Whether the Court Properly Granted Illinois Union Judgment on the Pleadings

¶ 33 Medline contends that the policy’s retroactive date does not avoid Illinois Union’s duty to

defend, because (1) the underlying complaints alleged intermittent releases of EtO and (2) each

intermittent release of EtO was a separate “pollution condition.” Illinois Union counters that the

allegations of the underlying complaints do not fall within the policy’s language and that pollution

occurring over many years from a single source is treated as a single pollution event.

¶ 34 1. Comparison of the Underlying Complaints to the Policy Language

¶ 35 Medline first argues that the underlying complaints allege (intermittent emissions of EtO.

Medline relies on the following language from the underlying complaints:

“The EtO sterilization process begins by placing medical equipment in a gas chamber.

After air is pumped out of the room, ethylene oxide is introduced and allowed to diffuse

into the products for several hours. Once the medical equipment is sterilized, the ethylene

oxide is pumped out of the chamber and the remaining EtO is allowed to slowly dissipate.”

Using this language, Medline argues that it is alleged to pump EtO into the atmosphere in batches

rather than in one continuous release. To support its argument that the underlying plaintiffs are

alleging multiple discrete emissions, Medline urges us to consider its own pleadings in the

declaratory judgment action. Medline also cites a response to Illinois Union’s motion for judgment

on the pleadings, filed by four of the underlying plaintiffs. In that response, the four underlying

plaintiffs clarified that the Waukegan facility did not emit EtO continuously “in a constant stream,”

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but in “discrete instances.” Medline further cites the Cook County order striking references to

continuity in the underlying complaints.

¶ 36 The parties disagree on whether we may look beyond the eight corners of the underlying

complaints and the insurance policy. As noted, courts generally first look to the allegations in the

underlying complaint and compare those allegations with the relevant provisions of the insurance

policy. Wilson,

. However, Medline asserts that we are not limited to the

underlying complaints but may look to other filings in both the underlying lawsuits and this

declaratory judgment action. Medline relies on Wilson. Wilson, like the instant case, involved a

motion for judgment on the pleadings. See Wilson,

. In Wilson, the court

determined that a genuine issue of material fact existed, precluding judgment on the pleadings, by

comparing the counterclaim in the underlying case to the allegations of the underlying complaint.

Wilson,

. Thus, Illinois Union argues that the court in Wilson considered only

the pleadings on file in the underlying case in deciding whether a duty to defend existed. However,

the court in Wilson bolstered its holding by looking at the defendant’s memorandum and

attachments in opposition to the motion for judgment on the pleadings in the declaratory judgment

action. Wilson,

. Illinois Union also cites Konstant Products, Inc. v. Liberty

Mutual Fire Insurance Co.,

(2010), for the proposition that the eight corners

rule applies unless the insurer is aware of a true but unpleaded fact. In Konstant Products, the court

held that the exception to the eight corners rule did not apply where the underlying complaint’s

allegations, if true, would bar coverage. Konstant Products,

.

¶ 37 Here, the underlying complaints allege that the Waukegan facility emitted EtO since 1994.

Specifically, the underlying complaints allege that “Medline and its predecessors have used, and

Medline continues to use, EtO in industrial medical device sterilization since approximately 1994

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***.” Additionally, the underlying complaints allege that “Medline’s predecessors consistently

released over 4000 pounds of EtO between 1996 and 2001, including approximately 17,000

pounds between 1999 and 2001.” Thus, the underlying complaints allege that the earliest emissions

occurred prior to the policy’s retroactive date of September 29, 2008.

¶ 38 Medline maintains that (1) the allegations of continuous emissions in the underlying

complaints leave open the possibility that the emissions occurred in batches, (2) the continuity

allegations are conclusory and should be disregarded, (3) the underlying plaintiffs affirmed in

pleadings that they did not plead that the emissions were uninterrupted but that the emissions were

released after each sterilization cycle, and (4) the term “continuous” is ambiguous.

¶ 39 We need not depart from the eight corners rule, because we read the continuity allegations

in the underlying complaints to concern the span of time during which the Waukegan facility

released EtO rather than alleging one unbroken stream since 1994.

