OPINION 

JUSTICE APPLETON delivered the judgment of the court, with
opinion. 

*1 ¶ 1 This is an action for declaratory judgment. The
plaintiff is Pekin Insurance Company (Pekin), and the two defendants are St.
Paul Lutheran Church of Roberts, Illinois (church), and Hope Farney, the
independent administrator of the estate of Kitty Mullins, deceased. 

¶ 2 In a case separate from this one—the underlying tort
case—Farney is suing the church for wrongful death, alleging that a church
employee, Matthew Geerdes, while using his personally-owned car for church
business, negligently crashed into Mullins’s car, causing her death. 

¶ 3 Pekin had issued the church an insurance policy, which
covered bodily injury caused by the use of a non-owned auto for church
business. In the present case, though, Pekin sought a declaratory judgment
that, for two reasons (corresponding to counts I and II of its amended
complaint for declaratory judgment), it had no contractual duty to defend its
insured, the church, in Farney’s wrongful-death lawsuit. First, at the time of
the accident, Geerdes was on his way to his other job, his job with University
Lutheran Ministry of Bloomington-Normal, Illinois (University Lutheran); thus, Pekin
contends, he was not using his car for church business, and there is no
business liability coverage under the Pekin policy. Second, Country Mutual
Insurance Company (Country Mutual) already was defending the church pursuant to
the automobile liability policy it had issued to Geerdes, and the policy Pekin
had issued to the church stipulated that the business liability coverage was
excess coverage when it came to the use of a non-owned auto for church business
and that as long as the primary insurer (in this case, Country Mutual) was
defending the church, Pekin had no duty to do so.

 

 

¶ 5 We conclude that count I of the amended complaint for
declaratory judgment is premature and that count II is moot. Because Pekin is
silent as to count III, it has forfeited any challenge to the dismissal of that
count. We find no abuse of discretion in the denial of permission to file the
proposed second amended complaint, since it would not have cured the
deficiencies in the amended complaint. Therefore, we dismiss this appeal as to
count II of the amended complaint for declaratory judgment, and we otherwise
affirm the trial court’s judgment.

¶ 6 I. BACKGROUND 

¶ 7 A. Pekin’s
Amended Complaint for Declaratory Judgment 

*2 ¶ 8 In its amended complaint for declaratory judgment, Pekin
made the following allegations.

¶ 9 1. The
Insurance Policy That Pekin Issued to the Church 

¶ 10 Pekin issued an insurance policy, No. 00BU11178, to the
church. This policy, which had an effective policy period of October 24, 2012,
to October 24, 2013, provided business liability coverage for “ ‘bodily injury’
or ‘property damage’ arising out of the use of any ‘non-owned auto’ in [the
church’s] business by any person other than [the church].”

 

¶ 11 This business liability coverage was subject to the
following condition pertaining to other insurance:

“H. OTHER INSURANCE

(1) If there is other insurance
covering the same loss or damage, we will pay only for the amount of covered
loss or damage in excess of the amount due from that other insurance, whether
you can collect on it or not.

(2) Business Liability Coverage is
excess over any other insurance that insures for direct physical loss or
damage.

(3) When this insurance is excess,
we will have no duty to defend any claim or ‘suit’ that any other insurer has a
duty to defend. If no other insurer defends, we will undertake to do so; but we
will be entitled to the insured’s rights against all those other insurers.”

¶ 12 2. The
Underlying Lawsuit

 

¶ 13 In Farney v. Geerdes, Ford County Circuit Court case
No. 13-L-14, Farney, as the special administrator of Mullins’s estate, filed a
third amended complaint against four defendants: Matthew Geerdes, Larry
Thorndyke, University Lutheran, and the church. In her third amended complaint,
Farney invoked the Wrongful Death Act (740 ILCS 180/2 (West 2012)) and the
Survival Act (755 ILCS 5/27-6 (West 2012)), alleging as follows. On October 9,
2013, at 9:20 a.m., Geerdes was driving a motor vehicle in Peach Orchard,
Illinois, when he negligently ran into a motor vehicle driven by Mullins, who
suffered fatal injuries. At the time of the accident, Geerdes was talking on
the phone with Thorndyke, in violation of section 12-610.2 of the Illinois
Vehicle Code (625 ILCS 5/12-610.2 (West 2012)). Thorndyke was the one who had
made the phone call to Geerdes, and when telephoning Geerdes, he knew Geerdes
was driving. Thus, Thorndyke negligently distracted Geerdes from the task of
driving, causing the fatal accident. At the time of the phone call and the
accident, Thorndyke was acting within the scope of his employment as an
employee of the church, and Geerdes was acting within the scope of his
employment as an employee of both the church and University Lutheran. Farney
sought to hold the church and University Lutheran vicariously liable for the
alleged negligence of their agents.

 

¶ 14 3. The Insurance
Policy That Country Mutual Issued to Geerdes

 

¶ 15 Country Mutual had issued insurance policy No.
A12A3355557 to Geerdes. This policy provided automobile liability coverage on a
primary basis and had an effective policy period of July 3, 2013, to January 3,
2014. 

*3 ¶ 16 The Country Mutual policy covered not only Geerdes
but “anyone else” liable for his acts or omissions in the operation of an
insured vehicle. Under the heading of “Persons Insured,” the policy provided: 

“Under this Section of the policy,
an insured is:

“1. With respect to an insured
vehicle :

a. you and any resident of
the same household as you;

b. anyone using an insured
vehicle with your permission or the permission of an adult relative;

c. anyone else, but only with
respect to liability resulting from acts or omissions of an insured as
defined in a. or b. above.” (Emphases in original.)

¶ 17 4. Tendering
the Defense 

¶ 18 The church tendered the defense to Pekin. Pekin accepted
the tender, but with reservations. Afterward, Pekin tendered the defense to
Country Mutual, which accepted the tender without reservations.

¶ 19 5. The
Judicial Declarations That Pekin Sought in Its Amended Complaint for
Declaratory Judgment 

¶ 20 Pekin’s amended complaint for declaratory judgment had
three counts.

 

¶ 21 In count I, Pekin alleged that “Geerdes, who was
operating his own motor vehicle, was not using his motor vehicle in connection
with Church business.” Therefore, as to count I, Pekin requested a declaratory
judgment that (1) “for the matters alleged in [case No. 13-L-14],” it was “not
liable under its policy of insurance issued to [the church]”; and (2) it was
“not obligated to defend [the church] in [case No. 13-L-14].” 

