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National Fire and Indemnity Exchange v. Ali & Sons

January 16, 2004

[5] NATIONAL FIRE AND INDEMNITY EXCHANGE, PLAINTIFF-APPELLEE,
v.
ALI & SONS, COMPANY, SAMIR ALI, NORTHWAY CLEANERS, DEFENDANTS-APPELLANTS.



[6] Appeal from the Circuit Court of Cook County No. 02 CH 09819 Honorable Sophia H. Hall, Judge Presiding.

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

[8]  Defendants Ali & Sons, Company, Samir Ali, and Northway Cleaners were sued for negligence and trespass relating to the alleged discharge of pollutants, among other things, by the owner of property they leased. Plaintiff National Fire and Indemnity Exchange, defendants' insurer for a portion of the lease period, brought an action for declaratory relief, seeking a judgment that it did not owe a duty to defend or indemnify defendants in the underlying lawsuit. The trial court granted summary judgment in plaintiff's favor. Defendants appeal, contending that a genuine question of material fact precludes the grant of summary judgment and, alternatively, that plaintiff had a duty to defend and indemnify them as a matter of law. We affirm.

[9]  In November 2001, the property owner, Gilbert Raphael (Raphael or lessor), filed an amended, seven-count complaint against defendants Ali & Sons, Company and Samir Ali (collectively, lessee). According to the complaint, lessee operated a dry cleaning business from July 1, 1991, to June 30, 2001, on the premises located at 7501 West Irving Park Road, Chicago (7501 premises). Under the lease, lessee also had exclusive use of the boiler room area of 7515 West Irving Park Road (7515 premises).

[10]   The complaint alleged that lessee "utilized certain dry cleaning materials, chemicals and solvents, as well as certain underground storage tanks" and was negligent for, among other things, allowing dry cleaning materials, chemicals and solvents to discharge into and contaminate the ground "around and under the premises located at 7501 West Irving Park Road" in violation of the Illinois Environmental Protection Act (415 ILCS 5/1 et seq. (West 2000)). The complaint further alleged that: such discharge and contamination "around and under" the 7501 premises violated lease provisions against misuse; defendants' failure to yield the premises in good condition created a hold-over tenancy at sufferance; and the contamination resulted in a trespass upon lessor's property and constituted a private nuisance.

[11]   In May 2002, plaintiff filed its complaint for declaratory relief, alleging that it issued insurance policies to defendants for two separate three-year periods ending in 1992. Copies of the policies were attached to the complaint; the policy relevant to this appeal covered defendants for the second three-year period, from January 1, 1990, to January 1, 1993. Plaintiff sought a declaration that it did not owe a duty to defend or indemnify defendants for property damage arising from the alleged discharge and contamination by pollutants, based on an absolute pollution exclusion contained in the policy. Plaintiff denied the underlying complaint alleged a personal injury offense within the policy's meaning of the term, but alleged that, even if it did, such offense would have been committed outside the policy period. On that basis, plaintiff also sought a declaration that it did not owe a duty to defend or indemnify defendants under the personal injury coverage portion of the policy.

[12]   Plaintiff subsequently filed a motion for summary judgment based on the pollution exclusion and the absence of any personal injury alleged in the Raphael complaint that occurred during the policy period. In the motion, plaintiff anticipated that defendants would try to "circumvent" the pollution exclusion by arguing they were covered under the policy's personal injury coverage. Personal injury was defined in the policy as "injury other than 'bodily injury,' arising out of" certain offenses which included "[w]rongful entry into, or eviction of a person from, a room, dwelling or premises that the person occupies."

[13]   Plaintiff maintained that defendants would argue that the "trespass" alleged in the Raphael complaint fell within the policy meaning of "wrongful entry," but it denied the alleged trespass was a "wrongful entry" covered by the policy. Plaintiff further contended that, even if trespass fell within the personal injury offense of "wrongful entry," there still would be no coverage for defendants because trespass is an invasion of the exclusive possession of land which could not have occurred during the policy period. Plaintiff based that contention on the fact that defendants had exclusive possession of the 7501 premises until 2001, which was about eight years after the policy period.

[14]   In a response, defendants conceded that the pollution exclusion in the policy barred claims for property damage and bodily injury. However, defendants asserted that the language of the lease was ambiguous and the Raphael complaint, which alleged contamination "around and under" the 7501 premises, could include the 7515 premises. Defendants further asserted that "the contamination migrated beyond" the 7501 premises based on statements of Ali that were contained in an attached affidavit. Additionally, defendants conceded they legally occupied the 7501 premises until the end of June 2001, but maintained their possession was not "exclusive" based on certain provisions in the lease. Based on their purported limited rights to possession of the 7501 premises, defendants further asserted, essentially, that trespass could have occurred during the leasehold and, thus, the allegations contained in the Raphael complaint fell within, "or potentially within," the policy's personal injury coverage.

[15]   The trial court granted plaintiff's motion for summary judgment "based on a reasonable interpretation of 'around' as immediately adjacent," and ordered that plaintiff did not owe a duty to defend or indemnify defendants in the underlying lawsuit.

[16]   On appeal, defendants first argue that the grant of summary judgment was improper because a question of facts exists as to whether the allegation of contamination "accumulated in the ground around and under" the 7501 premises includes the 7515 premises. Defendants rely upon a dictionary definition of the word "around" for their assertion that the Raphael complaint could have intended to allege damages to the 7515 premises as well as the 7501 premises.

[17]   Summary judgment is appropriate where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2000); Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384, 390-91, 620 N.E.2d 1073 (1993). The standard of review on an appeal from a grant of summary judgment is de novo. Crum & Forster Managers Corp., 156 Ill. 2d at 390.

[18]   Here, defendants' assertion about what the Raphael complaint might have intended to allege amounts to nothing more than mere conjecture. Defendants' reliance on their lease of the boiler room area of the 7515 premises does not create an issue of contested fact. The Raphael complaint in fact cites provisions of the lease covering the boiler room at the 7515 premises, but alleges damages specifically--and only--at the 7501 premises.

[19]   Dictionary definitions notwithstanding, if Raphael had intended to allege contamination of other premises, he could have done so. In the complaint at issue here, however, he did not. We find no basis in the record for defendants' assertion that the complaint could include allegations of contamination at the 7515 premises. Therefore, we find the trial court properly granted summary judgment for plaintiff based on a reasonable interpretation of "around" as "immediately adjacent."

[20]   Although defendants concede that, if the Raphael complaint "alleged an injury only to 7501 West Irving Park Road *** the alleged injury fell outside the policy period," they argue, alternatively, that the allegations fell at least potentially within the policy's personal injury coverage. Defendants argue in essence that trespass is a "wrongful entry," and because "wrongful entry" is one of ...


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