Motorola Solutions, Inc. v. Zurich Insurance Co.

2015 IL App (1st) 131529

• Court: Appellate Court of Illinois
• Decided: May 29, 2015
• Docket: 1-13-1529, 1-13-1530 cons.
• Status: Unpublished

Opinion

2015 IL App (1st) 131529 Nos. 1-13-1529, 1-13-1530 (cons.) Fifth Division May 29, 2015 ______________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT ______________________________________________________________________________

) MOTOROLA SOLUTIONS, INC., ) ) Plaintiff-Appellee, ) ) v. ) ) Appeal from the Circuit Court ZURICH INSURANCE COMPANY and ) of Cook County. ASSOCIATED INDEMNITY CORPORATION, ) ) No. 11 L 1902 Defendants-Appellants ) ) The Honorable (Continental Casualty Company; National Fire Insurance ) Daniel J. Pierce, Company of Hartford; Transportation Insurance ) Judge Presiding. Company; American Casualty Company of Reading, ) Pennsylvania; National Union Fire Insurance Company ) of Pittsburgh, Pennsylvania; Liberty Mutual Fire ) Insurance Company; and Liberty Insurance Company; ) Defendants). ) ) ______________________________________________________________________________

JUSTICE GORDON* delivered the judgment of the court, with opinion. Presiding Justice Palmer and Justice McBride concurred in the judgment and opinion.

OPINION

¶1 The instant consolidated appeals arise from the interpretation of two nearly identical

settlement agreements entered into by plaintiff Motorola Solutions, Inc. (Motorola), one with

defendant Zurich Insurance Company (Zurich) and one with defendant Associated Indemnity ___________________________ * Oral argument on the instant consolidated appeals was heard by a different panel of justices. However, the current panel has considered the audio of oral argument, in addition to the parties’ briefs and the record on appeal. Nos. 1-13-1529, 1-13-1530 (cons.)

Corporation (Associated). 1 The parties disagree about whether the settlement agreements

contained provisions that operated to release defendants from providing insurance coverage

for certain claims against Motorola. Each party filed a motion for summary judgment on the

issue, all of which were denied after the trial court found that the releases were ambiguous.

The parties conducted discovery and a bench trial was held on the issue of the scope of the

releases’ language. The trial court concluded that the parties had not released Motorola’s

claims, and defendants now appeal. On appeal, defendants claim that the trial court erred in

not granting summary judgment in their favor and erred in finding that the claims had not

been released after the bench trial. Additionally, defendants claim that the trial court erred in

denying their joint motion to compel discovery of certain Motorola documents. For the

reasons that follow, we affirm.

¶2 BACKGROUND

¶3 We note that the parties’ briefs and portions of the record on appeal were permitted to be

filed under seal, including the settlement agreements at issue on appeal. While we respect the

parties’ wishes to keep confidential material private, our consideration of the trial court’s

interpretation of the settlement agreements will necessarily require us to discuss details of

these documents in the instant appeal. However, we only include those details necessary to

our resolution of the issues on appeal.

¶4 I. Complaint

¶5 On February 18, 2011, Motorola filed a complaint for declaratory judgment and breach of

contract against a number of insurance companies, including Zurich and Associated; the

complaint was amended on July 1, 2011, and again on February 22, 2013. Motorola sought

1 Associated is a subsidiary of Fireman’s Fund Insurance Company and both names are used interchangeably throughout the record on appeal. For the sake of consistency, we use the name “Associated.”

2 Nos. 1-13-1529, 1-13-1530 (cons.)

the defendants to provide it legal representation to defend Motorola and/or coverage for

defense costs under insurance policies issued by each of the defendants for four underlying

personal injury actions in which claims were asserted against Motorola. The complaint

identified one Associated policy with a policy period from July 1, 1983, through July 1,

1985, and 13 Zurich policies with coverage from January 31, 1963, through July 1, 1983, and

from July 1, 1985, through July 1, 1987.

¶6 The four underlying actions (the clean room cases) alleged that Motorola was liable for

injuries that children of former Motorola employees and contractors allegedly sustained as a

result of exposure to various chemicals in “clean rooms” in Motorola manufacturing

facilities. According to Motorola’s complaint, from the 1960s through 2003, Motorola

operated facilities that manufactured, among other things, semiconductor products. These

facilities included certain rooms that were designated as “clean rooms” in which the

semiconductor products were manufactured, which “were designed to prevent dust and other

similar materials from contacting semiconductor components during the manufacturing

process.” The clean room cases all involved substantially similar allegations, in general

alleging that hazardous or toxic materials were present in the “clean rooms” and that “either

the father, the mother, or both worked in a Motorola clean room facility for some period of

time before, and in a number of cases after, the plaintiff child was born; often the period of

employment [was] alleged to have continued through the in utero period. The plaintiffs

generally claim[ed] that the children were injured as a result of parents working in clean

rooms.”

3 Nos. 1-13-1529, 1-13-1530 (cons.)

¶7 Motorola’s complaint alleged that one or more of the insurer defendants had a duty to

defend and/or pay defense costs in the clean room cases and that by failing to do so, the

defendants had breached their obligations to Motorola under the insurance policies.

¶8 The complaints in the underlying clean room cases were attached to Motorola’s

complaint. The complaints alleged that the parents of the plaintiff children had been

employed at Motorola facilities, where they “worked with and [were] exposed to harmful

chemicals and substances that were utilized in the process of manufacturing semiconductor

devices.” The employees were required to use “teratogenic and reproductively toxic

compounds” in the clean rooms, but “[n]o generalized ventilation system was configured

explicitly to protect the workers from inhalation or skin exposure to the liquids, vapors, gases

and fumes from the chemicals” and “[a]t relevant times[,] these chemicals have been

components of the recirculated air in the clean room, have remained in the recirculated air

mixture and have not been removed from it.” These chemicals “were defective, unsafe and/or

unreasonably dangerous” and caused the children to become “severely and permanently

injured.”

¶9 On August 5, 2011, Zurich filed its answer and affirmative defenses and also included a

counterclaim in which it alleged that Motorola had released all of its claims for coverage for

the clean room cases in a settlement agreement and release entered into with Zurich in

November 2003 (the Zurich release)

¶ 10 On August 8, 2011, Associated filed its answer and affirmative defenses and also

included a counterclaim alleging that it had no defense obligation for the clean room cases

due to a settlement agreement and release that was executed between Associated and

Motorola on May 30, 2003 (the Associated release).

4 Nos. 1-13-1529, 1-13-1530 (cons.)

¶ 11 II. Releases

¶ 12 The releases between Motorola and the two insurers are at the heart of the instant appeal.

While the Zurich release and the Associated release are two separate documents executed at

different times, the substantive provisions of the releases are nearly identical.

¶ 13 The Associated release was executed on May 30, 2003, and included “whereas” clauses

providing, in relevant part:

“WHEREAS, Motorola has been named in several lawsuits by private parties in

Arizona for alleged bodily injury and property damage relating to Motorola’s disposal

of hazardous substances in the Phoenix area ***, has been identified as being

responsible for the investigation and remediation of contamination at and around

numerous sites around the United States (‘the Known Sites,’ ***), and may be liable

for claims asserted by the United States Environmental Protection Agency

(‘USEPA’), the Arizona Department of Environmental Quality (‘ADEQ’) and/or

other similar state or local regulatory authorities or private individuals for alleged

harms as a result of contamination at and/or around the Known Sites (collectively, the

‘known Environmental/Toxic Tort Claims’);

***

WHEREAS, [Associated] has disputed Motorola’s claim of entitlement to defense

or indemnity in connection with the known Environmental/Toxic Tort Claims;

WHEREAS, Environmental/Toxic Tort Claims may in the future be asserted

against Motorola with respect to the Known Sites and/or additional Sites;

5 Nos. 1-13-1529, 1-13-1530 (cons.)

WHEREAS, Motorola and [Associated] now desire to compromise, settle and

adjust fully and finally all disputes which now or hereafter may exist between them

with respect to any and all claims, known and unknown, past, present or future, which

have arisen or may arise under any and all coverages of the Policies for

‘Environmental/Toxic Tort Claims’ (as that term is defined herein) on the terms

hereinafter set forth.”

¶ 14 The release contained an extensive definition for “Environmental/Toxic Tort Claims,”

which we reproduce in full:

“ ‘Environmental/Toxic Tort Claim(s)’ means:

i. any past, present and future Claim involving Motorola, whether presently

known, unknown or unknowable, involving actual, alleged, threatened or potential

property damage (or injury to property or damage to natural resources including but

not limited to ‘NRD’ or ‘natural resource damages’), bodily injury (including

sickness, disease, disability or death at any time resulting therefrom), mental injury,

mental anguish, shock, emotional distress, fear of injury (including Claims seeking

medical monitoring or damages for care and loss of services), personal injury and

claims to recover clean-up or remediation costs (including but not limited to costs

incurred and sums expended, or which may in the future be incurred or expended for

investigation, removal, distribution, treatment or containment), involving actual,

alleged, threatened or potential environmental pollution, environmental

contamination or other injurious environmental conditions, including exposure to

smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste

materials or other environmental contaminants or pollutants, petroleum or natural gas

6 Nos. 1-13-1529, 1-13-1530 (cons.)

or derivatives thereof, including without limitation, any hazardous waste as defined in

42 U.S.C. § 9601 or any substance regulated now or in the future by any government

entity to protect human health or the environment from injury, damage or

contamination.

ii. ‘Environmental/Toxic Tort Claim(s)’ shall include Claims asserted under

CERCLA, RCRA or equivalent state statutes or common law, whether at law or

equity, and whether sounding in tort, contract, equity, nuisance, trespass, negligence

or strict liability. ‘Environmental/Toxic Tort Claim(s)’ further includes, but is not

limited to, demands for costs incurred and sums expended, or which may in the future

be incurred or expended, for investigation, removal, distribution, treatment or

containment of environmental contamination, or incurred in relation to environmental

clean-up or remediation costs, whether known or unknown, including but not limited

to Claims involving the properties or operations of Motorola.

iii. The term ‘Environmental/Toxic Tort Claim’ shall not include any past, present

or future Claim or portion of any Claim against Motorola:

a. alleging or involving injury or damage caused or allegedly caused by or

arising from a product sold by Motorola, a product containing materials sold by

Motorola, or a product that contains component parts manufactured by Motorola,

including but not limited to two-way radios, cellular telephones, or any product

that utilizes or emits RF radiation, in which such injury or damage occurs or is

alleged to have occurred after the product or component part has been sold by

Motorola or after such product or component part has left Motorola’s possession,

7 Nos. 1-13-1529, 1-13-1530 (cons.)

custody, or control, and before the product has become a waste product or become

part of a waste product; or

b. alleging or involving injury or damage caused or allegedly caused by,

arising from or related in any way to asbestos or asbestos-containing materials.”

¶ 15 A “ ‘Claim’ ” under the release “means any past, present or future claim, demand, order,

directive, request, counter-claim, affirmative defense, PRP letter, PLP letter, NOR, request

for information, notice, damage, lien, contract, indemnity to defense obligation, agreement,

letter, inquiry, promise, liability, loss, cost, expense, action, suit, cause of action, cross-claim,

third-party action, notice of liability or potential liability, arbitration or mediation demand, or

notice of statutory or regulatory obligation, of any kind whatsoever, whether known or

unknown, asserted or unasserted, foreseen or unforeseen, fixed or contingent, suspected or

anticipated, direct, indirect or consequential, whether at law, equity, admiralty or otherwise,

and whether sounding in tort, contract, equity, trespass, negligence, strict liability or any

other statutory, regulatory, administrative or common law cause of action of any sort.”