¶ 22 Count II sought a declaration only that Pekin lacked a
duty to defend the church. Pekin alleged that, as an excess insurer, it was
“not obligated to defend the Church as there [was] other insurance covering the
same loss, namely, Geerdes'[s] personal automobile policy with Country Mutual,
and Country Mutual ha[d] accepted the Church’s defense without reservation.”
Therefore, as to count II, Pekin requested a declaratory judgment that because Pekin
was an excess insurer rather than a primary insurer, and because Country
Mutual, as the primary insurer, was defending the church without reservation,
the “Other Insurance” provision of the policy exempted Pekin of any obligation
to defend the church. 

¶ 23 In the final count of the amended complaint for
declaratory judgment, count III, Pekin alleged that the policy it had issued to
the church included a provision for the reimbursement of defense costs if Pekin
“ ‘initially defend [ed] an insured or [paid] for an insured’s defense but
later determine[d] that the claim [was] not covered under this insurance.’ ”
Therefore, as to count III, Pekin requested a declaratory judgment that the
church had to “reimburse Pekin * * * for all of the defense costs and other
expenses incurred on * * * behalf [of the church] in connection with [case No.
13-L-14].”

¶ 24 Also, in all three counts, Pekin alleged, “on
information and belief,” that defendants disagreed with the positions Pekin
took in its amended complaint. By Pekin’s understanding, defendants took the
position “that the allegations contained in the action filed by Farney [were]
covered under Pekin’s policy of insurance,” a position with which Pekin
disagreed. Consequently, Pekin alleged, “an actual and justiciable controversy
exist[ed] between the parties,” a controversy that “[might] be determined by a
judgment or order of [the trial court].” 

¶ 25 B. Defendants’
Motions To Dismiss the Amended Complaint for Declaratory Judgment 

¶ 26 1. The
Church’s Motion for Dismissal 

*4 ¶ 27 Pursuant to section 2-615 of the Code of Civil
Procedure (735 ILCS 5/2-615 (West 2014)), the church moved to dismiss, with
prejudice, Pekin’s amended complaint for declaratory judgment. 

¶ 28 The church argued that count I was legally insufficient
because “[t]he allegations of the Farney complaint squarely [brought] the
asserted claim under the scope of the coverage provided by [the church’s]
policy, irrespective of any denials by [Pekin] herein or by [the church] in
answer to the underlying complaint.” The church cited Maxum Indemnity Co. v.
Gillette, 405 Ill.App.3d 881, 885, 346 Ill.Dec. 78, 940 N.E.2d 78 (2010),
and quoted Valley Forge Insurance Co. v. Swiderski Electronics, Inc.,
359 Ill.App.3d 872, 884, 296 Ill.Dec. 5, 834 N.E.2d 562 (2005), for the
principle that, “[i]n determining whether an insurer ha[d] a duty to defend its
insured in an underlying lawsuit, the court [had to] look to the allegations in
the underlying complaint and compare those allegations to the relevant coverage
provisions of the insurance policy.” 

¶ 29 The church argued that, for two reasons, count II was
legally insufficient: 

“15. Firstly, if Country [Mutual]
is defending this claim without a reservation of rights, there is no active
dispute between Pekin and [the church]. Pekin is only seeking an advisory
ruling from this Court to the effect that, ‘should Country [Mutual] not defend
[the church] in the Farney claim, Pekin would still not be obligated to defend
the claim.’ This Court cannot and should not issue an advisory opinion on an
unripe claim.  

* * * 

16. Secondly, Country [Mutual] has
accepted the tender and is defending [the church] in the underlying action, but
the indemnity limit on the Country [Mutual]/Geerdes policy is only $100,000.00.
On information and belief, Country [Mutual] has tendered that limit to Farney.
Farney has not yet accepted the tender as doing so without releasing or waiving
a cause of action against the remaining defendants would require additional
efforts not yet accomplished. 

17. It is anticipated, however[,]
that once [Country Mutual’s] limit has been exhausted, it will have no
remaining obligation or intention to defend [the church]. At that time, Pekin’s
complaint may again become ripe for consideration by the Court. But, Pekin’s
defense to coverage will be no more tenable than this frivolous claim is now.
Therefore dismissal with prejudice is appropriate.” 

(Pekin points out that, actually, Geerdes’s policy says: “
‘[Country Mutual’s] duty to settle or defend ends when the limits of liability
stated on the declarations page have been exhausted by payment of any judgment
or settlement.’ ” (Emphasis in original.) Thus, Pekin explains, Country
Mutual’s voluntary payment of $100,000—the mere exhaustion of the policy
limit—actually would not end Country Mutual’s duty to defend its insureds; the
payment would have to be pursuant to a judgment or settlement. See Conway v.
Country Casualty Insurance Co., 92 Ill.2d 388, 395, 65 Ill.Dec. 934, 442
N.E.2d 245 (1982); Douglas v. Allied American Insurance, 312 Ill.App.3d
535, 542, 245 Ill.Dec. 123, 727 N.E.2d 376 (2000). This is because the duty to
defend and the duty to indemnify are separate and distinct, the former duty
being broader than the latter. Conway, 92 Ill.2d at 394, 65 Ill.Dec.
934, 442 N.E.2d 245. “[S]ince the insurer’s duty to defend its insured is not
dependent upon a duty to indemnify, but arises from the undertaking to defend
stated in the policy, an insurer’s payment to its policy limits, without more,
does not excuse it from its duty to defend.” Id.)

 

¶ 30 2. Farney’s
Motion for Dismissal 

*5 ¶ 31 Farney likewise moved to dismiss the amended
complaint for declaratory judgment on the ground that it failed to state a
cause of action. See 735 ILCS 5/2-615 (West 2014). In her motion, Farney
pointed out that, under the supreme court’s decision in United States Fidelity
& Guaranty Co. v. Wilkin Insulation Co., 144 Ill.2d 64, 73, 161
Ill.Dec. 280, 578 N.E.2d 926 (1991), an insurer’s duty to defend the insured
depended solely on a comparison of the underlying complaint with the insurance
policy. The supreme court said: 

“If the underlying complaints
allege facts within or potentially within policy coverage, the insurer
is obliged to defend its insured even if the allegations are groundless, false,
or fraudulent. [Citation.] An insurer may not justifiably refuse to defend an
action against its insured unless it is clear from the face of the
underlying complaints that the allegations fail to state facts which bring the
case within, or potentially within, the policy’s coverage. [Citation.]”
(Emphases in original.) Id. 

