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THIRD DIVISION
November 15, 2000
(NUNC PRO TUNC March 31, 2000)

JUSTICE BURKE delivered the opinion of the court:

Defendant Coregis Insurance Company (Coregis) appeals from an order of thecircuit court granting summary judgment in favor of plaintiff ContinentalCasualty Company (Continental) on its complaint for contribution from Coregis andordering Coregis to pay $2 million to Continental for funds, which Continentalpaid in behalf of Coregis' insured, Clark Nuber & Company (Clark Nuber), insettlement of a securities fraud class action against Clark Nuber, and denyingits motion for partial summary judgment. On appeal, Coregis contends that thetrial court erred in granting Continental summary judgment because: (1) thesettlement was covered under a policy issued by Continental to Clark Nuber(Continental policy), since a claim was made during Continental's policy period,and a question of fact existed as to whether a provision of Continental's policy,"Exclusion O," applied; (2) a policy issued by Coregis to Clark Nuber (Corgeispolicy) covered only the portion of the settlement which represented payment forClark Nuber's liability for its audit of its client's (Midisoft Corporation)recognition of revenue for two original equipment manufacturers' (OEM) contracts and, therefore, the trial court erred in finding that its policy covered theentire settlement; (3) even if Coregis' policy covered the settlement, a genuineissue of material fact existed as to what amount, if any, of the settlementshould be allocated to it; and (4) alternatively, if Coregis' policy covered thesettlement, it was entitled to a declaration that Continental's policy alsoapplied and to a pro rata allocation of the settlement. For the reasons setforth below, we affirm.

International Insurance Company issued a "claims made" accountants'professional liability policy to Clark Nuber, a certified public accounting firmwith offices in Bellevue, Washington, for the policy period of June 4, 1993, toJune 4, 1994. The policy was assumed by Mt. Airy Insurance Company, which laterchanged its name to Coregis Insurance Company. The policy provided, in part:

"If during the POLICY PERIOD, any INSURED firstbecomes aware of a potential CLAIM (i.e., any act, erroror omission which might reasonably be expected to be thebasis of a CLAIM against any INSURED under this policy),the insured must give immediate written notice of suchact, error or omission to the Company during the POLICYPERIOD. Any CLAIMS subsequently made against anyINSURED arising out of that act, error or omission shallbe considered to have been made and reported during thePOLICY PERIOD."

The policy also provided, under "Claims Expenses:"

"Two or more CLAIMS arising out of a single act,error or omission or a series of related acts, errors oromissions shall be treated as a single CLAIM."

Continental subsequently issued a claims made accountants' professionalliability policy to Clark Nuber for the policy period of June 4, 1994, to June4, 1995, which provided, in part:

"We will not defend or pay, under the Coverage Part,for:

O. Any wrongful act which happened prior to the'effective date' shown on the declarations; if on suchdate you knew or could reasonably foresee that suchwrongful act might be the basis for a claim."

Prior to the issuance of Continental's policy, Midisoft. a manufacturer ofinteractive multimedia software, retained Clark Nuber to audit its financialstatements for fiscal years 1991, 1992, 1993 and for the first quarter of 1994. Clark Nuber audited Midisoft's December 31, 1993, year-end financial statementsand reviewed its unaudited 1994 first quarter financial statements; it did notaudit Midisoft's 1994 unaudited second, third or fourth quarter financialstatements, nor its December 31, 1994, year-end financial statements.

In 1994, while Midisoft was in the process of planning a second publicoffering of its stock, the underwriter for the proposed public offering retainedCoopers & Lybrand, an accounting firm, to assist in its "due diligenceinvestigation." Coopers & Lybrand raised a question about Clark Nuber's"interpretation of relevant professional standards for the recognition ofrevenue" with respect to the financial statements audited by Clark Nuber in 1993. As a result, Clark Nuber sent Coregis the following letter, dated June 3, 1994,one day before Coregis' policy was to expire:

"Our firm has recently learned of circumstanceswhich may result in a claim being made against our firmand/or certain shareholders of our firm. *** [W]e arehereby notifying Coregis to comply with the policy'srequirement that we report the possibility of a claimwithin the current policy period. By making thisreport, we understand that any future claim arising outof these circumstances will be covered by the currentpolicy even if the claim itself is asserted after thepresent policy expires. ***

A publicly held software development Company,Midisoft Corporation, is in the process of planning itssecond public offering. *** During the process, [a]question [was raised] about the interpretation ofrelevant professional standards for the recognition ofrevenue by such a company, and, in an effort to obtainclarification, advised the software company to requestconcurrence of the SEC for the company's past accountingpractices in the recognition of such revenue. Thatquestion, in effect, raised a potential issue withrespect to the financial statements audited by our firmfor the fiscal year ending December 31, 1993, which wereincluded in the annual SEC 10K filing. *** Thecompany, with advice from both Coopers [& Lybrand] andour firm, has already discussed this issue with the SECaccounting staff. Our firm was told by one of the chiefaccountants last Friday, May 27, that the SEC accountingstaff had concluded there was no problem. ***

*** However, since our current policy expires onJune 4, we wanted to report these circumstances in theevent that a future claim is asserted so that thecurrent policy will cover it."

In November 1994, Midisoft retained Price Waterhouse as its auditor,replacing Clark Nuber. In July 1995, Midisoft announced that Price Waterhousewas restating Midisoft's 1994 first, second and third quarter financialstatements, and its 1994 year-end and 1995 first quarter financial statements. Midisoft shareholders subsequently sued Midisoft in Seattle, Washington, allegingMidisoft issued false and misleading financial statements concerning thecompany's financial position.

