Consolidation of 2 declaratory judgment actions related to insurance coverage for environmental contamination and cleanup at 2 Superfund sites. Settlement of $7.5 million was reached in underlying litigation without consent of insurer. Pollution exclusion and exclusion relating to illegal conditions do not apply to bar coverage, as Plaintiff cartage company's use of retention ponds occurred prior to 1970. Insurer's conduct and inconsistent positions as to settlement placed its insured in untenable situation, and insurer cannot complain if its insured acted reasonably to protect its interests. Insurer breached its duty to defend, and thus insured could enter into a reasonable settlement without insurer's consent. Insurer's actions were evidence of "bad faith" in refusing to settle within policy limits. Insurer's conduct is vexatious and unreasonable within meaning of Section 155 of Insurance Code. (CHAPMAN, concurring; CATES, dissenting.)
Illinois Appellate Court
Civil Court
Environmental Law