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State Automobile Mutual Insurance Co. v. Habitat Construction Co.

September 24, 2007


Appeal from the Circuit Court of Cook County. No. 02 CH 21220. The Honorable Bernetta D. Bush,Judge Presiding.

The opinion of the court was delivered by: Justice Garcia

Published opinion

In this declaratory judgment action, the trial court granted summary judgment in favor of the plaintiff, State Automobile Mutual Insurance Company (State Auto), finding it did not have a duty to defend or indemnify the defendant, Habitat Construction Company (Habitat), in an underlying personal injury action. Habitat contends on appeal that it, rather than State Auto, was entitled to summary judgment.


In 2000, a construction project for a building located at 2701 South Indiana in Chicago (the project) was underway. Habitat was the general contractor on the project, and Central Building & Preservation (Central Building) was a subcontractor hired to provide certain services. The written contract between Habitat and Central Building required Central Building to add Habitat as an additional insured on the commercial general liability policy it had in effect through State Auto, its insurer.*fn1 Habitat purportedly has in effect its own liability insurance policy through Pennsylvania General Insurance Company. The record provides no information about the terms of that policy.

The State Auto policy contains a "Blanket Additional Insured Endorsement-Primary and Non-Contributory" provision, which provides, in part:

"WHO IS AN INSURED (Section II) is amended to include as an insured any person or organization whom you are required to name as an additional insured on this policy under a written contract or agreement.

The insurance provided the additional insured is limited as follows:

1. That the person or organization is only an additional insured with respect to liability arising out of:

(b) 'Your work' for that additional insured for or by you.

3. The insurance provided the additional insured does not apply to 'bodily injury,' 'property damage,' 'personal injury,' 'advertising injury,' or defense coverage under the Supplemental Payments section of the policy arising out of an architect's, engineer's, or surveyor's rendering of or failure to render any professional services including:

(a) The preparing, approving, or failing to prepare or approve maps, drawings, opinions, reports, surveys, change orders, design or specifications; and

(b) Supervisory, inspection, or engineering services.

Any coverage provided hereunder shall be excess over any other valid and collectible insurance available to the additional insured whether primary, excess, contingent, or on any other basis unless a contract specifically requires that this insurance be non-contributory and or primary or you request that it apply on a non-contributory and or primary basis."

The policy defines "Your work" as "Work or operations performed by you or on your behalf; and *** [m]aterials, parts or equipment furnished in connection with such work or operations."

On June 19, 2000, Larry Medolan, a Central Building employee, was allegedly injured while working on the project. On April 2, 2002, Medolan filed a one-count complaint in the circuit court of Cook County, naming Habitat, South Commons Stage One Venture, and Solomon, Cordwell, Buenz and Associates, Inc., as defendants. Central Building was not named in the complaint. Medolan alleged the defendants owned or were in charge of the project site. He also alleged "[t]hat at the aforementioned time and place, [Medolan] was employed by Central Building & Preservation L.P. on said premises in the furtherance of the aforesaid work." He further alleged that the defendants were present during the construction and participated in coordinating the work done, designated work methods, and had the authority to stop the work, refuse the work and materials, and order changes in the work "in the event the work was being performed in a dangerous manner or for any other reason." Medolan also alleged the defendants erected a concrete wall to be used in the construction, that his "duties and responsibilities *** required that he work on and about the aforesaid concrete wall," and that a section of concrete fell onto the scaffold on which he was working, injuring him. Medolan alleged, in part, that the named defendants were guilty of certain negligent acts and/or omissions, including: (1) failing to make a reasonable inspection of the premises; (2) improperly operating, managing, maintaining, and controlling the premises; (3) failing to provide him with a safe place to work; (4) failing to warn him of dangerous conditions; (5) failing to provide adequate safeguards to prevent injury to him; (6) failing to supervise the work; and (7) improperly directing workers to cut excessive amounts of concrete, which caused the area to become unstable. According to the complaint, the defendants' negligence proximately caused Medolan's injuries.

Habitat, on May 21, 2003, filed a third-party complaint against Central Building. Habitat denied liability, but alternatively alleged that if it was found liable, Central Building engaged in certain negligent acts or omissions, including the same seven acts alleged by Medolan in his complaint. According to the third-party complaint, Central Building's negligence proximately caused Medolan's injuries.

Habitat forwarded the Medolan complaint to Central Building for defense and indemnification. Central Building then forwarded the matter to State Auto. State Auto rejected Habitat's tender of defense and, on November 22, 2002, filed the instant action seeking a declaration that there was no ...

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