¶ 16 The release provided that “[t]his Agreement prevails over prior communications

regarding the matters contained herein between the signatories hereto or their representatives.

This Agreement has been reviewed by counsel for the signatories hereto, and shall not be

construed against any signatory, each signatory expressly waiving the doctrine of contra

preferentem.” Finally, the release provided that “[t]his Agreement is an integrated Agreement

and contains the entire Agreement regarding the matters herein between the signatories

hereto, and no representations, warranties, or promises have been made or relied on by any

signatory hereto other than as set forth herein.”

8 Nos. 1-13-1529, 1-13-1530 (cons.)

¶ 17 The release also contained several statements that the release “is not intended to be, nor

shall it be, constructed as an insurance policy interpretation” and that the release “is not a

policy of insurance or a modification of any policy of insurance and the signatories do not

intend same to be interpreted as such.”

¶ 18 The Zurich release was executed on November 26, 2003, and was, in relevant part,

identical to the language of the Associated release quoted above.

¶ 19 III. Motions for Summary Judgment

¶ 20 On October 7, 2011, Zurich filed a motion for summary judgment, claiming that

Motorola had previously released all claims for coverage for the clean room cases under the

Zurich insurance policies. The same day, Associated also filed a motion for summary

judgment on the same basis.

¶ 21 Also on October 7, 2011, Motorola filed a motion for partial summary judgment against

Zurich and Associated on the issue of defendants’ counterclaims and affirmative defenses

concerning the releases, arguing that coverage for the clean room cases was not released

because the clean room cases involved chemicals inside Motorola facilities and not chemicals

released into the environment.

¶ 22 On April 13, 2012, Judge Daniel Pierce issued a written order denying the parties’

motions for summary judgment. The trial court noted that “[defendants’] position stems from

a number of lawsuits filed beginning around 1991 against Motorola where Motorola was

sued for polluting the groundwater, soil, and air near its facilities in Arizona. Motorola

submitted a claim to Defendants in those cases and the Insurers disputed coverage. The

parties eventually decided to settle their disputes and, in 2003, Motorola entered into separate

but substantially similar settlement agreements and releases (Releases) with Defendants

9 Nos. 1-13-1529, 1-13-1530 (cons.)

which relieved them of their duty to defend Motorola for past, present, and future

‘environmental/toxic tort claims.’ ” The lawsuits concerning the Arizona pollution are

referred to by the trial court and the parties as the “Valley litigation” or the “Valley claims.”

¶ 23 The trial court found that “[i]t can be inferred from the text of the Releases that at the

time the Releases were executed the complaints pending against Motorola dealt with outdoor

pollution caused by Motorola. The context in which the parties entered into the Releases

tends to favor the interpretation advanced by Motorola. The use of the term ‘environmental’

in the Releases would appear to only relieve the insurers of their duty to defend future cases

in which Motorola is alleged to have caused harm by polluting or contaminating areas

outside of its facilities.” The court pointed to the decision of American States Insurance Co.

v. Koloms, 177 Ill. 2d 473 (1997), and noted that the Illinois Supreme Court had explained

that traditional environmental contamination “is contamination of land, the atmosphere or

water.” The court also noted that the Illinois Environmental Protection Agency had

consistently limited its authority under the federal Clean Air Act to outdoor air and that the

legislature had given the agency the authority to take action whenever hazardous substances

were “ ‘release[d] into the environment’ ” but specifically excluded “ ‘any release which

results in exposure to persons solely within [a] workplace.’ ” (quoting 415 ILCS 5/3.395

(West 2010)).

¶ 24 The trial court found that “[t]he language used in the Releases to define

environmental/toxic tort is the prototypical language used in pollution exclusions for

insurance policies.” The court again pointed to Koloms, noting that the Illinois Supreme

Court had held that standard-form pollution exclusion clauses in commercial general liability

insurance policies did not apply in cases of indoor pollution and that an insurer must defend

10 Nos. 1-13-1529, 1-13-1530 (cons.)

such claims. The trial court found that “[b]ecause the language used in the pollution

exclusion in Koloms is virtually identical to that used in the Releases, it is not unreasonable

to infer that the court would treat this case the same way and hold that such an exclusion does

not apply to indoor air.” However, the court noted that the Koloms court was interpreting an

insurance policy and had construed the policy against the insurer; by contrast, “[h]ere, the

Releases contain anti-contra preferendum clauses so the Court will not construe the Releases

against either party.”

¶ 25 The trial court noted that “[i]n assessing the insurers’ position, the Court is cognizant of

the fact that the language of the Releases is quite broad,” contemplating “inclusion of

incidents that are not necessarily identical to the cases that gave rise to their execution.”

“Motorola agreed to release Zurich and Associated Indemnity from defending it against past,

present and future claims, whether known, unknown or unknowable”; thus, “[t]he insurers’

argument that the Releases essentially relieved them of the duty to defend virtually all cases

pertaining to injuries from toxic exposure is not unreasonable.”

¶ 26 The court concluded that “[t]he parties to these Releases provided their own definition for

environmental/toxic tort claims and it is not clear whether the clean room suits are within the

scope of that definition. The interpretations advanced by both Motorola and the insurers are

reasonable. As a result, the Court cannot determine the intention of the parties solely based

upon the plain language of the Releases.”

¶ 27 The trial court also considered whether the “ ‘carve-out’ provisions” in the releases

supported insurers’ argument that the clean room suits fell within the scope of the releases.

The court noted that the insurers had argued that if Motorola’s interpretation of the meaning

of “environmental claim” was adopted, then “there would have been no purpose for

11 Nos. 1-13-1529, 1-13-1530 (cons.)

excluding asbestos claims and products claims because those claims would have been outside

the scope of the Releases in the first place.” The court found that “[a]s the Court looks to

give meaning to each provision of the contract, this point is well taken.” However, the court

noted that “even though the carve-out provisions might be indicative of the parties’ intent,

the fact that they carved out exceptions to the scope of the Releases does not change the

definition the parties ascribed to ‘environmental/toxic tort claims.’ If the insurers’ argument

on this point is accepted, the Releases become unreasonably broad and encapsulate claims

which could not remotely be considered environmental claims. The interpretation advanced

by the insurers regarding these carve-out provisions essentially reads the term

‘environmental’ out of the Releases. The Releases also cannot be interpreted in a manner

where every claim not expressly exempted from their scope must be considered included.”

Therefore, the court found, “the Court cannot determine as a matter of law whether the clean

room cases fall within the scope of the Releases.”

¶ 28 The trial court summarized its analysis by noting that “[h]ere, the language of the

Releases does not resolve whether the clean room cases fall within their scope. The term

‘environmental/toxic tort’ as it is used in the Releases is ambiguous. Certain factors favor

Motorola’s desired interpretation while others favor the interpretation proffered by the

Defendants.” In such a case, the court found that summary judgment was inappropriate and

stated that “[e]ven though there are cross motions for summary judgment pending before the

Court and the parties do not dispute the facts, reasonable persons could draw divergent

inferences from the facts at issue. Reasonable minds could disagree about the meaning of the

term environmental/toxic tort claims as used in the Releases and whether the clean room

cases fall within the scope of that term. It is clear that issues regarding this subject matter

12 Nos. 1-13-1529, 1-13-1530 (cons.)

have been occurring around the country for years, but none of the parties to the Releases

adequately, clearly or unambiguously protected themselves [from] the ramifications of such

an event. Because the term is ambiguous, the parties must present further evidence regarding

the intended meaning of ‘environmental/toxic tort’ for resolution by the trier of fact.”

¶ 29 IV. Discovery

¶ 30 After the trial court’s denial of the parties’ motions for summary judgment, the parties

engaged in discovery on the issue of the scope of the releases. As part of discovery,

defendants filed a motion to compel the production of a document entitled the “CSRP

Reference Notebook (Environmental),” 2 which they claimed would be relevant to show that

Motorola considered clean room claims to be “environmental.” The document was allegedly

a compilation of memoranda drafted by a number of environmental and toxic tort attorneys

working under Motorola’s environmental, health, and safety group beginning in 1996,

concerning a defense strategy for anticipated litigation over environmental chemical

exposure in Motorola’s clean rooms after IBM, a competitor of Motorola, had been sued for

injuries and birth defects to children of employees and contractors who worked in IBM’s

clean room facilities. Motorola refused to produce the documents, arguing that the attorney-

client privilege and work product doctrine applied. On November 28, 2012, the trial court

ordered Motorola to produce the notebook to the court for in camera review, after which the

court would “rule on whether the CRSP Notebook is relevant.”

¶ 31 On December 10, 2012, at the beginning of trial, the trial court ruled on defendants’

motion to compel production of the CRSP notebook. The court stated:

2 “CSRP” is an abbreviation for “Clean Room Safety Program.”

13 Nos. 1-13-1529, 1-13-1530 (cons.)

“On the first topic with respect to the motion to compel, I reviewed the

compilation of documents that are referred to as the CRSP notebook which is the

Clean Room Safety Program notebook.

The defendants moved to have the notebook[,] I’ll refer to it as[,] produced in

discovery. The plaintiff objected on the grounds of attorney-client privilege and work

product, attorney work product privilege.

The Court is going—and I did review the manual. I find it to be privileged

information both as far as attorney-client matters and as to—and also that it is perhaps

also work product information.

Additionally, I’m ruling that it’s not relevant to the issue before the Court today

which is why we are here, and that is to determine what the phrase ‘environmental

toxic tort’ means as used in the two releases in question in this declaratory action

proceeding.

I don’t think work product or attorney-client information that was generated at

least several years prior to the execution of this release is relevant to the Court’s

inquiry as to what the parties intended, what the parties meant and what they agreed

to with respect to the term ‘environmental toxic tort’ in the context of the

circumstances surrounding the execution of the questioned releases. So with that,

that’s the ruling on the motion to compel.

Now, that is not to say that a different ruling might—and I emphasize ‘might’—

be appropriate if this were an underlying declaratory judgment action on the issue of

whether there was either a duty to defend or a duty to indemnify.

14 Nos. 1-13-1529, 1-13-1530 (cons.)

I know ultimately, that’s the bone of contention between the parties, but at this

juncture, the issue is what did the release that was executed in 2003 mean, what did

the parties want it to mean and what did they bargain for and what did they get when

they wrote it down and signed it.”

¶ 32 V. Trial

¶ 33 As noted, the parties came before the trial court for a bench trial on December 10, 2012.

¶ 34 A. Associated Witnesses

¶ 35 1. Alexander Gillespie

¶ 36 Alexander Gillespie testified that he was a litigator with the law firm of Bonner, Kiernan,

Trebach & Crociata and had represented Associated in connection with insurance coverage

claims relating to the “Valley litigation,” which was “[a] group of both litigated and non-

litigated claims arising out of environmental contamination or releases at Motorola sites in

the Phoenix area.” The types of claims were “[b]oth what I’ll call environmental and toxic

tort claims, meaning contamination itself of the ground and groundwater, et cetera, and

claims, for example, by residents of the area that toxic substances had migrated through the

groundwater into their houses and they had been injured by exposure to the toxic substances

that way.” The Valley claims were “long-tail” or “delayed manifestation” claims.

