Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

INTERNATIONAL INS. CO. v. PEABODY INTL. CORP.

September 26, 1990

INTERNATIONAL INSURANCE COMPANY, Plaintiff,
v.
PEABODY INTERNATIONAL CORPORATION, Defendant. PEABODY INTERNATIONAL CORPORATION, Counterplaintiff and Third-Party Plaintiff, v. INTERNATIONAL INSURANCE COMPANY, UNDERWRITERS OF LONDON, LLOYDS, AND WALBROOK INSURANCE CO., Counterdefendant and Third-Party Defendants



The opinion of the court was delivered by: LINDBERG

 GEORGE W. LINDBERG, UNITED STATES DISTRICT JUDGE

 One of the basic issues between the insurers, International Insurance Company, (International), Underwriters of London (Underwriters), Lloyds and Walbrook Insurance Company (Walbrook), on the one hand, and Peabody International Corporation (Peabody), the insured, on the other hand, is the question of whether or not the claim of Santee Cooper against Peabody, as presented in the arbitration proceeding, was covered by the insurers' policies of 1/25/85 to 1/25/86. In a motion for summary judgment regarding coverage, International for itself and its fellow insurers proposes the absence of coverage because (1) the claim was not first made during the policy period and (2) the insured had knowledge prior to the inception of the policy of facts or circumstances likely to give rise to the claim. In a separate motion for partial summary judgment regarding coverage, the other insurers, Underwriters, Lloyds and Walbrook propose an additional reason for non-coverage: that (3) the substance of the Santee Cooper claim(s) is not covered by the policies because the nature of the claim is not within the scope of coverage and is excluded from coverage by certain exclusions. This court has jurisdiction to hear this action because diversity of citizenship exists between the parties. 28 U.S.C. sec. 1332.

 A motion for summary judgment should be granted:

 
If the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

 FRCP 56(c). International, as the movant, bears the burden of establishing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S. Ct. 1598, 1608, 26 L. Ed. 2d 142 (1970). Moreover, in ruling on this motion, the court will draw all reasonable inferences from the facts in the light most favorable to Peabody. Hermes v. Hein, 742 F.2d 350, 353 (7th Cir. 1984). Since the motions for summary judgment can be decided on either of International's two proposed defects, the court does not need to address whether the other insurers' third proposed reason to deny coverage applies. Thus, the insurers' motions for summary judgment are granted in part.

 On January 7, 1985 Peabody submitted an application for Architects, Engineers and Construction Managers Professional Liability Insurance to International. On the basis of that application, International issued Policy No. 524-54-385-9 in favor of Peabody.

 The policy explicitly provides coverage only for claims first made against the insured during the policy period and limits coverage to claims which do not arise out of an act, error or omission of which the insured had knowledge on the effective date of the policy. Section I of the Insuring Agreement clearly outlines the parameters of the coverage provided by the policy.

 I. COVERAGE

 
The company will pay on behalf of the Insured all sums . . . which the Insured shall become legally obligated to pay as damages by reason of any act[,] error or omission committed . . . by the Insured . . . provided always that:
 
(a) Claim is first made against the Insured during the policy period by reason of such act, error or omission;
 
(b) The Insured's legal liability arised [sic] out of the performance of professional services as an architect, engineer or construction manager; and

 A contract must be interpreted as a whole. Metalex Corp. v. Uniden Corp. of America, 863 F.2d 1331 (7th Cir. 1988). Thus, courts must place the meaning of words within the context of a contract as a whole. J.M. Beals Enterprises, Inc. v. Industrial Hard Chrome, Ltd., 194 Ill. App. 3d 744, 551 N.E.2d 340, 141 Ill. Dec. 347 (1 Dist. 1990). Therefore, when language of a contract is unequivocal, it must be carried out according to its language. Ricci v. Reed, 169 Ill. App. 3d 1062, 523 N.E.2d 1218, 120 Ill. Dec. 307 (1 Dist. 1988). Consequently, the signatory to a contract is bound by its ordinary meaning. Robbins v. Lynch, 836 F.2d 330 (7th Cir. 1988).

 The first basis on which the motions for summary judgment may be resolved hinges on whether the Santee Cooper claim comes within the coverage provided by the policy. Only facts relevant to this issue are material for purposes of this basis for resolving the insurers' motions for summary judgment.

 The applicable provision of the policy provides that the insurer will pay only if:

 
(a) Claim is first made against the Insured during the policy period by reason of such ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.