The opinion of the court was delivered by: J. Phil Gilbert District Judge
This matter comes before the Court on a variety of motions: C Defendant/third-party plaintiff Roxana Landfill, Inc.'s ("Roxana") motion for summary judgment (Doc. 55), to which plaintiff United Fire & Casualty Company ("United Fire") has responded (Docs. 63 & 64);
C United Fire's motion for partial summary judgment (Doc. 74), to which Roxana and defendant Allied Waste Transportation, Inc. ("Allied Waste") have responded (Doc. 90); C Roxana's motion for partial summary judgment (Docs. 77 & 78), to which United Fire has responded (Docs. 80 & 82);
C United Fire's motion to strike Roxana's second motion for summary judgment (Doc. 79), to which Roxana has responded (Doc. 92); and C Third-party defendant Terry Thiems ("Terry") and Tad Thiems' ("Tad") motion to dismiss or, in the alternative, to stay (Doc. 93), to which Roxana has responded (Doc. 96).
The summary judgment motions overlap substantially in their arguments, so the Court will consider them all together.
In this suit, United Fire seeks a declaration that a commercial general liability insurance policy ("Policy"; Doc. 59-1 to -4, Page ID # 560-634) it issued to defendant Thiems Construction Company, Inc. ("Thiems Inc.") (CGL Policy No. 60057489) does not cover Roxana or Allied Waste as additional insured parties for claims brought against them in underlying state court litigation by defendant James C. Fowler -- Fowler v. Thiems, No. 09-L-922 (Cir. Ct. Mad. Co.). Fowler filed that case against Roxana, Allied Waste, Thiems Inc., and two officers of Thiems Inc. -- Terry and Tad. Roxana tendered its defense in the Fowler action to United Fire claiming it was an additional insured under the Policy, and United Fire accepted but reserved the right to deny coverage for a variety of reasons. It now seeks to deny coverage to Roxana and Allied Waste.
A. Allegations in Underlying Suit In the underlying action, Fowler alleges the following. Fowler, individually and as trustee for a trust, owns property in Edwardsville, Illinois, on which he has his home. Thiems Inc., Terry and Tad (collectively, "the Thiems defendants") operated a business on property adjacent to and immediately south of Fowler's property. Roxana and Allied Waste operated a landfill on property that was immediately south of the Thiems defendants' property.
At some time before 2008, Roxana entered into a real estate purchase and construction agreement ("Purchase and Construction Agreement") with Terry and Tad, who owned the property on which the Thiems defendants conducted their business operations. Pursuant to the Purchase and Construction Agreement, Terry and Tad would make improvements requested by Roxana on land they owned, and then they would sell the improved land to Roxana. The Purchase and Construction Agreement also provided that Terry and Tad "shall maintain comprehensive general liability coverage in the amount of $1 million per occurrence." Purchase and Construction Agreement, ¶ 7 (Doc. 56-1; Page ID # 519).
Beginning in April 2009, the Thiems defendants graded and made improvements on their property that unreasonably increased the natural run-off of water from their property to Fowler's property. Roxana and Allied Waste also graded their property such that it increased the natural water flow from their property, across the Thiems defendants' property, and onto Fowler's property. The increased run-off volume and velocity caused water, mud and debris to flow into Fowler's buildings and swimming pool, decreased his property value and prevented him, and continues to prevent him, from enjoying his property. Later, pursuant to the Purchase and Construction Agreement, Roxana purchased from Terry and Tad a part of the Thiems defendants' property that was adjacent to Fowler's property knowing the Thiems defendants had caused the offensive run-off.
In addition to the run-off problem, Fowler complains that vehicles from Roxana and Allied Waste's landfill track mud and debris on the road in front of Fowler's house. After the mud dries, it becomes airborne and pollutes the air by Fowler's home with dust and toxic substances. Debris also creates a road hazard. Roxanna and Allied Waste also fail to cover deposits in the landfill, which causes a stench that pervades Fowler's property. All this prevents Fowler from enjoying his property.
Fowler brings claims against the Thiems defendants for trespass (Count I), negligence (Count II) and injunctive relief to restore the prior run-off level (Counts III, IV, V and VI). He sues Roxana and Allied Waste for trespass because of the increased run-off (Count VII and VIII) and nuisance because of the smell and the tracked mud and debris (Count X). Against Roxana alone, he seeks injunctive relief forcing it to restore the prior run-off level (Count IX). He sues the Thiems defendants and Roxana for intentional infliction of emotional distress (Count XI) and brings a separate intentional infliction of emotional distress against the Thiems defendants (Count XII) based on the run-off. He also sues Allied Waste for intentional infliction of emotional distress based on the run-off and on the mud and debris tracked from the landfill (Count XIII). Fowler brings Count XIV against Roxana but the exact nature of the cause of action is unclear.
This lawsuit by United Fire relates only to potential coverage for the claims against Roxana and Allied Waste: Counts VII-XI, XIII and XIV. It claims that Roxana and Allied Waste are not additional insureds such that they are covered by the Policy. Roxana, in turn, has filed a third-party complaint against Terry and Tad based on their failure to provide insurance to Roxana as promised (in the event United Fire prevails on its declaratory judgment action).
B. Policy 1. Named Insureds
In deciding whether Roxana and Allied Waste are additional insureds under the Policy, a review of the Policy is a good place to start. As noted above, the Policy was issued to Thiems Inc. In the Policy declarations, the "Named Insured" lists "Thiems Construction Co Inc" and "See SPECEND." See Policy, Commercial General Liability Coverage Part (Doc. 59-1, Page ID # 562). Several pages later, an endorsement labeled "SPEC END" lists additional "Named Insureds" as Thiems Excavating Inc., Thiems Trucking Inc., Fox Creek Estates Inc. and Fox Creek Land Trust. See Policy, Endorsement (Doc. 59-1, Page ID # 571). The Policy also states that when it uses the terms "you" and "your," it refers to the "Named Insured shown in the Declarations, and any other person or organization qualifying as a Named Insured under this policy." Policy, Commercial General Liability Coverage Form at 1 (Doc. 59-1, Page ID # 572). The Policy uses the simple term "insured," as distinct from "Named Insured," to refer to anyone else covered by the Policy. Id. Of the "Named Insureds" listed in the Policy, only Thiems Inc. is relevant to this litigation. To facilitate understanding the Policy, the Court will substitute "Thiems Inc." as appropriate whenever the terms "Named Insured" or "you" appear in the relevant provisions.
The Policy also covers other entities that are not "Named Insureds." For example, it covers employees of Thiems Inc. (other than its executive officers) with respect to their duties within the scope of their employment. See Policy, Commercial General Liability Coverage Form at 10 (Doc. 59-1, Page ID # 581). "Executive officers" are holders of any of the offices created by the corporation's governing documents. Policy, Commercial General Liability Coverage Form at 14 (Doc. 59-1, Page ID # 585)
The Policy also extends coverage under an Ultra Liability Plus Endorsement, which states, in pertinent part:
5. Additional Insured -- Owners, Lessees or Contractors -- Automatic Status Required in Construction ...