On December 18, 1995, Midisoft shareholders also filed a securities fraudclass action in Washington against Clark Nuber, entitled Jackson Smith, et al.v. Clark Nuber & Co., P.S. (the Smith action). The Smith complaint alleged that"Midisoft's publicly issued financial statements for the year ending December 31,1993 as well as the quarters ending March 31, 1994, June 30, 1994 and September30, 1994 including the financial statements included in Midisoft's Prospectus forits secondary offering of stock were materially false and contributed to theartificial inflation of Midisoft's stock price and thus caused the Class membersdamage when they paid an inflated price for Midisoft stock." The complaintfurther alleged that Midisoft overstated its revenue and earnings during all of1993 and the first three quarters of 1994 as a result of improper accountingpractices by Midisoft concerning revenue recognition, failure to provide adequatereserves for uncollectible accounts receivable, capitalizing, instead ofexpensing, software and advertising costs, and improper accounting for stockoption compensation and the related tax benefit. The complaint also alleged thatClark Nuber participated "in the development of the accounting treatmentsessential to the irregularities in Midisoft's statements," and "falselyrepresented, in Midisoft's annual form 10-K which was filed *** for the year1993, that Midisoft's financial statements complied with *** Generally AcceptedAuditing Standards during the course of the audit," and assisted in developingthe strategies for accounting for Midisoft's stock option plan, which in turn hadbecome in part, the basis of Midisoft's quarterly reports to shareholders andpress releases containing financial information."

On December 20, 1995, Coregis wrote to Clark Nuber and reserved its rightsto decline to defend and/or indemnify Clark Nuber with regard to its work forMidisoft. In February 1996, Coregis agreed to participate in the defense ofClark Nuber in the Smith action, but reserved its "rights or defenses." OnFebruary 22 and 23, 1996, a court-ordered mediation was held in Seattle,Washington. According to Continental, in a letter dated February 23, 1996,"Coregis withdrew its reservation of rights [regarding the Smith action],acknowledged coverage under its policy for the complaint, and acknowledged thatit received written notice of the claim on June 3, 1994." In November 1996, afinal settlement was approved by the Washington court and judgment was entered;Continental paid $2 million in behalf of Clark Nuber, reserving its rights topursue contribution from Coregis, and Coregis paid $200,000.

In December 1996, Continental filed a one-count complaint, seekingcontribution from Coregis for the settlement amount it paid in the Smith action. Continental alleged that "all of the alleged wrongful acts by Clark Nuberoccurred during Coregis' policy period" and notice of the claim was made andreported to Coregis during Coregis' policy period" pursuant to the "Reporting ofPotential Claims" provision in Coregis' policy." Continental maintained that theJune 3, 1994, letter sent by Clark Nuber to Coregis gave notice to Coregis and,since Coregis admitted that the Midisoft claim was made and reported during theCoregis policy period, the Smith settlement was covered under the terms ofCoregis' policy. Continental also alleged that the damages flowing fromMidisoft's "revenue problem" and "tax problem" arose as a result of the wrongfulacts of Clark Nuber committed prior to June 4, 1994, during Clark Nuber's 1993audit of Midisoft's annual financial statements, and were solely during Coregis'policy period. Continental further alleged that the Smith claims fell underExclusion O, a "prior acts" exclusion provision of its policy, and, therefore,its policy did not apply.

In May 1997, Continental filed a motion for summary judgment in which itmade arguments similar to the allegations contained in its complaint. Continental additionally argued that because Coregis did not have a reservationof rights at the time of the Smith settlement, Coregis was estopped from denyingits obligation to pay the settlement and, therefore, summary judgment was properbecause the only issue was whether the Smith complaint was within the scope ofCoregis' policy.

Coregis then filed the affidavit of Jeffrey Goldwater, a partner in the lawfirm repesenting Coregis, and requested discovery. In his affidavit, Goldwaterstated that Continental's motion for summary judgment raised issues whichrequired discovery of material facts by Coregis as to the "scope of the noticeprovided to Coregis and the relationship of the claims asserted in the [Smithaction] to the acts upon which notice was provided to Coregis."

Continental moved to stay discovery, arguing that only an "objectiveanalysis" of the Smith complaint, the language of the parties' policies, Coregis'notice letter, and Coregis' withdrawal of its reservation of rights letter werenecessary to resolve the issues of Continental's complaint as a matter of law andthat no factual inquiry was permissible. In response, Coregis argued that theissues raised in Continental's complaint could not be resolved as a matter of lawon the limited record. Coregis maintained that the Smith complaint allegederrors that were unrelated to the errors referred to in the notice given by ClarkNuber to Coregis, which only notified Coregis of a "revenue recognition" issuerelating to two OEM contracts, the ACS and Rex Tec contracts. Coregis alsoargued that it was entitled to discovery to counter the Smith allegation "thatClark Nuber was somehow responsible for establishing the accounting practice ofMidisoft as opposed to merely serving as an outside auditor." The trial courtdenied Continental's motion to stay discovery.

In October 1997, Coregis filed its response to Continental's motion forsummary judgment, arguing that issues of material fact existed whether Coregis'or Continental's policy, or both, provided coverage for the Smith settlement,thereby precluding summary judgment. Coregis maintained that while "it wasundisputed that Coregis received notice of a potential claim by way of a letter,"an issue existed as to the scope of Clark Nuber's June 3, 1994, notice letter. Coregis stated that Midisoft wrote to the SEC regarding the ACS and Rex Teccontracts and also sent a letter to Coregis, dated June 3, 1994, that "wasintended to inform [Coregis] of the potential for a claim against Clark Nuber ifthe SEC disagreed with Midisoft's accounting for the recognition of revenue forthe ACS and Rex Tec contracts." Coregis also stated that the SEC informedMidisoft in a letter dated July 1, 1994, that it would take no action as toMidisoft's recognition of revenue for the ACS and Rex Tec contracts and that thepotential claim reported to Coregis was resolved.