¶ 37 Gillespie testified that Associated engaged Motorola in discussions about resolving

coverage issues concerning the Valley litigation and a meeting between the two occurred in

October 2002, with Gillespie, Eric Billeter, Shirley Shean, and J.P. Salgado present on behalf

of Associated. Associated had prepared a PowerPoint presentation “which culminated—we

were trying to get policy releases or policy buybacks from Motorola with respect to *** the

[Associated] policies so we went through various types of claims that we were aware of that

15 Nos. 1-13-1529, 1-13-1530 (cons.)

Motorola was involved with and various types of exposures, money that had been paid, both

defense and indemnity, on those various types of claims and applied a coverage analysis to

those claims and arrived at essentially what we’d valued as the—the dollar value of the

[Associated] exposure with respect to those claims. And then we presented an offer of a

greater amount for policy buybacks.” Gillespie testified that Associated offered $4 million

“[f]or full policy releases of all the Motorola policies,” meaning that “[i]t’s essentially as if

you tear up the policies and they never existed. No claims could ever be presented against

those policies again.” Gillespie testified that there was “some dialogue” at the meeting, but

that Motorola expressed reluctance to release asbestos or cell phone claims, because “[t]hey

didn’t think that they could put a value on the exposure of release of those claims.”

¶ 38 On January 29, 2003, Gillespie sent a letter to Mike Foradas at Kirkland & Ellis

“providing a draft form of settlement agreement or release for a policy buyback with a

carveout for asbestos-related claims.” The scope of the proposed release was “[f]ull policy

releases for all of the policies other than potential claims for insurance coverage of asbestos-

related claims.” After sending the draft agreement to Motorola, Associated continued to

engage in its analysis of the claims and was also preparing an actuarial analysis of

information concerning cell phone claims that it had received from Motorola.

¶ 39 On March 17, 2003, a few days before a subsequent March 19, 2003, meeting with

Motorola, Associated received a draft settlement agreement from Foradas. The draft

agreement was “certainly much more restrictive” than the earlier draft Associated sent to

Motorola, and was “essentially a release of Valley type claims, be they in the Valley claims

themselves or similar claims elsewhere.” The draft agreement removed the language

releasing “any and all coverages of the Policies” and changed it to release

16 Nos. 1-13-1529, 1-13-1530 (cons.)

“environmental/toxic tort claims” under the policies; “environmental/toxic tort claims” was a

reference to the Valley litigation and similar claims.

¶ 40 On March 19, 2003, Associated and Motorola met at Motorola’s headquarters in

Schaumburg, Illinois; Gillespie, Billeter, Salgado, Shean, and Noel Hehr were present on

behalf of Associated, while Foradas from Kirkland & Ellis, Jack Montgomery from Jones

Day, in-house counsel Kathleen Massey, corporate treasurer Garth Milne, and risk manager

Joe Wojdula were present on behalf of Motorola. The meeting began with Foradas making a

45-minute PowerPoint presentation on behalf of Motorola, responding to Associated’s

presentation from the first meeting; “Motorola went through their response to the factual

assertions, legal assertions, coverage evaluation, things of that nature, and presented a

counterdemand to [Associated’s] offer of 4 million for what was then—by then, it was policy

releases with an asbestos carveout.” Motorola demanded $7.9 million “for what he called an

environmental buyout,” which Gillespie understood to refer to “the environmental and

related toxic tort claims relating to the Valley sites and other sites,” meaning the claims

concerning groundwater pollution in Arizona.

¶ 41 The representatives from Associated responded to some of the issues raised by Foradas,

then Hehr made a 20-minute actuarial presentation on Associated’s behalf concerning the cell

phone claims. The presentation culminated with a valuation of approximately $1.1 million

for the cell phone claims. The representatives from Motorola were appreciative of Hehr’s

analysis, but expressed skepticism as to whether the assumptions underlying the analysis

would come to pass. They additionally raised concerns about “EME claims,” meaning claims

concerning two-way radios and other types of products that would emit electromagnetic

energy that would go beyond cell phones.

17 Nos. 1-13-1529, 1-13-1530 (cons.)

¶ 42 Associated made an offer of $5.5 million for “policy releases with carveouts for asbestos-

related claims, cell phone claims and two-way radio claims.” Motorola did not accept,

because “[e]ssentially, it was they did not believe that it was possible to come up with a firm

analysis and exposure evaluation of those claims, that it had been discussed at levels up to

and again including the CFO level at Motorola and that they simply weren’t willing to do that

broad a release.” Associated made a subsequent offer of $5.1 million “[f]or environmental

and toxic tort releases with those terms having to be defined in the agreement.” Motorola did

not accept it and Foradas returned with a demand of $6.3 million, indicating that “essentially,

a significant part of the difference in Motorola’s evaluation of that environmental toxic tort

release and [Associated’s] evaluation of the toxic tort release was that Motorola believed that

there was a premium in terms of money that would be appropriate for granting the broader

toxic tort release that Motorola was at that point willing to give.” Associated agreed to the

terms, but responded with a counteroffer of $6 million, which Motorola accepted.

¶ 43 Gillespie testified that he took handwritten notes at the March 19, 2003, meeting and that

he prepared typed-up minutes relating to the meeting within two days of the meeting, both of

which he did as part of his regular practice.

¶ 44 Gillespie testified that after the March 19, 2003, meeting, he prepared a draft settlement

agreement to reflect the outcome of the meeting, which Gillespie emailed to Foradas on April

7, 2003. The new agreement contained a “Definitions” section, which had not been contained

in the previous drafts, including definitions for “claims” and “environmental/toxic tort

claims.” The definition of “environmental/toxic tort claims” had three parts, and Gillespie

testified that “[i]n general terms, one defines ‘environmental’ and ‘toxic tort.’ Two makes

clear that certain things are within the definition of ‘environmental’ and ‘toxic tort.’ And

18 Nos. 1-13-1529, 1-13-1530 (cons.)

three specifies certain things that would not—that could not be deemed to be within the

definition of ‘environmental’ and ‘toxic tort.’ ”

¶ 45 Gillespie testified that after sending the draft to Motorola, Motorola responded by

attempting to insert certain words into the definition of “environmental/toxic torts.” Where

Associated’s draft referred to “pollution” and “contamination,” Motorola’s draft added the

term “environmental,” making the terms “environmental pollution” and “environmental

contamination,” and also added the term “into the environment” after “other environmental

contaminants or pollutants.” Associated deleted Motorola’s insertions in its next draft.

Motorola again attempted to add the same language, which Associated again deleted.

Ultimately, Associated left the two insertions of the term “environmental” but did not permit

the insertion of the term “into the environment” and Motorola agreed to the draft.

¶ 46 Gillespie testified that his concern as to Motorola’s attempt to add the term “into the

environment” was that policyholders had been using that phrase to attempt to persuade courts

to read pollution exclusions in insurance policies narrowly so as not to include exposure to

hazardous substances indoors. Gillespie testified that he “was concerned that it might leave

the agreement subject to a similar argument if there were disputes in the future and that

would result in someone arguing for a more restrictive application of the release than had

actually been agreed to.”

¶ 47 On cross-examination, Gillespie testified that in the presentation Associated made to

Motorola in October 2002, one of the topics was “non-environmental claims,” during which

asbestos and cell phone claims were discussed, and another topic was “environmental/toxic

tort claims,” during which the Valley claims were discussed. Gillespie admitted that, during

the “environmental/toxic tort” portion of the presentation, there was no claim discussed “that

19 Nos. 1-13-1529, 1-13-1530 (cons.)

did not involve some form of actual or alleged release of [a] hazardous substance into the

environment by Motorola.” Gillespie further admitted that, up to and through the draft

Motorola submitted on March 17, 2003, the term “environmental/toxic torts” was a reference

to the Valley litigation and similar claims.

¶ 48 2. Jean-Pierre Salgado

¶ 49 Jean-Pierre Salgado testified that in 2001 or 2002, he worked for Associated as a senior

environmental consultant in Associated’s historical claims unit, which was a unit “that was

put together by [Associated] to manage old policies that were general liability policies that

had environmental coverage in them.” Salgado testified that he was present at two meetings

between Associated and Motorola. The first meeting occurred in October 2002 and

Associated presented an offer of $4 million for a policy buyback. The second meeting

occurred in March 2003 at Motorola’s headquarters in Schaumburg. Salgado, Billeter, Shean,

Gillespie, and Hehr were present on behalf of Associated, while Wojdula, Massey, and

Foradas were present on behalf of Motorola. Foradas made a presentation “which was

essentially Motorola’s response to [Associated’s] initial offer of settlement that took place

several months before,” which was followed by Hehr’s presentation on cell phones. There

was then a “back-and-forth discussion” concerning the scope and dollar amount of the

release, with Billeter and Gillespie primarily speaking on behalf of Associated and Foradas

and Massey speaking on behalf of Motorola. Salgado testified that there were no terms

written at that point, but that “we settled for a buyback of the environmental and toxic tort

claims into the future, we excluded the asbestos and cell phone part of it. And the amount

that was agreed to was $6 million.”

20 Nos. 1-13-1529, 1-13-1530 (cons.)

¶ 50 Salgado testified that he did not work on asbestos or cell phone claims while at

Associated because those would not have been considered environmental claims.

¶ 51 3. Eric Billeter

¶ 52 Eric Billiter testified that he was a claim manager at Associated and his team handled

coverage actions involving asbestos, toxic tort, and environmental claims. The first

settlement agreement proposed by Associated was for $4 million for a policy buyback. The

$4 million valuation consisted of approximately $3.6 million for known claims, and,

“[b]ecause the terms of that offer were policy buybacks *** we offered additional

consideration for all the other exposures that Motorola might face in the future.” After

Motorola indicated at the first meeting that it was unwilling to release asbestos claims, there

was “back and forth” between the parties, culminating in another draft settlement agreement

proposed by Associated, which was a “complete release” with a carveout for asbestos claims

for $4 million. The proposed settlement agreement contained a “whereas” clause relating to

the Valley litigation, but Billeter testified that the clause did not limit the scope of the release.

¶ 53 Billeter testified that on March 17, 2003, two days before a scheduled meeting with

Motorola, Motorola sent a draft settlement agreement that was “a much more limited

release.” The release was “an environmental release” and also released claims similar to the

Valley claims. Associated did not accept this offer. At the March 19 meeting, Billeter, Shean,

Salgado, Gillespie, and Hehr were present on Associated’s behalf, while Foradas,

Montgomery, Massey, Milne, and Wojdula were present on Motorola’s behalf. Billeter

testified that Associated initially rejected Motorola’s offer because the representatives were

“[d]isappointed in the settlement terms and the dollar amount that they wanted from us.”

However, by the end of the meeting, they ultimately settled for a “full environmental and full

21 Nos. 1-13-1529, 1-13-1530 (cons.)

toxic tort release under the policies,” with carveouts for asbestos, cell phones, EME claims,

and product claims. Billeter testified that clean room claims would have been released

“[b]ecause it’s covered under the definitions in the agreement.” Billeter further testified that

Motorola’s initial offer changed “[i]n terms of dollars and scope of the release that they were

willing to provide to us.”

¶ 54 Billeter testified that at the second meeting, after Foradas’ presentation on Motorola’s

behalf, there was a break and then Associated responded to some of the points raised by

Forasas in his presentation and Hehr made a presentation on cell phone litigation. Following

Hehr’s presentation, Motorola’s representatives indicated that they could not release cell

phone claims and for the first time indicated that they were also concerned about Motorola’s

exposure relating to two-way radios. Associated made a counterproposal for $5.5 million

with carveouts for asbestos, cell phones, and two-way radios. Motorola did not accept the

offer and indicated that there were also concerns about EME claims and Motorola would not

release products claims. After another break, Associated came back with another

counterproposal of $5.1 million “for a complete environmental and toxic tort claim release.

And we were carving out asbestos, cell phones and EME claim[s] and products at that point.”

