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Cincinnati Ins. Co. v. H.D. Smith Wholesale Drug Co.

United States District Court for the Central District of Illinois, Springfield Division

September 23, 2019, Decided; September 26, 2019, Filed

Case No. 12-3289

Opinion

 [*923]  RICHARD MILLS, United States District Judge:

This is an insurance coverage dispute which at this stage concerns whether Cincinnati Insurance Company has an obligation to indemnify H.D. Smith for a $3.5 million settlement it entered into in an underlying lawsuit.

Both parties have filed motions for summary judgment.

I. INTRODUCTION

Plaintiff and Counterclaim Defendant Cincinnati Insurance Company ("Cincinnati") filed this action, seeking a declaration regarding insurance coverage sought by Defendant and Counterclaim Plaintiff H.D. Smith Wholesale Drug Company n/k/a H.D. Smith, L.L.C., in connection with an underlying lawsuit brought against it by the State of West Virginia ex rel. Darrell V. McGraw, Attorney General ("the underlying lawsuit" or "West Virginia lawsuit"). The underlying lawsuit, styled as State of West Virginia v. Amerisourcebergen Drug Corporation [**2]  et al., Civil Action No. 12-C-141, was originally filed in June 2012 in the Circuit Court of Boone County, West Virginia.

The current phase of the litigation involves what H.D. Smith claims is Cincinnati's obligation to indemnify H.D. Smith for a $3.5 million settlement it entered into in the underlying lawsuit. Cincinnati denies that it owes coverage to H.D. Smith for its settlement of the underlying lawsuit, denies that it breached any obligations to H.D. Smith in connection with the underlying lawsuit, and denies that it acted unreasonably at any time or that it is liable in any way for damages under 215 ILCS 5/155.

II. FACTUAL BACKGROUND

A. Cincinnati policies

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410 F. Supp. 3d 920 *; 2019 U.S. Dist. LEXIS 165129 **; 2019 WL 4727039

CINCINNATI INSURANCE COMPANY, Plaintiff and Counterclaim Defendant, v. H.D. SMITH WHOLESALE DRUG COMPANY, n/k/a H.D. SMITH, L.L.C., Defendant and Counterclaim Plaintiff.

Prior History: Cincinnati Ins. Co. v. H.D. Smith Wholesale Drug Co., 2015 U.S. Dist. LEXIS 100823 (C.D. Ill., July 28, 2015)

CORE TERMS

settlement, underlying lawsuit, damages, insured, bodily injury, settle, controlled substance, alleges, covered claim, duty to defend, coverage, second amended complaint, summary judgment, discovery, reasonable anticipation, primary focus, settlement amount, policies, contends, costs, defense costs, indemnify, counterclaim, duty to indemnify, insurance policy, lawsuit, summary judgment motion, settlement discussions, prescription, distributed