¶ 32 Farney argued that, far from being clear, from the face
of the underlying complaint, that her claim was outside the coverage of the
policy Pekin had issued to the church, her claim clearly was within the
business liability coverage of that policy, for Geerdes allegedly was driving
his car on church business at the time of the accident. The underlying
complaint in case No. 13-L-14 (more precisely, the third amended complaint)
alleged that Mullins’s death had resulted from the negligent operation of a motor
vehicle by Geerdes while he was employed by the church and while he was acting
within the scope of that employment. Specifically, the third amended complaint
alleged that, at the time of the accident, Geerdes was substantially within the
authorized time and space limits of his employment, he was serving the
interests of the church, and the church directly supervised and controlled him.
The policy issued by Pekin applied to bodily injury arising from the church’s
use (that is to say, its agent’s use) of a non-owned automobile in the church’s
business.

¶ 33 But what about the “Other Insurance” provision of the
church’s insurance policy, the provision that Pekin invoked in count II of its
amended complaint for declaratory judgment? Farney asserted: 

“The Pekin Insurance policy
provision ‘Other Insurance’ does not remove Hope Farney’s Complaint from inside
the borders of the Pekin Insurance policy coverage. Further, the ‘Other
Insurance’ provision does not relieve Pekin * * * from their obligation to
defend [the] [c]hurch as the allegations of the Complaint remain clearly within
the insurance policy coverage. Pekin * * * fails to demonstrate why coverage
does not apply or their duty to defend is relieved based on this provision. The
‘Other Insurance’ provision has no bearing as to whether the Pekin Insurance
policy applies or whether Pekin * * * must defend [the] [c]hurch, which are the
questions that must be answered by [Y]our Honor. Because the ‘Other Insurance’
provision does not affect the applicability of coverage or the duty to defend,
Plaintiff’s Amended Complaint for Declaratory Judgment is substantially
insufficient at law and must be dismissed with prejudice.”

¶ 34 3. Pekin’s Response to the Motions for Dismissal 

*6 ¶ 35 In its response to the motions for dismissal, Pekin
conceded that, “ordinarily,” when deciding whether an insurer had a duty to
defend its insured, a court should confine itself to comparing the allegations
of the underlying complaint with the provisions of the insurance policy. Pekin
noted, however, that, “under certain circumstances,” a court might “look beyond
the underlying complaint” when determining an insurer’s duty to defend. In this
respect, Pekin quoted the supreme court: 

“ ‘[I]f an insurer opts to file a
declaratory proceeding, we believe that it may properly challenge the existence
of such a duty by offering evidence to prove that the insured’s actions fell
within the limitations of one of the policy’s exclusions. [Citations.] The only
time such evidence should not be permitted is when it tends to determine an
issue crucial to the determination of the underlying lawsuit [citations] * * *.
If a crucial issue will not be determined, we see no reason why the party
seeking a declaration of rights should not have the prerogative to present
evidence that is accorded generally to a party during a motion for summary
judgment in a declaratory proceeding. To require the trial court to look
solely to the complaint in the underlying action to determine coverage would
make the declaratory proceeding little more than a useless exercise possessing
no attendant benefit and would greatly diminish a declaratory action’s purpose
of settling and fixing the rights of the parties.’ ” (Emphasis in
original.) Pekin Insurance Co. v. Wilson, 237 Ill.2d 446, 461, 341
Ill.Dec. 497, 930 N.E.2d 1011 (2010) (quoting Fidelity & Casualty Co. of
New York v. Envirodyne Engineers, Inc., 122 Ill.App.3d 301, 304–05, 77
Ill.Dec. 848, 461 N.E.2d 471 (1983)).

 

¶ 36 On the authority of that passage from Wilson, Pekin
requested the trial court to look beyond Farney’s complaint and consider
deposition testimony by Geerdes that, at the time of the accident, he was not
using his personal automobile for church business but, instead, was en route to
his other job, his job with University Lutheran. Pekin argued that the
consideration of this testimony would be perfectly consistent with Wilson
because “a jury could find that Geerdes was acting as the Church’s agent or
employee while talking on the phone without finding that Geerdes was using
his vehicle in connection with Church business.” (Emphases in original.)
Thus, by Pekin’s reasoning, “[a] finding in this action that Geerdes was not
using his vehicle in the Church’s business when he struck Mullins [would] not
collaterally impact Farney’s respondeat superior claim.” 

¶ 37 But if the trial court was concerned that the judicial
declarations Pekin sought in count I would collaterally estop Farney in her
tort case, Pekin requested, as an alternative, the declaration it sought in
count II: that the “Other Insurance” provision, together with Country Mutual’s
unreserved assumption of the defense, negated Pekin’s duty to defend the
church. If the trial court “rule[d] in Pekin’s favor as to [c]ount II, Pekin
[would] dismiss [c]ount I without prejudice and with leave to replead.” As far
as Pekin was concerned, the relief in count II would suffice for the time
being. 

¶ 38 Pekin disagreed with the church that count II was moot,
considering that the church had tendered the defense to Pekin and had
communicated to Pekin no formal withdrawal of the tender. Pekin argued: “Since
the Church has not withdrawn its tender of defense from Pekin, there is a live
controversy whether Pekin has a current duty or obligation to defend the Church
in the Farney action.” 

*7 ¶ 39 The other defendant in the declaratory judgment
action, Farney, did not regard this question as moot; she maintained that,
despite the “Other Insurance” provision and Country Mutual’s acceptance,
without reservation, of Pekin’s tender of the defense, Pekin still had a duty
to defend the church.

¶ 40 4. The Trial
Court’s Ruling on the Motions for Dismissal 

¶ 41 On May 19, 2015, the trial court granted defendants’
motions to dismiss Pekin’s amended complaint for declaratory judgment, but the
court did so “without prejudice.” 

¶ 42 C. Pekin’s Motion for Reconsideration 

¶ 43 1. The Arguments Pekin Made 

¶ 44 Pekin moved for reconsideration of the dismissal of its
amended complaint for declaratory judgment. Pekin argued it had pleaded the
three elements of an action for declaratory judgment—(1) a plaintiff with a
tangible legal interest, (2) a defendant with an opposing interest, and (3) an
actual controversy between the parties concerning these interests (Beahringer
v. Page, 204 Ill.2d 363, 372, 273 Ill.Dec. 784, 789 N.E.2d 1216 (2003))—and
that, instead of challenging the legal sufficiency of the amended complaint for
declaratory judgment, defendants had gone beyond the scope of a section 2-615
motion by challenging the merits of the amended complaint, at least when it
came to count I. In Pekin’s view, the trial court had erroneously accepted
defendants’ invitation to consider the merits of count I instead of evaluating
its legal sufficiency. 