Billeter testified that the terms used “had to be defined in the agreement because now we’re

at a different point of what the agreement was going to be.” The “environmental and toxic

tort” offer Associated was proposing “was broader than what Motorola had proposed” in that

“[i]t was a complete environmental and toxic tort claim release that they could never tender

another environmental or toxic tort claim subject to how those terms were going to be

defined in the settlement agreement.” Associated made the offer at that time because “at that

point in time, we knew we weren’t going to be able to get a complete policy buyback. You

22 Nos. 1-13-1529, 1-13-1530 (cons.)

know, it was the end of the negotiations. They were adamant they couldn’t release product

claims or cell phone claims or asbestos, and we always wanted through the history of the

negotiations the broadest release we could possibly get.” Motorola did not accept the offer,

but made a counterproposal of $6.3 million, noting that “there was some additional

consideration in that for unknown toxic tort claims.” Associated responded with an offer of

$6 million, which was accepted. Gillespie then took the lead in drafting the settlement

agreement, which was sent to Motorola.

¶ 55 Billeter testified that he composed an email to senior management concerning the

settlement a few days later “[t]o notify management that the case had settled and these were

the terms of the settlement.”

¶ 56 On cross-examination, Billeter admitted that clean room claims were never discussed

during negotiations even though Shean handled clean room cases at that time for a different

insured, IBM. Billeter testified that Associated never raised the issue of clean room claims,

“[b]ut we asked them what were the things that they were worried about.”

¶ 57 B. Zurich Witnesses

¶ 58 1. Steven Dale Pearson

¶ 59 Steven Dale Pearson testified that he was an attorney at Meckler, Bulger, Tilson, Marick

& Pearson and represented Zurich in connection with the Valley litigation. Pearson became

involved with the Valley litigation in 1994, and the disputes between Motorola and Zurich

concerning coverage continued for over a decade until, in 2001, Motorola and Zurich began

to explore the possibility of settling their disputes. In discussing settlement, Pearson spoke

primarily with Foradas.

23 Nos. 1-13-1529, 1-13-1530 (cons.)

¶ 60 There was an initial mediation session in May 2002 in Washington, D.C., where the

conversation focused on the Valley litigation. Zurich demanded $57 million from Motorola

“which was the costs that had been expended thus far in defending Motorola in the

underlying litigation on the premise that notice was late, they were never entitled to coverage

in the first instance and therefore would not have been entitled to any defense costs.”

Motorola, by contrast, demanded $56 million from Zurich, “representing settlement of the

underlying litigation that was at issue and the sites that they put us on notice of.” Thus,

Motorola and Zurich were approximately $114 million apart before the mediation. The

mediation was unsuccessful.

¶ 61 A second mediation session was set for November 2003. Zurich reduced its demand to

$19 million and requested a release concerning the Valley sites and 56 related sites. Motorola

reduced its demand to $23 million and requested both parties release all claims relating to the

Valley litigation and the 56 sites, with an exception for asbestos claims or product liability

claims. In addition to the letter sent by Motorola outlining the demand, Motorola also

included a copy of a private demand communicated to the mediator at the outset of the

mediation process; Pearson testified that he learned from the private demand letter “that Mr.

Foradas was also talking about an environmental buyout of some sort regarding matters in

addition to those sites that were what I call the known sites at that time,” which represented a

“possible” expansion of the scope of settlement discussion. Motorola also included a copy of

the Associated release, which Zurich had requested. In reading the Associated release

Pearson’s “reaction was this changed the scope of what we were talking about from a

settlement standpoint because this was much broader than the scope that we had been talking

about before. This agreement did not speak to the Valley litigation, did not speak to the

24 Nos. 1-13-1529, 1-13-1530 (cons.)

underlying litigation that comprised the Valley litigation and the 56 sites which were all of

the terms that I had been talking about but rather something much broader. And I was very

pleased to get it because I saw it as an opportunity now to break through the logjam from the

settlement standpoint.”

¶ 62 Pearson testified that at the mediation in November 2003, he, Bob Edwards, Ruth Kopec,

and Brent Graber were present on behalf of Zurich and Foradas, Montgomery, and Massey

were present on behalf of Motorola. Pearson testified that he “had an assurance going into

that mediation that Motorola would accept the same terms—terms, language of the

settlement agreement, with my client that they had agreed to with” Associated, so the entire

focus of the mediation was on the dollar amounts. The mediation resulted in the parties

agreeing to a “walkaway,” with neither Zurich nor Motorola paying any money.

¶ 63 Pearson testified that at the time, he examined the release, and there was no limitation to

outdoor claims. Instead, he testified that “[w]e were settling indoor claims to exposure to

[toxic chemicals] as part of the underlying litigation,” since several of the plaintiffs in the

Valley litigation had alleged exposure to toxic chemicals “in their homes in their drinking

water and showering in it in their homes.” Pearson further testified that no one told him that

that the release was intended to release only outdoor claims or that the carveouts for asbestos

and cell phone claims were not necessary but were only added as a precaution. Pearson was

also unaware of the content of the negotiations between Associated and Motorola that

resulted in the Associated release.

¶ 64 2. Robert Edwards

¶ 65 Robert Edwards testified that he worked for Zurich’s environmental claims unit until

2008. The environmental claims unit was comprised of three groups: the pollution group, the

25 Nos. 1-13-1529, 1-13-1530 (cons.)

mass litigation group, and the legal services group; asbestos claims were handled by the mass

litigation group, and Zurich considered the claims handled by any of the three groups to be

environmental claims. While at Zurich, Edwards worked for the mass litigation group for a

short time, then moved to the pollution group. While in the pollution group, Edwards worked

on the Valley litigation while Motorola and Zurich were engaged in coverage litigation.

Edwards attended the November 2003 mediation as a corporate representative of Zurich with

authority to settle and Kopec, Graber, and Pearson also attended the mediation on Zurich’s

behalf.

¶ 66 Edwards testified that he received the Associated release prior to the mediation and

considered it a “game changer in that the [Associated] release was an effort to provide a full

environmental and toxic tort release with the exception of cell phone and product cases as

well as asbestos.” At the mediation, the parties negotiated until “eventually, it became a zero

sum whereby no side ended up getting any type of a payout, but in exchange for that, there

was a broad environmental release that basically included all types of environmental claims

including toxic tort with the only carveout being along the lines that I previously discussed

and mentioned which was products and specifically cell phones as well as asbestos.”

¶ 67 On cross-examination, Edwards testified that he did not participate in any discussions

with anyone from Motorola concerning the scope of the release.

¶ 68 C. Motorola Witnesses

¶ 69 1. Michael Foradas

¶ 70 Michael Foradas testified that he was a partner at Kirkland & Ellis and was Motorola’s

lead outside insurance coverage counsel in the coverage litigation concerning the Valley

claims. He worked with Tom Campbell on the litigation, and Campbell handled the day-to-

26 Nos. 1-13-1529, 1-13-1530 (cons.)

day matters. Foradas’ primary contact in the Motorola law department concerning the

litigation was Kathleen Massey.

¶ 71 Foradas testified that the Valley litigation was settled in late 2000 to 2001, and in early

2002, Motorola began to consider the possibility of resolving the coverage litigation without

further litigation. Motorola’s first effort was with Zurich, which was Motorola’s primary

insurance carrier for many years. The initial mediation took place in spring 2002. Motorola’s

first demand was for $35 million and proposed “a full environmental release for the sites that

were in the Valley and the other company plant sites and remediation sites that we were

discussing”; Foradas testified that an “environmental release would mean that Zurich was

essentially absolved from any further liability for the Valley cases and for the other

environmental pollution sites.” Zurich demanded $52.2 million and proposed a release that

was “essentially [a] mirror image[]” of Motorola’s proposed release; Foradas testified that

“[t]hey were the same release. We were talking about the same things.” The first mediation

“was a bust,” as the parties were over $100 million apart and “[i]t was apparent very quickly

that we weren’t going to get anywhere at this mediation, and we agreed that we should

adjourn indefintely.”

¶ 72 Motorola turned its attention to Associated, which had approached Motorola through

Billeter about a settlement. Billeter informed Foradas that Associated would be interested in

a full policy buyout, but Foradas responded that Motorola was not interested in that kind of

release. Foradas informed Billeter that “we were interested in an environmental buyout or

release, that we had—Motorola had a number of environmental sites, 50 some odd sites. He

was obviously well aware of the Valley sites, but there were a number of others. Motorola

had been managing those sites for some period of time. We were willing to negotiate a

27 Nos. 1-13-1529, 1-13-1530 (cons.)

resolution of all those claims relating to those sites. We had, I think—we had our arms

around in pretty good fashion the environmental claims so we were prepared to do that kind

of settlement.” Foradas also informed Billeter “on many occasions from the outset of the

litigation and also through our efforts to settle the case that we really had no interest in

anything broader than that, that the company faced—it was a technology company, it faced

sort of [an] uncertain future with regard to the kinds of claims it may face. We couldn’t really

value those claims, it would be both difficult to value them and probably impossible given

that we had very little litigation at the time and that we weren’t interested in releasing our

insurance coverage that went back historically for, you know, claims that we really couldn’t

put a value on.”

¶ 73 Foradas testified that “from the outset of our discussions with [Associated], one of the

categories of claims we discussed resolving in the category that Motorola was interested in

resolving were environmental and associated toxic tort claims so pollution claims at the

various sites, clean up costs associated with those claims whether—usually ordered by the

government under the CERCLA or RCRA programs and then also private property damage

and bodily injury claims like those that had been asserted in the Valley by individuals who

claimed either property damage from environmental contamination or personal injuries

relating—bodily injuries relating to environmental contamination at various Motorola plant

sites.” This understanding of “environmental/toxic tort claims” was the way that Associated

“described what they were talking about from day one.”

¶ 74 Foradas met with Associated in October 2002, where Associated offered $4 million, “3.6

million and change for the environmental and toxic tort piece, and then they were prepared to

pay us $350,000 roughly for a release of every other kind of claim Motorola could ever make

28 Nos. 1-13-1529, 1-13-1530 (cons.)

under those insurance policies.” At the October 2002 meeting, there was no discussion of any

clean room type of claims asserted against Motorola. Although Foradas knew what clean

room claims were at that point, he had never heard of clean room claims in reference to

Motorola.

¶ 75 After the meeting, Associated and Motorola continued communicating. Foradas noted in

an email to Billeter that while Motorola was preparing information that Associated had

requested, “we weren’t really interested in doing anything that included anything other than

an environmental buyout and that’s what I said.” Foradas testified that the “environmental

buyout” was “[a] buyout for all the pollution claims relating to the various plant sites and we

would certainly consider the associated toxic tort claims that may come with those as they

had proposed from the outset.” Foradas testified that this environmental buyout “was our

position throughout the negotiations” and Motorola never changed its position on that issue.

¶ 76 Foradas testified that he had explained to Associated that Motorola was not interested in a

buyout of cell phone claims because “we simply couldn’t value the other claims. *** [W]e

simply weren’t prepared to release what was pretty valuable insurance for claims that we

couldn’t value at this juncture.”

¶ 77 Associated sent a proposed settlement agreement to Motorola which would have

excluded asbestos claims from the scope of the release but would have released cell phone

claims. Foradas and Campbell drafted a counterproposal leading into the next settlement

meeting.

¶ 78 Motorola and Associated again met on March 19, 2003. Foradas, Massey, Wojdula,

Milne, and Montgomery attended on behalf of Motorola, while Billeter, Gillespie, and

several other individuals were present on behalf of Associated. Foradas did the bulk of

29 Nos. 1-13-1529, 1-13-1530 (cons.)

Motorola’s presentation and focused on Associated’s financial analysis of the environmental

claims; “We focused solely on those claims. And the reason for that is identified in the next

bullet [of the presentation] which is we told them that while we understood what they would

like to have, if they wanted to do a settle[ment], we weren’t interested in a policy buyout or a

release of even particularly asbestos and cell phone claims. And then we made clear what we

were willing to do which was to grant them a full release for all past, current and future

hazardous waste claims which were the environmental/toxic tort claims that we’d been

discussing and were in the settlement drafts that had been exchanged.”

