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Cincinnati Insurance Co. v. Vita Food Products, Inc.

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

January 30, 2015

CINCINNATI INSURANCE COMPANY, Plaintiff,
v.
VITA FOOD PRODUCTS, INC., NARDO OVANDO, and KARINA BAEZ, Defendants.

MEMORANDUM OPINION AND ORDER

EDMOND E. CHANG, District Judge.

In this diversity action, Cincinnati Insurance Company seeks a declaratory judgment that it is not obligated either to defend or indemnify Vita Food Products, Inc., in a personal-injury lawsuit filed in state court by Nardo Ovando, an employee of a third-party contractor who fell while working at one of Vita Food's stores, and Ovando's wife, Karina Baez.[1] Cincinnati now moves for summary judgment. For the reasons given below, the motion is granted.

I. Background

On June 30, 2011, Nardo Ovando was working at a Vita Food premises in Chicago when he was injured in a fall. R. 40, PSOF ¶ 5.[2] Ovando was an employee of Painters USA, Inc., which had been retained by Vita Food to carry out contract work on the site. Id. ¶ 6. Ovando sued Vita Food for negligence in Cook County Circuit Court, and Baez also brought a loss of consortium claim in the same case. See R. 1-2, First Am. Compl., Case No. 12 L 012605. This federal suit turns on whether Cincinnati, which had issued a commercial general liability coverage and commercial umbrella liability policy to Painters for that June 2011 time period, PSOF ¶¶ 9-11, is obligated to cover Vita Food under that policy. Vita Food concedes that it was not an explicitly named insured on Painters' policy with Cincinnati, PSOF ¶ 15, but asserts that it was a covered party under the terms of the policy's endorsement of automatic additional insureds, Def.'s Resp. PSOF ¶ 15.

Painters' policy with Cincinnati states in relevant part that:

(1) Any person or organization... whom you [Painters] are required to add as an additional insured under this Coverage Part by reason of:
(a) A written contract or agreement; or
(b) An oral agreement or contract where a certificate of insurance showing that person or organization as an additional insured has been issued,
is an insured, provided:
(a) The written or oral contract or agreement is:
1) Currently in effect or becomes effective during the policy period; and
2) Executed prior to an "occurrence" or offense to which this insurance would apply.

R. 40-1, Painters' Policy at 10-11 (Paragraph 9: Automatic Additional Insures-Specified Relationships) (emphases added). The question is whether Vita Food can show any set of facts by which it was an insured party under these terms, specifically the provision for an oral agreement. In presenting the relevant factual background to resolve the issue, the Court sets forth the following evidence in the light most favorable to Vita Food as the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

Sometime before Ovando's fall, Vita Food and Painters entered into an oral agreement for Painters to perform painting services at the Vita Food location in question. DSOF ¶ 1.[3] Following the oral agreement, Painters submitted a written proposal to Vita Food offering the terms and conditions of the services. Id. Vita Food accepted some of these, but informed Painters that it would not go forward with the project unless Painters made Vita Food an additional insured under Painters' insurance policy; Painters agreed to the condition. Id. ¶¶ 2-4.[4] Although Cincinnati disputes that Painters so agreed, it concedes that Peter Cook, vice president of Painters, testified that he "may have" discussed Vita Food's need to be covered by Painters' insurance ...


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