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Howalt v. Ohio Casualty Ins. Co.

OPINION FILED MARCH 25, 1986.

FRED HOWALT, PLAINTIFF-APPELLEE,

v.

THE OHIO CASUALTY INSURANCE COMPANY, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Cook County; the Hon. Thomas J. O'Brien and the Hon. William R. Quinlan, Judges, presiding.

PRESIDING JUSTICE BILANDIC DELIVERED THE OPINION OF THE COURT:

Defendant, The Ohio Casualty Insurance Company (Ohio Casualty), appeals from an order entered on November 15, 1984, by the Honorable Thomas J. O'Brien granting partial summary judgment in favor of plaintiff Fred Howalt (Howalt) with respect to the issue of liability. This order found that Howalt was "potentially an insured" under a policy of insurance issued by Ohio Casualty and that Ohio Casualty was obligated to defend Howalt in the case of Mozden v. Clark Equipment, Inc., No. 80L6001 (the Mozden action). The order further found that the "co-employee" exclusion in the Ohio Casualty policy did not exclude Howalt from insurance coverage against a third-party action filed against him by Mozden Construction Company (Mozden Construction) in the same case.

Ohio Casualty also appeals from an order entered on April 18, 1985, by the Honorable William R. Quinlan granting summary judgment in favor of Howalt on the issue of damages. Ohio Casualty seeks reversal of the judgment as to liability and the judgment awarding damages to Howalt.

This case involves an insurer's breach of duty to defend. Plaintiff Howalt was employed by Mozden Construction as a crane operator on March 3, 1980. Mozden Construction was performing concrete construction at a shopping mall site. On that date, Howalt was involved in an accident, in which the crane tipped over and struck Rory Mozden, who was also an employee of Mozden Construction. Rory Mozden subsequently sued Howalt, as well as Clark Equipment, Inc., the crane manufacturer, Tonn & Blank, Inc., the general contractor, Mi Jack, Inc., the company which leased the crane to Mozden Construction, American Income Properties, the owner and developer of the shopping mall, and Maxwell Starkman Associates, the supervising architects. Rory Mozden's action against Howalt alleged negligence and violation of the Structural Work Act. Two defendants, Clark Equipment and Tonn & Blank, filed third-party actions against Mozden Construction for contribution or indemnity. Mozden Construction then filed a third-party action against Howalt and others for contribution or indemnity.

Mozden Construction was insured by defendant Ohio Casualty under two separate policies. One policy covered workers' compensation claims; the other was a comprehensive general liability policy which is the policy in issue here, and which will be referred to as the "policy." The policy contained a rider that extended liability insurance coverage to employees of Mozden Construction for claims arising in the course of their employment.

On three separate occasions, Howalt tendered the defense of Rory Mozden's direct claims and Mozden Construction's third-party action to Ohio Casualty. The defense was tendered in the belief that, as an employee of Mozden Construction, Howalt was covered under the policy. Ohio Casualty refused to defend Howalt.

Howalt was dismissed from all claims in the Mozden action by way of summary judgment entered by Judge Quinlan. Judge Quinlan ruled that there was no material issue of fact regarding Howalt's status as an employee of Mozden Construction and co-employee of Rory Mozden. Judge Quinlan then ruled that, under the "exclusive remedy" provisions of the Illinois Workers' Compensation Act, Howalt was immune from Rory Mozden's and Mozden Construction's claims.

Howalt then filed this action against Ohio Casualty, seeking to recover his defense costs incurred in the Mozden action. Howalt was granted summary judgment on the issue of liability and the issue of damages. This timely appeal followed.

I

The first defense raised by Ohio Casualty is that Howalt's status as an employee of Mozden Construction, which would entitle him to coverage under the insurance policy, did not appear on the face of Rory Mozden's second amended complaint. Therefore, Howalt could not commit a tort in the course of his employment with Mozden Construction.

Rory Mozden's second amended complaint filed against Howalt and others for personal injuries alleged the following facts, which are material in determining whether Howalt was an "additional insured" under the policy:

1. Clark Equipment manufactured a crane. (Mozden second amended complaint, count IV, par. 1.)

2. Mi Jack leased a crane to Mozden Construction for use at a construction site. (Mozden second amended complaint, count IV, par. 2.)

3. On March 3, 1980, Rory Mozden was employed by Mozden Construction at the construction site, and his duties included positioning and emptying concrete buckets which were suspended by the crane. ...


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