¶ 45 As for count II of the amended complaint, Pekin
disagreed it was moot. Pekin argued:

“To the contrary, the very fact
that Country Mutual undertook to defend the Church is exactly what makes the
Count ripe for adjudication, that is, another insurer has admitted that it owes
a duty to defend the Church, and the Pekin policy provides in that scenario, Pekin
has no duty to defend. At the very least, Pekin sufficiently pled facts
establishing that an actual controversy exists between Pekin, which claims it
has no duty to defend based on the other insurance provisions, and the
Defendants, who claim that Pekin owes a duty to defend the Church in the Farney
action.”

¶ 46 2. The
Church’s Response to Pekin’s Motion for Reconsideration 

¶ 47 The church filed a memorandum in opposition to Pekin’s
motion for reconsideration. In its discussion of count I, the church did not
specifically respond to Pekin’s quotation from Wilson; the church merely
continued to insist “the law [was] crystal clear” that, “in determining whether
an insurer has a duty to defend its insured in an underlying lawsuit, the court
must look to the allegations in the underlying complaint and compare those
allegations to the relevant coverage provisions of the insurance policy.” 

¶ 48 The church also continued to insist that count II was
moot. The church said: “If Country [Mutual] is defending this claim without a
reservation of rights, as is alleged, there is no active dispute between Pekin
and [the church]. Pekin is only seeking an advisory ruling from this Court to
the effect that, ‘should Country [Mutual] not defend [the church] in the Farney
claim, Pekin would still not be obligated to defend the claim.’ This Court was
correct in ruling that it cannot and should not issue an advisory opinion on an
unripe claim.” 

¶ 49 3. Farney’s
Response to Pekin’s Motion for Reconsideration 

¶ 50 In her response to Pekin’s motion for reconsideration,
Farney disputed that she had sought a ruling on the merits of Pekin’s amended
complaint. She argued, rather, it was Pekin that had transgressed the bounds of
procedural propriety by offering extrinsic evidence (Geerdes’s deposition) in
opposition to her section 2-615 motion. She also pointed out that Beahringer
was not new case law and that Pekin could have cited that case earlier instead
of waiting until its motion for reconsideration to do so. 

¶ 51 4. The Trial
Court’s Ruling 

*8 ¶ 52 On August 18, 2015, the trial court denied Pekin’s
motion for reconsideration. 

¶ 53 D. Pekin’s
Motion for Permission To File a Second Amended Complaint For Declaratory
Judgment

¶ 54 After the denial of its motion for reconsideration, Pekin
moved for permission to file a second amended complaint for declaratory
judgment “and also [to] immediately stay the declaratory [judgment action],
pending resolution of the underlying action.” The proposed second amended
complaint would have added the following allegation: “On May 14, 2014, Geerdes
testified that he was driving to his other job in Normal, Illinois[,] when the
alleged accident occurred.” A copy of Geerdes’s deposition transcript was
attached as an exhibit. Otherwise, the proposed second amended complaint
mirrored the (now dismissed) amended complaint. 

¶ 55 Defendants opposed Pekin’s motion for permission to
file a second amended complaint, and in doing so, they moved for sanctions
against Pekin pursuant to Illinois Supreme Court Rule 137 (eff. July 1, 2013). 

¶ 56 On November 6, 2015, the trial court denied Pekin’s
motion for permission to file a second amended complaint, this time “with
prejudice.” At the same time, the court denied defendants’ motions for
sanctions. 

¶ 57 Pekin appealed 14 days later. 

¶ 58 II. ANALYSIS 

¶ 59 A. The Three
Counts of Pekin’s Amended Complaint for Declaratory Judgment, Taken One at a
Time 

¶ 60 1. Count I 

12¶ 61 To survive a motion for dismissal pursuant to section
2-615, the complaint, when interpreted in the light most favorable to the
plaintiff, must set forth facts which, taken as true, legally entitle the
plaintiff to the relief requested in the complaint. DeHart v. DeHart,
2013 IL 114137, ¶ 18, 369 Ill.Dec. 136, 986 N.E.2d 85. The motion points out
defects that are apparent on the face of the complaint and that stand in the
way of granting the requested relief. Urbaitis v. Commonwealth Edison,
143 Ill.2d 458, 475, 159 Ill.Dec. 50, 575 N.E.2d 548 (1991). 

¶ 62 Defendants argue a defect is apparent on the face of
count I of Pekin’s amended complaint for declaratory judgment: a violation of
the eight-corners rule. We decide de novo whether they are correct. See City
of Chicago v. Beretta U.S.A. Corp., 213 Ill.2d 351, 364, 290 Ill.Dec. 525,
821 N.E.2d 1099 (2004). 

34¶ 63 Ordinarily, in a declaratory judgment action on an
insurer’s duty to defend the insured, courts follow the eight-corners rule,
comparing the four corners of the underlying complaint with the four corners of
the insurance contract. Country Mutual Insurance Co. v. Dahms, 2016 IL
App (1st) 141392, ¶ 37, 405 Ill.Dec. 311, 58 N.E.3d 118. “[A] court ordinarily
looks first to the allegations in the underlying complaint and compares those
allegations to the relevant provisions of the insurance policy,” and “[i]f the
facts alleged in the underlying complaint fall within, or potentially
within, the policy’s coverage, the insurer’s duty to defend is triggered.”
(Emphasis in original and internal quotation marks omitted.) Id. 

567¶ 64 We say “ordinarily” because there is an exception to
the eight-corners rule: in deciding whether the insurer has a contractual duty
to defend the insured, the court may consider factual matters external to the
underlying complaint and the insurance policy “as long as [these factual
matters] do not bear upon issues in the underlying litigation” (Millers
Mutual Insurance Ass’n of Illinois v. Ainsworth Seed Co., 194 Ill.App.3d
888, 889, 141 Ill.Dec. 886, 552 N.E.2d 254 (1989)) or “impact upon the
underlying plaintiff’s ability to pursue a theory of liability” (Fremont
Compensation Insurance Co. v. Ace–Chicago Great Dane Corp., 304 Ill.App.3d
734, 743, 237 Ill.Dec. 709, 710 N.E.2d 132 (1999)). Thus, the eight-corners
rule bars extrinsic evidence only if, as a result of the proposed declaratory
judgment, the plaintiff in the underlying lawsuit could be hampered by
collateral estoppel. Maryland Casualty Co. v. Peppers, 64 Ill.2d 187,
197, 355 N.E.2d 24 (1976). Otherwise, extrinsic evidence is admissible on the
question of the insurer’s duty to defend the insured. “[T]he only time such
[extrinsic] evidence should not be permitted is when it tends to determine an
issue crucial to the * * * underlying lawsuit” (internal quotation marks
omitted) (Wilson, 237 Ill.2d at 461, 341 Ill.Dec. 497, 930 N.E.2d 1011),
in which case the requested factual determination is regarded as “premature”
(internal quotation marks omitted) (Peppers, 64 Ill.2d at 197, 355
N.E.2d 24). 

