Motorola Solutions v. Zurich Insurance Company
2017 IL App (1st) 161465
| Ill. App. Ct. | 2017Background
- Motorola sued multiple insurers seeking defense and indemnity for several "clean room" personal-injury suits alleging toxic exposure; Zurich and Associated defended based on, among other things, late notice.
- Motorola moved for summary judgment on Zurich’s duty to defend; Zurich obtained limited Rule 191(b) discovery on notice timeliness and sought pre-litigation documents Motorola had withheld as privileged.
- The disputed materials were (1) Clean Room Safety Program (CRSP) reports prepared in 1996 at counsel’s direction and (2) documents related to Motorola’s 2003 S-1 securities filing disclosing potential clean-room liabilities (S-1 documents).
- The trial court ordered production of those documents; Motorola refused and was held in friendly civil contempt (small fine) to permit interlocutory appeal.
- The appellate court reversed the production order and vacated the contempt finding, holding Waste Management did not require disclosure of these pre-litigation documents under the policy’s cooperation clause or the common-interest rationale; attorney-client privilege therefore remained potentially available and required in-camera review below.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Waste Management compels production of pre-litigation CRSP and S-1 documents under the policy cooperation clause | Motorola: cooperation clause and Waste Management do not reach documents created years before any claim; privilege protects them | Zurich/Associated: Waste Management permits insurers to obtain insureds’ counsel-related materials and pre-policy knowledge relevant to notice | Held: Waste Management inapplicable; the cooperation clause here is narrower and does not encompass CRSP/S-1 documents created before litigation, so attorney-client privilege may apply |
| Whether the common-interest (Peppers/Waste Management) rationale removes privilege for pre-litigation materials | Motorola: no ongoing common defensive interest existed when documents were created; common-interest exception does not reach these materials | Zurich/Associated: insured and insurer shared interests such that privileged communications should be producible for coverage/notice issues | Held: Common-interest doctrine does not extend to these pre-litigation documents absent factual connection to defense of underlying suits |
| Whether Sharp expands Waste Management to require production of pre-policy counsel analyses here | Motorola: Sharp relied on specific policy language (known-loss exclusion/cooperation language) not present here | Zurich/Associated: Sharp supports disclosure of pre-policy knowledge where relevant to coverage | Held: Sharp distinguishable — its policy language differs materially; Sharp is of limited use here |
| Whether Peppers prohibits the requested coverage-related discovery | Motorola: disclosure would improperly decide ultimate facts that could bind underlying suits | Zurich/Associated: discovery here seeks only documents to oppose summary judgment on notice (not resolving underlying liability) | Held: Peppers not implicated — court may order discovery relevant to coverage/notice without deciding ultimate liability in the underlying cases |
Key Cases Cited
- Waste Management, Inc. v. Int’l Surplus Lines Ins. Co., 144 Ill. 2d 178 (Ill. 1991) (insurer entitled to insureds’ defense counsel files under cooperation clause and common-interest rationale)
- Maryland Cas. Co. v. Peppers, 64 Ill. 2d 187 (Ill. 1976) (declaratory-judgment courts should not decide ultimate facts that would bind underlying litigation)
- Norskog v. Pfiel, 197 Ill. 2d 60 (Ill. 2001) (contempt orders enforcing discovery provide interlocutory appealability; standards for reviewing discovery/contempt)
- Sharp v. Trans Union L.L.C., 364 Ill. App. 3d 64 (Ill. App. Ct. 2006) (pre-policy documents may be discoverable where policy language (e.g., known-loss exclusion/cooperation clause) requires disclosure of general counsel’s pre-policy knowledge)