¶ 40 However, even if we look beyond the underlying complaints to clarifications that the

emissions were intermittent, we still conclude that they are alleged to have commenced before the

retroactive date of September 29, 2008. In their response to the motion for judgment on the

pleadings, the four underlying plaintiffs, while clarifying the intermittent nature of the emissions,

did not retract the allegations that the emissions began in 1994. Similarly, the Cook County order

striking references to the continuity of emissions leaves intact the pleading that the earliest

emissions occurred in 1994. Medline’s memorandum in response to Illinois Union’s motion for

judgment on the pleadings disputes only that the emissions were one continuous event, not that

those emissions began in 1994. In sum, the allegation that the emissions were intermittent does not

avoid the bar of the retroactive date, because the emissions nevertheless “first commenced” prior

to the retroactive date.

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¶ 41 2. Construction of the Policy Definition of “Pollution Condition”

¶ 42 To avoid the bar of the retroactive date and effectively convert the policy into one affording

full retroactive coverage, Medline argues that each separate release of EtO is a new “pollution

condition.” Thus, Medline reasons that pollution conditions occurring after the retroactive date are

covered under the policy. Illinois Union argues that the underlying complaints do not specifically

allege that any emissions occurred after the retroactive date. This argument is specious, as the

complaints allege that, “[s]ince 2008, Medline has used and continues to use EtO for medical

device sterilization at the Waukegan facility.”

¶ 43 The policy defines “pollution condition” as “[t]he discharge, dispersal, release, escape,

migration, or seepage of any solid, liquid, gaseous or thermal irritant, contaminant, or pollutant

*** into *** the atmosphere, surface water, or groundwater.” Medline argues that “discharge,

dispersal, release, escape, migration, or seepage” must be read in the disjunctive, so that each

separate discharge, dispersal, release, etcetera of EtO constitutes a new pollution condition.

¶ 44 Medline relies on Ackley v. Paramus Board of Education, No. L-4653-09,

(N.J. Super. Ct. App. Div. Feb. 29, 2012) (per curiam), an unreported New Jersey case.

Even if we consider Ackley as persuasive authority, it is inapposite. In Ackley, Illinois Union

insured a school board for damages arising out of pesticide contamination. Ackley,

at *1. The retroactive date of the policy was July 1, 2005. Ackley,

, at *2.

In December 2006, the school discovered pesticide-contaminated soil on its property. Ackley,

, at *2. The policy defined “pollution condition” as the “discovery, discharge,

dispersal, release, escape, migration, or seepage” of any pollution, inter alia, into or upon land.

(Emphasis added.) Ackley,

, at *2. Although Illinois Union agreed that the words

contained in the definition of “pollution condition” should be read disjunctively, it contended that

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no coverage existed if any single pollution condition existed before the retroactive date. Ackley,

, at *3. The New Jersey appellate court held that the inclusion of the word

“discovery” in the definition of “pollution condition” meant that the school’s discovery of a

pollution condition after the retroactive date was covered. Ackley,

, at *5. Here,

significantly, the definition of “pollution condition” does not contain the word “discovery.” Nor is

the date that the pollution condition was discovered an issue in our case.

¶ 45 In our case, even reading the words “discharge, dispersal, release, escape, migration, or

seepage” in the disjunctive, they are all different ways of describing how a pollutant leaves a

covered location. Those words do not say that the manner of the pollutant’s leaving must be either

intermittent or continuous. It is a pollutant leaving a covered location plus entering “on, in, into,

or upon land and structures thereupon, the atmosphere, surface water, or groundwater” that

constitutes a pollution condition. The language does not say that entering “on, in, into, or upon”

must be either intermittent or continuous. Thus, we determine that the emission of a pollutant from

a covered location, either intermittently or continuously, constitutes a pollution condition.

