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04/12/96 CONTINENTAL CASUALTY COMPANY v. SECURITY

April 12, 1996

CONTINENTAL CASUALTY COMPANY, PLAINTIFF AND COUNTERDEFENDANT AND APPELLEE AND CROSS-APPELLANT,
v.
SECURITY INSURANCE COMPANY OF HARTFORD, DEFENDANT AND COUNTERPLAINTIFF AND APPELLANT AND CROSS-APPELLEE.



Appeal from the Circuit Court of Cook County. Honorable Aaron Jaffe, Judge Presiding.

Presiding Justice McNULTY delivered the opinion of the court: Cousins and Hourihane, JJ., concur.

The opinion of the court was delivered by: Mcnulty

PRESIDING JUSTICE McNULTY delivered the opinion of the court:

Continental Casualty Company (Continental) filed this action against Security Insurance Company of Hartford (Security) seeking a declaration that Continental is entitled to equitable contribution from Security for defending mutual insureds, Edward Durrell Stone & Associates (Durrell Stone), and Perkins & Will Corporation (Perkins & Will), in litigation arising out of the construction of the Standard Oil building in Chicago, Illinois. The trial court granted Continental's motion for summary judgment and declared that Security must reimburse Continental one-half of its costs of defending Durrell Stone and Perkins & Will. Security appeals this ruling.

Security filed a counterclaim against Continental seeking a declaration that it is entitled to equitable contribution from Continental for defending Edward Durell Stone Associates, P.C. (the P.C. entity), in the Standard Oil building litigation. The trial court granted summary judgment against Continental and in favor of Security with respect to its counterclaim and ordered Continental to reimburse Security for one-half of its costs of defending the P.C. entity. Continental cross-appeals the trial court's ruling on this issue.

The appeal and cross-appeal were timely filed pursuant to Illinois Supreme Court Rules 301 and 303(a)(3), respectively. 155 Ill. 2d Rs. 301, 303(a)(3).

Continental issued an architects' and/or engineers' professional liability claims policy to Durrell Stone and Perkins & Will originally effective April 21, 1969, through April 21, 1972. Various endorsements extended coverage for the insureds' liability for claims made through March 31, 1987. This policy covered the insureds' legal liability arising out of professional services performed on behalf of the joint venture entered into by Durrell Stone and Perkins & Will involving the design and construction of the Standard Oil building.

Durrell Stone and Perkins & Will were named insureds in this policy, which further defined "insured" as follows:

"III Definition of Insured The unqualified word 'insured' includes the named insured and also includes any partner, executive officer, director, stockhholder or employee of the named insured while acting within the scope of his duties as such."

The policy did not name or define the P.C. entity as an insured.

The Continental policy provides primary professional liability coverage as follows:

"I Coverage

The Company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages if legal liability arises out of the performance of professional services for others in the insureds' capacity as an architect or an engineer and if such legal liability is caused by an error, omission or negligent act."

Security also issued primary professional liability claims made policies to Durrell Stone and Perkins & Will. The Security policy issued to Perkins & Will covered claims made between July 2, 1987, and July 2, 1988. The Security policy issued to Durrell Stone, which also named the P.C. entity as an insured, covered claims made between November 27, 1987, and ...


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