Coregis also argued that no claim was made against Clark Nuber until afterCoregis' policy lapsed on June 4, 1994. Coregis conceded that it had waived anyargument that the June 3, 1994, letter did not trigger the discovery clause inits policy, but argued that triable issues of fact existed as to which acts,errors or omissions Clark Nuber was "subjectively" aware, and provided notice,of during the Coregis policy, and what amount, if any, of the settlement shouldbe allocated to those alleged negligent acts, errors or omissions. Coregisfurther argued that the affidavit of Ronald Rauch, a Clark Nuber partner incharge of Midisoft, contradicted Continental's position that the notice letterrelated to "all [of Clark Nuber's] work for Midisoft in general" and demonstratedthe existence of a factual dispute because Rauch's affidavit stated that the onlypotential claim of which Clark Nuber was aware of at the time of its noticeletter related to the recognition of revenue for the ACS and Rex Tec contracts.

Coregis further argued that a genuine issue of material fact existed as towhether Continental's "prior knowledge" provision, Exclusion O, applied becausethere was no evidence that Clark Nuber knew or could have foreseen on June 4,1994, that each wrongful act ultimately alleged in the Smith complaint might bethe basis for a claim. Coregis also argued that it did not waive and was notestopped from asserting its defenses as a result of its February 23, 1996,reservation of rights letter.

On December 17, 1997, at the hearing on Continental's motion for summaryjudgment, the court asked Continental whether Clark Nuber's notice letter gavenotice of a potential claim within Coregis' policy period and stated what thespecific act, error or omission was "in terms of the obligation of the insured." In response, Continental stated:

"Yes *** the notice letter gives notice of twothings [i.e., that there was work being done onMidisoft's second public offering and Clark Nuber mightbe sued with respect to its auditing of Midisoft's 1993year-end financial statements and the first quarter of1994]. The complaint that was subsequently filed [theSmith action] is based on those two things, and that'swhere [sic] there's no facts at issue."

In response, Coregis stated to the court:

" *** [Y]our Honor, this [Smith] complaint is muchmore than has been represented to. It doesn't justconcern a malpractice claim regarding the 1993 financialstatements. It lays out five distinct areas of wrongfulacts and accounting problems by MidiSoft [sic] to whichClark Nuber allegedly participated and mademisrepresentations regarding they involved distinct actsor omissions over a long period of time, and theyinvolved distinct documents, not just the audited 1993financial statements.

So what you essentially have here in our view ***is at least five separate claims that are asserted inthe MidiSoft [sic] complaint.

So with that background those are the claims thatwere made in MidiSoft's [sic] suite [sic] against theinsured, Clark Nuber. Those are the claims that weresettled."

Coregis further argued that Continental's Exclusion O, which provides thatContinental will not defend or pay for any wrongful act, which happened prior tothe policy date, if on such date the insured knew or could reasonably foreseethat such act might be the basis for a claim, could not be met because there weremultiple acts alleged prior and subsequent to June 4, 1994. Coregis also arguedthat Rauch's affidavit stated that, other than the revenue recognition issueraised with regard to the ACS and Rex Tec contracts, there was no evidence thatall of the other allegations in the Smith complaint against Clark Nuber were actsthat Clark Nuber knew or could reasonably have foreseen as potential claims. With respect to Clark Nuber's notice letter, Coregis argued that the onlyspecific potential claim identified in the letter pertained to the recognitionof revenue of the two OEM contracts, and not an "act or omission *** about [a]public offering [or] not *** work in general" and "not anything in the 1994." Coregis further argued that there was nothing stated in the notice letter aboutinadequate reserves for accounts receivable, capitalization of software andadvertising costs, tax error, or improper accounting for stock options.

In response, Continental argued that according to the notice letter,"[t]here's a sentence in [it] that says you're put on notice in case they getsued for the work they did in connection with the 1993 audit and because of workthey did with the second public offering," and that "[a]ll of this stuff aboutOEM contracts and different things that they have produced in discovery justdon't have anything to do with the notice that was actually given." Continentalpointed out that the "5 claims that Coregis talks about and says have nothing todo with Clark Nuber's 1993 audit of financial statements are allegations againstMidisoft, not Clark Nuber, about what was wrong with Midisoft." The trial courtsubsequently granted summary judgment in favor of Continental, finding thatCoregis' policy provided coverage for the Smith settlement, and set the case forstatus regarding Continental's request for prejudgment interest and attorneyfees.

On January 15, 1998, Coregis filed a motion for partial summary judgment,seeking a declaration that Continental's policy, as a concurrent or overlappingpolicy, also covered the Smith settlement "and that the settlement should beallocated between [Continental] and Coregis, as a matter of law, based on theamounts paid by the parties at the time of the settlement" or, "[a]lternatively,the settlement should be reallocated between [Continental] and Coregis on a pro-rata [sic] basis pursuant to the limits of liability contained in theirrespective policies." Coregis' motion repeated arguments it had made in itsresponse to Continental's motion for summary judgment.