¶ 46 The policy provides coverage for pollution conditions that “first commence, in their

entirety, on or after the retroactive date.” The words “first commence” and “in their entirety”

cannot be ignored. See Central Illinois Light Co. v. Home Insurance Co.,

(2004) (we must assume, in construing an insurance policy, that every provision was intended to

serve a purpose). “Commence” means “begin” or “start.” Merriam-Webster Online Dictionary,

https://www.merriam-webster.com/dictionary/commence (last visited Feb. 1, 2022) [https://

perma.cc/TT3L-5YZU]. “Entirety” means “sum total” and “whole.” Merriam-Webster Online

Dictionary, https://www.merriam-webster.com/dictionary/entirety (last visited Feb. 1, 2022)

[https://perma.cc/6A5M-359A]. Thus, the policy requires us to look at when the totality of the

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emissions from the Waukegan facility started to determine whether they commenced before or

after the retroactive date. Otherwise, Illinois Union is correct that we would be reading the

retroactive date out of the policy. We are mindful that Medline purchased a policy containing a

retroactive date rather than one affording full retroactive coverage. We cannot rewrite an insurance

policy to suit a party’s needs. Vivify Construction, LLC v. Nautilus Insurance Co.,

.

¶ 47 In its reply brief, Medline argues for the first time that “in their entirety” means pollution

conditions caused by Medline “in their entirety.” Thus, Medline concludes that the policy language

does not require us to look at events prior to the retroactive date. Issues raised for the first time in

a reply brief do not merit consideration. Tivoli Enterprises, Inc. v. Brunswick Bowling & Billiards

Corp.,

(1995). Forfeiture aside, we reject this argument. If we cannot

look to events prior to the retroactive date, then the retroactive date is meaningless. Courts must

not interpret an insurance policy in a manner that renders any policy provision meaningless. Amico

v. Allstate Corp.,

. Medline’s argument also requires us to read a

limitation into the policy language that is not present—namely, that a pollution condition is an

event that is caused entirely by the insured.

¶ 48 Medline’s reliance on Primrose Operating Co. v. National American Insurance Co.,

(5th Cir. 2004), misses the mark. In Primrose, the Senn family sued Primrose and another

oil company, CADA, for polluting their ranch while operating oil and gas leases thereon. Primrose,

. Primrose’s insurer, National American Insurance Company (NAICO), originally

agreed to defend Primrose under a reservation of rights, but then it denied coverage and refused to

pay Primrose’s legal bills. Primrose,

. A jury in the Senn case awarded the

Senns substantial damages against Primrose, and Primrose sued NAICO in state court for breach

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of its alleged duty to defend Primrose in the Senn suit. Primrose,

. NAICO removed

the case to federal court, where a jury awarded Primrose damages. Primrose,

. The

district court denied NAICO’s postjudgment motion, NAICO appealed, and the appellate court

affirmed. Primrose,

.

¶ 49 The NAICO policy provided that injury or damage from a “pollution incident” must not be

caused or contributed to by any pollution incident that commenced prior to the beginning of the

policy period. Primrose,

. “Pollution incident” was defined as an “ ‘occurrence

consisting of any actual emission, discharge, release or escape of pollutant’ ” that results in

environmental damage. Primrose,

. The Senns’ pleadings in the underlying case

alleged a “wide variety” of negligent acts committed by Primrose and CADA without

distinguishing which tortfeasor committed which acts. Primrose,

. Nor did the

Senns’ pleadings allege when the pollution incidents occurred. Primrose,

. The

court noted that, from the pleadings alone, “it is fully possible that a pollution incident caused

entirely by Primrose during NAICO’s coverage resulted in an injury that is now completely

indivisible from an injury resulting entirely from a pollution incident caused by CADA.” Primrose,

.

¶ 50 Here, the underlying plaintiffs alleged that the emissions of EtO from the Waukegan

facility began in 1994 and continued at least to when the underlying lawsuits were filed in 2019

and 2020. Thus, the underlying complaints did not allege that the “pollution condition,” as defined

in the policy, commenced, in its entirety, after the retroactive date.

¶ 51 Medline’s citation of Tunnell Hill Reclamation, LLC v. Endurance American, Specialty

Insurance Co., No. 2:15-CV-2720,

(S.D. Ohio July 12, 2016), also misses the

mark. In Tunnell Hill, the Ohio federal district court denied the insurer’s motion for judgment on

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the pleadings, finding that the policy term “pollution conditions” was ambiguous. Tunnell Hill,

, at *5. Here, Medline does not contend in its briefs that the policy language is

ambiguous. 2 Lastly, Medline cites an unreported decision of a Massachusetts trial court. We

decline to discuss that case, as decisions of trial courts of foreign jurisdictions have no precedential

value in Illinois disputes. Skipper Marine Electronics, Inc. v. United Parcel Service, Inc.,

(1991).

