Appeal from the n/k/a Milwaukee Circuit Court of Cook County. No. 09 CH 20554 Daniel A. Riley, The Honorable Judge Presiding.
The opinion of the court was delivered by: Justice Lampkin
JUSTICE LAMPKIN delivered the judgment of the court, with opinion.
Presiding Justice Hall and Justice Rochford concurred in the judgment and opinion.
¶ 1 Plaintiff, Milwaukee Mutual Insurance Company, n/k/a Milwaukee Insurance Company (Milwaukee Insurance), appeals the trial court's order denying its motion for summary judgment and granting summary judgment in favor of defendant, J.P. Larsen, Inc. (Larsen). Plaintiff contends the trial court erred in finding the underlying pleadings sufficiently established plaintiff had a duty to defend Larsen in a third-party action. Based on the following, we affirm.
¶ 3 At all relevant times, Milwaukee Insurance provided Larsen with commercial general liability(CGL) insurance and umbrella insurance. In March 2003, Weather-Tite, Inc. (Weather-Tite), hired Larsen as a subcontractor to apply sealant to windows installed by Weather-Tite in a condominium building called Prairie District Homes (PDH). The windows subsequently leaked and caused water damage. On July 29, 2008, the PDH Association filed a third amended verified complaint against, inter alia, Weather-Tite for breach of express and implied warranties. On April 23, 2009, Weather-Tite filed a third-party complaint against Larsen alleging that, in the event the PDH Association was successful with its breach of warranty claims, Larsen was liable for contribution as a joint tortfeasor and also alleging Larsen was in breach of contract for failing to add Weather-Tite as an additional insured to its CGL policy.
¶ 4 Weather-Tite and Larsen both tendered defenses to Milwaukee Insurance. Weather-Tite tendered its defense to the PDH Association's third amended verified complaint and Larsen tendered its defense to Weather-Tite's third-party complaint. Milwaukee Insurance denied both defense tenders, finding there was no coverage under the CGL policy where the complaints alleged only construction defects and not "property damage" or an "occurrence" within the terms of the policy.
¶ 5 On June 25, 2009, Milwaukee Insurance filed a complaint for declaratory judgment against Weather-Tite and Larsen to determine the parties' rights under the CGL policy. Milwaukee Insurance filed a motion for summary judgment, and Weather-Tite and Larsen both filed cross-motions for summary judgment. On March 30, 2010, the trial court entered an order granting Milwaukee Insurance's summary judgment motion as to Weather-Tite, but denying Milwaukee Insurance's summary judgment motion as to Larsen. The trial court granted Larsen's cross-motion for summary judgment against Milwaukee Insurance. This appeal followed.
¶ 7 Summary judgment is appropriate when "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." 735 ILCS 5/2-1005(c) (West 2002). When cross-motions for summary judgment have been filed, the parties agree there are no genuine issues of material fact and only a question of law is at issue; therefore, the parties invite the trial court to decide the issues based on the record. Greenwich Insurance Co. v. RPS Products, Inc., 379 Ill. App. 3d 78, 84, 824 N.E.2d 1102 (2008). We review an order granting summary judgment de novo. Adames v. Sheahan, 233 Ill. 2d 276, 296, 909 N.E.2d 742 (2009).
¶ 8 The construction of an insurance policy is a question of law. CMK Development Corp. v. West Bend Mutual Insurance Co., 395 Ill. App. 3d 830, 837, 917 N.E.2d 1155 (2009). In construing the terms of an insurance policy, it is this court's goal to give effect to the intent of the contracting parties by relying on the language used in the signed contract. Id. at 837-38. We construe an insurance policy as a whole, using the plain and ordinary meaning of the terms to give effect to every provision. Id. at 838. Construction of the policy should include "due regard to the risk undertaken, the subject matter that is insured and the purposes of the entire contract." Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 108, 607 N.E.2d 1204 (1992). When the policy terms are unambiguous, we must apply them as written; however, if the terms are ambiguous, we must construe them strictly against the insurance company as the drafters of the policy. CMK Development Corp., 395 Ill. App. 3d at 838.
¶ 9 Milwaukee Insurance contends the trial court erred in finding it had a duty to defend Larsen under the parties' CGL policy where the underlying pleadings failed to allege damages within the policy's coverage.
¶ 10 Courts have established a general set of rules regarding a CGL insurer's duty to defend, such that:
" 'A court must compare the allegations in the underlying complaint to the policy language ***.' [Citations.] The allegations in the underlying complaint must be liberally construed in favor of the insured. [Citation.] ' "An insurer may not justifiably refuse to defend an action against its insured unless it is clear from the face of the underlying complaints that the allegations fail to state facts which bring the case within, or potentially within, the policy's coverage." ' (Emphasis omitted.) [Citation.] Where the insurer relies on a provision that it contends excludes coverage to reject a tender of defense, we review the applicability of the provision to ensure it is ' "clear and free from doubt" that the policy's exclusion prevents coverage.' [Citation.]" National Fire Insurance of Hartford v. Walsh Construction Co., 392 Ill. App. 3d 312, 315-16, 909 N.E.2d 285 (2009). "If recovery is premised on several theories of liability, some of which are excluded ...