At the status hearing, Continental informed the court that it was notpursuing its claim for prejudgment interest and attorney fees. Coregis thenargued that the court had not considered or ruled upon the issue of whetherContinental's policy covered a portion of the Smith settlement and, pursuant toCoregis' motion for partial summary judgment, it sought a proration of thesettlement between itself and Continental. Continental responded that thecourt's ruling on December 17, 1997, that Coregis' policy covered the entiresettlement, left no remaining issue as to whether Continental's policy providedcoverage. Continental further maintained that Coregis' motion for partialsummary judgment was in fact a motion to reconsider, arguing that the motion wasidentical to the arguments contained in Coregis' response to Continental's motionfor summary judgment, which the court considered at the December 17 hearing andruled that Coregis' policy covered the Smith settlement. Thereafter, the courtentered an order continuing the matter "for a ruling by the court as to whetherit [would] further consider Coregis' motion for partial summary judgment or entera final order on the settlement amount in [Continental's] favor." On February17, the court denied Coregis' motion for partial summary judgment, characterizingit as a motion to reconsider. The February 17 order was amended on February 19to reflect the judgment amount of $2 million. This appeal followed.

Coregis first contends that the trial court erred in granting summaryjudgment in favor of Continental because a genuine issue of material fact existedas to whether Clark Nuber's June 3, 1994, notice letter gave Coregis notice ofall the wrongful acts, errors or omissions claimed in the Smith action. In orderto determine the "scope of coverage" of Coregis' policy, Coregis argues that aproper interpretation of what "wrongful" acts Clark Nuber's notice letterprovided to Coregis was dependent upon a consideration of disputed factsregarding Clark Nuber's "subjective" intent and awareness at the time of theletter and what amount of the Smith settlement, if any, could be attributed forthe acts, errors or omissions of which Clark Nuber gave Coregis notice. Coregismaintains that, based upon Rauch's affidavit, the notice letter gave Coregisnotice only of a potential claim concerning the recognition of revenue for theACS and Rex Tec contracts and, therefore, Coregis was only put on notice of apotential claim regarding these two contracts.

Coregis further asserts that Continental's policy covered the remainingSmith claims, most of which "had nothing to do with recognition of revenue,"because the Smith complaint was filed against Clark Nuber during Continental'spolicy period. Coregis also asserts that Exclusion O of Continental's policybarred coverage only for liability, if any, attributable to Clark Nuber's auditof Midisoft's recognition of revenue for the ACS and Rex Tec contracts. Coregismaintains that since "the undisputed evidence demonstrated that Clark Nuber facedno exposure attributable to its audit of Midisoft's recognition of revenue forthese contracts, Exclusion O did not bar coverage for any portion of thesettlement." Coregis also argues that Exclusion O did not preclude coveragebecause Continental had the burden, but failed to present any evidence to showthat Clark Nuber had or could have foreseen prior to June 4, 1994, that "eachwrongful act ultimately alleged in the [Smith] complaint might be the basis fora claim."

Continental contends that "whether the potential notice letter wassufficiently related to the Smith complaint for the Coregis policy to affordcoverage" was a question of law for the trial court since "the notice letter, theSmith complaint and the relevant Coregis policy provision all speak forthemselves." Continental maintains that Coregis "attempts to create an issue offact" by asserting that Clark Nuber did not intend to give Coregis notice of allof the claims alleged in the Smith action, but only those pertaining to the ACSand Rex Tec contracts. Continental further argues that Clark Nuber's"subjective" intent and awareness when it sent its notice letter was irrelevantin determining whether the notice letter was sufficient to trigger coverage underCoregis' policy for the Smith claims and, similarly, that it was irrelevant "whatamount of liability would have attached to different allegations in the Smithcomplaint."

Continental also argues that Clark Nuber's notice letter met all of therequirements of the Coregis policy because the letter put Coregis on notice thatClark Nuber might be sued for work it performed for Midisoft and that "all of thealleged negligence stemming from the alleged improper accounting treatments werebased on alleged wrongful acts committed by Clark Nuber during the year-end 1993audit and the first quarter 1994 review allegedly included in [Midisoft's]prospectus for the secondary offering." Continental maintains, therefore, thatCoregis' policy solely provided coverage for the Smith claims. Lastly,Continental alternatively argues that even if all the acts in the Smith complaintwere not precisely the same as the acts of which Clark Nuber gave notice toCoregis, the trial court's ruling should be affirmed based on the "related acts"provision of Coregis' policy.

The standard of review of a summary judgment ruling is de novo. McNameev. State of Illinois, 173 Ill. 2d 433, 438, 672 N.E.2d 1159 (1996).⁽¹⁾ A motionfor summary judgment is properly granted when the pleadings, depositions,admissions, and affidavits establish that no genuine issue as to any materialfact exists and the moving party is entitled to a judgment as a matter of law. See 735 ILCS 5/2--1005(c) (West 1996); Cramer v. Insurance Exchange Agency, 174Ill. 2d 513, 530, 675 N.E.2d 897 (1996). "The mere existence of some allegedfactual dispute will not defeat an otherwise properly supported motion[;] theremust be no genuine issue of material fact." (Emphasis in original.) FederalSavings & Loan Insurance Corp. v. Burdette, 718 F. Supp. 649, 653 (E.D. Tenn.1989), citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 91 L. Ed.2d 202, 106 S. Ct. 2505.

