APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIRST DIVISION
513 N.E.2d 1, 159 Ill. App. 3d 780, 111 Ill. Dec. 755 1987.IL.605
Appeal from the Circuit Court of Cook County; the Hon. Arthur L. Dunne, Judge, presiding.
JUSTICE O'CONNOR delivered the opinion of the court. QUINLAN, P.J., and CAMPBELL, J., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE O'CONNOR
Defendant, Bell Fuels, Inc. (Bell), appeals from a declaratory judgment finding that Midland Insurance Company (Midland) owed no coverage for the defense or indemnification of Bell with respect to a third-party contribution action brought against Bell by Ford Motor Company (Ford). We affirm.
James L. Howard, an employee of Bell, brought a personal injury action against Ford, Al Piemonte Ford, Inc., Genway Corporation, and Genway Fleet Leasing Corporation based on an injury which occurred in the course of his employment with Bell and while driving a vehicle leased to Bell by Genway. Ford then filed a third-party contribution action against Bell, seeking damages beyond its pro rata share of relative culpability in the event that Ford was found liable to Howard.
Bell tendered the case to its insurer, Midland, which refused to defend Bell. Midland then filed a declaratory judgment action asserting that it did not owe a defense to Bell by reason of certain policy exclusions. Bell brought a declaratory counterclaim against Midland, alleging that Midland had wrongfully refused to defend Bell and that Midland should be estopped to deny coverage under the terms and conditions of its policy due to its failure to defend. Midland and Bell both filed motions for summary judgment. After a hearing on the motions, the trial court granted Midland judgment on the pleadings. Bell now brings this appeal.
The question raised by this appeal is whether a comprehensive general liability policy containing an employee exclusion relieves the carrier of any duty to defend or indemnify when a third party brings a contribution against the insured employer.
The insurance policy in question initially provides as follows: I. COVERAGE
The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of . . . (c) bodily injury . . . to which this insurance applies . . .."
The exclusion in question states that coverage does not apply:
"(c) to bodily injury to any employee of the insured arising out of and in the course of his employment by the insured or to any obligation of the insured to indemnify another because of damages arising out of such injuries."
Bell maintains that the first part of the exclusion applies only to direct actions, i.e., to preclude coverage when the insured is sued by an injured employee. Bell also maintains that the second part of the exclusion should not apply in a contribution action between a third party ...