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United National Insurance Company, A v. 200 North Dearborn Partnership

October 22, 2012

UNITED NATIONAL INSURANCE COMPANY, A
CORPORATION,
PLAINTIFF-APPELLEE AND COUNTERDEFENDANT AND CROSS-APPELLANT,
v.
200 NORTH DEARBORN PARTNERSHIP, AN ILLINOIS PARTNERSHIP, BAIRD & WARNER, INC., KENILWORTH, INC.,
WARNER INVESTMENT COMPANY, INC., AND ELZIE HIGGENBOTTOM, DEFENDANTS-APPELLANTS AND COUNTERPLAINTIFFS AND CROSS-APPELLEES (HARTFORD CASUALTY INSURANCE COMPANY, INTERVENOR PLAINTIFF-APPELLANT;
UNITED NATIONAL INSURANCE COMPANY, INTERVENOR DEFENDANT-APPELLEE AND CROSS-APPELLANT).



Appeal from the Pennsylvania Circuit Court of Cook County No. 06 CH 17017 Honorable Daniel A. Riley, Judge Presiding.

The opinion of the court was delivered by: Justice Karnezis

JUSTICE KARNEZIS delivered the judgment of the court, with opinion. Presiding Justice Hoffman and Justice Rochford concurred in the judgment and opinion.

OPINION

¶ 1 Defendants and counterplaintiffs-appellants and cross-appellees 200 North Dearborn Partnership, Baird & Warner, Inc., Kenilworth, Inc., Warner Investment Company, Inc., and Elzie Higgenbottom, and intervenor plaintiff-appellant and cross-appellee Hartford Casualty Insurance Company (collectively defendants unless otherwise indicated) appeal from the trial court's August 4, 2009, and January 27, 2010, orders. Plaintiff and counterdefendant and intervenor defendant-appellee and cross-appellant United National Insurance Company (United National) cross-appeals from the trial court's August 4, 2009, and January 27, 2010, orders. We affirm for the following reasons.

¶ 2 Background

¶ 3 Underlying Lawsuit

¶ 4 This appeal concerning the extent of the respective parties' insurance coverage stems from the underlying lawsuit filed after the deceased, Marian Gal, died due to an elevator malfunction at a building located at 200 North Dearborn Parkway in Chicago. Gal v. 200 North Dearborn Partnership, No. 01 L 010485 (Cir. Ct. Cook Co.). The accident occurred on July 19, 2001. The record on appeal does not contain a copy of the original complaint. However, documents in the record reference that it was filed on or about August 21, 2001. The record contains the fifth amended complaint, which was filed on June 22, 2006. The fifth amended complaint named as defendants 200 North Dearborn Partnership, Aargus Security Systems, Inc., Schindler Elevator Corporation, Baird & Warner, Inc., Baird & Warner Management Group, Inc., B & W Management Group, Inc., Elzie Higgenbottom, Kenilworth, Inc., and Warner Investment Company, Inc., f/k/a Kenilworth, Inc. It alleged that on the day of the accident, Gal was at the building located at 200 North Dearborn Parkway performing janitorial services. Despite previous malfunctions with one of the elevators, Gal was given an access key to the elevator by an Aargus security guard. When the elevator doors opened, the elevator was not at the same floor as Gal, and he plummeted down the elevator shaft to his death. The suit was ultimately settled in November 2006.

¶ 5 The Agreement and Insurance Policies

¶ 6 In 1995, Aargus Security contracted with 200 North Dearborn in a continuing services agreement (Agreement) to provide certain services with respect to the property located at 200 North Dearborn Parkway in Chicago. The Agreement provided that Aargus would name Baird & Warner, Inc., and the "[o]wner" as "additional insureds." "Owner" was defined as "200 North Dearborn Partnership."

¶ 7 United National issued a commercial general liability policy to Aargus, which covered the relevant time period when Gal's accident occurred. The "additional insured" endorsement did not specifically name who was an additional insured; rather, it stated "blanket where required by contract." The "additional insured" endorsement contained two limitations. First, the insurance would not apply to an additional insured's own acts or omissions. Second, if liability was to be imposed on the additional insured because of its acts or omissions and those of the named insured, the insurance would serve as "coinsurance with any other insurance available to the additional insured, in proportion to the limits of liability of all involved policies." The policy also contained an employer's liability exclusion, which excluded coverage for bodily injury to an employee of the insured arising out of and in the course of employment by the insured. Further, the policy had a $1 million per-occurrence limit. United National initially denied coverage to 200 North Dearborn and Baird & Warner; however, United National later provided a defense under a reservation of rights.

¶ 8 200 North Dearborn was also insured by Hartford Casualty Insurance Company. Hartford issued a commercial general liability insurance policy to 200 North Dearborn, which covered the relevant time period when Gal's accident occurred. The policy had a $1 million per-occurrence limit. Hartford undertook 200 North Dearborn's defense in the underlying lawsuit.

¶ 9 Declaratory Judgment Action

¶ 10 United National filed this declaratory judgment action on August 18, 2006. The following defendants were named: 200 North Dearborn, Baird & Warner, Inc., Kenilworth, Inc., Warner Investment Company, Inc., Elzie Higgenbottom and Edward Gal, as special administrator of the estate of Marian Gal, deceased. United National acknowledged that it was defending its named insured Aargus in the underlying lawsuit. United National further acknowledged that it had agreed under a reservation of rights to defend 200 North Dearborn and Baird & Warner pursuant to the "additional insured" endorsement in its policy with Aargus. However, United National contended that it had no duty to defend or indemnify as additional insured defendants Kenilworth, Inc., Warner Investment Company, Inc., and Elzie Higgenbottom, whom it referred to collectively as the "non-identified defendants." According to the declaratory judgment complaint, the "non-identified defendants" were added as defendants in the third amended complaint in the underlying cause in 2003.

ΒΆ 11 The parties filed cross-motions for summary judgment. United National sought summary judgment against defendants on the basis that Kenilworth, Warner Investment Compay, Inc., and Higgenbottom were not additional insureds under United National's policy with Aargus. United National further alleged that it did not have a ...


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