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Great Sw. Fire Ins. Co. v. Greenlee

OPINION FILED JUNE 28, 1985.

GREAT SOUTHWEST FIRE INSURANCE COMPANY, PLAINTIFF-APPELLEE,

v.

DARRELL GREENLEE ET AL., DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Cook County; the Hon. James C. Murray, Judge, presiding.

JUSTICE BILANDIC DELIVERED THE OPINION OF THE COURT:

Plaintiff-appellee Great Southwest Fire Insurance Company (hereinafter Great Southwest) brought a declaratory judgment action to adjudicate its obligation to defend and indemnify the defendants-appellants, Darrell and Rosina Greenlee, under a general liability policy. The Greenlees are defendants in a suit brought by the buyer of grain storage bins that collapsed after construction. (Tabor Grain Co. v. Chicago Eastern Corp., No. 79 L 25225 (Ill. Cir. Ct. May 7, 1980).) Great Southwest moved for summary judgment, which was granted.

On appeal, we vacated the judgment and remanded for further findings because the record was insufficient to show whether defendants had a "reasonable expectation" to expect coverage under the policy. (Great Southwest Fire Insurance Co. v. Greenlee (1982), 108 Ill. App.3d 1205 (Rule 23 order).) On remand, depositions of the Greenlees and their insurance agent, James Pumo, were taken. Based on the evidence in the depositions, plaintiff again moved for summary judgment, which was granted. On appeal, defendants argue that the policy's completed operations and product hazards exclusions do not apply and that their reasonable expectation should determine whether the provisions of the policy are ambiguous so that they must be construed in the insureds' favor. For the following reasons, we affirm.

Defendants were sued by the Tabor Grain Company in a complaint that alleged strict liability in tort, negligence, and breach of express and implied warranties in the construction of a grain storage bin. The complaint alleged that Chicago Eastern Corporation was in the business of designing and making bins and their foundation materials; that the defendants were in the business of constructing and installing bins; and that on September 17, 1978, the foundation materials fractured and the storage bins collapsed, "causing extensive damage to and destruction of the aforementioned bins and other property of the plaintiff." Tabor Grain sought $379,197.22 in damages.

During that time, defendants Greenlees had an insurance policy in effect that covered the period in question. The policy was entitled "Manufacturers' and Contractors' Liability," and included liability coverage for bodily injury and property damage, followed on the next page by a list of exclusions. The exclusions at issue are:

"Exclusions

This insurance does not apply:

(a) to liability assumed by the insured under any contract or agreement except an incidental contract; but with respect to bodily injury or property damage occurring while work performed by the named insured is in progress, this exclusion does not apply to a warranty that such work will be done in a workmanlike manner;

(n) to property damage to the named insured's products arising out of such products or any part of such products;

(o) to property damage to work performed by or on behalf of the named insured arising out of the work or any portion thereof, or out of materials, parts or equipment furnished in connection therewith;

(p) to bodily injury or property damage included within the completed operations hazard or the products hazard; * * *."

Definitions follow on pages 14 and 15 of the policy:

"Definitions

When used in this policy (including endorsements forming a part thereof):

`completed operations hazard' includes bodily injury and property damage arising out of the operations or reliance upon a representation or warranty made at any time with respect thereto, but only if the bodily injury or property damage occurs after such operations have been completed or abandoned and occurs away from the premises owned by or rented to the named insured. `Operations' includes materials, parts or equipment ...


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