¶ 79 Foradas testified that there was some discussion of what the term “full environmental

buyout” meant, but that “[w]e didn’t have to discuss it too much because we had been

discussing it for some period of time, exchanged drafts, had defined that in the ‘whereas’

clauses as an environmental/toxic tort release. You know, we’d made it clear that’s what we

were interested in doing, we were prepared to essentially because we thought we could value

and both parties thought they could value the various company pollution sites and the

prospect of, you know, tort claims relating to them that we were prepared to release those

kinds of claims.” Motorola’s position on the scope of a release it was willing to grant did not

change during the meeting.

¶ 80 After further discussion, the parties agreed to settle for $6 million; the scope of the

release was “[a] full environmental buyout, that is a buyout of all the environmental sites

that—the pollution claims relating to those sites both sort of governmental cleanup claims

and associated toxic tort property damage and bodily injury claims. And we agreed—and I

believe our draft made clear because we thought it was a negotiating point that would give[]

[Associated] some comfort, our draft provided for and we were prepared to essentially agree

30 Nos. 1-13-1529, 1-13-1530 (cons.)

to release those whether they existed now or would come down the road in the future.” At the

March 19 meeting, there was no discussion of clean room claims and Foradas had not heard

of any clean room claims against Motorola.

¶ 81 Foradas testified that after the meeting, Campbell (for Motorola) and Gillespie (for

Associated) worked on drafting the release, and the release was executed in June 2003.

¶ 82 Foradas testified that after the agreement with Associated, Motorola turned back to

Zurich. The parties had a second mediation session, and Foradas, Massey, Wojdula, Milne,

and Montgomery were present on behalf of Motorola, while Pearson, Graber, and several

other individuals were present on behalf of Zurich. Prior to the mediation, Motorola sent

Zurich a copy of the Associated release because “we wanted the same deal to apply to both

the insurance companies.” In a letter attached to the Associated release, Foradas stated that

“under the deal we have with [Associated], they paid Motorola 6 million for a comparable

environmental release to the one that Mr. Pearson and I had just said we’d be interested in

doing.” At the mediation, the focus was on the dollar amounts at issue, since “we made clear

in our correspondence that we were going to do the [Associated] deal, that that’s what we

wanted.” The parties agreed to “[a]n environmental buyout like what we did with

[Associated] for environmental pollution sites and associated toxic tort claims, and we agreed

essentially—we agreed to walk away, no money would exchange hands.” There was no

discussion of clean room claims against Motorola, and Foradas was not aware of any clean

room claims against Motorola at that point.

¶ 83 2. Kathleen Massey

¶ 84 Kathleen Massey testified that she was an in-house lawyer for Motorola until 2011,

responsible for corporate litigation. Massey was involved with clean room matters

31 Nos. 1-13-1529, 1-13-1530 (cons.)

concerning Motorola, which began in approximately 2007 or 2008, years after the release at

issue in the instant case. Massey was also involved in the Valley coverage litigation that

resulted in the settlements with Associated and Zurich.

¶ 85 Massey testified that Motorola first attempted mediation with Zurich in 2002, but “[i]t

was a complete failure,” as the two were approximately $100 million apart. At that point,

Foradas suggested that Motorola commence discussions with Associated. Motorola invited

Associated to its offices in Schaumburg, and Associated made a presentation in which

Associated indicated that it “wanted a complete policy buyout for their policies with

Motorola.” Motorola was not interested in such a buyout “at all.” Instead, Motorola was

willing to grant an environmental buyout. Motorola and Associated met a second time, and

reached an agreement in which “[Associated] would pay Motorola $6 million and in

exchange would be getting an environmental buyout from Motorola on its policies.” After

Motorola settled with Associated, it turned its attention to Zurich. Motorola provided Zurich

with a “take-it-or-leave-it situation” in which Zurich would either agree to the same terms as

Associated “or there was no deal.”

¶ 86 On cross-examination, Massey testified that she did not have a specific recollection as to

who spoke on behalf of Associated or Motorola at the March 19 meeting, nor did she have

any notes or know of anyone at Motorola who took notes at the meeting. Massey further

testified that she was unaware of any clean room cases against Motorola in 2003, despite the

fact that a filing with the Securities and Exchange Commission concerning Motorola’s

spinning off its semiconductor business listed potential claims concerning “ ‘clean room

environments’ ” as a “ ‘significant risk factor.’ ”

32 Nos. 1-13-1529, 1-13-1530 (cons.)

¶ 87 3. Thomas Campbell

¶ 88 Thomas Campbell testified that he was an attorney at Kirkland & Ellis in 2001 and

worked on the Valley coverage litigation. His role in the litigation was “to support Mr.

Foradas at Kirkland and really do whatever a junior partner would need to do for him.”

Campbell did not attend the October 2002 meeting between Motorola and Associated, but did

assist in preparing a response to Associated’s presentation at that meeting, which included

working on Motorola’s presentation for the March 19, 2003, meeting. Campbell did not

attend the March 19 meeting, but Foradas informed him after the meeting that the parties had

reached a deal and that Campbell was to put together the final agreement. Foradas informed

Campbell that “the deal we were talking about was we were resolving coverage issues with

[Associated] relating to the Valley litigation and other sites that we had identified for those

types of claims. We weren’t resolving the other stuff that [Associated] originally wanted us

to resolve in their proposal.” Campbell then exchanged a number of draft agreements with

Gillespie, and the final settlement agreement was executed.

¶ 89 Campbell testified that one of the changes he suggested was to the definition of

“environmental/toxic tort claims,” because “we were trying to make changes to make sure

that we were documenting the deal that had been struck, that we were building in language—

and it’s not just here, it’s elsewhere as well—to make sure that what we were talking about

was the Valley litigation and the Valley litigation type claims, the 52nd, 56th, 82nd Street.

And so we were trying to make those types of distinctions clear.”

¶ 90 D. Trial Court Ruling

¶ 91 On January 31, 2013, the trial court issued a written memorandum and judgment order in

which it indicated that “[t]his cause came to be heard by the Court, sitting without a jury, to

33 Nos. 1-13-1529, 1-13-1530 (cons.)

determine whether certain Releases entered into between Plaintiff and Defendants Associated

Indemnity Corporation (a/k/a Fireman’s Fund) and Zurich Insurance Company, separately,

apply to a category of civil lawsuits referred to as ‘clean room cases.’ ” The court stated:

“The Court previously found the Releases to be ambiguous to the extent that the

term ‘environmental/toxic tort’ (as defined therein) is susceptible to more than one

reasonable interpretation when considering whether the Release applied to clean room

cases. The Court has weighed and considered the testimony of the witnesses, judged

their credibility by taking into account their manner and demeanor while testifying

and, further, considered the reasonableness of their testimony in light of all the

admissible evidence together with the exhibits offered and admitted into evidence.

The Court did not consider any single utterance or document as definitive or

conclusive. Reasonable inferences were drawn based on the totality of the evidence,

testimonial and documentary, and all evidence was given appropriate weight and

consideration in order to reach the instant judgment.”

¶ 92 The court noted that “[a]t all times relevant, Plaintiff and Defendants [were] sophisticated

entities represented by knowledgeable, competent attorneys and staffed with personnel

experienced in the technicalities and complexities of both the manufacturing process

employed by Plaintiff and the corresponding risks involved in insuring Plaintiff’s business.”

The court further noted that the “fundamental subject matter giving rise to the execution of

the Releases” was litigation referred to as the “Valley litigation,” which involved claims

against Motorola concerning contamination of landfills resulting in alleged bodily injury and

property damage generally associated with groundwater contamination caused by toxic

substances. The court found:

34 Nos. 1-13-1529, 1-13-1530 (cons.)

“The Court finds each Defendant was motivated and desired to rid itself of any

future liability under specific, known policies of insurance previously issued in favor

of Plaintiff. Each sought a ‘complete policy buyout’. Plaintiff was motivated to

recover reimbursement and/or indemnification for its costs in the Valley and coverage

litigation recognizing the risks involved in continued coverage litigation. Plaintiff did

not agree to a ‘full policy buy out’ with either Defendant. Although it could

comfortably evaluate its exposure to future ‘Valley like litigation’ it could not

commercially evaluate or quantify its exposure to certain claims, including cell

phones, asbestos and product liability claims. Through negotiation the parties agreed

to ‘carve out’ from the Releases claims relating to cell phones, asbestos and product

liability. All parties, Plaintiff and Defendants, were aware that IBM had been the

subject of clean room claims starting in the [sic] mid-1990. No party discussed or

negotiated the question of whether clean room type claims would or would not be

included within the scope of either Release. The Court draws a reasonable inference

that the failure to raise or discuss whether clean room cases were within the scope of

either Release was either an oversight by one or all parties or it was an intentional

decision not to bring the subject up in the course of the release negotiation process.

There is no evidence from which the Court could reasonably conclude that a subject

that was not discussed was within the contemplation of any party at the time of

negotiation or execution of either Release.”

¶ 93 The court further noted:

“The Court concludes there were valid reasons not to raise the issue of whether

clean room cases were within the scope of the Release. From the Defendants’

35 Nos. 1-13-1529, 1-13-1530 (cons.)

perspective, millions of dollars had been spent and millions more might be spent

dealing with the ongoing Valley coverage litigation. To raise the issue of clean room

cases being released, when Motorola expressly stated it was unwilling to agree to

release coverage for ‘claims’ it could not price, would surely eliminate the possibility

[of] resolving the coverage litigation. Better to leave unknown, potential future claims

relating to clean room cases for another day. From the Plaintiff’s perspective, it had

no known clean room claims, and to inject that issue into coverage litigation

settlement discussions could possibly kill any reasonable chance of an acceptable

resolution of its Valley and coverage claims thereby frustrating its goal of terminating

all aspects of the Valley litigation. Better to leave unknown, potential future claims

relating to clean room cases for another day. It was in the interest of all parties to

fight the clean room claims at a later time, if ever.”

¶ 94 The court ultimately concluded:

“Each Defendant knew which policy of insurance was involved in the Valley

litigation and under which Plaintiff claimed coverage. Each party knew the limits of

each policy and to what extent each policy was or would be impacted at the time of

their negotiations and going forward. Although the Defendants may have desired a

‘full policy buyout’ Motorola never agreed to same. There is no persuasive testimony

to support an inference or conclusion that Motorola would have agreed to a full policy

buyout especially where it would not forego coverage for claims it could not

reasonably anticipate or intelligently price. Given the sophistication of the

Defendants, had it been the intention of the parties to forever terminate either

Defendant’s obligations under specific policies, either could have simply and directly

36 Nos. 1-13-1529, 1-13-1530 (cons.)

stated in the Release a clear, definite provision listing each specific policy issued in

favor of Plaintiff and the fact of termination thereof upon execution of the Release.

This glaring omission supports the inference that there was no agreement or

contemplation by the parties to include the clean room cases within the scope of

either Release.”

Accordingly, the trial court entered judgment in favor of Motorola on each defendant’s

affirmative defense and counterclaim concerning the applicability of the release.

¶ 95 VI. Posttrial Proceedings

¶ 96 On February 13, 2013, defendants filed a motion before Judge Margaret Brennan for a

finding under Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010). On March 14, 2013,

defendants also filed a motion to stay the proceedings pending resolution of an appeal on the

release issue.

¶ 97 On April 12, 2013, Motorola filed a motion for summary judgment against defendants on

the issue of whether defendants had a duty to defend Motorola in the clean room litigation

and also sought to stay litigation over coverage defenses pending a resolution of the clean

room cases.

