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Northern Illinois Gas Co. v. Home Ins. Co.

777 N.E.2d 417 (2002)

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Northern Illinois Gas Co. v. Home Ins. Co.

Illinois Appellate Court

777 N.E.2d 417 (2002)

Facts

Northern Illinois Gas Co. (the company) (plaintiff) owned land contaminated by the prior operation of manufactured-gas plants. To initiate a legal action for pollution remediation under Illinois law, the Illinois Environmental Protection Agency was required provide notice of potential liability to a utility. The agency coordinated with the company and other utilities in a prenotice program to clean up the pollution, without providing notice, filing a legal action, or entering into a settlement agreement. The company incurred millions of dollars in expenses in its participation in the remediation program. The company held policies with several insurance companies, including Home Insurance Company (collectively, the insurers) (defendants), indemnifying the company for property-damage costs the company was obligated to pay by law or the company assumed by contract or agreement. The company filed a declaratory action in state court against the insurers for indemnification to recover the costs of the remediation. The company claimed that it was obligated to pay for the remediation under the law and by virtue of its agreements with the Illinois Environmental Protection Agency. The insurers moved for summary judgment on the ground that the policies did not require indemnification for voluntary remediation actions. The trial court granted the motions for summary judgment, and the company appealed.

Rule of Law

Issue

Holding and Reasoning (McBride, J.)

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