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Atlantic Casualty Insurance Co. v. Sealtite Roofing & Construction Co.

United States District Court, N.D. Illinois, Eastern Division

November 14, 2014

ATLANTIC CASUALTY INSURANCE COMPANY, Plaintiff,
v.
SEALTITE ROOFING & CONSTRUCTION COMPANY and ERIE INSURANCE EXCHANGE a/s/o RICHARD RYSER, Defendants

Page 954

For Atlantic Casualty Insurance Company, Plaintiff: Keith G. Carlson, LEAD ATTORNEY, Carlson Law Offices, Chicago, IL.

For Erie Insurance Exchange, other Richard Ryser, Defendant: Paul A. McLennon, Jr., LEAD ATTORNEY, McLennon & McFadden, Ltd., Chicago, IL.

For Sealtite Roofing & Construction Company, Defendant: Irina Dashevsky, LEAD ATTORNEY, Dentons U.S. LLP, Chicago, IL.

Page 955

MEMORANDUM OPINION AND ORDER

John J. Tharp, Jr., United States District Judge.

Plaintiff Atlantic Casualty Insurance Company (" Atlantic" ) brings this action against its insured, Defendant Sealtite Roofing & Construction Company (" Sealtite" ), seeking a declaratory judgment tat it has no duty to defend or indemnify Sealtite from claims asserted in an underlying lawsuit filed in the Circuit Court of Cook County, Illinois. The underlying lawsuit, Erie Insurance Exchange as subrogee of Richard Ryser v. Sealtite Roofing & Construction Company, Case No. 2011 L 012497, contends that Sealtite is liable for damage allegedly caused by the failure of a roof it installed. Atlantic, as Sealtite's insurer, is defending the underlying case under a reservation of rights.[1] Atlantic claims that the damages claimed in the underlying lawsuit fall within several policy exclusions, and it therefore has no duty to defend or indemnify Sealtite against those claims. Pending before the Court is Sealtite's Motion to Dismiss for Failure to State a Claim (Dkt. 33) and Sealtite's Motion to Stay Discovery Pending Resolution of Its Motion to Dismiss (Dkt. 47).

BACKGROUND[2]

In 2005, Sealtite contracted to perform roofing work on a building in Orland Park, Illinois, owned by Richard Ryser. Underlying Compl., Dkt. 1-1, at 1. Specifically, Sealtite " was hired to replace the roof framing" on Ryser's building. Id. In February 2011, " the roof framing" blew off the structure, and the property was damaged by " snow, rain, and other moisture." Id. at 2. Ryser, the property owner, filed a claim under his own insurance policy with Erie Insurance Group (" Erie" ), which paid $740,010.17 for the property damage under the policy. Id. at 3. Erie, as Ryser's subrogee, then sued Sealtite in the Circuit Court of Cook County seeking to recover this amount under two theories of liability--negligence and breach of contract. Id. at 1, 3.

At the time the underlying lawsuit was filed, Sealtite had an insurance policy (the " Policy" ) with Atlantic. The Policy's coverage terms provides in relevant part:

SECTION I - COVERAGES

COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY

1. Insuring Agreement

a. We will pay those sums that the insured becomes legally obligated to pay

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as damages because of " bodily injury" or " property damage" to which this insurance applies. We will have the right and duty to defend the insured against any " suit" seeking those damages.

However, we will have no duty to defend the insured against any " suit" seeking damages for " bodily injury" or " property damage" to which this insurance does not apply. We may, at our discretion, investigate any " occurrence" and settle any claim or " suit" that ...

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