*9 8¶ 65 In its brief, Pekin admits: “[C]onsideration of
Geerdes'[s] deposition testimony may tend to determine a factual issue crucial
to the underlying lawsuit, namely, whether at the time of the accident, Geerdes
was on Church business.” We see the same problem. If Farney wanted to argue, in
her tort case, that the church was vicariously liable because, at the time
Geerdes ran into Mullins, he was driving his car on church business, Farney
would find herself collaterally estopped by the declaratory judgment requested
in count I of Pekin’s amended complaint. See Mabie v. Village of Schaumburg,
364 Ill.App.3d 756, 758, 301 Ill.Dec. 786, 847 N.E.2d 796 (2006) (“In order to
apply collateral estoppel, (1) the issue decided in the prior adjudication must
be identical to the issue in the current action; (2) the party against whom
estoppel is asserted must have been a party or in privity with a party in the
prior action; and (3) the prior adjudication must have resulted in a final
judgment on the merits.”). 

¶ 66 Nevertheless, on the authority of TIG Insurance Co.
v. Canel, 389 Ill.App.3d 366, 329 Ill.Dec. 423, 906 N.E.2d 621 (2009), Pekin
maintains that count I states a cause of action, “even if it would require a
premature factual determination of a crucial issue in the Farney
litigation,” and “the proper procedural move here was not to dismiss Pekin’s
complaint altogether, but instead, allow Pekin to amend its Complaint and stay
Count I pending resolution of the underlying action,” an option that Pekin
suggested to the trial court in the hearing on Pekin’s motion to file a second
amended complaint for declaratory judgment. 

¶ 67 TIG is distinguishable, however, because in TIG,
the plaintiff in the underlying action moved for a stay, not the insurer. The
plaintiff in the underlying action filed a motion either to dismiss the
insurer’s declaratory judgment complaint as premature or to stay the
declaratory judgment action. Id. at 369, 329 Ill.Dec. 423, 906 N.E.2d
621. Thus, the plaintiff in the underlying action was willing to live with the
prematurity, and therefore the legal insufficiency (see Beahringer, 204
Ill.2d at 374–75, 273 Ill.Dec. 784, 789 N.E.2d 1216), of the declaratory
judgment complaint if the trial court stayed the declaratory judgment action
until it ripened, that is, until resolution of the underlying action. The
insured, the defendant in the underlying action, appealed the stay (TIG,
389 Ill.App.3d at 367, 329 Ill.Dec. 423, 906 N.E.2d 621), and the appellate
court found no abuse of discretion in staying the declaratory judgment action
until the underlying action was resolved (id. at 375, 329 Ill.Dec. 423,
906 N.E.2d 621). 

¶ 68 In the present case, by contrast, the church and Farney
never intimated they were willing to live with the prematurity (and, therefore,
the legal insufficiency) of count I until the underlying action was resolved.
They moved for dismissal on the ground of failure to state a cause of
action—period. If dismissal was justified on that ground, they were entitled to
a dismissal. They were entitled to a correct ruling that was responsive to their
motion. 

9¶ 69 Another way TIG is distinguishable is its
procedural posture. Just because the appellate court, in TIG, found no
abuse of discretion in the granting of the stay, it does not logically follow
that denying the stay would have been an abuse of discretion, either. The
standard of “abuse of discretion” is the most deferential standard of review
recognized by the law; a decision will be deemed an abuse of discretion only if
the decision is “unreasonable and arbitrary or where no reasonable person would
take the view adopted by the circuit court.” Gulino v. Zurawski, 2015 IL
App (1st) 131587, ¶ 64, 398 Ill.Dec. 192, 43 N.E.3d 1102. There could be two
opposing but reasonable answers to the same question. When presented with a
motion for dismissal on the ground of legal insufficiency, a trial court could
reasonably decide it does not want an unripe declaratory judgment action
sitting on its docket. After all, an unripe declaratory judgment action lacks
an essential element of the cause of action, namely, an actual controversy (Underground
Contractors Ass’n v. City of Chicago, 66 Ill.2d 371, 375, 5 Ill.Dec. 827,
362 N.E.2d 298 (1977)) (a controversy is “actual” only if “the underlying facts
and issues of the case are not moot or premature” (emphasis added)), and
a complaint lacking even a single element is a legally insufficient complaint,
subject to dismissal under section 2-615 (Misselhorn v. Doyle, 257
Ill.App.3d 983, 986, 195 Ill.Dec. 881, 629 N.E.2d 189 (1994); Black’s Law
Dictionary 538 (7th ed. 1999) (defining “element” as “[a] constituent part of a
claim that must be proved for the claim to succeed”)). If a count is legally
insufficient, we cannot fault the trial court for dismissing it on defendants’
motion. Because we agree with the trial court that count I fails to state a
cause of action for declaratory judgment—specifically, count I fails to show
the controversy is ripe (as Pekin seems to admit)—we affirm the dismissal of
that count, and we find no abuse of discretion in the denial of Pekin’s request
for a stay.

¶ 70 2. Count II 

*10 10¶ 71 Count II seeks a judicial declaration that, under
the “Other Insurance” provision, Pekin has no duty to defend the church in case
No. 13-L-14 because Pekin is an excess insurer rather than a primary insurer
and because the primary insurer, Country Mutual, has accepted without
reservation the tender of the defense. The church insists that count II is moot
because the church agrees with Pekin that while Country Mutual defends the
church, Pekin has no contractual duty to do so. On appeal, Pekin seems to be
asking us to second-guess the church when the church, all but pounding the
table, says over and over again it agrees with Pekin in this regard. 

¶ 72 If the church says it agrees, it agrees, and that is
that. As between Pekin and the church, count II presents no “justiciable
[matter],” a constitutional prerequisite of the trial court’s subject-matter
jurisdiction. Ill. Const. 1970, art. VI, § 9; see Belleville Toyota, Inc. v.
Toyota Motor Sales, U.S.A., Inc., 199 Ill.2d 325, 335, 264 Ill.Dec. 283,
770 N.E.2d 177 (2002) (defining “a ‘justiciable matter’ ” as “a controversy
appropriate for review by the court, in that it is definite and concrete, as
opposed to hypothetical or moot, touching upon the legal relations of parties
having adverse legal interests” (emphasis added)); In re Marriage of
Peters–Farrell, 216 Ill.2d 287, 291, 296 Ill.Dec. 444, 835 N.E.2d 797
(2005) (“An appeal is moot if no actual controversy exists * * *.”). 