¶ 52 Illinois Union contends that pollution occurring over many years from a single source is

treated as a single pollution event, citing this court’s opinion in Outboard Marine Corp. v. Liberty

Mutual Insurance Co.,

(1996). In Outboard Marine, the plaintiff polluted

Waukegan Harbor from 1953 to 1976 by periodically discharging PCBs. Outboard Marine,

. The plaintiff sued its insurance carriers, alleging a duty to defend and indemnify

in connection with federal litigation. Outboard Marine,

. The trial court

found that the plaintiff’s multi-year contamination constituted a “single continuing occurrence”

for purposes of the defendant’s policy and apportioned damages among the insurers, including the

defendant. Outboard Marine,

. On appeal, we noted that the defendant’s

policy was a comprehensive general liability policy (CGL). Outboard Marine,

. Under that policy, the defendant agreed to pay “ ‘all sums’ ” that the plaintiff was obligated

to pay “ ‘on account of’ ” property damage “ ‘arising out of any one occurrence.’ ” Outboard

Marine,

. The policy defined “occurrence” as “ ‘an accident or a happening

2 At oral argument, Medline argued that the policy definition of “pollution condition” is

ambiguous. We deem this argument forfeited. Issues cannot be raised for the first time at oral

argument. Spirn v. Joseph,

(1986).

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or event of a continuous or repeated exposure to conditions which unexpectedly or

unintentionally’ ” results in property damage. Outboard Marine,

. The

policy contained an exclusion for property damage from the discharge of contaminants or

pollutants, but there was an exception for discharge that was “ ‘sudden and accidental.’ ”

Outboard Marine,

. This court affirmed the trial court’s finding that the

plaintiff’s periodic contamination constituted a single continuing occurrence. Outboard Marine,

.

¶ 53 Medline argues that Outboard Marine is distinguishable from our case. We agree that the

case is distinguishable but disagree that it is relevant. First, Outboard Marine concerned a CGL,

rather than a pollution, policy. Indeed, the defendant’s policy in that case contained a pollution

exclusion. Outboard Marine Corp. v. Liberty Mutual Insurance Co.,

(1992);

Outboard Marine,

. Second, the definition of “occurrence” in the CGL

policy included “continuous or repeated” exposure to conditions resulting in property damage.

Here, the definition of “pollution condition” contains no such language. For the same reasons,

Illinois Union’s reliance on Missouri Pacific R.R. Co. v. International Insurance Co.,

(1997), is also misplaced. Thus, those cases neither inform nor impact our analysis, except

to the extent that they provide examples of continuous exposures that are also periodic.

¶ 54 Moreover, Medline ignores that the underlying complaints in our case allege that the

“majority” of Medline’s emissions are not from a “controlled source,” but are “fugitive” emissions.

Thus, Medline’s reliance on Konell Construction & Demolition Corp. v. Valiant Insurance Co.,

No. CV03-412-MO,

(D. Or. May 15, 2006), is misplaced. In Konell, the Oregon

federal district court ruled that a “pollution incident”—which was defined as the “ ‘emission,

discharge, release, or escape of “pollutants” ’ ” at a work site—could plausibly mean that separate

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dump truck loads of contaminated soil were separate pollution incidents. Konell,

, at *4. The court noted that “each delivery of a dump truck load of contaminated soil is

naturally divisible from the others.” Konell,

, at *4. Here, because of the fugitive

emissions, we cannot say that each emission is “naturally divisible” from all the others.

¶ 55 Medline next argues that Illinois Union’s choice not to include aggregating language in the

definition of “pollution condition,” but to include such language elsewhere in the policy, requires

us to construe “pollution condition” to mean that each emission is a separate pollution condition.

