No "magic words" needed for targeted tender
In State Auto Property & Cas. Ins. Co. v. Springfield Fire & Cas. Co. (Ill. App. 4th Dist., 9-30-09), the court found that where an insured deselects a carrier, pursuant to John Burns Constr. Co. v. Indiana Ins. Co., 189 Ill.2d 570 (2000), it need not make a "targeted tender" to the selected carrier; it need only "file its claim for coverage with [the selected carrier].'
Swearingen Brothers was the named insured on a GL policy with State Auto and a policy with Springfield for the project at issue, where one worker was injured and another was killed. The insured tendered to State Auto, which sought a declaratory judgment that its policy would be excess to Springfield's based on the "other insurance" clauses. The trial court granted Springfield's motion to dismiss based on Burns.
On appeal, State Auto argued that the Burns doctrine applies only for "pre-arranged contractual risk shifting" - where the insured is a named insured on one policy and an AI on another.The appellate court disagreed, holding that the Burns doctrine applies to all policies on which the insured is named, and thus paid the premiums, or contracted to be named, an AI, on another's policy. It would seem that this is an even stronger case for selective tender than in Burns as Swearingen was the named insured and not simply an AI on the State Auto policy.
Perhaps more significantly, the court also rejected State Auto's argument that the deselection of the Springfield policy did not automatically result in a targeted tender to State Auto, to which Swearingen had simply tendered, because it did not advise that it sought coverage solely from State Auto. The court stated that Swearingen needed only to "file its claim for coverage with State Auto" and that no "magic words" were required.
In other words, all tenders are "Burns tenders"; an insured need only deselect its carrier and tender. In fact, it is not even clear from the case that the insured needs to formally deselect - Springfield simply asserted that is was deselected. If so, any carrier not tendered is deselected.
While I continue to believe that Burns was wrongly decided, the above would be a reasonable simplification of the process.
