the damage was faulty workmanship on the part of Defendant. In support of
this argument, Defendant attached a copy of a Third-Party Complaint it
filed in the circuit court of Champaign County in the underlying cause of
action. In the Third-Party Complaint, Defendant alleged that the
negligence of other subcontractors involved in the construction of the
Building proximately caused or contributed to the damages allegedly
incurred by KDB.
On December 14, 1998, Plaintiff filed a Motion to Strike (# 19).
Plaintiff asserted that Defendant's reference to the Third-Party
Complaint and the attached Third-Party Complaint should be stricken from
Defendant's Memorandum. On June 28, 1999, the parties filed an Agreed
Motion for Enlargement of Time (# 25), seeking to extend the discovery
deadlines if this court denies Plaintiff's Motion for Judgment on the
A Rule 12(c) judgment on the pleadings is "`designed to provide a means
of disposing of cases when the material facts are not in dispute and a
judgment on the merits can be achieved by focusing on the content of the
pleadings and any facts of which the court will take judicial notice.'"
Continental X-Ray Corp. v. Home Indem. Co., 1997 WL 102537, at *2
(N.D.Ill. 1997)(quoting 5A Charles A. Wright & Arthur R. Miller, Federal
Practice & Procedure § 1367 (1990)). A Rule 12(c) motion is subject
to the same standard as a Rule 12(b)(6) motion to dismiss and "`should
not be granted unless it appears beyond doubt that the plaintiff cannot
prove any facts that would support his claim for relief.'" GATX Leasing
Corp. v. National Union Fire Ins. Co., 64 F.3d 1112, 1114 (7th Cir.
1995)(quoting Thomason v. Nachtrieb, 888 F.2d 1202, 1204 (7th Cir.
1989)); Continental X-Ray Corp., 1997 WL 102537, at *2. When the
plaintiff is the moving party, the motion should not be granted unless it
appears beyond doubt that the non-moving party cannot prove facts
sufficient to support his position. See Continental X-Ray Corp., 1997 WL
102537, at *5-6. In ruling on a Rule 12(c) motion, this court must view
the facts in a light most favorable to the non-moving party. Flenner v.
Sheahan, 107 F.3d 459, 461 (7th Cir. 1997); Continental X-Ray Corp., 1997
WL 102537, at *2. A judgment on the pleadings is proper when only
questions of law, and not questions of fact, exist after the pleadings
have been filed. Indiana Ins. Co. v. Hydra Corp., 245 Ill. App.3d 926,
185 Ill.Dec. 775, 615 N.E.2d 70, 72 (1993), appeal denied, 152 Ill.2d 559,
190 Ill.Dec. 889, 622 N.E.2d 1206 (1993).
Both parties agree that Illinois law governs the policy at issue in
this diversity case. See Prisco Serena Sturm Architects, Ltd. v. Liberty
Mut. Ins. Co., 126 F.3d 886, 890 (7th Cir. 1997). To determine whether
the insurer has a duty to defend the insured, the court must look to the
allegations included in the underlying complaint and compare those
allegations to the relevant provisions of the insurance policy. Outboard
Marine Corp. v. Liberty Mut. Ins. Co., 154 Ill.2d 90, 180 Ill.Dec. 691,
607 N.E.2d 1204, 1212 (1992). An insurer's duty to defend is much broader
than its duty to indemnify. Crum & Forster Managers Corp. v. Resolution
Trust Corp., 156 Ill.2d 384, 189 Ill.Dec. 756, 620 N.E.2d 1073, 1079
(1993); see also Nationwide Ins. v. Board of Trustees of Univ. of
Illinois, 116 F.3d 1154, 1155 n. 2 (7th Cir. 1997). If the facts alleged
in the underlying complaint fall within, or even potentially within, the
policy's coverage, the insurer has a duty to defend. Outboard Marine
Corp., 180 Ill.Dec. 691, 607 N.E.2d at 1212. Refusal to defend is
unjustifiable unless it is clear from the face of the underlying
complaint that the facts alleged do not fall potentially within the
policy's coverage. Outboard Marine Corp., 180 Ill.Dec. 691, 607 N.E.2d at
The construction of an insurance policy is a question of law. American
States Ins. Co. v. Koloms, 177 Ill.2d 473, 227 Ill.Dec. 149, 687 N.E.2d 72,
A court's primary objective in construing the language of the policy is
to ascertain and give effect to the intentions of the parties as
expressed in their agreement, the insurance policy. Koloms, 227 Ill.Dec.