"It is well established that the 'claims made' or 'discovery' policy ischaracterized by coverage for negligent acts or omissions only if such arediscovered during and brought to the attention of the insurer within the policyterm." Graman v. Continental Casualty Co., 87 Ill. App. 3d 896, 899, 409 N.E.2d387 (1980). "The major difference between a claims made policy and an occurrencepolicy is in the risk insured. In the occurrence policy, the risk is theoccurrence itself. In the claims made policy, the risk insured is the claimbrought by a third party against the insured." General Insurance Co. of Americav. Robert B. McManus, Inc., 272 Ill. App. 3d 510, 514, 650 N.E.2d 1080 (1995),citing Central Illinois Public Service Co. v. American Empire Surplus LinesInsurance Co., 267 Ill. App. 3d 1043, 1048, 642 N.E.2d 723 (1994). "One of thepurposes of a claims made policy is to allow the insurance company to easilyidentify its risk, allowing it to know in advance the extent of its claimsexposure and thus compute its premiums with greater certainty." McManus, 272Ill. App. 3d at 514.

"The construction of an insurance policy is a matter of law." MarylandCasualty Co. v. Chicago & North Western Transportation Co., 126 Ill. App. 3d 150,155, 466 N.E.2d 1091 (1984). Where no factual disputes exist, but only theinterpretation of the content of an insuring agreement and notice, thesufficiency of a notice letter is determined as a matter of law based upon thecontent of the letter and the allegations contained in a subsequently filedcomplaint. Continental Insurance Co. v. Metro-Goldwyn-Mayer, Inc., 107 F.3d1344, 1346 (9^th Cir. 1997). A proper analysis of the sufficiency of notice iswhether the notice given objectively complied with the potential claim noticeprovision of a policy. Federal Deposit Insurance Corp. v. Mijalis, 15 F.3d 1314,1335 (5^th Cir. 1994). "The insured need not provide notice of every possibleevent out of which coverage may arise, but only of claims made." University ofIllinois v. Continental Casualty Co., 234 Ill. App. 3d 340, 364, 606 N.E.2d 1235(1992). Whether a claim is within a policy's coverage is determined by thenature of a third party's claim. U.S. Gypsum Co. v. Admiral Insurance Co., 268Ill. App. 3d 598, 624,, 648 N.E.2d 1220 (1994); Dayton Independence SchoolDistrict v. National Gypsum Co., 682 F. Supp. 1403, 1406 (E.D. Tex. 1988). "Nothing said at a date after the notice letter can lessen the notice given toand received by the insured." Burdette, 718 F. Supp. at 655. After a case hasbeen settled, the plaintiff need only prove that the allegations in theunderlying complaint are covered under the policy language, and the plaintiffdoes not have to show that the allegations could actually have been proven attrial. Public Utility District No. 1 of Klickitat County v. InternationalInsurance Co., 124 Wash. 2d 789, 881 P. 2d 1020, 1032 (Wash. 1994).

We find that because the content of the notice letter in the present casewas not disputed, but only its interpretation, no question of fact existed as tothe sufficiency of the letter and, in fact, Coregis concedes that the letter wassufficient to trigger coverage under its policy. We thus proceed to determinewhether all of the Smith claims were covered under the language of the pertinentCoregis policy provision. We find that they were.

As indicated above, Coregis' CLAIMS MADE POLICY PROVISION stated that ifClark Nuber, the insured, became "aware of a potential claim (i.e., any act,error or omission which might reasonably be expected to be the basis of a claimagainst any insured under the policy)," it was required to give immediate noticeto Coregis. The policy further provided that any subsequent claims made againstClark Nuber, "arising out of that act, error or omission shall be considered tohave been made and reported during the policy period."

Clark Nuber's NOTICE LETTER stated, in pertinent part, that Midisoft was"in the process of planning its second public offering," a question was raised"about the interpretation of relevant professional standards for the recognitionof revenue by such a company," and that "[t]hat question, in effect, raised apotential issue with respect to the financial statements audited by our firm forthe fiscal year ending December 31, 1993, which were included in the annual SEC10K filing." (Emphasis added.)

Paralleling the notice letter statements, the SMITH COMPLAINT alleged thatMIDISOFT'S "publicly issued financial statements for the year ending December 31,1993 as well as the quarters ending March 31, 1994, June 30, 1994 and September30, 1994 including the financial statements included in Midisoft's Prospectus forits secondary offering of stock were materially false and contributed to theartificial inflation of Midisoft's stock price." (Emphasis added.) Thecomplaint listed four improper accounting practices by Midisoft with respect to: revenue recognition; failure to provide adequate reserves for uncollectibleaccounts receivable; capitalizing, instead of expensing, software and advertisingcosts; and improper accounting for stock option compensation and the related taxbenefit.

Immediately following the allegations against Midisoft, the complaintalleged that CLARK NUBER: "falsely represented, in Midisoft's annual form 10-Kwhich was filed *** for the year 1993, that Midisoft's financial statementscomplied with *** Generally Accepted Auditing Standards during the course of theaudit"; "actively and directly participated in this plan of deception by falselyissuing unqualified opinions on Midisoft's financial statements for the periodending December 31, 1993, by continuing that fraud throughout the Class Period,and by participating in the development of the accounting treatments essentialto the irregularities in Midisoft's financial statements"; "Clark Nuber wasliable "by virtue of its conduct related to the structuring and approval of theimproper tax accruals related to Midisoft's stock option plan"; "Clark Nuber[was] also liable *** due to its performance of a grossly negligent audit for theyear 1993, as well as a negligent review for the March 31, 1994 financialstatements which were included in the prospectus for the secondary offering"; and"Clark Nuber personnel actually helped craft the financial statements and relatednotes, and assisted in developing the strategies for accounting for Midisoft'sstock option plan, which in turn had become in part, the basis of Midisoft'squarterly reports to shareholders and press releases containing financialinformation." (Emphasis added.)

