APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIFTH DIVISION
511 N.E.2d 776, 158 Ill. App. 3d 783, 110 Ill. Dec. 599 1987.IL.1009
Appeal from the Circuit Court of Cook County; the Hon. Charles E. Freeman, Judge, presiding.
JUSTICE MURRAY delivered the opinion of the court. SULLIVAN, P.J., and PINCHAM, J., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MURRAY
Plaintiffs, Burlington Northern Railroad Company (Burlington), Donald R. McCrystal, and Robert R. Conway, appeal from the trial court's order in a declaratory judgment action granting defendant Illinois Emcasco Insurance Company's (Emcasco's) motion for judgment on the pleadings and denying plaintiffs' summary judgment motion. The trial court specifically found that Emcasco had no duty to defend and was not estopped from denying coverage in connection with an underlying wrongful death action.
The record reveals that on August 25, 1982, a young woman, Anh Van Nguyen, was struck and killed by a Burlington freight train operated by plaintiffs McCrystal and Conway, employees of Burlington. At the time of the occurrence, Nguyen was trying to board a passenger train at Burlington's commuter train station in Lisle, Illinois. Subsequently, a special administrator for Nguyen's estate filed a wrongful death action against plaintiffs. Allegations in the complaint and two amended complaints asserted that the deceased was killed while using the commuter station premises through plaintiffs' negligence and that plaintiffs had a duty to operate the premises in a safe manner so as not to cause harm to person boarding or departing commuter trains.
Prior to the incident, on May 1, 1978, Burlington leased the commuter station to the village of Lisle (village) to facilitate the station's renovation. The leased premises generally included the station, the passenger platforms on the north and south sides of the tracks, and the parking areas. Excluded from the leased premises were the ballasted right-of-way and the tracks. The village procured an insurance policy from Emcasco naming Burlington and its employees as additional insureds "with respect to liability arising out of the ownership, maintenance or use" of the leased premises (endorsement No. 1). Plaintiffs wrote the village in December 1982 to notify it that they were being sued by decedent's estate and requested the village to notify its insurer and to provide the insurer's identity and policies to plaintiffs. No communication occurred between plaintiffs and Emcasco until December 1983 when plaintiffs made a tender of defense to Emcasco, which was refused. Thereafter, plaintiffs filed this declaratory judgment action alleging that the underlying claim against them asserted that decedent was using the leased premises and that the accident arose out of the ownership, maintenance, or use of the insured premises. Plaintiffs brought this appeal after the trial court granted defendant's motion for judgment on the pleadings and denied plaintiffs' summary judgment motion.
On appeal, plaintiffs argue that the trial court's decision that Emcasco had no duty to defend or indemnify was in error and premature. They contend that the underlying complaint against them contained allegations that triggered Emcasco's duty to defend in the wrongful death suit. Plaintiffs further argue that the trial court's order was premature because the evidence adduced against plaintiffs in the underlying suit may trigger defendant's duty to indemnify. Their final contention is that defendant is estopped to deny coverage by its failure to defend under a reservation of rights or to seek a declaratory judgment that there was no coverage.
Defendant Emcasco argues that it had no duty to defend because the accident occurred at a place expressly excluded from the premises insured by its policy. It also contends that plaintiffs are estopped to assert a premature ruling argument by virtue of the fact that plaintiffs asked for a ruling on the duty to defend issue when they filed their complaint for declaratory judgment and subsequently moved for summary judgment or judgment on the pleadings.
We reverse this cause for the following reasons.
We initially note that the trial court did not rule as to Emcasco's duty to indemnify but rather found that defendant had no duty to defend and would not be estopped from denying coverage. We hold that the finding that Emcasco had no duty to defend was erroneous.
In support of their argument, plaintiffs rely on the proposition that where the complaint in an underlying action alleges facts indicating coverage or potential coverage, an insurance company has a duty to defend. (Maryland Casualty Co. v. Peppers (1976), 64 Ill. 2d 187, 193, 355 N.E.2d 24.) Moreover, failure to defend with a reservation of rights or to seek a declaratory judgment where the underlying complaint suggests potential coverage creates an estoppel barring a denial of coverage. La Rotunda v. Royal Globe Insurance Co. (1980), 87 Ill. App. 3d 446, 452, 408 N.E.2d 928.
Plaintiffs are correct as to the general proposition of law. The duty to indemnify an insured for a loss covered by an insurance policy and the duty to defend are separate and sometimes independent obligations of an insurer. (Conway v. Country Casualty Insurance Co. (1982), 92 Ill. 2d 388, 394, 442 N.E.2d 245.) The duty to defend is generated not necessarily by the facts of a case but by the allegations made in the complaint filed in the sub judice case. (Thornton v. Paul (1978), 74 Ill. 2d 132, 144, 384 N.E.2d 335.) If just one claim falls within the ambit of coverage, the duty to defend is triggered. (The Fidelity & Casualty Co. v. Nalco Chemical Co. (1987), 155 Ill. App. 3d 730, 740. On the other hand, the duty to ...