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EMPLOYERS INS. OF WAUSAU v. BODI-WACHS AVIATION IN

March 9, 1994

EMPLOYERS INSURANCE OF WAUSAU, Plaintiff,
v.
BODI-WACHS AVIATION INSURANCE AGENCY, INC., et al., Defendants.



The opinion of the court was delivered by: MILTON I. SHADUR

 Employers Insurance of Wausau ("Employers," treated as a singular noun) sues Bodi & Wachs Aviation Insurance Agency, Inc. ("Bodi & Wachs," also employed as a singular collective noun) and Robert and Bernadine West (collectively "Wests") under the Declaratory Judgment Act, 28 U.S.C. ยง 2201. *fn1" Employers seeks a ruling that it has no obligation under its errors and omissions ("E & O") Policy AGW 000798 (the "Policy") to defend Bodi & Wachs in an action brought by Wests against Bodi & Wachs and others in the Circuit Court of Winnebago County, Illinois (West, et al. v. Eagle Air Helicopters, et al., No. 92-MR-23) (the "Action")).

 Employers and Bodi & Wachs have filed cross-motions under Fed.R.Civ.P. ("Rule") 56 for summary judgment as to Employers' duty to defend, with Bodi & Wachs' cross-motion also seeking a declaration that Employers has a duty to indemnify it against any liability arising out of the Action. *fn2" For the reasons stated in this memorandum opinion and order, Bodi & Wachs' motion is granted, so that Employers' motion is naturally denied. *fn3"

 Summary Judgment Principles

 Rule 56 principles impose on each movant the burden of establishing the lack of a genuine issue of material fact ( Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986)). For that purpose this Court is "not required to draw every conceivable inference from the record--only those inferences that are reasonable"--in the light most favorable to the nonmovant ( Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir. 1991) and cases cited there). Where as here cross-motions are involved, that principle thus demands a dual perspective--one that this Court has often described as Janus-like--that sometimes involves the denial of both motions. That has not occurred here, though, because of the total absence of material factual disputes and of inconsistent inferences from those facts.

 This District Court's General Rule ("GR") 12(m) and 12(n) respectively require the submission of factual statements in support of and in opposition to Rule 56 motions. Each of Employers and Bodi & Wachs has filed its own GR 12(m) statement (respectively cited "P. 12(m) P --" and "D. 12(m) P --"), but only Employers has filed a GR 12(n)(1) statement (cited "P. 12(n) P --") In technical terms, then, on the Bodi & Wachs motion only the facts set forth in its GR 12(m) statement as to which there is no genuine issue are taken as established, while as to Employers' motion all the material facts stated in its GR 12(m) statement that are supported by the factual record and are not at odds with Bodi & Wachs' initial GR 12(m) statement are deemed admitted ( Stewart v. McGinnis, 5 F.3d 1031, 1034 (7th Cir. 1993)).

 As it turns out, however, there are really no material facts in dispute, so that technical difference proves to have no practical significance. And because the outcome here depends upon:

 
1. Wests' Circuit Court Complaint (cited "Action Complaint P --"),
 
2. a letter sent by Wests' counsel to Bodi & Wachs' counsel,
 
3. correspondence between Bodi & Wachs' counsel and Employers and
 
4. the precise coverage to which Bodi & Wachs is entitled under the Policy,

 this opinion looks to those documents (all of which are exhibits attached to the parties' submissions) to assess the accuracy of the GR 12(m) statements (see, e.g., Hermitage Ins. Co. v. Dahms, 842 F. Supp. 319, 1994 U.S. Dist. LEXIS 183, at *3 (N.D. Ill. 1994)).

 Facts4

 Bodi & Wachs is an aviation insurance broker placing insurance policies exclusively for the aviation industry (Jay Bodi ("Bodi") Dep. 11-12). On February 14, 1992 Wests filed the Action Complaint (which was captioned "Complaint for Declaratory Relief" and asked for a declaration of rights as its only expressly identified type of relief), listing "Bodi & Wachs Aviation Insurance" as one of the named defendants (P. Ex. B at 30). In late February or early March 1992 Bodi & Wachs was served with a copy of the Action Complaint (D. 12(m) P 7). Because the Action Complaint's allegations are obviously important in determining Employers' duty or lack of duty to defend the Action on behalf of Bodi & Wachs, relevant paragraphs of the Complaint are reproduced at length here (italics in original omitted):

 
5. At all relevant times, TransAmerica Insurance Company ["Transamerica"], was an insurance corporation authorized to do business in the State of Illinois and was doing business in Winnebago County, Illinois.
 
6. At all relevant times, Southern Marine & Aviation Underwriters, Inc. ["Underwriters"] was a corporation authorized to do business in the State of Illinois and was the Aviation Manager and Authorized Representative of TransAmerica Insurance Company.
 