¶ 98 On May 6, 2013, the trial court granted defendants’ motions and found that there was no

just reason to delay enforcement of or appeal from the court’s orders of April 13, 2012,

December 10, 2012, and January 31, 2013, and also ordered that no further proceedings of

any nature would take place pending the resolution of defendants’ appeal. This appeal

follows.

37 Nos. 1-13-1529, 1-13-1530 (cons.)

¶ 99 ANALYSIS

¶ 100 On appeal, defendants claim that the trial court erred in not granting summary judgment

in their favor and erred in finding that the claims had not been released after a bench trial.

Additionally, defendants claim that the trial court erred in denying their joint motion to

compel discovery of the CRSP Notebook.

¶ 101 I. Summary Judgment

¶ 102 Defendants first claim that the trial court erred in not granting summary judgment in their

favor. Defendants argue that the trial court should have found the releases to be

unambiguous, instead of finding them to be ambiguous as to the meaning of the term

“environmental/toxic tort claims” and setting the issue for trial. A trial court is permitted to

grant summary judgment only “if the pleadings, depositions, and admissions on file, together

with the affidavits, if any, show that there is no genuine issue as to any material fact and that

the moving party is entitled to a judgment as a matter of law.” 735 ILCS 5/2-1005(c) (West

2010). The trial court must view these documents and exhibits in the light most favorable to

the nonmoving party. Home Insurance Co. v. Cincinnati Insurance Co., 213 Ill. 2d 307, 315

(2004). We review a trial court’s decision to grant a motion for summary judgment de novo.

Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992). De novo

consideration means we perform the same analysis that a trial judge would perform. Khan v.

BDO Seidman, LLP, 408 Ill. App. 3d 564, 578 (2011).

¶ 103 “Summary judgment is a drastic measure and should only be granted if the movant’s right

to judgment is clear and free from doubt.” Outboard Marine Corp., 154 Ill. 2d at 102.

However, “[m]ere speculation, conjecture, or guess is insufficient to withstand summary

judgment.” Sorce v. Naperville Jeep Eagle, Inc., 309 Ill. App. 3d 313, 328 (1999). A

38 Nos. 1-13-1529, 1-13-1530 (cons.)

defendant moving for summary judgment bears the initial burden of proof. Nedzvekas v.

Fung, 374 Ill. App. 3d 618, 624 (2007). The defendant may meet his burden of proof either

by affirmatively showing that some element of the case must be resolved in his favor or by

establishing “ ‘that there is an absence of evidence to support the nonmoving party’s case.’ ”

Nedzvekas, 374 Ill. App. 3d at 624 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325

(1986)). In other words, there is no evidence to support the plaintiff’s complaint.

¶ 104 “ ‘The purpose of summary judgment is not to try an issue of fact but *** to determine

whether a triable issue of fact exists.’ ” Schrager v. North Community Bank, 328 Ill. App. 3d

696, 708 (2002) (quoting Luu v. Kim, 323 Ill. App. 3d 946, 952 (2001)). We may affirm on

any basis appearing in the record, whether or not the trial court relied on that basis or its

reasoning was correct. Ray Dancer, Inc. v. DMC Corp., 230 Ill. App. 3d 40, 50 (1992).

¶ 105 A release “ ‘is the abandonment of a claim to the person against whom the claim

exists.’ ” Thornwood, Inc. v. Jenner & Block, 344 Ill. App. 3d 15, 21 (2003) (quoting Hurd v.

Wildman, Harrold, Allen & Dixon, 303 Ill. App. 3d 84, 88 (1999)); Fuller Family Holdings,

LLC v. Northern Trust Co., 371 Ill. App. 3d 605, 614 (2007). It is a contract and is therefore

governed by contract law. Farm Credit Bank of St. Louis v. Whitlock, 144 Ill. 2d 440, 447

(1991) (citing Polo National Bank v. Lester, 183 Ill. App. 3d 411, 414 (1989)). Where a

contract is clear and explicit, a court must enforce it as written, and the meaning of the

contract, as well as the intention of the parties, must be gathered from the document without

the assistance of extrinsic aids. Rakowski v. Lucente, 104 Ill. 2d 317 (1984); Fuller Family,

371 Ill. App. 3d at 614; Shultz v. Delta-Rail Corp., 156 Ill. App. 3d 1, 10 (1987). However, if

the language of the contract is susceptible to more than one meaning, it is ambiguous.

Thompson v. Gordon, 241 Ill. 2d 428, 441 (2011). If the contract language is ambiguous, a

39 Nos. 1-13-1529, 1-13-1530 (cons.)

court can consider extrinsic evidence to determine the parties’ intent. Thompson, 241 Ill. 2d

at 441.

¶ 106 In the case at bar, the trial court found the term “environmental/toxic tort claim” to be

ambiguous and set the matter for trial to determine whether the clean room cases were

encompassed by the scope of the release. Defendants argue that the trial court should have

granted their motions for summary judgment because the unambiguous language of the

releases demonstrated that the clean room cases were released. Under the releases,

“environmental/toxic tort claim” was a term that was defined to mean:

“any past, present and future Claim involving Motorola, whether presently known,

unknown or unknowable, involving actual, alleged, threatened or potential property

damage (or injury to property or damage to natural resources including but not

limited to ‘NRD’ or ‘natural resource damages’), bodily injury (including sickness,

disease, disability or death at any time resulting therefrom), mental injury, mental

anguish, shock, emotional distress, fear of injury (including Claims seeking medical

monitoring or damages for care and loss of services), personal injury and claims to

recover clean-up or remediation costs (including but not limited to costs incurred and

sums expended, or which may in the future be incurred or expended for investigation,

removal, distribution, treatment or containment), involving actual, alleged, threatened

or potential environmental pollution, environmental contamination or other injurious

environmental conditions, including exposure to smoke, vapors, soot, fumes, acids,

alkalis, toxic chemicals, liquids or gases, waste materials or other environmental

contaminants or pollutants, petroleum or natural gas or derivatives thereof, including

without limitation, any hazardous waste as defined in 42 U.S.C. § 9601 or any

40 Nos. 1-13-1529, 1-13-1530 (cons.)

substance regulated now or in the future by any government entity to protect human

health or the environment from injury, damage or contamination.”

Defendants claim that the clean room cases fall under “other injurious environmental

conditions, including exposure to *** toxic chemicals, liquids or gases, *** including ***

any substance regulated now or in the future by any government entity to protect human

health or the environment from injury, damage or contamination.” By contrast, Motorola

argues that the injuries in the clean room cases do not involve “other injurious environmental

conditions,” because there was no release of a substance into the environment as would be

present in a traditional environmental claim.

¶ 107 We agree with defendants that it is reasonable to interpret the releases to encompass clean

room claims. However, we also agree with the trial court’s conclusion that it is unclear

whether the definition of “environmental/toxic tort claims” necessarily encompasses the

clean room claims. Since the language is susceptible to more than one meaning, it is

ambiguous. See Thompson, 241 Ill. 2d at 441. Accordingly, the trial court did not err in

denying summary judgment.

¶ 108 Defendants’ argument that the releases are unambiguous is based on: (1) dictionary

definitions of the word “environmental”; (2) inclusion of “literally all government entities”

(emphasis omitted) in the definition, thereby making clear the releases’ broad scope; and (3)

the carveouts present in the definition of “environmental/toxic tort claim.” Defendants also

claim that there is nothing in the releases limiting environmental claims to outdoor claims.

¶ 109 First, defendants point to several dictionary definitions that they claim support their

reading of the term “environmental.” To give words their plain, ordinary, and popular

meanings, it is proper to consult a dictionary. See Founders Insurance Co. v. Munoz, 237 Ill.

41 Nos. 1-13-1529, 1-13-1530 (cons.)

2d 424, 436 (2010); Valley Forge Insurance Co. v. Swiderski Electronics, Inc., 223 Ill. 2d

352, 366 (2006). Thus, defendants point to dictionary definitions indicating that

“environment” is a broad term encompassing the general circumstances surrounding an

individual. For instance, Merriam-Webster’s dictionary defines “environment” as “the

circumstances, objects, or conditions by which one is surrounded.” Merriam-Webster Online

Dictionary, http://www.merriam-webster.com/dictionary/environmental (last visited May 27,

2015). See also MacMillan Dictionary, http://www.macmillandictionary.com/us/dictionary/

american/environment (last visited May 27, 2015) (defining “environment” as “the place in

which people live and work, including all the physical conditions that affect them”).

However, defendants’ dictionary definitions are not the only definitions of the term

“environment.” For instance, MacMillan’s dictionary also defines “environment” as “the

natural world, including the land, water, air, plants, and animals, especially considered as

something that is affected by human activity.” MacMillan Dictionary,

http://www.macmillandictionary.com/us/dictionary/american/environment (last visited May

27, 2015). See also The American Heritage Dictionary of the English Language,

https://www.ahdictionary.com/word/search.html?q=environment (5th ed. 2014) (defining

“environment” as “[t]he totality of the natural world, often excluding humans”). Thus, simply

looking at dictionary definitions does not provide a clear answer as to whether the clean

rooms were “environments” for purposes of the releases.

¶ 110 Defendants also argue that the releases’ broad language indicates that clean room cases

were covered. Defendants point to the releases’ language that covered injuries due to

exposure to “any substance regulated now or in the future by any government entity to

protect human health or the environment from injury, damage or contamination.” In its brief,

42 Nos. 1-13-1529, 1-13-1530 (cons.)

Associated argues that “[t]he inclusion of literally all government entities reflects just how

broad the Release was intended to be, and indicates, beyond question, that it encompasses

chemical exposure claims involving substances regulated by OSHA to protect workers from

harm in workplace environments, which of course the clean rooms were (and are).”

(Emphasis in original.) However, as Motorola notes, the broad language of the release is

limited by the requirement that the injury must involve “injurious environmental conditions.”

Thus, it would still be only exposure to a substance regulated by a government entity

occurring in injurious environmental conditions that would be covered by the release. The

language cited by defendants does not shed any light on the meaning of the term

“environmental” itself. If anything, it cuts against their argument, because a broad reading of

“environmental” coupled with the inherent broadness of “any substance regulated now or in

the future by any government entity” would result in the release of claims involving, in

Motorola’s words, “any type of exposure, anywhere, through any means.” “[W]hen parties

agree to and insert language into a contract, it is presumed that it was done purposefully, so

that the language employed is to be given effect.” Thompson, 241 Ill. 2d at 442. Thus, the

term “environmental” must be some sort of limitation. At best, the broadness of the language

remains unclear.

¶ 111 Finally, defendants point to the carveouts for asbestos, cell phones, and products liability

as evidence that indoor claims are contemplated under the releases. The releases, in addition

to the definition of “environmental/toxic tort claim” in subpart (i) of the definition, included

two additional subparts providing:

“ii. ‘Environmental/Toxic Tort Claim(s)’ shall include Claims asserted under

CERCLA, RCRA or equivalent state statutes or common law, whether at law or

43 Nos. 1-13-1529, 1-13-1530 (cons.)

equity, and whether sounding in tort, contract, equity, nuisance, trespass, negligence

or strict liability. ‘Environmental/Toxic Tort Claim(s)’ further includes, but is not

limited to, demands for costs incurred and sums expended, or which may in the future

be incurred or expended, for investigation, removal, distribution, treatment or

containment of environmental contamination, or incurred in relation to environmental

clean-up or remediation costs, whether known or unknown, including but not limited

to Claims involving the properties or operations of Motorola.

iii. The term ‘Environmental/Toxic Tort Claim’ shall not include any past, present

a. alleging or involving injury or damage caused or allegedly caused by or

arising from a product sold by Motorola, a product containing materials sold by

Motorola, or a product that contains component parts manufactured by Motorola,

including but not limited to two-way radios, cellular telephones, or any product

that utilizes or emits RF radiation, in which such injury or damage occurs or is

alleged to have occurred after the product or component part has been sold by

Motorola or after such product or component part has left Motorola’s possession,

custody, or control, and before the product has become a waste product or become

b. alleging or involving injury or damage caused or allegedly caused by,

arising from or related in any way to asbestos or asbestos-containing materials.”

