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Cincinnati Insurance Company v. River City Construction Company

October 04, 2001

CINCINNATI INSURANCE COMPANY, AS SUBROGEE TO THE RIGHTS OF CATERPILLAR, INC, A CORPORATION, AND THE CINCINNATI INSURANCE COMPANY, A CORPORATION, PLAINTIFFS-APPELLANTS
v.
RIVER CITY CONSTRUCTION, COMPANY AND ILLINOIS CORPORATION, AND AUTO-OWNERS INSURANCE, A FOREIGN CORPORATION AUTHORIZED TO DO BUSINESS IN THE STATE OF ILLINOIS, DEFENDANTS-APPELLEES



Appeal from the Circuit Court of the 10th Judicial Circuit Tazewell County, Illinois No. 99-L-157 Honorable Robert A. Barnes, Jr., Judge Presiding

The opinion of the court was delivered by: Presiding Justice Homer

PUBLISHED

Cincinnati Insurance Company (Cincinnati) filed a two-count complaint seeking contribution from River City Construction Company (River City) and Auto-Owners Insurance Company (Auto-Owners) for a work-related injury settlement paid by Cincinnati to Victor Modugno. Cincinnati appeals from the judgment of the trial court granting the defendants' separate motions to dismiss, filed pursuant to section 2-619 of the Code of Civil Procedure (735 ILCS 5/2--619 (West 2000)). We affirm in part and reverse in part.

BACKGROUND

In November 1995, Victor Modugno was working for Illinois Piping Corporation (Illinois Piping) at the Caterpillar Corporation (Caterpillar) Building LL in East Peoria. River City had a contract with Caterpillar to fabricate and install tanks at Building LL. By November 1995, River City had fabricated and installed the tanks and grating around the tanks, but had failed to install temporary or permanent hand railing as required by the contract. Modugno's work required use of the grating to access his jobsite. While Modugno was on the grating, he lost his balance and fell a distance of 20 feet to the ground, sustaining serious injuries. Cincinnati alleges that River City knew that workers were using the grating around the tanks prior to Modugno's fall.

At the time of the accident, Auto-Owners provided general liability insurance coverage for River City, and Cincinnati provided general liability insurance coverage for Illinois Piping. River City was named as an additional insured under Illinois Piping's policy. Caterpillar was named as an additional insured under both policies.

In November 1997, Cincinnati settled with Modugno for $541,422.12 for his injuries. Modugno's wife received $25,000 for damages she sustained as a result of her husband's injuries. As a result of the settlement, the Modugnos signed releases waiving all claims against Caterpillar, Illinois Piping, and Cincinnati, as well as all claims against River City and Auto-Owners.

In November 1999, Cincinnati filed a two-count complaint against River City and Auto-Owners. Count I asserted a subrogation action on behalf of Caterpillar against River City pursuant to the Illinois Joint Tortfeasor Contribution Act (740 ILCS 100/0.01 et seq. (West 2000)), requesting contribution from River City based on its pro rata share of the liability. Count II asserted a direct action by Cincinnati against Auto-Owners for equitable contribution. In this count, Cincinnati requested that a determination be made as to Caterpillar's proportionate share of liability and that Auto-Owners be ordered to reimburse Cincinnati for 50% of such amount.

River City filed a section 2--619 (735 ILCS 5/2--619 (West 2000)) motion to dismiss count I, arguing that since River City was named as an additional insured under Cincinnati's policy with Illinois Piping, it was not subject to Cincinnati's subrogation claim. River City also filed a section 2--615 (735 ILCS 5/2--615 (West 2000)) motion to dismiss, arguing that count I failed to state a cause of action because it did not specify the amount paid by Caterpillar in excess of its pro rata share of liability.

Auto-Owners filed a section 2--619 motion to dismiss count II arguing that Cincinnati could not maintain an action for equitable contribution because Cincinnati's and Auto-Owners' policies did not insure the same risk and because Cincinnati failed to segregate the settlement amounts.

Cincinnati obtained and filed deposition testimony from River City officials John Hoelscher, chief financial officer, and Joseph West, a former vice president of customer accounts. Cincinnati also filed affidavits from Jeff Lewis, Illinois Piping's owner and president, and from Peter Coyle of Coyle Insurance Agency. Coyle was responsible for procuring the Cincinnati policy issued to Illinois Piping.

In his deposition, Hoelscher said that when Illinois Piping is a subcontractor of River City, Illinois Piping must include River City as an additional insured. However, according to Hoelscher, when there is no written subcontract between River City and Illinois Piping, then Illinois Piping is not required to provide any insurance to River City. Hoelscher conceded that at the time of Modugno's fall, there was no contractual relationship between River City and Illinois Piping regarding the work at Building LL. In his deposition, West stated that there was no contractual relationship between River City and Illinois Piping at Building LL. West indicated that Hoelscher was charged with the duty of ensuring that the proper insurance was in place for River City. In his affidavit, Coyle indicated that it was his understanding when he wrote the Cincinnati policy that the additional insured status for River City would only apply when River City had a contractual relationship with Illinois Piping on a construction project. According to Lewis' affidavit, Illinois Piping had subcontracts with River City at various work sites, but was not River City's subcontractor at Building LL at the time of Victor Modugno's fall.

The circuit court found the endorsement adding River City as an additional insured to be clear and unambiguous and not subject to interpretation by parol evidence. Stating that it agreed with the defendants' positions, the court then entered an order dismissing counts I and II of the complaint with prejudice ...


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