Motorola Solutions v. Zurich Insurance Company
2017 IL App (1st) 161465
| Ill. App. Ct. | 2017Background
- Motorola Solutions sued several insurers (including Zurich and Associated) seeking defense and indemnity for multiple "clean room" personal-injury suits alleging toxic exposures to children of employees; coverage litigation followed.
- Motorola previously litigated the scope of 2003 releases; after appeals the coverage suit proceeded and Motorola moved for summary judgment on Zurich’s duty to defend one claim.
- Insurers filed a Rule 191(b) motion for limited discovery on Motorola’s notice to insurers; the court entered a stipulated protective order and permitted targeted discovery.
- Insurers sought two categories of documents Motorola had withheld as privileged: (1) Clean Room Safety Program (CRSP) materials prepared in the 1990s (reports by/at direction of outside counsel) and (2) documents related to Motorola’s 2003 S‑1 securities filing disclosing risk.
- Trial court ordered production; Motorola refused and was held in friendly civil contempt to permit interlocutory appeal.
- The appellate court reversed the production order and vacated the contempt, holding Waste Management did not control and the attorney‑client privilege remains available for in‑camera review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether attorney‑client privilege bars production of CRSP and S‑1 documents | Motorola: documents are privileged (and/or work product); privilege protects pre‑litigation materials | Insurers: privilege waived or unavailable under Waste Management via cooperation clause and common‑interest doctrine; docs relevant to notice defense | Held: privilege remains available; Waste Management does not automatically require production of these pre‑litigation documents; trial court must review documents in camera to determine privilege applicability |
| Whether Waste Management requires disclosure under the policy cooperation clause | Motorola: Waste Management is distinguishable because it involved counsel files from underlying litigation; CRSP/S‑1 were created long before any suit | Insurers: similar principles apply; cooperation clause and fairness require disclosure of materials showing insured’s knowledge | Held: Distinguishable — cooperation clause here does not clearly encompass pre‑litigation CRSP/S‑1 materials, so Waste Management does not mandate production |
| Applicability of the common‑interest doctrine to negate privilege | Motorola: common‑interest exception in Waste Management tied to ongoing defense of underlying litigation and joint interests; not applicable to pre‑litigation material | Insurers: common interest in minimizing/defending claims and determining coverage makes privilege inapplicable | Held: Court rejects extension of Waste Management common‑interest rationale to these pre‑litigation materials; doctrine not shown to negate privilege here |
| Whether Peppers prohibits discovery now because it risks resolving facts overlapping underlying torts | Motorola: discovery would improperly decide ultimate facts that could bind underlying plaintiffs; Peppers supports restraint | Insurers: Peppers inapplicable — court only deciding discoverability to oppose summary judgment, not resolving underlying merits | Held: Peppers does not bar the limited discovery for summary‑judgment response; issue of factual overlap can be managed (and was not dispositive on appeal) |
Key Cases Cited
- Waste Management, Inc. v. International Surplus Lines Insurance Co., 144 Ill. 2d 178 (1991) (supreme court held attorney‑client privilege unavailable where cooperation clause and common interest justified insurer access to defense files)
- Maryland Casualty Co. v. Peppers, 64 Ill. 2d 187 (1976) (court should generally avoid resolving ultimate facts in declaratory coverage actions that could bind underlying litigation)
- Sharp v. Trans Union L.L.C., 364 Ill. App. 3d 64 (2006) (applied Waste Management principles to pre‑policy documents where policy language and exclusions made insured’s counsel analysis dispositive)
- Norskog v. Pfiel, 197 Ill. 2d 60 (2001) (contempt sanctions can be used to review correctness of discovery orders on interlocutory appeal)