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12/18/97 AMERICAN COUNTRY INSURANCE COMPANY v.

December 18, 1997

AMERICAN COUNTRY INSURANCE COMPANY, PLAINTIFF-APPELLEE,
v.
THE HANOVER INSURANCE COMPANY, DEFENDANT-APPELLANT AND CHUBB INSURANCE COMPANY, SCARSDALE DEVELOPMENT, LTD., AND KATHLEEN POLIZZI, ADMINISTRATOR OF THE ESTATE OF MARK POLIZZI, DECEASED, DEFENDANTS.



Appeal from the Circuit Court of Cook County. No. 92--CH--11392. Honorable Aaron Jaffe, Judge Presiding.

Presiding Justice Cerda delivered the opinion of the court. Wolfson, J., and McNamara, J., concur.

The opinion of the court was delivered by: Cerda

PRESIDING JUSTICE CERDA delivered the opinion of the court:

This appeal involves an insurance coverage dispute between plaintiff, American Country Insurance Company (American Country), and defendant, The Hanover Insurance Company (Hanover), concerning the priority of coverage for the second $1 million of a $4.5 million settlement in an underlying wrongful death action. After cross-motions for summary judgment were filed and argued, the trial court entered judgment for American Country on the ground that its umbrella policy was excess over Hanover's policy. For the following reasons, we affirm.

On October 1, 1990, Mark Polizzi was employed by Keystone Mechanical Industries, Inc. (Keystone) installing underground water utilities at the Edgewood Estates real estate development in Bartlett, Illinois. The walls of the trench in which he was working collapsed on him, causing his death. Scarsdale Development, Ltd. (Scarsdale) was the general contractor on the construction project and Keystone was the plumbing subcontractor. At the time of Polizzi's injury, Keystone was insured by a Commercial Liability Policy issued by American Country. Under this policy, which had a limit of $1 million for a single occurrence, Scarsdale was named as an additional insured. Keystone was also covered by a $5 million Commercial Excess Policy, an umbrella policy, issued by American Country. Although Scarsdale was not originally an additional insured under the Excess Policy, it was later added as an additional insured.

The American Country Excess Policy included the following "Other Insurance" clause:

"Section 10 - OTHER INSURANCE

This insurance is excess over any other valid and collectible insurance, whether primary, excess, contingent, or any other basis, except other insurance written specifically to be excess over this insurance. "Underlying insurance" is not other insurance."

In addition, Scarsdale was insured by Hanover's Homebuilders Commercial Lines Policy, which provided general liability coverage up to $1 million for each occurrence. The policy's insuring agreement provides:

"We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend any "suit" seeking those damages."

The policy also contains the following provisions:

"IV. EXCESS INSURANCE

Under SECTION IV - COMMERCIAL GENERAL LIABILITY CONDITIONS PARAGRAPH "4. Other Insurance" is hereby deleted and replaced with the following:

4. Other Insurance

If other valid and collectible insurance is available to the insured for a loss we cover under Coverage A, B or D of this Coverage Part, ...


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