As Continental correctly points out, Clark Nuber's June 3, 1994, noticeletter stated that Clark Nuber might be sued based upon its financial statementsin connection with Midisoft's second public offering, and it is clear that "ClarkNuber [was] only being charged with wrongful acts committed during thepreparation of the year-end 1993 audit and the review of the March 31, 1994financial statements which were allegedly included in the prospectus for thesecondary offering." With respect to the 1994 second and third quarterstatements, Clark Nuber was also charged with "participating in the developmentof the accounting treatments essential to the irregularities in Midisoft'sfinancial statements during the 1993 audit." Accordingly, all of the negligencealleged by the Smith claimants "arose out of" the four improper accountingtreatments developed by Clark Nuber and were based on the alleged wrongful actsinitially committed by Clark Nuber during the year-end 1993 audit and the firstquarter review allegedly included in the prospectus for the secondary offering. We therefore find, based on Coregis' pertinent policy provision, Clark Nuber'snotice letter and the allegations of the Smith complaint, that Coregis' policycovered all of the Smith claims, as the trial court properly found in grantingContinental summary judgment.

We further find Coregis' argument without merit that the scope of coverageunder its policy of the Smith claims can only be determined based on ClarkNuber's subjective intent and awareness of potential claims at the time of ClarkNuber's notice letter and that the letter only notified Coregis of a potentialclaim based on the ACS and Rex Tec contracts. Coregis admitted during oralargument that no case law exists supporting its "intent and awareness" argument,and our research reveals none. We find Burdette, however, instructive on theissue of Coregis' narrow interpretation of the notice letter in the present case.

In Burdette, which involved a claims made policy, the insurer argued thatletters to others and minutes of meetings, made after the insured had providedthe insurer with a letter giving it notice that "certain former officers anddirectors" of the insured might be sued, was evidence that the insured "intended"to only sue eight former officials, rather than all of those named in thesubsequently filed complaint against the officials. Burdette, 718 F. Supp. at655. In rejecting this argument, the Burdette court stated that "[n]othing saidat a date after the notice letter can lessen the notice given to and received bythe insurer." Burdette, 718 F. Supp. at 655. The court found that the noticeletter was "notice to the insurer that one, some, or all the former officers anddirectors might be sued," and the subsequent correspondence had no bearing on thepreviously submitted notice letter of which officials the insured "intended" tosue. Burdette, 718 F. Supp. at 655.

In the present case, Coregis attempts to limit the scope of coverage of itspolicy to the ACS and Rex Tec contracts based on Rauch's affidavit, like theBurdette insurer attempted to limit its policy coverage to fewer officials of theinsured based on correspondence evidencing its "intention" to do so after noticeof a potential claim had been received by the insurer in Burdette. Coregisstates in its opening brief that Clark Nuber's notice letter "unequivocallyreferred only to two particular contracts," the ACS and Rex Tec contracts. Wefirst observe, however, that nowhere in Clark Nuber's letter are the ACS and RexTec contracts referred to; the letter states only that a question was raised"about the interpretation of relevant professional standards for the recognitionof revenue." If, assuming arguendo, that Clark Nuber had "intended" to notifyCoregis that the ACS and Rex Tec contracts were the sole basis for a potentialclaim, Clark Nuber could have specifically referred to those two contracts as thesole basis. Instead, Clark Nuber's notice letter not only did not refer to theACS and Rex Tec contracts, but further stated a broader notification to Coregisthat the question about the recognition of revenue raised a "potential issue withrespect to the financial statements audited by [Clark Nuber] for the fiscal yearending December 31, 1993, which were included in the annual SEC 10K filing" andwere being used in connection with Midisoft's second public offering, as anadditional basis for a potential claim. Accordingly, Coregis was notified thatthe "financial statements," in their entirety, which it audited, as well as theinterpretation of relevant professional standards for the recognition of revenue,might be the bases of potential claims against it. We further observe thatCoregis fails to cite to any authority in support of its conclusion that thebroader potential claim regarding the financial statements should be ignored infavor of the narrower potential claim regarding the recognition of revenue.

We also observe that because Clark Nuber performed no work for Midisoftafter the effective date of Continental's policy, the only work that Clark Nubercould be sued for was work performed during Coregis' policy period, as well asthe subsequent effect of this work, as alleged by the Smith claimants. ClarkNuber gave timely notice to Coregis of what the acts, errors or omissions thatit was "aware" of at that time that might result in it being sued, i.e., itsfinancial statements and interpretation of relevant professional standards forthe recognition of revenue. Clark Nuber objectively complied with the potentialclaim notice provision of Coregis' policy, giving Coregis all the information ithad at the time. See Mijalis, 15 F.3d at 1335; Continental Insurance Co. v.Bangerter, 37 Cal. App. 45^th 69, 43 Cal. Reptr. 2d 374, 380 (Cal. Crt. App.1995). Thus, even if the ACS and Rex Tec contracts were, arguendo, "intended"to be the basis for a potential claim in Clark Nuber's notice letter, whichCoregis claims Clark Nuber was absolved of liability for, this alleged disputedfact does not constitute a material question of fact because the notice letteralso stated the broader potential claim concerning the financial statementsaudited by Clark Nuber and used in connection with Midisoft's second publicoffering, which the Smith claimants alleged resulted in the "irregularities inMidisoft's financial statements."

We also find without merit Coregis assertion that the Smith claims wereseparate, multiple claims, "disparate in nature, time and character" and, thus,"not related to the recognition of revenue wrongful acts which were reportedduring the Coregis policy." Coregis' policy provided that it would cover allclaims "arising out of" a timely reported potential claim and, as we havediscussed above, all the Smith claims arose out of Clark Nuber's work forMidisoft in 1993 and the first quarter of 1994 and, thereafter, "arose out of"the accounting treatments Clark Nuber had put into place.