Section II of the policy is labeled “Limits of Liability and Self-Insured Retention.” Medline’s self-

insured retention, i.e., deductible, was $500,000. Section IIB of the policy provides that “[o]ne

‘self-insured retention’ shall apply to all ‘loss’ *** arising out of the same, continuous, repeated,

or related ‘pollution condition.” Section IID provides that “the most the Insurer shall pay for all

‘loss’ arising out of the same, continuous, repeated, or related ‘pollution condition’ ” is the limit

of liability identified elsewhere in the policy. Medline argues that, by using different language in

different sections of the policy, Illinois Union intended the language to mean different things. See

Taracorp, Inc. v. NL Industries, Inc.,

(7th Cir. 1996) (the choice of substantially

different words in a contract to address analogous issues signifies a different approach). Medline

argues that Illinois Union, had it so intended, could have used aggregating language in defining

“pollution condition,” citing a string of unreported foreign cases where insurers included such

language in defining a pollution condition.

¶ 56 Medline relies on MHM Correctional Services, Inc. v. Evanston Insurance Co.,

. In MHM, the plaintiffs provided health care services within correctional

institutions. MHM,

. The underlying lawsuits against the plaintiffs

for various health care violations did not request monetary damages but instead prayed for health

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care services. MHM,

. The appellate court held that the

defendant insurer had a duty to defend. MHM,

. The policy

provided that the insurer had a duty to defend any “ ‘[c]laim,’ ” in contrast to a different policy

provision that provided that self-insurance applied to any claim “ ‘seeking [d]amages.’ ”

(Emphasis omitted.) MHM,

. The court concluded that the use

of different language in the two provisions indicated that the parties intended the language to mean

different things. MHM,

.

¶ 57 Medline also relies on Mutual Fire, Marine & Inland Insurance Co. v. Vollmer,

(Md. 1986), Duke University v. Endurance Risk Solutions Assurance Co., No. 5:20-CV-672-

BO,

(E.D.N.C. June 8, 2021), and Ball v. NCRIC, Inc.,

(4th

Cir. 2005) (per curiam). In Vollmer, the court held that coverage existed because of an ambiguity

created by the claims-made provision of the insurance policy and an exclusion thereto. Vollmer,

. In Duke University, the district court found that coverage existed where there

was a conflict between the policy and an endorsement and because the law provided that the

endorsement prevailed. Duke University,

, at *3. Vollmer and Duke University

are, thus, inapposite.

¶ 58 In Ball, the plaintiff obtained a judgment against a doctor named Daniel, who injected the

plaintiff with drugs and sexually assaulted her. Ball,

. The plaintiff sued the

defendant, which insured Daniel, seeking to satisfy the judgment. Ball,

. The

defendant argued against coverage on the basis that Daniel knew, or should have known, about the

plaintiff’s claim when the policy was issued. Ball,

. By the time the policy was

issued, Daniel had administered drugs to the plaintiff multiple times and had sexually assaulted

her at least once. Ball,

. The plaintiff argued in favor of coverage because

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Daniel also assaulted her after the policy was issued. Ball,

. The policy

provided coverage for claims caused by a “ ‘medical incident.’ ” Ball,

. The

policy provided that all related acts or omissions shall be considered “ ‘one’ ” medical incident.

Ball,

. Because of this aggregating language, the court held that Daniel

reasonably should have known about the medical incident, which included the totality of Daniel’s

behavior, before and after the policy was issued. Ball,

.

¶ 59 We do not doubt the soundness of Medline’s arguments that an insurer can include

aggregating language in a definition or that the use of different language in parallel provisions of

a policy is interpreted to mean different things. What Medline ignores is that section IA of the

policy at issue contains such aggregating language. Medline would have us stop reading after the

definition of “pollution condition.” However, section IA further provides that coverage applies

only to “pollution conditions” that “first commence, in their entirety, on or after the retroactive

date.” “Entirety” is the aggregating language. As discussed, “entirety” in this context means the

totality of the emissions from the Waukegan facility. Just as the court in Ball was obliged to look

at the totality of Daniel’s behavior, so are we obliged by the policy to look at the totality of the

releases of EtO.

¶ 60 Medline argues that the “entirety” language in the policy is not aggregating language,

because it “says nothing about whether repeated emissions constitute only one” such pollution

condition. Medline cites no Illinois or other authority for the proposition that magic language is

required. When insurance policies do not define terms, courts give them their plain, ordinary, and

popular meanings, looking to their dictionary definitions. Valley Forge Insurance Co. v. Swiderski

Electronics, Inc.,

(2006). Here, “entirety” means “sum total” or “whole.” See

supra ¶ 46. A synonym for “sum total” is “aggregate.” Merriam-Webster Online Thesaurus,

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https://www.merriam-webster.com/thesaurus/sum%20total (last visited Feb. 1, 2022) [https://

perma.cc/67AE-N2CB].