Defendants specifically point to the carveouts of subpart (iii) to argue that the releases

contained a broad reading of the term “environmental.” They argue that the releases must

44 Nos. 1-13-1529, 1-13-1530 (cons.)

encompass indoor claims because, otherwise, there would have been no need to carve out

asbestos and cell phone claims, both of which involve indoor exposure.

¶ 112 “A court will not interpret a contract in a manner that would nullify or render provisions

meaningless, or in a way that is contrary to the plain and obvious meaning of the language

used.” Thompson, 241 Ill. 2d at 442. Thus, defendants correctly note that there must be some

meaning behind the inclusion of the carveouts, and their argument that the carveouts support

a reading of the term “environmental” that would encompass indoor claims is a reasonable

one. However, there is also a reasonable interpretation of the presence of the carveouts that

would not lead to defendants’ desired result. As Motorola notes, subparts (ii) and (iii) can be

read as examples of claims that are encompassed by the release and claims that are not

encompassed by the release, respectively. Subpart (ii) makes clear that certain types of

claims are encompassed by the release. Associated explains in its brief that at the time the

releases were executed, “there was substantial litigation over how costs incurred in response

to government demand letters/claims for equitable relief should be treated under insurance

policies,” and that “far from being meaningless or redundant, Section 1(B)(ii) clarified

Section 1(B)(i), which made no specific reference at all to CERCLA, RCRA, or other such

statutes, and the special issues they present.” Thus, subpart (ii) took claims that may have

otherwise been questionable, and expressly encompassed them under the release. Similarly,

subpart (iii) can be read as taking claims that may have otherwise been questionable, and

expressly excluded them from the release. In other words, while defendants’ interpretation is

reasonable, it is also reasonable to interpret subparts (ii) and (iii) as providing clarification on

claims that may otherwise have been the source of disagreement between the parties. Thus,

the presence of the carveouts does not resolve any ambiguity.

45 Nos. 1-13-1529, 1-13-1530 (cons.)

¶ 113 Pulling together all of their arguments, defendants additionally argue that nothing in the

releases limits them to outdoor claims. However, at oral argument, Motorola made clear in

no uncertain terms that the indoor/outdoor distinction is not at issue; instead, the issue is

whether there was an environmental release. We agree with Motorola that the issue is not

whether the claim was an indoor claim or an outdoor claim, but the issue instead is how

broadly the term “environmental” is construed. That term controls the scope of the release

and it is that term that is ambiguous.

¶ 114 Defendants also make several arguments concerning the specific reasoning of the trial

court. However, “[d]e novo review is completely independent of the trial court’s decision,”

and a reviewing court does not need to defer to the trial court’s judgment or reasoning.

Platinum Partners Value Arbitrage Fund, Ltd. Partnership v. Chicago Board Options

Exchange, 2012 IL App (1st) 112903, ¶ 12. As demonstrated above, we have engaged in our

own analysis of the releases’ language and have come to the same conclusion as the trial

court. Accordingly, we have no need to discuss the particular reasoning employed by the trial

court.

¶ 115 In interpreting a contract, “a court initially looks to the language of a contract alone.” Air

Safety, Inc. v. Teachers Realty Corp., 185 Ill. 2d 457, 462 (1999). “If the language of the

contract is facially unambiguous, then the contract is interpreted by the trial court as a matter

of law without the use of parol evidence.” Air Safety, 185 Ill. 2d at 462. “If, however, the trial

court finds that the language of the contract is susceptible to more than one meaning, then an

ambiguity is present.” Air Safety, 185 Ill. 2d at 462. In the case at bar, examining the

language of the releases alone, the trial court determined that the definition of

“environmental/toxic tort claim” was susceptible to more than one meaning and that the

46 Nos. 1-13-1529, 1-13-1530 (cons.)

releases were ambiguous. After conducting a de novo review of the releases, we agree with

the trial court that the releases were ambiguous and that the trial court properly denied

defendants’ motions for summary judgment and set the issue for trial.

¶ 116 II. Trial

¶ 117 Defendants next argue that the trial court’s finding that the release did not encompass the

clean room claims was against the manifest weight of the evidence. Where ambiguity in a

contract exists, “the trial court’s determination of the intent of the parties must not be

disturbed on review unless it is contrary to the manifest weight of the evidence.” Bradley

Real Estate Trust v. Dolan Associates Ltd., 266 Ill. App. 3d 709, 712 (1994). “A factual

finding is against the manifest weight of the evidence if the opposite conclusion is plainly

evident, or where the decision is unreasonable, arbitrary or without a basis in the evidence.”

Asset Recovery Contracting, LLC v. Walsh Construction Co. of Illinois, 2012 IL App (1st)

101226, ¶ 74.

¶ 118 “As the trier of fact, the trial judge was in a superior position to judge the credibility of

the witnesses and determine the weight to be given to their testimony.” Chicago’s Pizza, Inc.

v. Chicago’s Pizza Franchise Ltd. USA, 384 Ill. App. 3d 849, 859 (2008). In reviewing the

trial court’s findings, “ ‘[i]t is not enough to show that there is sufficient evidence to support

a contrary judgment.’ ” Ceres Illinois, Inc. v. Illinois Scrap Processing, Inc., 114 Ill. 2d 133,

142 (1986) (quoting People ex rel. Lauth v. Wilmington Coal Co., 402 Ill. 161, 167 (1949)).

Instead, “[w]hen contradictory testimony that could support conflicting conclusions is given

at a bench trial, an appellate court will not disturb the trial court’s factual findings based on

that testimony unless a contrary finding is clearly apparent.” Chicago’s Pizza, 384 Ill. App.

3d at 859. “Even where [a party’s] testimony in a bench trial was uncontradicted, the trial

47 Nos. 1-13-1529, 1-13-1530 (cons.)

court was not required to give credence to or accept that testimony as establishing any fact in

issue.” Gonet v. Chicago & North Western Transportation Co., 195 Ill. App. 3d 766, 776

(1990). “It is the trial court’s prerogative to draw reasonable inferences and ultimate

conclusions from the evidence [citation], and its judgment will not be disturbed because

another trier of fact could have found differently or found reasonable other conclusions.”

Gonet, 195 Ill. App. 3d at 776. “The court will not upset determinations of facts, credibility

of witnesses or weight to be given testimony unless those determinations are manifestly

against the weight of the evidence.” Gonet, 195 Ill. App. 3d at 776.

¶ 119 In the case at bar, although the releases they executed were substantively identical,

Motorola engaged in very different negotiations with Associated and Zurich. Accordingly,

we discuss each defendant separately for purposes of considering whether the trial court’s

factual findings concerning the parties’ intent were against the manifest weight of the

evidence.

¶ 120 A. Associated

¶ 121 Associated claims that the trial court’s findings were against the manifest weight of the

evidence (1) because the trial court based its decision on a factual finding that was not

supported by the evidence and (2) because the trial court applied an inappropriate legal

analysis and failed to resolve the issue before it.

¶ 122 Associated first claims that “the Trial Court premised its five paragraph decision entirely

on a finding that both parties knew about the possibility for clean room claims against

Motorola and, for reasons about which the Trial Court speculated, chose not to discuss

them.” We do not find this argument persuasive. The trial court’s written opinion indicates

that it found that “[a]ll parties, Plaintiff and Defendants, were aware that IBM had been the

48 Nos. 1-13-1529, 1-13-1530 (cons.)

subject of clean room claims starting in the [sic] mid-1990.” This fact is uncontroverted;

Billeter, Associated’s witness, testified that Shirley Shean, who participated in the

Associated-Motorola negotiations, handled clean room cases for IBM at the time of the

execution of the release. From this fact, the trial court arguably inferred that the parties

would have been aware of the possibility that such claims would also affect Motorola. “It is

the trial court’s prerogative to draw reasonable inferences” (Gonet, 195 Ill. App. 3d at 776),

and we cannot find that the trial court’s inference here, if one was made at all, was

unreasonable. IBM was a competitor of Motorola engaged in the same type of business, and

it was reasonable for the trial court to infer that Associated would have been aware of the

possibility that Motorola would face the same kinds of liability claims as IBM had. We

cannot find that this would render the trial court’s decision against the manifest weight of the

¶ 123 Associated also argues that the trial court applied the wrong legal analysis because it

focused on whether the clean room cases were within the parties’ contemplation instead of

determining whether the definition of “environmental/toxic tort claim” encompassed the

interior of Motorola’s workplace. Associated argues that “a particular claim need not have

been specifically contemplated or discussed by the parties to be encompassed by the release;

rather[,] it need only fall within one of the categories that were contemplated by the parties.”

We do not find this argument persuasive.

¶ 124 In support of its argument, Associated relies on our decision in Goodman v. Hanson, 408

Ill. App. 3d 285 (2011). In that case, we considered the issue of “whether unknown claims

that fall within the specific terms of a general release are barred by the release.” Goodman,

408 Ill. App. 3d at 294. The release in that case barred “ ‘any and all claims and matters that

49 Nos. 1-13-1529, 1-13-1530 (cons.)

have been asserted in the Litigation or that could have been asserted in the Litigation, and

any and all claims arising out of or in any way related to the obligations, duties and

management or administration of the Estate and/or Trust.’ ” Goodman, 408 Ill. App. 3d at

289. The question presented to us was whether a malpractice claim based on the defendant’s

failure to take certain deductions in a federal estate tax return was barred by the release.

Goodman, 408 Ill. App. 3d at 288-89. After conducting an analysis of the relevant case law,

we concluded that the claim was barred by the release, noting that “although the parties may

not have contemplated claims specifically based on the Federal return, the terms of the

release indicate that they contemplated (1) there were matters that were not asserted in the

first lawsuit that could have been and (2) claims related to the ‘obligations, duties and

management or administration of the Estate and/or Trust.’ Both of these categories include

the claims based on the Federal return, and accordingly, those claims are barred.” Goodman,

408 Ill. App. 3d at 297.

¶ 125 Goodman is inapposite to the instant case. As noted, in that case, there was no question

that the claims asserted fell within the terms of the release. The only question was whether

the fact that they were unknown at the time of the release’s execution had any effect on the

applicability of the release. Here, by contrast, the question that the trial court had to resolve

was whether the clean room cases fell within the definition of “environmental/toxic tort

claims.” The trial court concluded that they did not, based on the parties’ negotiation history.

¶ 126 While it would have been equally proper for the trial court to have stated the question

more broadly, we can find no error in its choosing to limit its holding to answering the

narrow question presented by the facts before it: whether the clean room cases in particular

were covered by the release. The trial court expressly stated that it “weighed and considered

50 Nos. 1-13-1529, 1-13-1530 (cons.)

the testimony of the witnesses, judged their credibility by taking into account their manner

and demeanor while testifying and, further, considered the reasonableness of their testimony

in light of all the admissible evidence together with the exhibits offered and admitted into

evidence.” It also referenced the parties’ negotiation history in its analysis, specifically

noting that Associated was seeking a full policy buyout while Motorola was unwilling to

release cell phone, asbestos, or product liability claims because it could not quantify its

exposure. We cannot find that the trial court’s conclusion that the clean room cases were not

encompassed by the release to be “unreasonable, arbitrary or without a basis in the evidence”

(Asset Recovery Contracting, LLC, 2012 IL App (1st) 101226, ¶ 74), and, accordingly, affirm

the trial court’s judgment in favor of Motorola.

