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El Rincon Supportive Services Organization

January 09, 2004

[5] EL RINCON SUPPORTIVE SERVICES ORGANIZATION, INC., A/K/A EL RINCON COMMUNITY CLINIC, AN ILLINOIS NOT-FOR-PROFIT CORPORATION, AND ERC PROPERTIES FOUNDATION, INC., AN ILLINOIS NOT-FOR-PROFIT CORPORATION, PLAINTIFFS-APPELLEES,
v.
FIRST NONPROFIT MUTUAL INSURANCE COMPANY, DEFENDANT-APPELLANT.



[6] Appeal from the Circuit Court of Cook County Honorable Bernetta Bush, Judge Presiding.

[7] The opinion of the court was delivered by: Justice Gallagher

[8]  Defendant First Nonprofit Mutual Insurance Company (FNMIC) appeals from an order granting summary judgment in favor of El Rincon Supportive Services Organization, Inc., a/k/a El Rincon Community Clinic, and ERC Properties Foundation, Inc. (El Rincon), concluding that FNMIC owed coverage to El Rincon under a multiple-peril insurance policy for a claim against the policy for damages to El Rincon's property. On appeal, FNMIC first contends that El Rincon's use of the term "construction" in its complaint and in an exhibit amounts to a judicial admission that the property damage resulted from "construction" activities. FNMIC next contends on appeal that the plain definition of the term "construction" encompasses all activities relating to the construction process and that the insurance policy is not ambiguous. FNMIC also contends on appeal that this court should be persuaded by the reasoning underlying decisions in other jurisdictions finding comparable exclusion language unambiguous. FNMIC's final contention on appeal is that no question of fact exists in the record that precludes summary judgment in favor of FNMIC after the exclusion is found unambiguous.

[9]  El Rincon is an Illinois not-for-profit corporation. El Rincon provides professional social services, including but not limited to alcoholism and other drug dependency clinical services on the west side of Chicago.

[10]   El Rincon procured an FNMIC multiple-peril insurance policy that was in effect from May 15, 2001 until May 1, 2002 (policy). The policy provided coverage on El Rincon's property located at 1874 N. Milwaukee Avenue, Chicago, Illinois (property). On or around September 1, 2001, the property was physically damaged by the "acts, decisions, errors, or omissions of a third party performing construction excavation and operations to an adjacent property" located at 1868-1870 N. Milwaukee Avenue, Chicago, Illinois (the adjacent property). El Rincon notified FNMIC of the claim regarding the property damage (the claim). According to a site inspection performed on the property around October 3, 2001, by Engineering Systems, Inc. (ESI), construction operations on the adjacent property allegedly caused the following to the property: "damaged masonry walls, portions of walls left unsupported, a severely cracked parapet wall, and walls that had been impacted." In a letter dated October 5, 2001, to El Rincon, FNMIC reserved its rights under the policy concerning the claim while it investigated the matter. On December 11, 2001, FNMIC disclaimed coverage in a letter to El Rincon asserting exclusion 3.b(2) of the policy barred coverage.

[11]   Pertinent provisions of the policy, including exclusion 3.b(2), are as follows:

[12]   "GENERAL PROPERTY COVERAGE

[13]   A. COVERAGE AGREEMENT

[14]   We will pay for direct physical loss or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss.

[15]   2. Property Not Covered

[16]   Except as provided in C. Extensions of Coverage, Covered Property does not include:

[17]   d. The cost of excavations, grading, backfilling or filing;

[18]   E. EXCLUSIONS

[19]   3. We will not pay for loss or damage caused by or resulting from ...


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