¶ 73 Farney is a little more difficult to read. On the one
hand, she says: “The allegations contained in Farney’s complaint are clearly
within the insurance policy coverage[,] and the ‘Other Insurance’ provision
does not relieve Pekin from their obligation to defend the Church.” On the
other hand, beginning with the next sentence of her brief, she says: 

“[S]ince the Church (through Pekin)
tendered the defense to Country Mutual, there was no ripe controversy between Pekin
and the Church for the court to entertain. * * * [B]ecause Country Mutual had
undertaken the defense of the Church, any controversy between Pekin and the
Church is moot. Pekin’s attempt to tack on this theory to their already legally
insufficient first count must fail. * * *

* * * [B]ecause Country Mutual
undertook the Church’s defense, Pekin’s attempt to argue there is not duty to
defend because of Country’s tender is premature as there is no actual or ripe
controversy between Pekin and the Church, and the circuit court appropriately
dismissed Count II of Pekin’s Amended Complaint for Declaratory Judgment.” 

Farney seems to be arguing that, given the allegations of
her third amended complaint in case No. 13-L-14, Pekin has a contractual duty
to defend the church but that because Country Mutual has undertaken the defense
of the church, Pekin’s performance of its contractual duty has not yet fallen
due (and, possibly, never will fall due). This seems a roundabout way of saying
she agrees with Pekin’s position, in count II, that as long as Country Mutual
is defending the church, Pekin need not do so. 

¶ 74 Ultimately, then, it seems that Farney, like the
church, regards count II as moot, or as presenting no “actual controversy.” Id.
Therefore, as to count II of Pekin’s amended complaint for declaratory
judgment, we dismiss this appeal as moot. See La Salle National Bank v. City
of Chicago, 3 Ill.2d 375, 379, 121 N.E.2d 486 (1954) (“Since the existence
of a real controversy is an essential requisite to appellate jurisdiction, the
general rule is that where a reviewing court has notice of facts which show
that only moot questions or mere abstract propositions are involved, it will
dismiss the appeal * * * even though such facts do not appear in the record.”). 

¶ 75 3. Count III 

¶ 76 In its brief, Pekin makes no argument regarding count
III of its amended complaint for declaratory judgment. Therefore, pursuant to
the doctrine of procedural forfeiture, we uphold the dismissal of that count.
See Ill. S. Ct. R. 341(h)(7) (eff. Jan. 1, 2016) (“Points not argued are
[forfeited] * * *.”). 

 *11 1112¶ 78 A trial court has broad discretion when
deciding whether to allow an amendment to a complaint, and we will defer to its
decision unless we find an abuse of discretion (Charleston v. Larson,
297 Ill.App.3d 540, 555, 231 Ill.Dec. 497, 696 N.E.2d 793 (1998)), or, in other
words, unless we find the court’s decision to be arbitrary or unreasonable (Gulino,
2015 IL App (1st) 131587, ¶ 64, 398 Ill.Dec. 192, 43 N.E.3d 1102). The court
already had allowed Pekin to amend its complaint, and the latest proposed
amendment, the second amended complaint, would not have cured a defect in the
amended complaint. Therefore, we find no abuse of discretion in the denial of
permission to file the second amended complaint. See Charleston, 297
Ill.App.3d at 555, 231 Ill.Dec. 497, 696 N.E.2d 793. “[I]f the proposed
[amendment] made no substantial change in the complaint previously held bad,
the court had a right to reject an attempt to re-litigate the same points
already decided, and this is a sufficient basis, in and of itself, to affirm
the trial court’s rejection of the proposed amendment.” (Internal quotation
marks omitted.) Beane v. Millers Mutual Insurance Ass’n of Alton, 90
Ill.App.3d 258, 260, 45 Ill.Dec. 542, 412 N.E.2d 1124 (1980). 

¶ 79 The proposed second amended complaint was identical to
the amended complaint except for one additional allegation: Geerdes himself
testified he was driving to his other job, in Normal, Illinois, at the time of
the accident. As Pekin admits in its brief, “consideration of Geerdes'[s]
deposition testimony may tend to determine a factual issue crucial to the
underlying lawsuit, namely, whether at the time of the accident, Geerdes was on
Church business.” Thus, all the proposed second amended complaint did was
enhance or elaborate the defect in count I of the amended complaint. See Fremont
Compensation, 304 Ill.App.3d at 743, 237 Ill.Dec. 709, 710 N.E.2d 132; Millers
Mutual, 194 Ill.App.3d at 889, 141 Ill.Dec. 886, 552 N.E.2d 254.

¶ 80 C. Dismissal
With Prejudice, as Opposed to Without Prejudice 

13¶ 81 In its petition for rehearing, Pekin argues that the
dismissal of its amended complaint for declaratory judgment should have been
without prejudice instead of with prejudice. Pekin argues that “[i]f a
declaratory judgment is premature because it would decide an ultimate issue of
fact in the underlying litigation, the proper resolution is a stay or dismissal
without prejudice.” In support of that argument, Pekin cites State Farm Fire
& Casualty Co. v. Shelton, 176 Ill.App.3d 858, 868, 126 Ill.Dec. 286,
531 N.E.2d 913 (1988), Batteast v. Argonaut Insurance Co., 118
Ill.App.3d 4, 7, 73 Ill.Dec. 609, 454 N.E.2d 706 (1983), and Grinnell Mutual
Reinsurance Co. v. Frierdich, 79 Ill.App.3d 1146, 1150, 35 Ill.Dec. 418,
399 N.E.2d 252 (1979). 

