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11/27/96 PEPPER CONSTRUCTION COMPANY v.

November 27, 1996

PEPPER CONSTRUCTION COMPANY, PLAINTIFF AND COUNTERDEFENDANT-APPELLEE AND CROSS-APPELLANT,
v.
TRANSCONTINENTAL INSURANCE COMPANY, DEFENDANT AND COUNTERPLAINTIFF-APPELLANT AND CROSS-APPELLEE (EDWARD R. QUINLAN, DEFENDANT AND COUNTERDEFENDANT; CNA INSURANCE COMPANIES, AND CLIMATEMP, INC., DEFENDANTS).



Appeal from the Circuit Court of Cook County. 94 CH 06831. Honorable Lester Foreman Judge Presiding.

Released for Publication January 15, 1997.

The Honorable Justice Cahill delivered the opinion of the court: Hoffman, P.j., and Theis, J., concur.

The opinion of the court was delivered by: Cahill

JUSTICE CAHILL delivered the opinion of the court:

Transcontinental Insurance Company appeals a trial court grant of summary judgment for Pepper Construction Company in a declaratory judgment action. Pepper cross-appeals the court's denial of attorney fees. We reverse and remand the grant of summary judgment, finding a triable issue of fact. We affirm the denial of attorney fees.

Pepper was the general contractor for a construction project in Chicago. Pepper subcontracted with Advance Mechanical Systems. Advance agreed to perform heating, ventilation, and air conditioning work for the project. The contract also required Advance to provide insurance naming Pepper as an additional insured.

Advance, in turn, subcontracted with Climatemp to perform work at the site. The contract between Advance and Climatemp contained the following clause:

"Work performed by [Climatemp] shall be in strict accordance with all applicable plans, general conditions, specifications, and addenda thereto, and [Climatemp] is bound by all provisions of these documents and also all other documents to which [Advance] is bound, and to the same extent."

Transcontinental was Climatemp's insurer. The policy contains an additional insured endorsement which reads in part:

"Owners, Lessees or Contractors.

Commercial General Liability Coverage Part.

1. Who is an insured (Section II) is amended to include as an insured any person or organization (called 'additional insured') for whom or for which you have contracted or agreed to provide general liability insurance, but only with respect to liability arising out of 'your work' for the additional insured(s)."

An employee of Climatemp was injured while working at the job site. He filed a personal injury lawsuit against Pepper. Pepper tendered its defense to Climatemp's insurer, Transcontinental, on February 27, 1991, alleging that Pepper was an additional insured under Transcontinental's insurance policy covering Climatemp.

Transcontinental accepted Pepper's defense on March 28, 1991. Transcontinental tendered the defense back to Pepper over three years later, on April 26, 1994, alleging that it had ...


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