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Brit UW Ltd. v. Tripar, Inc.

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

January 6, 2017

BRIT UW, LTD., The Sole Corporate Capital Provider For Lloyd's Syndicate 2987, the Sole Lloyd's Syndicate Subscribing to Lloyd's Policy No. RTS000282
v.
TRIPAR, INC., and DAVIS RUSSELL REAL ESTATE AND MANAGEMENT, LLC, Defendants.

          MEMORANDUM OPINION AND ORDER

          Robert W. Gettleman United States District Judge

         Plaintiff Brit UW, Ltd. filed a two-count complaint against defendants Tripar, Inc. (“Tripar”) and Davis Russell Real Estate and Management LLC (“Davis Russell”), seeking a declaratory judgment that it has no duty to indemnify Tripar for damages awarded to Davis Russell in its lawsuit against Tripar (the “Underlying Action”) because: (1) the events that led to the Underlying Action are not covered because they do not qualify as an “occurrence” under Tripar's insurance policy (Count I); and (2) Tripar did not notify plaintiff of the lawsuit until several months after summary judgment was awarded to Davis Russell (Count II). On December 10, 2015, Davis Russell filed a counter-claim against plaintiff, seeking a declaratory judgment that plaintiff is: (1) required to indemnify Tripar for the Underlying Action; (2) required to reimburse Davis Russell for losses resulting from plaintiff's delay; and (3) required to reimburse Davis Russell for additional costs resulting from the damage at issue in the Underlying Action (Count I) and that Davis Russell has satisfied its obligations under Tripar's policy with plaintiff (Count II). Having failed to timely answer or appear, Tripar is in default. On August 19, 2016, plaintiff filed the instant motion for summary judgment pursuant to Fed.R.Civ.P. 56, and on September 30, 2016, Davis Russell also filed a motion for summary judgment. For the reasons discussed below, plaintiff's motion for summary judgment is granted and Davis Russell's motion for summary judgment is denied.

         BACKGROUND[1]

         On August 29, 2012, Davis Russell hired Tripar, a general contractor, to renovate a 12-unit apartment building. The entire roof was to be replaced by a roofing subcontractor as part of the renovations. Davis Russell drafted a Professional Services Agreement (“PSA”) that governed the project. The agreement required Tripar to do the following: (1) obtain workers compensation, employers liability, commercial general liability (“CGL”), and automobile insurance; (2) provide a certificate of insurance (“COI”) evidencing such coverage; and (3) identify Davis Russell as an “additional insured” on the policies. Tripar's insurance broker, who was not authorized to act on behalf of plaintiff, prepared a COI reflecting that a CGL and Auto Liability policy was issued to Tripar by plaintiff for the period of August 4, 2012, to August 4, 2013 (the “Tripar Policy”), and listing Davis Russell as an “additional insured.” The COI was clear that it was not issued by plaintiff and that it did not alter or amend coverage under the policy. The COI included the following relevant language:

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.

         IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed.

         As for the coverage provided by the Tripar Policy, it contained the following provisions:

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

         b. This insurance applies to “bodily injury” and “property damage” only if:

(1) The “bodily injury” or “property damage” is caused by an “occurrence” that takes place in the “coverage territory”;

         The Policy required the insured (Tripar) to give notice of an “occurrence” or “suit” “as soon as practicable. Specifically, the Policy provides:

         2. Duties in the Event of Occurrence, Offense, Claim or Suit

a. You must see to it that we are notified as soon as practicable of an “occurrence” or offense which may result in a claim . . . .
b. If a claim is made or “suit” is brought against any insured, you must:
(1) Immediately record the specifics of the claim or “suit” and the date received; and
(2) Notify us as soon as practicable.
You must see to it that we receive written notice of the claim or “suit” as ...

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