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Ladd Constr. v. Insurance Co. of N. America

OPINION FILED JUNE 19, 1979.

LADD CONSTRUCTION COMPANY, PLAINTIFF-APPELLANT,

v.

INSURANCE COMPANY OF NORTH AMERICA, DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Bureau County; the Hon. C. HOWARD WAMPLER, Judge, presiding.

MR. PRESIDING JUSTICE SCOTT DELIVERED THE OPINION OF THE COURT:

This is an appeal from an order of the Circuit Court of Bureau County which dismissed the complaint of the plaintiff, Ladd Construction Company. The dismissed complaint had sought damages from the defendant, Insurance Company of North America, on the grounds that it had wrongfully refused to defend the plaintiff under the terms of a general liability policy.

The plaintiff construction company owned real property in the village of Ladd in Bureau County. Located on this property was a conicalshaped slag or gob pile, being approximately 100 feet high, 1,000 feet long and 700 feet in width. A "gob" or "slag" pile consists of the residue which remains or is discarded after mined coal has been processed. A predecessor in title to the plaintiff had operated a coal mine and had created the gob pile. Tracks of the Burlington Northern Inc., a railway company, were located adjacent to the gob pile and in 1972, and for a time thereafter the slag pile began to collapse and slide so as to cover and block a portion of Burlington's tracks. The sliding and collapsing occurred after the plaintiff, Ladd Construction Company, undertook to remove a portion of the gob pile so as to create a level area.

Burlington Northern, Inc., brought suit in equity against Ladd Construction Company, praying for relief as follows:

"13. Wherefore, the plaintiff prays that this Court will issue its mandatory writ of injunction directing the defendant, within a short day to be fixed by the Court:

(a) To remove all the debris from its gob pile which encroaches on the plaintiff's right of way; and

(b) To remove sufficient additional material from the gob pile itself so that what is left will remain in place without further collapse or slide.

14. The plaintiff asks for such other and further relief as equity and good conscience require."

The insurance policy purchased by the plaintiff, Ladd Construction Company, from defendant, Insurance Company of North America, was known as a "multiple liability insurance policy" and was in effect at all times pertinent to this litigation. The policy provided in part:

"The company will pay on behalf of the insured all sums which the insured shall become legally liable to pay as damages because of

a. Bodily Injury or

b. Property Damage to which this insurance applies, caused by an occurrence and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage * * *."

After being sued by Burlington, the plaintiff, Ladd Construction Company, requested that the defendant, Insurance Company of North America, undertake the defense of the plaintiff pursuant to the terms of the aforementioned contract of insurance. The defendant refused to defend on the grounds that "there had been no occurrence within the definition of that term * * *" and "* * * there has been no property damage to the plaintiff's property within the definition of that term * * *." The plaintiff employed private counsel who negotiated a monetary settlement with Burlington and thereafter, as previously stated, the plaintiff instituted the litigation from which this appeal ensued.

The first issue presented for review is whether the defendant insurance company had an obligation to defend a Federal court ...


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