¶ 61 Medline posits, however, that aggregating language does not always mean that separate

releases of pollutants constitute a single occurrence, citing Nicor, Inc. v. Associated Electric &

Gas Insurance Services Ltd.,

(2006). In Nicor, Nicor paid $90 million to remediate

mercury contamination in 1070 homes from which it had removed mercury-containing regulators.

Nicor,

. Nicor looked to its insurers for reimbursement. Nicor,

.

Each insurer except Lloyd’s of London (London) settled with Nicor. Nicor, 223 Ill. 2d at 413.

London’s policies required it to indemnify Nicor for sums that Nicor paid for remediation to 195

homes, for property damage growing out of an “ ‘occurrence.’ ” Nicor,

.

“Occurrence” was defined in policies London issued earlier as “ ‘one happening or series of

happenings arising out of or due to one event taking place during the term of this contract.’ ” Nicor,

. In later policies, “occurrence” was defined as an accident or event or

“ ‘continuous or repeated exposure to conditions’ ” resulting in bodily injury, personal injury,

death, or property damage. Nicor,

. If each of the 195 mercury spills covered by

London’s policies constituted a separate occurrence, London would owe Nicor nothing, because

of Nicor’s deductible. Nicor,

. On the other hand, if the spills constituted a single

occurrence, London’s payout would be substantial. Nicor,

.

¶ 62 The trial court granted summary judgment in Nicor’s favor, finding that Nicor’s systematic

failure to safely remove the regulators resulted from a single occurrence. Nicor,

.

The appellate court reversed. Nicor,

. The appellate court held that damages due

to mercury contamination were caused by separate and independent acts of Nicor’s servicemen in

an isolated number of cases. Nicor,

.

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¶ 63 Our supreme court noted that London’s policies were commercial liability policies. Nicor,

. The court also noted that the definition of “occurrence” used in the London

policies was typical of commercial liability policies and that the Illinois Appellate Court in many

cases had adopted the “cause theory” to determine the number of “occurrences” under a

commercial liability policy. Nicor,

. Under the “cause theory,” the number of

occurrences is determined by referring to the cause or causes of the damage. Nicor,

. This is in contrast to the “effect theory,” which determines the number of occurrences by

looking at how many individual claims or injuries resulted from the occurrence. Nicor,

. Interpreting London’s commercial liability policies, our supreme court held that the

appellate court’s approach was sound. Nicor,

. The supreme court reasoned that

the mercury spills occurred at different times over 17 years, no temporal or geographical pattern

to the spills was established, and no particular technician or group of technicians was responsible

for the spills. Nicor,

. The supreme court concluded that “[t]o say that each of the

195 spills emanated from a single cause would *** be completely untenable.” Nicor,

.

¶ 64 Nicor is inapplicable to our case because the supreme court’s analysis was particular to

commercial liability policies. Here, the policy is a premises pollution liability policy. The two

types of policies are not interchangeable, as shown by the evolution of the pollution exclusion in

commercial liability policies. Broadly, after courts interpreted “accident” in commercial liability

policies to encompass pollution-related injuries, the insurance industry added an endorsement and

then language to standard commercial liability policies excluding coverage for injuries caused by

contaminants or pollution. See American States Insurance Co. v. Koloms,

(1997).

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¶ 65 Medline next argues that, for Illinois Union to avoid coverage, it had to specifically exclude

coverage for EtO emissions. This is so, Medline asserts, because Illinois Union knew that Medline

sought coverage for claims relating to its emissions. Medline contends that Illinois Union

“misuses” the retroactive date to deprive Medline of the coverage that it “reasonably understood

it was buying.” Medline relies on Indiana Insurance Co. v. Royce Realty & Management, Inc.,

. However, that case is inapposite. In Indiana, Indiana knew that Royce

Realty was in the business of providing property management services to a variety of commercial

properties, including golf courses. Indiana,

. The potential for

accidents giving rise to lawsuits was inherent in Royce Realty’s business. Indiana,

