APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. No. 95 CH 6726. HONORABLE DOROTHY KIRIE KINNAIRD, JUDGE PRESIDING.
Released for Publication October 9, 1997.
The Honorable Justice McNAMARA delivered the opinion of the court. Wolfson, P.j., and Burke, J., concur.
The opinion of the court was delivered by: Mcnamara
The Honorable Justice McNAMARA delivered the opinion of the court:
In this declaratory judgment action, plaintiff, Pekin Insurance Co. (Pekin), appeals from the trial court's entry of summary judgment against Pekin and in favor of defendants, Pekin's insureds, L.J Shaw & Company (Shaw), and Shaw's employee, William L. Hall (Hall). The trial court found that, under the provisions of an insurance policy issued to defendants, Pekin had a duty to defend Shaw and Hall in an underlying action brought against them. Specifically, the trial court held that the "professional services" exclusion relied upon by Pekin did not preclude coverage in the underlying action. On appeal, Pekin contends that coverage is unambiguously excluded where the underlying complaint alleges injuries due to defendants' rendering or failure to render a professional service. Defendants respond that the allegations of the underlying complaint fall within, or potentially within, the coverage provided for in the policy and were not clearly excluded by the provision relied upon by Pekin.
The underlying action in which Shaw and Hall, among others, were named as defendants was brought by Joseph P. Caulfield & Associates, Inc. (Caulfield) in the United States District Court for the Eastern District of Missouri. According to the complaint, on January 23, 1994, a fire occurred at the printing plant of Litho Productions, Inc. (Litho), in Madison, Wisconsin. The fire caused Litho to "suffer substantial damage" to its building, equipment, and inventory. Shaw and Hall, "persons experienced with insurance claim negotiations and adjustment, represented [Litho's insurers] in the initial Fire Loss claim discussions with Litho." Litho, inexperienced in such matters, "knew it needed professional assistance" in negotiating its fire loss claim, and therefore retained Caulfield, a company "experienced and expert in fire loss investigations *** and fire loss claim settlements."
The Caulfield complaint goes on to allege that, during the course of the negotiations, Shaw and Hall, along with Litho's insurers and other entities, acted in a manner meant to induce Litho to terminate its relationship with Caulfield. Specifically, the complaint alleges that Hall, in the course of his employment with Shaw, "falsely represented *** that [Caulfield] grossly overstated, and possibly engaged in fraudulent misrepresentation, of Litho's Fire Loss damages as a pretext to cause [Caulfield's] termination *** [by] Litho in the Fire Loss claim negotiations." These allegations form the basis for Count II, alleging that Shaw and Hall, among others, participated in a "civil conspiracy," and Count V, alleging "intentional interference with contract."
Upon being named as defendants, Shaw and Hall tendered the Caulfield complaint to Pekin seeking coverage pursuant to the "Businessowners Policy" issued to Shaw by Pekin. Pekin refused coverage and filed the instant action seeking a declaration that it had no duty to defend or indemnify defendants. Pekin maintained that the injuries alleged in the Caulfield complaint resulted from defendants' conduct in performing independent insurance adjusting on behalf of Litho's insurers. These allegations, Pekin argued, fell within the policy's "professional services" exclusion, which provided:
"This insurance does not apply to:
j. 'Bodily injury', 'property damage', 'personal injury' or 'advertising injury' due to rendering or failure to render any professional service. This includes but is not limited to:
(2) Preparing, approving, or failing to prepare or approve maps, drawings, opinions, reports, surveys, change orders, designs, or specifications[.]"
Defendants filed a counterclaim seeking a declaration of their rights under the policy. Defendants relied on the following coverage provision: