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AETNA CAS. & SUR. CO. v. SPANCRETE OF ILLINOIS

December 7, 1989

AETNA CASUALTY & SURETY COMPANY, a corporation, Plaintiff
v.
SPANCRETE OF ILLINOIS, INC., an Illinois corporation, Defendant



The opinion of the court was delivered by: BUA

 NICHOLAS J. BUA, UNITED STATES DISTRICT JUDGE

 In this declaratory judgment action, plaintiff Aetna Casualty & Surety Company ("Aetna") asks the court to find that Aetna has no duty to defend or indemnify one of its insureds, defendant Spancrete of Illinois, Inc. ("Spancrete"), in connection with one count of a personal injury suit filed against Spancrete in state court. Aetna and Spancrete have now filed cross motions for summary judgment, each urging the court to enter judgment in its favor as a matter of law. For the reasons stated herein, Spancrete's motion for summary judgment is granted in its entirety; Aetna's motion is partially granted and partially denied.

 FACTS

 In May of 1984, Robert and Marie Scott filed suit in state court against various defendants, including Power Contracting & Engineering Corporation ("Power"). Mr. Scott claimed that on November 30, 1982, he sustained injuries while working at a construction site managed by Power. Mr. Scott sought recovery from Power, the general contractor, based on the Illinois Structural Work Act and common law negligence; Mrs. Scott brought a claim against Power for loss of consortium.

 In response to the Scott's complaint, Power filed a third-party complaint against Spancrete, which was working as a subcontractor at the job site where Mr. Scott was injured. *fn1" Power's third-party complaint sets forth three counts. Two of those counts (Counts I and II) assert the same claims against Spancrete that Scott brought against Power -- claims based on the Illinois Structural Work Act and common law negligence. In Count III, Power alleges that Spancrete breached its subcontract with Power. According to Power, Spancrete failed to fulfill its obligation under the subcontract to name Power as an additional insured in certain liability policies covering Spancrete's work at the construction site.

 Upon being served with Power's third-party complaint, Spancrete contacted Aetna. Aetna had issued a comprehensive general liability insurance policy to Spancrete for the period from April 1, 1982 to April 1, 1983. The policy provided certain coverage for bodily injury liability, as follows:

 Since Mr. Scott suffered his injuries during the policy period, Spancrete sought both defense and indemnification from Aetna for any liability resulting from Power's third-party action. Aetna agreed to defend and indemnify Spancrete with respect to Counts I and II of Power's third-party complaint. However, Aetna refused to provide any defense or indemnity for Count III of the suit.

 Aetna initiated this diversity action seeking an order declaring that it has no duty to defend or indemnify Spancrete on Count III of Power's third-party action. Aetna has now filed a motion for summary judgment, arguing that it is entitled to such a declaration as a matter of law. Spancrete's cross motion for summary judgment argues that Aetna has a duty to defend Spancrete on Count III of Power's third-party action. Spancrete further maintains that because Aetna has wrongfully refused to provide such defense, Aetna is liable for the costs and attorneys' fees which Spancrete has incurred in defending Count III of Power's third-party action, as well as the costs and fees it has incurred in defending this declaratory judgment action.

 DISCUSSION

 As a preliminary matter, that court finds that Aetna's cavalier disregard for the procedural rules of this court by itself constitutes grounds for denial of Aetna's motion for summary judgment. Rule 12(l) of the Local Rules of the United States District Court for the Northern District of Illinois requires a party moving for summary judgment to submit a statement of material facts along with its motion. Aetna submitted no Rule 12(l) statement. Rule 12(l) expressly states that "failure to submit such a statement constitutes grounds for denial of the motion." In addition, Aetna failed to file its response to Spancrete's factual statement along with its memorandum in opposition to Spancrete's motion, as required by Local Rule 12(m). These procedural deficiencies are not taken lightly by this court. Nevertheless, this court will not rely on procedural defects to deny Aetna's motion. Since this case involves purely legal issues, the interest of justice and the speedy resolution of this case are better served if the court addresses the merits of the parties' arguments at this time.

 I. Aetna's Duty to Indemnify

 Aetna first argues that as a matter of law, it is entitled to a declaration that the insurance policy issued to Spancrete does not provide coverage for Count III of Power's third-party action. On this point, Aetna is correct. The general coverage provision in the Aetna policy states that Aetna must indemnify Spancrete for damages which Spancrete becomes legally obligated to pay as the result of bodily injury or property damage. This provision does not provide coverage for damages resulting from breach of contractual obligations, as is the basis for Count III of Power's third-party complaint. See Reliance Ins. Co. ...


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