. Nevertheless, Indiana issued Royce Realty a CGL policy, which is a type of

policy intended to protect against risks associated with business operations. Indiana,

. Cathy Stackhouse was injured when a tree at Lakemoor Golf Club, one of the

entities that Royce Realty managed, fell on her. Indiana,

. Indiana

posited that the policy did not cover the Stackhouse claim because of a policy endorsement limiting

coverage to those operations taking place at Royce Realty’s offices. Indiana,

. Indiana argued that this endorsement converted the CGL policy into a premises

liability policy. Indiana,

. Noting that Indiana “chose” to insure

Royce Realty under a CGL policy, knowing the risks, and then attempted to convert the policy

into one leaving such risks without coverage, we held that the premises endorsement did not “put

the insured on notice that the fundamental nature of the policy had changed and that most of the

coverage under the CGL policy was nullified.” Indiana,

. In these

circumstances, we said that, if an insurer does not intend to insure against a risk inherent in the

insured’s business, the insurer “ ‘should expressly exclude that risk from the coverage of the

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policy.’ ” Indiana,

(quoting Dash Messenger Service, Inc. v.

Hartford Insurance Co. of Illinois,

(1991)).

¶ 66 The facts in Indiana are far remote from our case. Here, Medline got the coverage that it

paid for. Medline opted for a policy with a retroactive date rather than one affording coverage for

emissions retroactive to the beginning of time. Medline cannot plead ignorance of the difference

in these policy coverages because Endorsement 019 to the policy shows that Medline purchased

“Full Retro” coverage on another covered location. Also, there is nothing in the policy language

of section IA that is misleading or ambiguous, nor does Medline so argue in its briefs.

¶ 67 Illinois Union argues that Medline asks us to “cast aside” the policy language and to invoke

the “reasonable expectations doctrine,” which Illinois does not recognize. Under the “reasonable

expectations doctrine,” the objectively reasonable expectations of all applicants and intended

beneficiaries of an insurance contract will be honored even where the policy provisions would

negate those expectations. Continental Casualty Co. v. Howard Hoffman & Associates,

. Howard Hoffman noted that some Illinois courts have rejected the doctrine

while others seem to have accepted it, terming the doctrine’s application in Illinois “an open

question.” Howard Hoffman,

.

¶ 68 Medline denies raising the reasonable expectations doctrine. Nevertheless, even if we were

inclined to accept the doctrine, we would decline to apply it to this case. As noted, the policy

language is unambiguous, and Medline does not argue to the contrary. Medline does not point to

any facts indicating that it misunderstood the meaning of the retroactive date when it purchased

the policy. There is simply nothing in the record to indicate that Medline’s expectations were not

met. According to the asset purchase agreement between Medline and its predecessor, Medline

knew that its predecessor released EtO from the Waukegan facility. Thus, Medline knew that its

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own risk predated its purchase of the facility. Medline could have purchased a “full retro” policy

that would have protected it against pollution conditions commencing prior to the retroactive date

(see Kim,

(for prior acts, a policy may provide full retroactive coverage)), but it

chose not to do so. Now, faced with multiple lawsuits alleging pollution conditions prior to the

retroactive date, Medline wants to convert its policy into one with full retroactive coverage.

Medline may not do so. It is well established that, where terms of a contract are clear and

unambiguous, they must be enforced as written, and courts cannot rewrite a contract to provide a

better bargain to suit one of the parties. Owens v. McDermott, Will & Emery,

(2000).

¶ 69 3. Whether Emissions Before the Retroactive Date are Relevant

¶ 70 Medline argues that emissions from the Waukegan facility prior to September 29, 2008,

which was when Medline purchased the facility, are irrelevant because Medline cannot be held

liable for injuries caused by those prior emissions. Medline emphasizes that the underlying

plaintiffs sued Medline only for those emissions occurring after Medline acquired the Waukegan

facility. When we examine the underlying complaints, we see that the underlying plaintiffs

included allegations of prior emissions (1) as background information, (2) to demonstrate that the

plaintiffs were unknowingly exposed to the cancer-causing pollutant over time, and (3) to show

that Medline knew, or should have known, that its emissions endangered the health of the

surrounding community and that of the plaintiffs. The allegations of emissions that occurred before

Medline acquired the Waukegan facility were material to state a cause of action for willful and

wanton conduct (see Majewski v. Chicago Park District,

(1988) (willful

and wanton conduct requires a conscious disregard for the safety of others)) and are material.