In light of our holding, it is unnecessary to address Continental'scontention, which Coregis argues Continental only made in a footnote in itsmotion for summary judgment and was not argued before the trial court, thatCoregis' "related acts" policy provision supports Continental's argument that anyof the Smith claims not specifically referred to in Clark Nuber's notice letterwere covered under Coregis' policy by virtue of the "related acts" provision. Based on the Smith allegations, all of the Smith claims against Clark Nuberclearly arose out of the work Clark Nuber initially performed for Midisoft in1993 and the first quarter of 1994 and thus were, without question, related tothat initial conduct, which was first timely reported to Coregis in Clark Nuber'snotice letter during Coregis' policy period.

Based on our holding that Coregis' policy solely covered all of the Smithclaims, we only briefly respond to Coregis' argument that the trial court erredin denying its motion for "partial summary judgment" based on the court'smistaken belief "that only one policy or the other policy could cover the Smithsettlement, [thereby] failing to recognize the possibility that both policiescould cover the settlement." Coregis argues that Continental's policy providedcoverage for the Smith settlement because: (1) Continental was notified of theSmith claims during Continental's policy period; (2) genuine issues of materialfact existed whether Coregis' policy covered any portion of the Smith settlement;(3) a question of material fact existed whether Exclusion O of Continental'spolicy applied; and (4) Coregis' and Continental's policies provided "concurrent"coverage, and an allocation of the settlement between Coregis and Continentalshould have been made or a pro rata allocation pursuant to the limits ofliability of the respective policies.

With respect to Coregis' first and second arguments, while the fact thatthe Smith claims were made during Continental's policy period, the basis for theSmith claims, as stated above, was Clark Nuber's work for Midisoft in 1993 andthe first quarter of 1994, prior to the effective date of Continental's policy,that was timely reported to Coregis during its policy period, which arose out ofthe accounting treatments put in place by Clark Nuber and subsequently used byMidisoft during the "Class Period," thereby covering all of the Smith claims. Also, as discussed above, Coregis' argument that Clark Nuber "intended" to notifyCoregis of a potential claim concerning the ACS and Rex Tec contracts only,pursuant to Rauch's affidavit, did not constitute a material question of fact.

In its third argument, Coregis asserts that Clark Nuber was not aware andcould not have foreseen the Smith claims at the time of Clark Nuber's noticeletter. Coregis relies on Rauch's affidavit which stated that Clark Nuber wasnot aware of, nor could have foreseen the potential claims for which it might besued, other than the ACS and Rex Tec contracts. Coregis therefore maintains thata question of fact existed whether Continental's policy applied. Coregis alsoasserts that Continental was required, but failed, to present any evidence whichestablished that Exclusion O of Continental's policy precluded coverage for theentire Smith settlement.

We reject Coregis' arguments in light of our holding above, and find, asContinental argues, that its policy was irrelevant regarding the Smith claims. We also briefly note that the cases Coregis relies upon in support of itsargument are distinguishable. In Graman v. Continental Casualty Co., 87 Ill.App. 3d 896, 409 N.E.2d 387 (1980), the court found that the insurer was notrequired to defend or indemnify an insured under a claims made policy because theinsurer was not notified of the claim until more than three years after theexpiration of the policy at issue. Here, Clark Nuber sent its notice letter toCoregis during the Coregis policy period. Stiefel v. Illinois Union InsuranceCo., 116 Ill. App. 3d 352, 452 N.E.2d 73 (1983), and Mann v. Mann, 133 Ill. App.2d 552, 273 N.E.2d 40 (1971), both involved issues of the insureds' failure toinform their insurers of their knowledge of a claim prior to the effective dateof the insureds' policies. Here, there is no issue regarding the withholding ofprior knowledge of a claim before the effective date of Coregis' policy.

Coregis' fourth argument, that the parties' policies provided "concurrent"coverage and an allocation or pro rata allocation of the settlement should havebeen made between them, is without merit because the parties' policies wereconsecutive, not concurrent, policies.⁽²⁾ Concurrent policies are those whichexist for the same policy period or overlap in their policy periods. See St.Paul Fire & Marine Insurance Co. v. Vigilant Insurance Co., 919 F.2d 235, 241(4^th Cir. 1990). Here, Coregis' policy ran from June 4, 1993, to June 4, 1994,whereas Continental's policy ran from June 4, 1994, to June 4, 1995. Accordingly, the two policies were consecutive policies. Since Coregis' andContinental's policies were consecutive policies, and Clark Nuber's notice of apotential claim with respect to the Smith claims was made during Coregis' policyperiod, Coregis' policy covered the entire settlement because all of the claims first arose out of Clark Nuber's initial conduct in 1993 and the first quarterof 1994. Therefore, Continental's policy did not cover any portion of thesettlement since none of Clark Nuber's conduct, which was the basis of the Smithclaims against Clark Nuber, occurred during Continental's policy period.

We briefly note that the cases Coregis relies on in support of its argumentare distinguishable. Universal Underwriters Insurance Group v. Griffin, 287 Ill.App. 3d 61, 677 N.E.2d 1321 (1997), involved concurrent policies--a personalautomobile policy and a garage policy. Outboard Marine Corp. v. Liberty MutualInsurance Co., 283 Ill. App. 3d 630, 670 N.E.2d 740 (1996), involved coverage byfour commercial general liability policies for a corporation that dischargedpolychlorinated byphenyl contamination while manufacturing outboard motors. TheOutboard Marine court held that the contamination constituted a continuous injurythat triggered coverage under more than one policy. Similary, Insurance Co. ofNorth America v. Home & Auto Insurance Co., 256 Ill. App. 3d 801, 628 N.E.2d 643(1993), involved a continuous injury of lead posioning over a period of time andequal contribution from three successive policies was held appropriate. In thepresent case, however, the professional liability policies at issue here coverclaims based on the time of the notice of a potential claim, not on the time ofinjury, as in Outboard Marine and Home & Auto.