149, 687 N.E.2d at 75. "A court must construe the policy as a whole and
take into account the type of insurance purchased, the nature of the
risks involved, and the overall purpose of the contract." Koloms, 227
Ill.Dec. 149, 687 N.E.2d at 75. The court must look to the nature of the
policy at issue and the risks undertaken by the insurer. Outboard Marine
Corp., 180 Ill.Dec. 691, 607 N.E.2d at 1215. When construing an insurance
policy, the court must strive to give each term in the policy meaning
unless doing so would render the clause or policy inconsistent or
inherently contradictory. State Farm Fire & Cas. Co. v. Martin,
710 N.E.2d 1228, 238 Ill. Dec. 126, 186 Ill.2d 367 (1999). The policy
should be liberally construed with any uncertainty resolved in favor of
the insured. Hydra Corp., 185 Ill.Dec. 775, 615 N.E.2d at 72-73. If the
language of the policy is ambiguous, the court must construe the policy
in favor of the insured and against the insurer that drafted the policy.
Employers Ins, of Wausau v. Ehlco Liquidating Trust, 186 Ill.2d 127, 237
Ill.Dec. 82, 708 N.E.2d 1122, 1130 (1999). However, where a provision is
clear and unambiguous, it will be applied as written (Monticello Ins.
Co. v. Wil-Freds Constr., Inc., 277 Ill. App.3d 697, 214 Ill.Dec. 597,
661 N.E.2d 451, 454 (1996)), giving the words in the policy their plain,
ordinary and popular meaning (Lapham-Hickey Steel Corp. v. Protection
Mut. Ins. Co., 166 Ill.2d 520, 211 Ill.Dec.459, 655 N.E.2d 842, 846
The type of policy at issue here is a comprehensive general liability
(CGL) policy, also referred to as a commercial general liability policy.
Defendant concedes that, under Illinois law, CGL policies "are intended
to provide coverage for injury or damage to the person or property of
others; they are not intended to pay costs associated with repairing or
replacing an insured's defective work, and products which are purely
economic losses." See Western Cas. & Sur. Co. v. Brochu, 105 Ill.2d 486,
86 Ill.Dec. 493, 475 N.E.2d 872, 877 (1985); Pekin Ins. Co. v. Richard
Marker Assocs., Inc., 289 Ill. App.3d 819, 224 Ill.Dec. 801,
682 N.E.2d 362, 365 (1997), appeal denied, 175 Ill.2d 531, 228 Ill.Dec.
719, 689 N.E.2d 1140 (1997); see also Continental X-Ray Corp., 1997 WL
102537, at *3.
In construing the policy at issue here, keeping in mind the nature of
the policy and the risks intended to be covered, this court concludes
that the KDB complaint does not allege facts which fall within, or even
potentially within, the policy's coverage. This court concludes that the
KDB complaint does not allege property damage caused by an "occurrence,"
as defined by the policy. CCL policies are "occurrence-based" policies of
insurance. Outboard Marine Corp., 180 Ill.Dec. 691, 607 N.E.2d at 1219.
As noted previously, the policy defines an "occurrence" as "an accident,
including continuous or repeated exposure to substantially the same
general harmful conditions." The policy does not define "accident."
However, "[w]hen construing CCL policies, courts define an accident as
`an unforeseen occurrence, usually of an untoward or disastrous character
or an undesigned sudden or unexpected event of an inflictive or
unfortunate character.'" Monticello Inc. Co., 214 Ill.Dec. 597, 661
N.E.2d at 455; see also Hydra Corp., 185 Ill.Dec. 775, 615 N.E.2d at 73.
"The use of the word `occurrence' in insurance policies broadens coverage
and eliminates the need to find an exact cause of damages as long as they
are neither intended nor expected by the insured." Hydra Corp., 185
Ill.Dec. 775, 615 N.E.2d at 73. However, the occurrence must still be
accidental. Hydra Corp., 185 Ill.Dec. 775, 615 N.E.2d at 73. "An
accident, by its very nature contemplates an event that is unforeseen and
neither intended nor expected." Diamond State Ins. Co. v. Chester-Jensen
Co., 243 Ill. App.3d 471, 183 Ill.Dec. 435, 611 N.E.2d 1083,
1091 (1993). In construing an occurrence provision in a CCL policy, it is
the property damage that must be unexpected and unintended. See Outboard
Marine Corp., 180 Ill.Dec. 691, 607 N.E.2d at 1220; see also Huntzinger
v. Hastings Mut. Ins. Co., 143 F.3d 302, 313-14 (7th Cir. 1998) (the
"occurrence" must cause the property damage in order to be covered under
The mere failure of a product to perform as warranted
is not beyond the realm of expectation and is
foreseeable by the parties. In fact, it is this
expectation that provides the impetus for requiring a
warranty from the vendor in the first place. While
such failure is most likely to be unintentional, it
cannot be considered an `accident' within the meaning
of the policy because the "natural and ordinary
consequences of an act do not constitute an accident.
Diamond State Ins. Co., 183 Ill.Dec. 435, 611 N.E.2d
at 1092; see also Continental X-Ray Corp., 1997 WL
102537, at *4.
Accordingly, the law is well settled, in Illinois and in other
jurisdictions, that the natural results of negligent and unworkmanlike
construction of a building do not constitute an "occurrence." Monticello
Ins. Co., 214 Ill.Dec. 597, 661 N.E.2d at 456 (and cases cited therein);