7. At all relevant times, John A. Giandi was the Aviation Manager and Authorized Representative for TransAmerica Insurance Company.
 
8. At all relevant times, Bodi & Wachs Aviation Insurance, was an insurance broker and acted as agent and producer of insurance business for Southern Marine & Aviation Underwriters, Inc.
 
9. All Defendants named herein have an interest in this controversy, or in the transaction or series of transactions out of which this controversy arose, and are necessary parties for the complete determination of the questions involved.
 
10. Prior to, and on March 22, 1989, Eagle Air Helicopters, Inc. ["Eagle Air"] had a contract with Commonwealth Edison for helicopter services that included the following requirement:
 
"M. The Contractor must carry liability insurance with a company duly licensed to do business in Illinois, acceptable to Owner, in the following minimum amounts on each helicopter furnished, and such insurance will include the Owner as an additional insured:
 
Comprehensive Bodily Injury and Property Damage Liability Including Passenger Liability. . . . . . . . . $ 5,000,000.00
 
Voluntary passenger Liability on Owner's Employes (sic), each such Passenger. . . . . . . . . . . . . . . . $ 50,000.00
 
A certified copy of the insurance policy must be furnished to the Owner."
 
11. At all times prior to March 22, 1989, Eagle Air Helicopters, Inc. complied with the contract requirements of Commonwealth Edison Company by purchasing and maintaining a $ 5,000,000.00 single limit liability insurance for bodily injury and property damage claims for TransAmerica Insurance Company, naming Commonwealth Edison Company was an additional insured on the policies.
 
12. All Defendants had knowledge of the contractual requirement of Commonwealth Edison for Eagle Air Helicopters, Inc. to purchase and maintain policies containing a $ 5,000,000.00 single limit liability insurance for bodily injury and property damage claims, naming Commonwealth Edison Company as an additional insured on the policies.
 
13. On March 1, 1988, TransAmerica Insurance Company, by and through Southern Marine & Aviation Underwriters, Inc. and John A. Giandi, and as a result of the activities of Bodi & Wachs Aviation Insurance brokers, duly issued Policy No. 120 5766 with a $ 5,000,000 single limit insuring Eagle Air Helicopters, Inc. . . . and Commonwealth Edison Company with $ 5,000,000 single limit of liability, including passengers; however, Plaintiffs do not have a copy of this policy.
 
* * *
 
15. All Defendants knew that Policy No. 120 5766 would expire on March 1, 1989 and Eagle Air Helicopters, Inc. required a renewal policy to be effective March 1, 1989 with identical coverage.
 
16. On March 22, 1989, Robert West, an employee of Commonwealth Edison Company in the course and scope of his employment, a passenger in a helicopter owned and operated by Eagle Air Helicopters, Inc. . . . was injured in a helicopter crash that occurred in De Kalb County, Illinois enroute to Winnebago County, Illinois.
 
17. After the accident of March 22, 1989, on March 27, 1989, for reasons presently unknown to Plaintiffs, TransAmerica Insurance Company, by and through Southern Marine & Aviation Underwriters, Inc. and John A. Giandi at the request of Bodi & Wachs Aviation Insurance, duly issued Policy No 120-7423 insuring Eagle Air Helicopters, Inc. . . . and Commonwealth Edison Company with $ 5,000,000 limit of liability for Property Damage and $ 5,000,000 Per Occurrence, with an effective date of March 20, 1989. . . .
 
18. Contrary to the express contract requirements of Commonwealth Edison Company, and contrary to the limits of the earlier policy, which were all well known to Defendants, the renewal policy contained a new limitation of $ 100,000 for each passenger.
 
* * *
 
20. TransAmerica Insurance Company has asserted that it carries only $ 100,000 per passenger limits and has offered only $ 100,000 to Plaintiffs.
 
21. Plaintiffs believe, and therefore assert that TransAmerica Insurance Company, or its agents or representatives, issued a modified insurance policy, with full knowledge of the accident, contrary to the express direction of Eagle Air Helicopters, Inc., contrary to the contractual requirements of Commonwealth Edison Company, and contrary to the earlier policy for Eagle Air Helicopters, Inc.
 
22. A dispute has arisen concerning the terms and provisions of the insurance policy that was in force on March 22, 1989; to-wit, whether the policy should have been issued with coverage for $ 5,000,000 single limit bodily injury, including passengers, and, in the alternative whether the term "Bodily Injury" as defined in the policy permits Bernadine West to claim $ 100,000 for her Bodily Injury loss of consortium claim.
 
Wherefore, Plaintiffs pray that this Court enter a Declaratory Judgment finding that a justiciable controversy exists and declaring the rights and liabilities ...

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