The opinion of the court was delivered by: Will, District Judge.
This is an action for a declaratory judgment under 28 U.S.C. § 2201,
2202 (1982). Plaintiff Casualty Indemnity Exchange ("CIE") seeks a
determination that it is not liable to indemnify defendant Impact
Engineering and Construction Company ("Impact") or defendant City of
Chicago for the alleged wrongful death of a construction worker, Arnett
Banks, Jr. All parties have filed motions for summary judgment. For the
reasons stated herein, each of the motions is denied.
I. Uncontroverted Facts*fn1
CIE issued its general liability policy No. GL 012518 to Impact for the
term of September 15, 1982 through September 15, 1983. The negotiations
for the policy were handled through the Weiss Insurance Agency, Inc.
("Weiss") and United Commercial Affiliated ("UCA"), an authorized
representative of CIE. Toward the end of the term, Impact contracted with
the City of Chicago to perform repair work on a masonry stack at the
North Park Village Boiler Plant. As a condition of the contract, Impact
was required to secure an endorsement to its insurance policy naming the
City as an additional insured for purposes of the boiler plant project.
Impact subcontracted its work to Allied Chimney and Construction, Inc.
On September 9, 1988, an employee of Allied Chimney, Arnett Banks,
Jr., fell to his death from a scaffold at the boiler plant project. The
City of Chicago received notice of the accident the same day. On February
29, 1984, Banks's wife, defendant Margaret Banks, filed suit against the
City in the Circuit Court of Cook County. The City of Chicago was served
with a summons and complaint on March 6, 1984 and, three weeks later,
transferred these documents to Weiss. CIE did not receive the documents
until July 5, 1984.
II. Analysis and Controverted Facts
In order to obtain summary judgment, the movant must establish the
absence of genuine issues of material fact by competent proof Adickes v.
S.H. Kress & Co., 398 U.S. 144, 158 n. 17, 159 n. 19, 90 S.Ct. 1598, 1608
n. 17, 1609 n. 19, 26 L.Ed.2d 142 (1970). The proof may consist of
affidavits, answers to interrogatories, admissions, depositions, or other
verified evidence that would be admissible at trial. Martz v. Union Labor
Life Ins. Co., 757 F.2d 135, 188 (7th Cir. 1985); 6 Moore's Federal
Practice ¶ 56.11 (2d ed. 1985). It is not sufficient merely to rely
upon the allegations of one's pleadings or memoranda or to summarize the
contents of documents that are not in the record. Pfeil v. Rogers,
757 F.2d 850, 859-63 (7th Cir. 1985). In this case, none of the parties
has presented a properly supported motion.*fn2 Those few facts that have
been properly established and appear without substantial controversy are
set forth in the preceding section. They do not provide an adequate basis
for judgment in favor of any party. Nevertheless, since it appears likely
that many of the "facts" asserted in the parties' memoranda may indeed be
undisputed, we will undertake to shed some light on the issues, rather
than disposing of the motions on purely formal grounds.
The first issue involves CIE's potential liability only as to the
City. (Apparently, Impact has been joined as a defendant in the state
case, so CIE would still run a risk of liability even if it prevails on
this issue.) CIE contends that the only endorsement it issued for the
City of Chicago attached to policy No. GL 012600 ("renewal policy") for
the year September 15, 1983 through September 15, 1984, not policy No. GL
012518 ("original policy") for the year in which the accident occurred.
While CIE concedes that a certificate of insurance issued to Impact by
Weiss indicated that the City was covered under the original policy, CIE
maintains that Weiss had no authority to issue the certificate.
The resolution of this question turns upon principles of the Illinois
law of agency. The Illinois cases tend to distinguish between an
"insurance agent," who acts solely for the insurer, and a "broker," who
is not permanently employed by any principal, but acts in each case as a
special agent for a single object. See, e.g., City of Chicago v. Barnett,
404 Ill. 136, 88 N.E.2d 477 (1949); Browder v. Hanley Dawson Cadillac,
62 Ill. App.3d 623, 20 Ill.Dec. 138, 379 N.E.2d 1206 (1978). Since Weiss
appears not to have been permanently employed by CIE, it may be
appropriate to refer to Weiss as a "broker." This designation, however,
does not assist in the ultimate determination of whether Weiss had
authority to bind CIE, Impact, or both. That question in every case "is
dependent upon who called [the agent] into action, who controls his
movement, who pays him, and whose interests he represents." Id. at 629,
20 Ill.Dec. at 143, 379 N.E.2d at 1211. These are questions of fact, to
be determined from the particular circumstances of the case. Davidson v.
Comet Casualty Co., 89 Ill. App.3d 720, 44 Ill.Dec. 943, 412 N.E.2d 19
(1980). Where the evidence clearly shows that the broker is acting on
behalf of a particular principal, however, they may become matters of
law. Id. at 723, 44 Ill.Dec. at 946, 412 N.E.2d at 22.
Apparently, Weiss negotiated the original policy through UCA and may
have dealt with UCA in regard to the certificate of insurance.
Documentary evidence submitted in this case shows that the policy was
signed by J.J. Carroll of UCA acting as the "authorized representative"
of CIE. We therefore conclude that UCA had actual or apparent authority
to bind CIE. The further question is whether Weiss was a subagent for CIE
or an agent for Impact.
CIE maintains that Weiss was subject to Impact's direction at all times
relevant to the suit. In response, the defendants contend that Weiss
received actual authority from an officer of UCA and that, regardless of
actual authority, CIE ratified Weiss's actions by acquiescing in them.
See Old Security Life Ins. Co. v. Continental Illinois Nat. Bank,
740 F.2d 1384, 1392 (7th Cir. 1984); Copley v. Pekin Ins. Co.,
130 Ill. App.3d 299, 302, 85 Ill.Dec. 643, 646, 474 N.E.2d 57, 60
(Ill.App.Ct. 1985) (discussing principles of ratification under Illinois
Although both sides have developed viable theories of agency, neither
has presented sufficient evidence to support them. The best either side
can do is to cite deposition transcripts. See supra note 2. Moreover,
there appears to be a significant factual dispute as to whether Weiss
received actual authority from a UCA officer. See Mem. in Support of City
of Chicago's Motion for Summary Judgment at 2-3. In sum, the record in
this case is not so clear as to justify converting the essentially
factual question of agency into a question of law.
The second issue — timeliness of notice — focuses on the
following provisions of the insurance policy:
(b) if claim is made or suit is brought against the
insured, the insured shall immediately forward to the
company every demand, notice, summons or other process
received by him or his representative.
¶ 5. No action shall lie against the company
unless, as a condition precedent thereto, there shall
have been full compliance with all ...