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Indiana Insurance Company v. Powerscreen of Chicago

June 29, 2012

INDIANA INSURANCE COMPANY, PLAINTIFF-APPELLANT,
v.
POWERSCREEN OF CHICAGO, LTD., DEFENDANT-APPELLEE, TERRELL MATERIALS CORPORATION, JOHN KOHN AND COLLEEN KOHN, DEFENDANTS.
POWERSCREEN OF CHICAGO, LTD., COUNTERPLAINTIFF-APPELLEE,
v.
INDIANA INSURANCE COMPANY, COUNTERDEFENDANT-APPELLANT, HARTFORD FIRE INSURANCE COMPANY, INTERVENOR PLAINTIFF-APPELLEE AND CROSS-APPELLANT,
v.
INDIANA INSURANCE COMPANY,
INTERVENOR DEFENDANT-APPELLANT ANDCROSS-APPELLEE.



Appeal from the Circuit Court of Cook County. No. 09 CH 40309 Honorable Michael B. Hyman, Judge Presiding.

The opinion of the court was delivered by: Justice Cunningham

JUSTICE CUNNINGHAM delivered the judgment of the court, with opinion. Presiding Justice Quinn and Justice Connors concurred in the judgment and opinion.

OPINION

¶1 This consolidated appeal arises from the November 8, 2010 order entered by the circuit court of Cook County, which denied a motion for summary judgment in a declaratory judgment action against the plaintiff-appellant, Indiana Insurance Company (Indiana Insurance), but granted a cross-motion for summary judgment in favor of the counterplaintiff-appellee, Powerscreen of Chicago, Ltd. (Powerscreen), and the intervenor plaintiff-appellee, Hartford Fire Insurance Company (Hartford). This appeal also arises from the circuit court's January 26, 2011 order denying Hartford's motion for entry of monetary judgment against Indiana Insurance, and the May 24, 2011 order denying Hartford's motion to reconsider the January 26, 2011 ruling. On cross-appeal, (1) Indiana Insurance argues that the circuit court erred in granting summary judgment in favor of Powerscreen and Hartford; and (2) Powerscreen and Hartford argue that the circuit court properly granted summary judgment in their favor but that Hartford is entitled to reimbursement from Indiana Insurance. For the following reasons, we affirm the November 8, 2010 judgment of the circuit court of Cook County granting summary judgment in favor of Powerscreen and Hartford, but remand the matter to the circuit court solely for the determination of the amount of reimbursement that Indiana Insurance owed Hartford.

¶2 BACKGROUND

¶3 In February 2008, Powerscreen, which was in the business of owning, leasing and repairing construction equipment, entered into a rental agreement whereby Powerscreen agreed to lease a concrete crusher to Terrell Materials Corporation (Terrell Materials). Pursuant to the terms of the rental agreement, Terrell Materials was required to, at its own costs, "operate and maintain the equipment with factory authorized parts and to make any repairs which may become necessary," and "to return the equipment to [Powerscreen] in the same condition as received." Further, the rental agreement specified that Terrell Materials agreed to name Powerscreen as an additional insured on its liability coverage policy.

¶4 On July 16, 2008, John Kohn (John), an employee of Noel Ramos Construction Company (Noel Construction), was allegedly injured in the process of moving the concrete crusher from an Interstate-294 road construction site near the Willow Road overpass area to the Lake Cook Road overpass in Cook County, Illinois. Subsequently, John and his wife, Colleen Kohn (Colleen), filed a personal injury lawsuit against, inter alia, Terrell Materials and Powerscreen. See Kohn v. Terrell Materials Corporation, No. 08 L 007928 (Cir. Ct. Cook Co.) (the underlying lawsuit).

¶5 At the time of John's injury, Terrell Materials was insured by a commercial general liability insurance policy issued by Indiana Insurance. The Indiana Insurance policy contained the following pertinent provisions:

"I. ADDITIONAL INSUREDS -- BY CONTRACT, AGREEMENT OR PERMIT

1. Paragraph 2 under SECTION II WHO IS AN INSURED is amended to include as an insured any person or organization when you and such person or organization have agreed in writing in a contract, agreement or permit that such person or organization be added as an additional insured on your policy to provide insurance such as is afforded under this Coverage Part. Such person or organization is an additional insured only with respect to liability arising out of:

a. Your ongoing operations performed for that person or organization; *** With respect to provision 1.a. above, a person's or organization's status as an insured under this endorsement ends when your operations for that person or organization are completed."

Powerscreen was insured by a separate commercial general liability policy issued by Hartford.

¶6 On December 29, 2008, Hartford, on behalf of Powerscreen as its insurer, formally tendered defense and indemnification of the underlying lawsuit to Indiana Insurance, stating that Powerscreen was an "additional insured" under the Indiana Insurance policy and requesting that Hartford be reimbursed for all costs it had incurred in defending Powerscreen in the underlying lawsuit.

¶7 On October 20, 2009, Indiana Insurance denied the tender by stating that it owed no duty to defend or indemnify Powerscreen against the claims asserted in the underlying lawsuit. On that same day, October 20, 2009, Indiana Insurance filed a complaint for declaratory judgment against Powerscreen, Terrell Materials, John and Colleen, which requested the court to determine the rights and liabilities of the parties with respect to the Indiana Insurance policy; to declare that Powerscreen was neither a named insured nor an additional insured under the terms of the Indiana Insurance policy; and to declare that Indiana Insurance had no obligation to defend or indemnify Powerscreen in the underlying lawsuit.

ΒΆ8 On January 28, 2010, the circuit court granted Hartford leave to intervene in the instant cause of action and granted leave to Hartford and Powerscreen to file a countercomplaint against Indiana Insurance for declaratory judgment. On February 2, 2010, Hartford and Powerscreen filed a "countercomplaint and intervenor complaint for declaratory judgment" against Indiana Insurance, requesting that the court enter a judgment finding that Indiana Insurance owed a duty to defend and indemnify Powerscreen in the underlying ...


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