¶ 82 On the other hand, in Schwanke, Schwanke &
Associates v. Martin, 241 Ill.App.3d 738, 739, 182 Ill.Dec. 120, 609 N.E.2d
654 (1992), the trial court dismissed a declaratory-judgment complaint with
prejudice on the ground that it was premature, and the appellate court affirmed
the judgment (id. at 752, 182 Ill.Dec. 120, 609 N.E.2d 654). In Schwanke,
the director of the Department of Labor notified the plaintiff of his
“intention to initiate a debarment hearing” to debar the plaintiff from bidding
and receiving any public-work contracts, accusing the plaintiff of violating
the Prevailing Wage Act (Ill. Rev. Stat. 1991, ch. 48, ¶¶ 39s-1 through
39s-12). Schwanke, 241 Ill.App.3d at 739, 182 Ill.Dec. 120, 609 N.E.2d
654. Before such an administrative hearing occurred, and before the plaintiff
was placed on the debarment list (id. at 747, 182 Ill.Dec. 120, 609
N.E.2d 654), the plaintiff filed a complaint against the director, seeking a
declaratory judgment that the plaintiff had not been violating the Prevailing
Wage Act (id. at 739, 182 Ill.Dec. 120, 609 N.E.2d 654). The appellate
court agreed with the trial court that the declaratory-judgment complaint was
premature. The complaint had to “state facts sufficient to show ripeness.”
Because the complaint “failed to allege or establish the existence of an actual
controversy ripe for judicial determination,” “[t]he trial court properly
dismissed the complaint as being premature” (id. at 748, 182 Ill.Dec.
120, 609 N.E.2d 654) and, again, the dismissal was with prejudice (id.
at 739, 182 Ill.Dec. 120, 609 N.E.2d 654). Initially, as in the present case,
the trial court dismissed the complaint without prejudice, but the court
changed its mind and made the dismissal with prejudice. Id. at 752, 182
Ill.Dec. 120, 609 N.E.2d 654. Commenting on this earlier dismissal, the
appellate court had reservations that the prematurity of a declaratory-judgment
action entitled the plaintiff to a dismissal without prejudice: 

*12 “Finally, and parenthetically,
we note that although the trial court dismissed plaintiff’s complaint as
premature, the initial order of dismissal was without prejudice and with leave
for plaintiff to move for a stay in the event of an adverse decision, i.e.,
debarment, by the Department. We question the propriety of such an order in
view of the fact that plaintiff’s complaint did not present a justiciable
controversy in the first instance, and that plaintiff would still be required
to exhaust its administrative review remedies prior to being entitled to
judicial review.” Id. 

¶ 83 So, if a declaratory-judgment action by an insurer is
premature or unripe in that it would decide an important issue of fact in the
underlying litigation, what is the correct disposition: dismissal with
prejudice (see id.) or dismissal without prejudice (see Shelton,
176 Ill.App.3d at 868, 126 Ill.Dec. 286, 531 N.E.2d 913; Batteast, 118
Ill.App.3d at 7, 73 Ill.Dec. 609, 454 N.E.2d 706; Grinnell, 79
Ill.App.3d at 1150, 35 Ill.Dec. 418, 399 N.E.2d 252) 141516 

¶ 84 In answering that question, we begin with the legal
significance of the phrase “with prejudice.” A dismissal with prejudice amounts
to an adjudication on the merits, and such an adjudication can be res
judicata in a subsequent action. McGann v. Illinois Hospital Ass’n,
172 Ill.App.3d 560, 569, 122 Ill.Dec. 509, 526 N.E.2d 902 (1988). Res
judicata does not apply, however, to a subsequent action if the subsequent
action is “based on different operative facts” than the previous action. Regan
v. Ivanelli, 246 Ill.App.3d 798, 807–808, 187 Ill.Dec. 351, 617 N.E.2d 808
(1993); see also Rock River Water Reclamation District v. The Sanctuary
Condominiums of Rock Cut, 2014 IL App (2d) 130813, ¶ 48, 391 Ill.Dec. 443,
30 N.E.3d 1081; O’Connor v. Greer, 55 Ill.App.3d 253, 261, 12 Ill.Dec.
939, 370 N.E.2d 850 (1977). It follows that if a court dismisses a
declaratory-judgment complaint as unripe and designates the dismissal as
“without prejudice” for the sake of preserving the plaintiff’s right to later
bring a declaratory-judgment action that is ripe, the court labors under a
misconception. The dismissal of a declaratory-judgment complaint with
prejudice, on the ground of unripeness, would not bar the plaintiff from later
bringing a declaratory-judgment action that has since become ripe. Res
judicata would be inapplicable because the complaint in the subsequent
declaratory-judgment action would allege facts that the complaint in the
previous declaratory-judgment action did not and could not have alleged,
namely, facts establishing that the declaratory-judgment action now is ripe.
See Schwanke, 241 Ill.App.3d at 748, 182 Ill.Dec. 120, 609 N.E.2d 654
(“If the complaint does not state facts sufficient to show ripeness, dismissal
is proper.”). From one action to the other, there would be “different sets of
operative facts”—and hence no res judicata. Rock River, 2014 IL
App (2d) 130813, ¶ 48, 391 Ill.Dec. 443, 30 N.E.3d 1081. 

¶ 85 Therefore, we agree with Schwanke and disagree
with Shelton, Batteast, and Grinnell. Unless, in response
to a motion for dismissal on the ground of unripeness, the plaintiff in a
declaratory-judgment action can demonstrate a present ability to allege facts
establishing ripeness, the dismissal should be with prejudice. See Schwanke,
241 Ill.App.3d at 752, 182 Ill.Dec. 120, 609 N.E.2d 654. Accordingly, we deny Pekin’s
petition for reconsideration. 

¶ 86 D. The Church’s
Motion for Sanctions Against Pekin

¶ 87 1. Alleged
Frivolity in Count I 

18¶ 88 The church moves that we impose sanctions on Pekin
pursuant to Illinois Supreme Court Rule 375(b) (eff. Feb. 1, 1994), which
provides, in its first paragraph: 

“If, after consideration of an
appeal or other action pursued in a reviewing court, it is determined that the
appeal or other action itself is frivolous, or that an appeal or other action
was not taken in good faith, for an improper purpose, such as to harass or to
cause unnecessary delay or needless increase in the cost of litigation, or the
manner of prosecuting or defending the appeal or other action is for such
purpose, an appropriate sanction may be imposed upon any party or the attorney
or attorneys of the party or parties. An appeal or other action will be deemed
frivolous where it is not reasonably well grounded in fact and not warranted by
existing law or a good-faith argument for the extension, modification, or
reversal of existing law. An appeal or other action will be deemed to have been
taken or prosecuted for an improper purpose where the primary purpose of the
appeal or other action is to delay, harass, or cause needless expense.”

¶ 89 The church argues: “[W]ithout any basis under the facts
or law, Pekin has taken the frivolous position that by denying that Geerdes was
actually acting within the scope of his employment at the time of the
accident (irrespective of the complaint’s allegations), it is entitled to deny
coverage for defense of the claim.” (Emphasis in original.) 

