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02/19/87 United States Fidelity & v. Continental Casualty

February 19, 1987

UNITED STATES FIDELITY & GUARANTY COMPANY, PLAINTIFF-APPELLEE

v.

CONTINENTAL CASUALTY COMPANY, DEFENDANT-APPELLANT



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FOURTH DIVISION

505 N.E.2d 1072, 153 Ill. App. 3d 185, 106 Ill. Dec. 281 1987.IL.177

Appeal from the Circuit Court of Cook County; the Hon. Arthur L. Dunne, Judge, presiding.

APPELLATE Judges:

Presiding Justice McMorrow delivered the opinion of the court. Johnson and Linn, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MCMORROW

Continental Casualty Company (Continental) appeals from the order of the circuit court of Cook County that allowed the motion for summary judgment of United States Fidelity & Guaranty Company on USF&G's action for declaratory judgment. USF&G sought a determination that its insurance policy covering certain activities of Hansen, Lind & Meyers , an architectural firm, did not obligate USF&G to defend or indemnify HLM with respect to HLM's alleged liability for personal injuries sustained by a worker at a jobsite at which HLM was allegedly in charge of the construction work.

USF&G's "multi-peril" insurance policy to HLM excluded from coverage personal injury or property damage arising from the firm's provision of "professional services." Continental's insurance with HLM covered liability for errors, omissions, or negligent acts resulting from HLM's performance of "professional services." The trial court found that HLM's alleged control of construction work amounted to the performance of professional services. It determined that USF&G policy's exclusion for professional services coverage applied and that Continental was obligated to defend and indemnify HLM pursuant to its professional liability policy with HLM.

On appeal, Continental argues that genuine issues of material fact precluded the entry of summary judgment in favor of USF&G. Assuming there were no such issues presented to prevent the entry of summary judgment, Continental also maintains that the services which HLM provided, according to the allegations of the underlying personal injury suit, do not fall within the purview of USF&G's policy exclusion and do not require Continental to defend or indemnify HLM pursuant to Continental's professional liability insurance coverage with HLM.

We conclude that there were no genuine issues of material fact presented to prevent the trial court's entry of summary judgment. We also determine that the services which HLM allegedly provided according to the underlying personal injury suit amounted to "professional services" covered by Continental's liability insurance with HLM. As a result, the order of the circuit court is affirmed.

Background

Warren Priemann (Priemann) allegedly sustained injuries on April 2, 1982, while he was engaged in construction work at St. Francis Hospital in Evanston, Illinois. His complaint alleges in pertinent part that HLM was the architect on the jobsite, that it had charge of the work being performed at the time of the occurrence and the construction generally, and that the injury he sustained when he fell through an unprotected, unguarded, and inadequate skylight was proximately caused by HLM's failure to comply with the provisions of the Illinois Structural Work Act (Ill. Rev. Stat. 1981, ch. 48, pars. 60 through 69).

Defense of the Priemann action was tendered to both USF&G and Continental. Each company agreed to defend HLM under reservations of rights subject to the Disposition of USF&G's instant declaratory judgment action. Continental filed an answer to USF&G's pleading and also filed a counterclaim for declaratory relief to the effect that USF&G's policy obligated USF&G to defend and indemnify HLM with respect to Priemann's claim.

At the time of Priemann's alleged injury, USF&G's policy with HLM provided that USF&G would "pay on behalf of the insured all sums which the insured shall become 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 even if any of the allegations of the suit are groundless, false or fraudulent." An endorsement to the policy provided that the "insurance does not apply to bodily injury or property damage arising out of the rendering of or the failure to render any professional services by or for the named insured, including (1) the preparation or approval of maps, plans, opinions, reports, surveys, designs or specifications; and (2) supervisory, inspection or engineering services."

Continental's insurance policy with HLM stated that Continental agreed "to pay on behalf of the insured all sums in excess of the insured's deductible, which the insured shall become legally obligated to pay as damages if such legal liability arises out of the performance of professional services for others in the insured's capacity as an architect or engineer and if such legal liability is caused by an error, ...


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