¶ 127 B. Zurich

¶ 128 In addition to some of the same arguments raised by Associated, which we will not repeat

here, Zurich argues that the trial court’s finding was against the manifest weight of the

evidence because (1) the trial court ignored evidence that the Valley litigation resolved

claims involving indoor exposures, (2) the trial court ignored evidence of Motorola’s and

Zurich’s course of dealings on the intended meaning of the term “environmental,” and (3) the

trial court disregarded evidence that Motorola itself treated clean room claims as

environmental claims.

¶ 129 As an initial matter, as noted, Zurich’s arguments are based on the trial court “ignor[ing]”

or “disregard[ing]” certain evidence. However, all of the evidence that Zurich points to was

presented during the bench trial, and the court’s opinion expressly stated that it “weighed and

considered the testimony of the witnesses, judged their credibility by taking into account

their manner and demeanor while testifying and, further, considered the reasonableness of

51 Nos. 1-13-1529, 1-13-1530 (cons.)

their testimony in light of all the admissible evidence together with the exhibits offered and

admitted into evidence.” The fact that the trial court did not expressly mention the pieces of

evidence Zurich cites does not mean that the trial court did not consider it.

¶ 130 Zurich first argues that the trial court’s order “fails even to acknowledge the evidence

admitted at trial that the Valley Litigation involved both indoor and outdoor environment

exposures.” However, as noted, the relevant question was not whether the release

encompassed both indoor and outdoor claims since, as Zurich notes, it is undisputed that

several of the Valley cases involved claims of drinking contaminated groundwater inside the

plaintiffs’ homes. Instead, the question was whether Motorola’s clean rooms constituted

“environments” under the release. Thus, Zurich’s argument offers no support to its claim that

the trial court’s decision was against the manifest weight of the evidence.

¶ 131 Next, Zurich argues that the trial court ignored the unimpeached evidence at trial that

Motorola knew that Zurich treated the Valley litigation, cell phone suits, and asbestos suits as

environmental claims under the purview of its environmental claims unit. However, as

Motorola notes, the trial court was entitled to give Zurich’s internal organizational

nomenclature little weight in the context of interpreting the Zurich release, and we will not

reweigh the evidence. Moreover, “[e]ven where [a party’s] testimony in a bench trial [is]

uncontradicted, the trial court [is] not required to give credence to or accept that testimony as

establishing any fact in issue.” Gonet, 195 Ill. App. 3d at 776. We cannot find that the trial

court’s failure to mention this fact renders its decision against the manifest weight of the

¶ 132 We also note that this was not the only evidence of the course of dealings between

Motorola and Zurich. Instead, there was also evidence of the parties’ negotiations leading to

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the execution of the release. Pearson, who represented Zurich, testified that for the second

mediation session in November 2003, Zurich requested a release concerning the Valley sites

and 56 related sites. Motorola suggested a release also concerning the Valley sites and 56

related sites, but with an exception for asbestos and cell phone claims. Motorola also

provided Zurich a copy of the Associated release, which Pearson considered to be “much

broader” in scope; however, Pearson did not discuss his interpretation with anyone at

Motorola. Instead, in a letter attached to the Associated release, Foradas, on behalf of

Motorola, stated that “under the deal we have with [Associated], they paid Motorola 6

million for a comparable environmental release to the one that Mr. Pearson and I had just

said we’d be interested in doing.” Thus, Zurich was informed that Motorola considered the

Associated release to be a “comparable environmental release” to the scope of release that

Pearson and Foradas had been discussing. The scope of the release was not discussed further

between the parties, with the only negotiation being over the dollar amounts at issue.

¶ 133 Finally, Zurich argues that the trial court ignored evidence that Motorola itself considered

clean room claims to be environmental claims. However, again, the trial court was permitted

to give little weight to Motorola’s use of the term in various contexts in light of the language

of the release and the negotiating history between the parties. Furthermore, there is no

indication that Zurich was aware of Motorola’s use of the term. As Zurich itself points out,

“[o]nly the overt acts of the parties and the communications between them may be

considered in determining whether and upon what terms they have entered into a contract.”

American College of Surgeons v. Lumbermens Mutual Casualty Co., 142 Ill. App. 3d 680,

693 (1986). See also Carey v. Richards Building Supply Co., 367 Ill. App. 3d 724, 727

(2006) (“undisclosed intentions are not relevant”). Accordingly, we cannot find that the trial

53 Nos. 1-13-1529, 1-13-1530 (cons.)

court’s finding that the clean room cases were not encompassed by the Zurich release to be

against the manifest weight of the evidence and affirm the judgment of the trial court.

¶ 134 III. Motion to Compel

¶ 135 Finally, defendants argue that the trial court erred in denying their motion to compel

discovery of the CSRP Notebook. As part of discovery, defendants filed a motion to compel

the production of a document entitled the “CSRP Reference Notebook (Environmental),”

which they claimed would be relevant to show that Motorola considered clean room claims

to be “environmental.” The document was allegedly a compilation of memoranda drafted by

a number of environmental and toxic tort attorneys working under Motorola’s environmental,

health, and safety group beginning in 1996, concerning a defense strategy for anticipated

litigation over environmental chemical exposure in Motorola’s clean rooms after IBM, a

competitor of Motorola, had been sued for injuries and birth defects to children of employees

and contractors who worked in IBM’s clean room facilities. Motorola refused to produce the

documents, arguing that the attorney-client privilege and work product doctrine applied. On

November 28, 2012, the trial court ordered Motorola to produce the notebook to the court for

in camera review, after which the court would “rule on whether the CRSP Notebook is

relevant.”

¶ 136 On December 10, 2012, at the beginning of trial, the trial court ruled on defendants’

motion to compel production of the CRSP notebook. The court stated:

“On the first topic with respect to the motion to compel, I reviewed the

compilation of documents that are referred to as the CRSP notebook which is the

54 Nos. 1-13-1529, 1-13-1530 (cons.)

The defendants moved to have the notebook[,] I’ll refer to it as[,] produced in

discovery. The plaintiff objected on the grounds of attorney-client privilege and work

The Court is going—and I did review the manual. I find it to be privileged

information both as far as attorney-client matters and as to—and also that it is perhaps

Additionally, I’m ruling that it’s not relevant to the issue before the Court today

which is why we are here, and that is to determine what the phrase ‘environmental

toxic tort’ means as used in the two releases in question in this declaratory action

I don’t think work product or attorney-client information that was generated at

least several years prior to the execution of this release is relevant to the Court’s

inquiry as to what the parties intended, what the parties meant and what they agreed

to with respect to the term ‘environmental toxic tort’ in the context of the

circumstances surrounding the execution of the questioned releases. So with that,

Now, that is not to say that a different ruling might—and I emphasize ‘might’—

be appropriate if this were an underlying declaratory judgment action on the issue of

whether there was either a duty to defend or a duty to indemnify.

I know ultimately, that’s the bone of contention between the parties, but at this

juncture, the issue is what did the release that was executed in 2003 mean, what did

the parties want it to mean and what did they bargain for and what did they get when

55 Nos. 1-13-1529, 1-13-1530 (cons.)

¶ 137 On appeal, defendants argue that the trial court’s denial of their motion to compel was

legally erroneous and prejudicial. Defendants argue that (1) the trial court did not apply the

correct standard for relevance and (2) the notebook fell within the proper scope of discovery.

Defendants also argue that the trial court erred in finding the documents shielded by the

attorney-client privilege and the work product doctrine. We do not find these arguments

persuasive.

¶ 138 Defendants first argue that the trial court erred by applying the standard for relevance for

admissible evidence, as opposed to the standard for relevance for discovery. Illinois Supreme

Court Rule 201(b)(1) (eff. July 1, 2002) authorizes broad discovery “regarding any matter

relevant to the subject matter involved in the pending action.” “Traditionally, the trial court is

accorded great latitude in determining the scope of discovery, as discovery presupposes a

range of relevance and materiality which includes not only what is admissible at trial, but

also that which leads to what is admissible at trial.” D.C. v. S.A., 178 Ill. 2d 551, 561 (1997).

A trial court’s rulings on discovery matters “will not be disturbed on appeal absent a manifest

abuse of discretion.” Reda v. Advocate Health Care, 199 Ill. 2d 47, 54 (2002). A court abuses

its discretion “when its ruling ‘is arbitrary, fanciful, unreasonable, or where no reasonable

person would take the view adopted by the trial court.’ ” Taylor v. County of Cook, 2011 IL

App (1st) 093085, ¶ 23 (quoting People v. Caffey, 205 Ill. 2d 52, 89 (2001)). This standard of

review is “highly deferential” to the trial court. Taylor, 2011 IL App (1st) 093085, ¶ 23.

¶ 139 In the case at bar, there is no evidence that the trial court failed to apply the standard for

relevance in discovery matters. The court made it clear that the CSRP Notebook was sought

to be produced in discovery, and the court found it not to be relevant after an in camera

56 Nos. 1-13-1529, 1-13-1530 (cons.)

review. We will not presume that the trial court applied the wrong standard in the absence of

any evidence that it did so.

¶ 140 Furthermore, we cannot find that the trial court abused its discretion in denying

defendants’ motion to compel. Defendants argue that the notebook demonstrated that

Motorola’s own environmental, health, and safety group considered clean room claims to be

environmental claims. Zurich additionally argues that “[w]hat Motorola knew about the clean

room risk at the time of settlement, how it treated that risk as environmental, and why it did

not carve out those claims is essential evidence and, thus, is relevant.” However, with respect

to Zurich’s point, there is no indication that any of these documents would have shed light on

Motorola’s knowledge at the time of settlement, as they were compiled prior to the

settlement negotiations; the trial court also found that Motorola knew of the possibility of

clean room claims, so the notebook would not add anything to that aspect. Additionally, as

noted, Motorola’s internal characterization of clean room claims several years before

entering into settlement negotiations with either defendant is not relevant to the issue of

whether those claims were released because there is no indication that this characterization

was ever shared with defendants. “[T]he pertinent inquiry [in interpreting a contract] focuses

upon the objective manifestations of the parties, including the language they used in the

contract.” Carey, 367 Ill. App. 3d at 727. Thus, “undisclosed intentions are not relevant.”

Carey, 367 Ill. App. 3d at 727. The relevant information for interpreting the scope of the

releases was the negotiations between the parties and the information shared between them.

We cannot find the trial court abused its discretion by denying defendants’ motion to compel.

¶ 141 Moreover, we note that the trial court had the opportunity to review the notebook in

camera prior to its ruling on the motion to compel. Thus, the court had the opportunity to

57 Nos. 1-13-1529, 1-13-1530 (cons.)

examine whether the documents contained in the notebook were relevant or would lead to

relevant information. Armed with this additional knowledge of the contents of the documents

defendants sought to discover, we cannot find that the trial court’s determination that these

documents were not relevant was an abuse of discretion.

¶ 142 Since we have determined that the trial court did not abuse its discretion in denying

defendants’ motion to compel on the basis of relevance, we have no need to consider whether

the documents were also shielded from discovery by the attorney-client privilege and the

work product doctrine.

¶ 143 CONCLUSION

¶ 144 For the reasons set forth above, we find that: (1) the trial court did not err in denying

defendants’ motions for summary judgment and finding the releases to be ambiguous; (2) the

trial court’s finding that the releases did not encompass clean room claims was not against

the manifest weight of the evidence; and (3) the trial court did not abuse its discretion in

denying defendants’ motion to compel the production of the CRSP Notebook.

¶ 145 Affirmed.