Westchester Fire Insurance Co. v. G. Heilemen Brewing Co.

State: Illinois

Court: 1st District Appellate

Docket No: 1-99-2566 Rel

Case Date: 03/30/2001

FIFTH DIVISION
March 30, 2001

No. 1-99-2566

WESTCHESTER FIRE INSURANCE CO.,

Plaintiff-Appellant,

G. HEILEMAN BREWING COMPANY, INC.,

Defendant-Appellee.

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Appeal from the
Circuit Court of
Cook County.

No. 97 CH 6935

The Honorable
Michael B. Getty,
Judge Presiding

MODIFIED OPINION UPON DENIAL OF REHEARING

Justice Greiman delivered the opinion of the court:

Westchester Fire Insurance Co. (Westchester) filed adeclaratory judgment action against G. Heileman Brewing Co. (Heileman), seekinga finding that it had no duty to defend an action filed in California by anumber of Heileman distributors. The trial court granted Heileman's motion forsummary judgment. The court, applying California law, found that Westchester hadbreached its duty to defend; was obligated to indemnify Heileman for thejudgment amount in the underlying action; and was liable for all costs andattorney fees incurred in defending that suit and this declaratory action.Westchester appeals, arguing that (1) Illinois law applies; (2) it had no dutyto defend Heileman in the underlying action; (3) it did not breach its duty todefend; (4) it should not be estopped from denying coverage; (5) Heileman is notentitled to attorney fees and costs incurred prior to tendering the underlyingaction; (6) Westchester is entitled to a credit for sums recovered by Heilemanfrom another insurer; and (7) Heileman is not entitled to attorney fees andcosts incurred in defending this declaratory action.

FACTS

On February 26, 1993, Rausser Distributing Co. and otherHeileman distributors filed suit against Heileman, Logret Import & ExportCo. (Logret), and Dan McKinney Co.(McKinney) in the United States District Courtfor the Northern District of California. The complaint alleged that theplaintiffs entered into a contract with Heileman which granted them theexclusive right to distribute designated Heileman beer products in a definedgeographic area. Count I alleged that defendants violated section 1 of theSherman Act (15 U.S.C.A.