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A-1 Roofing Company v. Navigators Insurance Company and Jack Frost Iron Works

June 24, 2011

A-1 ROOFING COMPANY,
PLAINTIFF-APPELLANT,
v.
NAVIGATORS INSURANCE COMPANY AND JACK FROST IRON WORKS, INC.,
DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County No. 09 CH 5980 Honorable Martin S. Agran, Judge Presiding.

The opinion of the court was delivered by: Justice Cahill

JUSTICE CAHILL delivered the judgment of the court, with opinion. Presiding Justice Garcia and Justice McBride concurred in the judgment.

OPINION

Plaintiff A-1 Roofing Company (A-1) appeals from the trial court's grant of summary judgment against A-1 and in favor of defendant Navigators Insurance Company (NIC). We reverse and remand.

A-1 was the general contractor for a roof resurfacing job at Barrington High School. Jack Frost Iron Works, Inc. (Frost), was one of A-1's subcontractors. Frost had a commercial general liability insurance contract with NIC containing an additional insured endorsement. The additional insured endorsement contains a clause, stating: "[n]either the coverages provided by this insurance policy nor the provisions of this endorsement shall apply to any claim arising out of the sole negligence of any additional insured or their agents/employees." (Emphasis added.) It is undisputed that A-1 is an additional insured under Frost's policy.

William McKoin, an employee of Frost subcontractor Midwest Sheet Metal, Inc., was killed when a boom-lift he was operating flipped over while working on the project. The boom-lift had been leased by Frost subcontractor Bakes Steel Erectors, Inc. (BSE). McKoin's estate brought a construction negligence and wrongful death suit against A-1, BSE and two other defendants. Frost was not named as a party ormentioned in the complaint. A-1 filed a declaratory judgment action against NIC, seeking a judgment that NIC owed it a duty to defend and indemnify the underlying McKoin suit. The trial court found NIC had no duty to defend or indemnify A-1 because McKoin's complaint did not state a cause of action against the insured, Frost. Defendant appeals.

Our standard of review from a trial court's summary judgment ruling is de novo. Weather-Tite, Inc. v. University of St. Francis, 233 Ill. 2d 385, 389, 909 N.E.2d 830 (2009).

"In determining if there is a duty to defend a particular lawsuit, the underlying complaint and the insurance policy will be liberally construed in favor of the insured, and all doubts and ambiguities will be resolved in favor of extending coverage to the insured." Village of Hoffman Estates v. Cincinnati Insurance Co., 283 Ill. App. 3d 1011, 1014, 670 N.E.2d 874 (1996) (citing United States Fidelity & Guaranty Co. v. Wilkin Insulation Co., 144 Ill. 2d 64, 74, 578 N.E.2d 926 (1991)). "Where a policy provision is clear and unambiguous, its language must be taken in its 'plain, ordinary and popular sense.' " Wilkin, 144 Ill. 2d at 74 (quoting Hartford Accident & Indemnity Co. v. Case Foundation Co., 10 Ill. App. 3d 115, 121, 294 N.E.2d 7 (1973)).

A-1 contends that NIC had a duty to defend or indemnify A-1 because A-1's liability "arose" out of Frost's work for A-1, and "but for" Frost's retention of BSE, A-1 would not have been sued by McKoin. A-1 points to language in the policy stating that an additional insured is covered "with respect to liability arising out of 'your work' for that insured by or for you." "Your work" is defined in the policy as "[w]ork or operations performed by you or on your behalf." A-1 contends that since the underlying injury arose out of work performed "for" Frost by BSE (Frost's subcontractor), the claim against A-1 is within the scope of the additional insured endorsement.

The policy language here is clear and unambiguous: it includes in the definition of "[y]our work," "[w]ork or operations performed *** on your behalf." (Emphasis added.) It is undisputed that Frost was subcontracted by A-1 for the Barrington High School project, and Frost subcontracted a portion of the work to BSE. The underlying complaint alleges McKoin's death occurred while BSE was performing this work on Frost's behalf, in furtherance of the work Frost was contractually obligated to perform for A-1. See Wanzek Construction, Inc. v. Employers Insurance of Wausau, 679 N.W.2d 322, 329-30 (Minn. 2004) (work was performed "on behalf" of general contractor where the subcontractor's performance of its obligations contributed to performance by the general contractor of its obligation to the owner). We believe that A-1's liability in the underlying McKoin suit arose out of work performed for A-1 on behalf of Frost by BSE. See American Economy Insurance Co. v. Holabird & Root, 382 Ill. App. 3d 1017, 1035, 886 N.E.2d 1166 (2008) (but for the underlying plaintiff's work for subcontractor, the plaintiff would not have been injured, so the plaintiff's injuries potentially arose out of subcontractor's work); State Automobile Mutual Insurance Co. v. Kingsport Development, LLC, 364 Ill. App. 3d 946, 954, 846 N.E.2d 974 (2006) (same).

We next address the primary dispute in this case: whether the "sole negligence clause" contained in the policy should negate NIC's obligation to provide coverage to A-1.

The sole negligence clause in the policy at issue states: "[n]either the coverages provided by this insurance policy nor the provisions of this endorsement shall apply to any claim arising out of the sole negligence of any additional insured or any of their agents/employees." (Emphasis added.)

A-1 contends that the sole negligence exclusion does not apply because McKoin's underlying lawsuit did not solely allege negligence on behalf of A-1 but also alleged negligence on behalf of BSE and two other parties. A-1 argues that the exclusion would only apply if the underlying allegations were exclusively directed toward A-1.

NIC responds that the sole negligence exclusion was triggered because Frost (the named insured) was not alleged to have been negligent and direct allegations of negligence against A-1 (the ...


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