¶ 90 Is it really impossible, though, for Pekin to find a
foothold from which to plausibly argue the exception to the eight-corners rule?
Consider the precise wording of this passage from Envirodyne Engineers,
which the supreme court quoted with approval in Wilson: 

“ ‘[W]e find no support for
Envirodyne’s contention that the court may not look beyond the underlying
complaint even in a declaratory proceeding where the duty to defend is at issue.
* * *. * * * [I]f an insurer opts to file a declaratory proceeding, we believe
that it may properly challenge the existence of such a duty by offering
evidence to prove that the insured’s actions fell within the limitations of one
of the policy’s exclusions. [Citations.] The only time such evidence should not
be permitted is when it tends to determine an issue crucial to the
determination of the underlying lawsuit * * *.’ ” 

(Emphasis added.) Wilson, 237 Ill.2d at 461, 341
Ill.Dec. 497, 930 N.E.2d 1011 (quoting Envirodyne Engineers, 122
Ill.App.3d at 304–05, 77 Ill.Dec. 848, 461 N.E.2d 471). 

¶ 91 In formal contexts, “crucial” means “decisive or
critical.” The New Oxford American Dictionary 410 (2001). Whether Geerdes, at
the time of the accident, was using his car for church business is important
to the determination of the church’s vicarious liability, but arguably, it is
not decisive or critical to the determination of the church’s
vicarious liability. The argument could be made, and Pekin does argue, that
even if Geerdes was not using his car for church business, the church still
could be held vicariously if Geerdes—having been encouraged by the church’s
other agent, Thorndyke, to violate section 12-610.2 of the Illinois Vehicle
Code (625 ILCS 5/12-610.2 (West 2012))—used his cell phone for church business
and consequently, to Mullins’s detriment, let his attention wander from the
road. 

19¶ 92 Ultimately, we are unconvinced by that argument. We
conclude that the bar to extrinsic evidence reaches further than indispensable
facts. The test is not whether the evidence determines a crucial issue but
whether the evidence “tends” to do so (internal quotation marks omitted) (Wilson,
237 Ill.2d at 461, 341 Ill.Dec. 497, 930 N.E.2d 1011), and cases from the
appellate court bar evidence that “bear[s] upon issues in the underlying
litigation” (Millers Mutual, 194 Ill.App.3d at 889, 141 Ill.Dec. 886,
552 N.E.2d 254) or “impact[s] upon the underlying plaintiff’s ability to pursue
a theory of liability” (Fremont Compensation, 304 Ill.App.3d at 743, 237
Ill.Dec. 709, 710 N.E.2d 132). The supreme court wants to save the plaintiff in
the underlying lawsuit from being hampered by the collateral-estoppel effect of
the declaratory judgment. Peppers, 64 Ill.2d at 197, 355 N.E.2d 24. 

¶ 93 In Pekin’s defense, the declaratory judgment could be
hampering in different degrees: it could be hampering when it comes to
“ultimate facts” (the term that Peppers and Envirodyne Engineers
use (Peppers, 64 Ill.2d at 197, 355 N.E.2d 24; Envirodyne Engineers,
122 Ill.App.3d at 306, 77 Ill.Dec. 848, 461 N.E.2d 471)), or it could be
hampering when it comes to either-or facts that are not “ultimate” but are
nevertheless important and could potentially be decisive in the
underlying lawsuit, depending on what other factual findings the jury makes.
See Black’s Law Dictionary 612 (7th ed. 1999) (defining “ultimate fact” as “[a]
fact essential to the claim or the defense” (emphasis added)). Millers
Mutual and Fremont Compensation bar evidence of important facts, not
just ultimate facts. Millers Mutual, 194 Ill.App.3d at 889, 141 Ill.Dec.
886, 552 N.E.2d 254; Fremont Compensation, 304 Ill.App.3d at 743, 237
Ill.Dec. 709, 710 N.E.2d 132. Nevertheless, “a reasonable, prudent attorney[,]
acting in good faith” (Penn v. Gerig, 334 Ill.App.3d 345, 357, 268
Ill.Dec. 339, 778 N.E.2d 325 (2002)) could perceive this thin fissure in the
language of Wilson, Peppers, and Envirodyne Engineers—this
reference to “ultimate facts” or “crucial” issues—and try to pry it apart. Thus,
count I of the amended complaint for declaratory judgment has a reasonable
enough basis in the language of case law that we are unwilling to sanction Pekin
for count I. See Ill. S. Ct. R. 375(b) (eff. Feb. 1, 1994).

¶ 94 2. The
Alleged Frivolity of Count II 

*14 20¶ 95 The church further argues in its motion for
sanctions: “Pekin tacked onto its frivolous complaint a second theory that on
its face failed to present an actual and ripe controversy between the parties.
The trial court properly dismissed the complaint with prejudice. On this point,
Pekin again offers no existing law that supports its appeal and no good-faith
argument for the extension, modification, or reversal of existing law.” 

¶ 96 The church must be referring to count II of the amended
complaint for declaratory judgment, in which Pekin seeks a declaration that,
under the “Other Insurance” provision of the insurance policy it issued to the
church, Pekin has no duty to defend the church in Farney’s lawsuit while the
primary insurer, Country Mutual, is undertaking the defense. As we have already
discussed, we agree that the parties have no actual controversy as to count II. 

¶ 97 Even so, three things could be said in favor of count
II. First, in the proceedings below, Farney took a hard line, insisting that,
despite the “Other Insurance” provision and Country Mutual’s assumption of the
defense, Pekin had a duty to defend the church (she seems to have moderated her
position on appeal). Second, Pekin pointed out to the trial court that the
church never sent Pekin a formal withdrawal of the tender of defense. Third,
the church, like Farney, is capable of sending mixed signals: in paragraph 9 of
its motion for sanctions, the church says: “Pekin had no good faith basis under
the law to deny defense of the Farney claim.” How could Pekin lack such
a good-faith basis if, as the church maintains, count II presents no actual
controversy? We decline to sanction Pekin for count II. 

¶ 98 3. Count III 

¶ 99 It does not appear that, in its motion for sanctions,
the church makes any argument specifically pertaining to count III of the
amended complaint for declaratory judgment. Therefore, for the reasons we have
discussed in connection with count I and II, we deny the church’s motion for
sanctions pursuant to Rule 375(b).

 

¶ 100 III. CONCLUSION 

¶ 101 We dismiss this appeal as to count II of Pekin’s
amended complaint for declaratory judgment, and we otherwise affirm the trial
court’s judgment. 

¶ 102 Appeal dismissed in part and affirmed in part.

Justices Holder White and Steigmann concurred in the
judgment and opinion.