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02/03/94 NATIONAL UNION FIRE INSURANCE COMPANY

February 3, 1994

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, ET AL. (NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, APPELLANT),
v.
GLENVIEW PARK DISTRICT ET AL. (GLENVIEW PARK DISTRICT, APPELLEE).



McMORROW, Bilandic, Heiple

The opinion of the court was delivered by: Mcmorrow

JUSTICE McMORROW delivered the opinion of the court:

The instant appeal requires interpretation of an endorsement to a comprehensive liability insurance policy issued to a named insured and specifying a third party as an additional insured. The endorsement states in relevant part that it extends coverage to additional insureds "with respect to operations performed by" the named insured. However, the endorsement also contains a clause that excludes from coverage "damages arising out of the negligence" of the additional insured.

We determine that the exclusionary clause, since it specifically refers to the additional insured's acts of "negligence," does not exclude from coverage allegations that the additional insured violated the Structural Work Act (Ill. Rev. Stat. 1987, ch. 48, par. 60 et seq.). As a result, the insurer in this case has a duty to defend the additional insured in an action based on allegations that the additional insured was negligent and also based on allegations that the additional insured violated the Structural Work Act. Our determination that the insurer has a duty to defend renders it unnecessary to consider the parties' remaining arguments.

Background

In March 1988, National Decorating Service (NDS) and Glenview Park District (Glenview) entered into a contract for NDS to paint portions of the Glenview Ice Center. The contract obligated NDS to "secure andmaintain in [its] own name with Glenview Park District specifically noted as additional insured, Public Liability insurance covering Bodily Injury and Property Damage with limits * * *." To satisfy this contractual requirement, NDS relied upon a comprehensive general liability policy issued to NDS by National Union Fire Insurance Company (National Union). The policy contained several endorsements, including a "Blanket Additional Insured Endorsement" which provided coverage for persons to whom NDS had agreed, by contract, "to include as an Insured with respect to operations performed by or on behalf of" NDS.

During NDS's performance of its contract with Glenview, one of NDS's employees, Frederick Claussen, fell from a scaffold and was injured at the Glenview Ice Center. Claussen's wife, Patricia, in her individual capacity and in her capacity as Claussen's legal guardian, filed suit against Glenview for damages relating to the injuries. The Claussen complaint alleged that Glenview was liable under both the Structural Work Act and common law principles of negligence.

In April 1989, National Union filed suit for a declaratory judgment that it had no duty to defend or indemnify Glenview in the Claussen action. National Union claimed that the endorsement in NDS's insurance policy excluded coverage for damages arising from Glenview's "negligence," which would include the Claussen claims for Structural Work Act violations and ordinary negligence. National Union and Glenview filed motions for summary judgment. Following briefing and argument, the trial court found that National Union's endorsement excluded coverage to Glenview for the negligence and the Structural Work Act claims of the Claussen complaint. As a result, the trial court entered judgment in favor of National Union.

Upon review, the appellate court upheld the validityof the negligence exclusion contained in the additional insured endorsement. However, the appellate court reversed the trial court's finding that the exclusion precluded coverage to Glenview with respect to the Structural Work Act claim of the Claussen complaint. (230 Ill. App. 3d 578.) This court subsequently allowed National Union's petition for leave to appeal (134 Ill. 2d R. 315).

Analysis

To support its argument that it has no duty to defend or indemnify Glenview with respect to the Claussen complaint under the comprehensive liability insurance policy it issued to NDS, National Union relies upon Endorsement No. 2 in the NDS policy. That endorsement stated, in pertinent part:

"The Persons Insured provision of this policy is amended to include as an Insured any Person or organization whom the Named Insured has agreed by contract, either oral or written, prior to loss, to include as an Insured with respect to operations performed by or on behalf of the Named Insured. Such Insureds included by contract shall hereinafter be referred to as Additional Insureds, and the insurance afforded [herein] shall not apply to damages arising out of the negligence of the Additional Insureds." (Emphasis added.)

The parties dispute whether this endorsement excludes from coverage the allegations of the Claussen complaint that Glenview was negligent and the allegations that Glenview violated the Structural Work Act.

We consider first whether the exclusion in Endorsement No. 2 encompasses the allegations of the Claussen complaint that Glenview violated the Structural Work Act. National Union acknowledges that the exclusion does not explicitly refer to actions alleging a violation of the Structural Work Act. However, National Union argues that a Structural Work Act claim is reasonably implied in the exclusion's reference to "negligence" of the additional insured, Glenview.

According to National Union, a Structural Work Act claim bears significant relation to a negligence suit. National Union notes that in Davis v. Commonwealth Edison Co. (1975), 61 Ill. 2d 494, 501-02, 336 N.E.2d 881, this court found that a "wilful" violation of the Structural Work Act occurs "'when a person having charge of the work knew or, in the exercise of ordinary care, could have known of a dangerous condition.'" ( Davis, 61 Ill. 2d at 502, quoting Illinois Pattern Jury Instructions, Civil, No. 180.01, Comment, at 468 (2d ed. 1971).) National Union urges that in Simmons v. Union Electric Co. (1984), 104 Ill. 2d 444, 473 N.E.2d 946, this court recognized several similarities between a negligence claim and a claim based upon an alleged violation of the Structural Work Act.

However, as the appellate court in the instant cause accurately recognized, "[a] cause of action for common law negligence is neither identical nor tantamount to a statutory cause of action under the [Structural Work] Act. [Citations.]" (230 Ill. App. 3d at 586.) In Simmons, for example, this court stressed the distinctions between common law negligence and a Structural Work Act violation. (See Simmons, 104 Ill. 2d at 458-59 (holding that plaintiff's contributory fault cannot be used to offset damages for which defendant found liable under Structural Work Act).) The Simmons court found it significant that, unlike an action based upon common law negligence principles, the Structural Work Act requires proof of a wilful violation of the statute in order to permit recovery. (See Simmons, 104 Ill. 2d at 458-59.) The court explained:

"Treating claims under the [Structural Work] Act differently from common law [negligence] actions does not conflict with our previous holdings which first allowed and then expanded the use of comparative negligence. 'It has been determined that the Structural Work Act protects work activities of a particularly hazardous nature and is designed to lessen the extent of the danger. [Citations]. * * * To effectuate this purpose a liberal construction has been adopted [citation] in order to afford "broad protection to working men." [Citation.]' ( Halberstadt v. Harris Trust & Savings Bank (1973), 55 Ill. 2d 121, 127, 302 N.E.2d 64.) This statute is dissimilar to a common law remedy designed to compensate an injured party for the damage he has suffered because of the negligence of another and ...


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