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¶ 71 Nevertheless, whether Medline could be found liable for such prior emissions is immaterial

to the determination of whether the policy affords coverage. Under the rule in Maryland Casualty

Co. v. Peppers,

(1976), it is “ ‘generally inappropriate for a court considering

a declaratory judgment action to decide issues of ultimate fact that could bind the parties to the

underlying litigation.’ ” (Internal quotation marks omitted.) Sentry Insurance v. Continental

Casualty Co.,

(quoting Landmark American Insurance Co. v. NIP

Group, Inc.,

). 3

¶ 72 Medline cites no case holding that we may consider its underlying liability in determining

whether a duty to defend or indemnify exists. Instead, Medline relies on Illinois cases that state

the uncontroversial axiom that courts compare the underlying allegations with the terms of the

insurance policy. We performed that analysis above and concluded that the policy affords no

coverage.

¶ 73 Medline additionally relies on Scheer v. State Farm Fire & Casualty Co.,

,

(Fla. Dist. Ct. App. 1998), for the proposition that we look only at those allegations in the

underlying pleadings pertinent to the insured. In Scheer, the underlying complaint alleged four tort

claims against the insured, Scheer, but also alleged that Scheer committed those torts in the course

of his employment. Scheer,

. The court held that only those counts against

Scheer individually were pertinent in determining whether Scheer’s insurer owed a duty to defend.

Scheer,

. Nothing in Scheer is inconsistent with the trial court’s ruling in the

3 Application of the Peppers doctrine resulted in the trial court in our case reconsidering,

and vacating, its ruling that a genuine issue of material fact precluded entry of judgment on the

pleadings.

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instant case. Here, as noted, the underlying allegations that emissions occurred prior to Medline’s

ownership of the Waukegan facility are pertinent to the willful and wanton causes of action against

Medline. Consequently, we reject this argument.

¶ 74 4. Whether a Fact Issue Precluded Judgment in Favor of Illinois Union

¶ 75 Medline contends that whether the emissions were continuous, in the sense that they were

unabated, or whether they were intermittent is a fact question that precludes judgment on the

pleadings. See Hartlett v. Dahm,

(1981) (trial court erred in granting

judgment on the pleadings where material issues of fact existed). Regardless of which party first

raised this specter of “continuous” versus “intermittent,” it has no bearing on whether Illinois

Union owes Medline a defense. As discussed, the allegations in the underlying complaints that

emissions occurred at the Waukegan facility since 1994 means that those emissions did not

commence, in their entirety, after the retroactive date, regardless of whether those emissions were

continuous or intermittent.

¶ 76 Medline posits that the allegations in the underlying complaints of continuous emissions

are ambiguous and must be construed in Medline’s favor. We reject this argument because, as

noted, the continuous-intermittent controversy is irrelevant. Accordingly, for all of the above

reasons, we hold that the court properly granted Illinois Union’s motion for judgment on the

pleadings. Because we determine that no duty to defend or indemnify arises under the present

facts, we also hold that the court properly dismissed with prejudice Medline’s second amended

counterclaim.

¶ 77 III. CONCLUSION

¶ 78 For the reasons stated, we affirm the judgment of the circuit court of Lake County.

¶ 79 Affirmed.

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No. 2-21-0175

Cite as: Illinois Union Insurance Co. v. Medline Industries, Inc.,

Decision Under Review: Appeal from the Circuit Court of Lake County, No. 19-MR-1026; the Hon. Luis A. Berrones, Judge, presiding.

Attorneys John S. Vishneski III, Stanley C. Nardoni, and Adrienne N. for Kitchen, of Reed Smith LLP, of Chicago, Lowndes Christopher Appellant: Quinlan, of McGuireWoods LLP, of Charlotte, North Carolina, and Sean A. McClelland, of McGuireWoods LLP, of Washington, D.C., for appellant.

Attorneys James J. Sanders, Matthew J. Dostal, Alexander W. Ross, and for Ryan M. Murnighan, of Clyde & Co US LLP, of Chicago, for Appellee: appellee.

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