We further note that during oral argument before this court, Coregis statedthat it had discovered a recent case holding that consecutive claims madepolicies can cover the same claim. We told Coregis that it could file a motionto cite supplemental authority. Coregis did not file a motion, and our researchreveals no such case.⁽³⁾ We therefore find that the trial court properly deniedCoregis' motion for "partial summary judgment," which motion, based on our reviewof the record, was properly treated by the trial court as a motion to reconsider. In light of our holding, we need not address Continental's arguments thatCoregis was estopped from denying coverage and that Coregis had waived allcoverage defenses.

For the reasons stated, the judgment of the circuit court is affirmed.

Affirmed.

THEIS and HALL, JJ., concur.

1. ¹The parties disagree with respect to whether Illinois or Washington lawapplies, but agree that it is irrelevant because the applicable case law on theissues raised in the present case is the same throughout the United States.

2. ²In almost identical footnotes in its motion for partial summary judgmentand opening brief in this court, Coregis suggests that because Continental seekscontribution from Coregis for the Smith settlement, Continental would have to bea concurrent insurer for the Smith claims or otherwise Continental is notentitled to contribution from Coregis. In Coregis' subsequently filed petitionfor rehearing, it maintained that it "specifically" raised this argument in itsmotion for partial summary judgment. However, contrary to Coregis' assertion,it did not, beyond its footnote in its motion, make this "contribution argument"in the trial court, and the court did not consider it. Instead, Coregisconsistently argued that the Smith settlement "should be allocated between[Continental] and Coregis *** based on the amounts paid by the parties at thetime of the settlement" or, "[a]lternatively, the settlement should bereallocated between [Continental] and Coregis on a pro-rata [sic] basis pursuantto the limits of liability contained in their respective policies." Accordingly,just as Coregis suggested in its brief before us that we should not considerContinental's "related acts" argument because Continental did not argue it in thetrial court and only "advanced" it in a footnote in its motion for summaryjudgment, we find that Coregis waived its "contribution argument." Lake CountyTrust Co. v. Two Bar B, Inc., 238 Ill. App. 3d 589, 598, 606 N.E.2d 258 (1992)("[A]n appellate court will not consider on review theories which were notpresented to the trial court"); Srivastava v. Russell's Barbecue, Inc., 168 Ill.App. 3d 726, 732, 523 N.E.2d 30 (1988) ("An issue not presented to or consideredby the circuit court cannot be raised on review for the first time").

3. ³In Coregis' petition for rehearing, it argues that this court "ruled that[Continental's] policy was 'irrelevant' based on the argument that two claimsmade policies cannot cover the same loss." Coregis cites to two cases for theproposition that "two claims made policies can cover the same risk, where onepolicy is triggered by the a [sic] notice of a potential claim, and thesubsequent policy is triggered when the actual claim is made during the term ofthe subsequent policy."

We first observe that nowhere in this court's opinion do we state that twoclaims made policies can never cover the same loss, but rather only that Coregisfailed to cite to any authority in support of its argument otherwise. Additionally, given the impropriety of Coregis' citation in its petition forrehearing of two cases not presented to this court prior to our decision,contrary to Supreme Court Rule 341(e)(7), which states, in part, that anappellant has "a positive duty to support each point made in its appeal withcontentions *** [and] citation of authorities" and a point not argued may not beraised in a petition for rehearing (134 Ill. 2d R. 341(e)(7)), the facts of thiscase, and because the two cases are distinguishable from the present case, weneed not make such a determination.

In Board of Education v. New Jersey School Boards Ass'n Insurance Group,719 A.2d 645 (N.J. Super. A.D. 1998), the court found that a consecutiveinsurer's claims made policy provided coverage for a federal claim based on thecourt's determination that the federal claim was a "new and different" claim froma previous State administrative claim, notwithstanding that both claims werebased upon common facts, because the federal claim alleged wrongful actscommitted after the conclusion of the State administrative proceeding and pled"a conglomeration of civil wrongs, not only under the federal education laws anddisability laws, but also under the federal constitution and the Civil RightsAct." Board of Education, 719 A.2d at 650. In the present case, the complainedof conduct by Clark Nuber, after the effective date of Continental's policy, wasnot "new" conduct, but rather was related to, and arose out of, the conduct firstreported during Coregis' policy period.

In Coregis Insurance Co. v. Camico Mutual Insurance Co., 959 F. Supp 1213(C.D. Cal. 1997), the court found that a consecutive claims made policy, issuedby Coregis and in effect when a complaint was filed, did not provide coveragewhere the insured failed to inform Coregis of the claim prior to the effectivedate of its policy, and the insured knew or should have reasonably foreseen thata claim would be made against him. Accordingly, the Camico court held that theclaims made policy issued by Camico solely covered the claim. Here, Clark Nuberreported a potential claim to Coregis during Coregis' policy period, and allclaims made after the expiration of Coregis' policy and the effective date ofContinental's policy were related to the potential claim. Coregis' policyclearly covered the Smith action claims based on Coregis' policy provision that "[a]ny CLAIMS subsequently made against any INSURED arising out of [the reportedpotential claim] *** shall be considered to have been made and reported duringthe POLICY PERIOD." (Emphasis added.)