Appeal from the Circuit Court of Du Page County. No. 10-MR-1184 Honorable Bonnie M. Wheaton, Judge, Presiding.
The opinion of the court was delivered by: Presiding Justice Jorgensen
PRESIDING JUSTICE JORGENSEN delivered the judgment of the court, with opinion. Justices Hutchinson and Burke concurred in the judgment and opinion.
¶ 1 Plaintiffs, Patrick Engineering, Inc. (Patrick), and Commonwealth Edison Company (ComEd), appeal the trial court's ruling granting summary judgment in favor of defendant, Old Republic General Insurance Company (Old Republic), wherein the court found that Patrick's insurance policy's professional-services exclusion barred ComEd, an additional insured, from coverage. For the reasons that follow, we reverse.
¶ 3 A. Underlying Litigation
¶ 4 In June 2004, ComEd entered into a two-part consulting services agreement with Patrick. Pursuant to the agreement, Patrick provided engineering design services to ComEd. The agreement required Patrick to procure commercial general liability (CGL) insurance for ComEd:
"Consultant [Patrick] shall provide and maintain *** insurance coverage *** including: *** commercial general liability insurance (with coverage *** [for] *** property damage *** with a combined single limit of not less than one million dollars ***). ***
[T]he liability insurance polic[y] *** shall name [ComEd] *** as [an] additional insured[ ]."
¶ 5 In March 2008, ComEd directed Patrick to design the relocation of ComEd's utility poles along South Main Street in Lombard. While working on the relocation project, ComEd smashed through an underground sewer facility in at least four separate locations. In January 2010, the Village of Lombard initiated the underlying litigation against ComEd, alleging that ComEd acted negligently.
¶ 6 In February 2010, ComEd tendered its defense to Old Republic, the insurer with which Patrick had procured CGL insurance, requesting that Old Republic defend and indemnify it in the underlying litigation. ComEd represented to Old Republic that it was an additional insured under the policy's additional-insured endorsement. ComEd also tendered its defense to Patrick.*fn1
¶ 7 In April 2010, Patrick tendered to Old Republic the underlying litigation. Patrick requested that Old Republic defend and indemnify ComEd in the underlying litigation.
¶ 8 Old Republic denied coverage for ComEd, and it subsequently refused several requests for reconsideration. Old Republic seemed to accept that ComEd was an additional insured, but it denied coverage based on the CGL policy's professional-services exclusion.*fn2
¶ 10 In August 2010, Patrick brought the instant suit against Old Republic for declaratory judgment. Patrick sought a declaration that the CGL policy required Old Republic to defend and indemnify ComEd as an additional insured in the underlying litigation. Additionally, ComEd filed its own claim against Old Republic, seeking defense and indemnification in the underlying litigation.
¶ 11 In May 2011, Old Republic counterclaimed, seeking a declaration that the CGL policy does not provide coverage for ComEd in the underlying litigation. Patrick, ComEd, and Old Republic each filed a motion for summary judgment. Each fully briefed its respective motion and the trial court heard argument.
¶ 12 The parties agreed that the CGL policy covered general liability for damage arising out of nonprofessional or labor-based services, and not for damage arising out of professional services; according to all parties, that is the purpose of the CGL policy. The parties further agreed that Patrick, the named insured, provided only professional services, in the form of engineering design (and, therefore, clearly was barred from coverage), and that ComEd, the additional insured, provided no professional services. Old Republic, however, argued that the policy's professional-services exclusion nevertheless barred coverage for ComEd. The professional-services exclusion stated that the insurance did not apply to property damage arising out of professional services by Patrick or any engineer who is either employed by Patrick or performing work on Patrick's behalf. Old Republic essentially argued that, because the damage arose, even in part, out of Patrick's professional services, and because the policy did not cover damage arising out of Patrick's professional services, the professional-services exclusion barred ComEd from coverage. Plaintiffs responded by invoking the policy's separation-of-insureds clause, which they argued allowed for ComEd's coverage to be determined independently of Patrick and that, because the damage (also) arose out of ComEd's nonprofessional (labor) services, the professional-services exclusion did not bar ComEd's coverage.
¶ 13 The court granted summary judgment in favor of Old Republic and against plaintiffs. The court's explanation was brief; it simply stated that it was "very, very clear that these activities [were] excluded" under the CGL policy's professional-services exclusion.
¶ 15 Plaintiffs appeal the trial court's ruling granting summary judgment in favor of Old Republic, wherein the court found that the professional-services exclusion barred coverage for ComEd. Summary judgment shall be rendered if 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 judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2010). We review de novo the trial court's grant or denial of summary judgment. State Automobile Mutual Insurance Co. v. Habitat Construction Co., 377 Ill. App. 3d 281, 285 (2007).
¶ 16 At issue is the interpretation of the CGL policy, particularly the interplay among: (1) the separation-of-insureds clause; (2) the additional-insured endorsement; and (3) the professional-services exclusion. The CGL policy is structured as a 16-page "COMMERCIAL GENERAL LIABILITY COVERAGE FORM" (general form), and it contains the critical separation-of-insureds clause. Numerous endorsements serving as amendments to the policy are attached to the general form, including the ...