Murray, a former Lombard police officer, filed an eight-count complaint in the United States District Court for the Northern District of Illinois naming Lombard and several of its officers and employees as defendants. The complaint alleged violations of federal civil rights and employment laws and sought both compensatory and punitive damages. Lombard tendered the defense of the entire matter to IRMA.
IRMA's executive director accepted the defense of the covered compensatory claims but, pursuant to the "No Coverage-No Defense" amendment, rejected defense of the noncovered punitive claims. IRMA did offer to voluntarily supply Lombard and its employees with the services of an IRMA-appointed counsel to defend the noncovered punitive claims, but only on the condition that they would waive all potential conflicts of interest.
*91 Lombard refused to waive allpotential conflicts and appealed the executive director's decision to a three-member IRMA appeals committee. Lombard requested the appeals committee to require IRMA to pay for separate, independent counsel to defend both Lombard and its employees in the entire lawsuit. Despite Lombard's request, the appeals committee unanimously affirmed the executive director's decision. The appeals committee's ruling was then unanimously affirmed by the nine-member IRMA executive board. The executive board's decision, in turn, was affirmed by IRMA's 68-member board of directors. Except for Lombard, all members voted to affirm the decision.
On May 22, 1995, Tim Ryan, Jr., and Garrett Wainwright also filed an eight-count complaint in the United States District Court for the Northern District of Illinois naming Lombard and several of its officers and employees as defendants. This complaint,