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Supreme Laundry Service, L.L.C. v. Hartford Casualty Insurance Co.

April 4, 2008


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 06 CV 4475-James B. Zagel, Judge.

The opinion of the court was delivered by: Williams, Circuit Judge.


Before FLAUM, MANION, and WILLIAMS, Circuit Judges.

Supreme Laundry Service, L.L.C. ("Supreme") leases space in condominium and multi-unit apartment buildings for the purpose of installing and maintaining laundry machines for the residents' use. A dispute between Supreme and its main competitor, Coinmach Corporation ("Coinmach"), led to litigation in which Supreme's insurance provider, Hartford Casualty Insurance Company ("Hartford"), refused to provide a defense. Hartford claims that the relevant provisions of the policy require that it provide a defense for Supreme only against claims made by natural persons and not corporations. Because the policy is ambiguous as to whether its provisions are limited to only natural persons, we find that Hartford had a duty to defend Supreme against Coinmach's claims. We therefore reverse the judgment of the district court.


In June 2000, the Hinsdale Point Condominium Association (the "Association") entered into a lease with Supreme to install and maintain laundry equipment, a service previously provided by its competitor, Coinmach, whose lease was cancelled for failure to pay rent. In 2001, Supreme filed a declaratory judgment action to determine the validity of its lease with the Association, and Coinmach filed a three count counterclaim. Coinmach's first count sought a declaration that its eviction from the Association's laundry rooms was unlawful and that it was entitled to an order directing Supreme to vacate the laundry rooms. Its second count accused Supreme of "willful, wanton and malicious" trespass resulting in lost profits exceeding $90,000. Coinmach's third count alleged that Supreme's employees had unlawfully moved, removed and/or used Coinmach's property in the Association's laundry rooms.

In April 2002, Supreme forwarded the counterclaim to Hartford, requesting a defense. A few weeks later, Hartford denied coverage, finding that the counterclaim allegations did not fall within the confines of the "personal and advertising injury" provision of Supreme's Commercial General Liability Policy ("CGL policy"). In September 2004, Coinmach filed an amended counterclaim, which Supreme also forwarded to Hartford with a renewed request to defend. Hartford again rejected the request, this time because Supreme was not the owner, landlord, or lessor of the laundry rooms and that the alleged acts of trespass fell outside of the scope of the policy.

Supreme then filed this suit against Hartford, alleging that Coinmach's counterclaim fell within the terms of Supreme's CGL policy. Hartford argues that Coinmach is a "corporation" and not a "natural person"; therefore, the counterclaim falls outside the purview of the "personal and advertising injury" provision of the policy. The "personal and advertising injury" provision includes the following language:

We will pay those sums that the insured becomes legally obligated to pay as damages because of "personal and advertising injury" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages.

The policy defines "personal and advertising injury" as:

[I]njury, including consequential 'bodily injury', arising out of one or more of the following offenses:

c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling, or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor . . .

Supreme also has a second policy with Hartford, the Umbrella Policy, which was issued contemporaneously with the CGL policy and provides coverage for any sums that the insured must pay for personal or advertising injury that are in excess of the coverage provided by the CGL policy. The Umbrella policy's "personal injury" provision contains similar language to that in the CGL policy. The district court granted Hartford's Rule 12(c) motion for judgment on the pleadings, finding that Hartford had no duty ...

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