United States District Court, S.D. Illinois
MEMORANDUM AND ORDER
M. YANDLE, UNITED STATES DISTRICT JUDGE
before the Court is Defendant E.T. Simonds Construction
Company's Amended Motion for Summary Judgment (Doc. 118).
Plaintiffs filed a response (Doc. 157). For the following
reasons, the motion is DENIED.
2007, Plaintiffs filed a negligence action in this court
seeking to recover for injuries resulting from a single
vehicle accident which occurred on August 21, 2005
(“the underlying action”) (see Doc.
106-1; see also Turubchuk v. E.T. Simonds Const.
Co., 07-CV-216-WDS). Plaintiffs sued Defendants E.T.
Simonds Construction Company (“ETS”) and Southern
Illinois Asphalt Company, Inc. (“SIAC”).
Defendants were contractors on a State of Illinois road
construction project (the “Project”) who were
involved in repaving a stretch of Interstate 24. At the time
of the accident, Plaintiffs' vehicle was travelling
eastbound on Interstate 24.
alleged that the fog-line and yellow solid lines on the
interstate had not been repainted after the repaving. In
addition, a guardrail, which was in place to construction had
been removed and that the vehicle in which they were riding
left the paved road in the construction zone, slipped off of
a severe edge drop-off and rolled. Plaintiffs further alleged
that Defendants were negligent by creating an unreasonably
dangerous condition, failing to erect appropriate barricades
and failing to warn vehicle operators of these hazards.
2004, the Illinois Department of Transportation
(“IDOT”) opened the bidding process for the
Project. ETS and SIAC bid on the Project as a joint venture
and were awarded the Project in July 2004. On August 23,
2004, ETS and SIAC executed a Joint Venture Agreement (the
“Agreement”) (Doc. 118-10). Under the terms of
the Agreement, ETS was named the overall Project Manager with
responsibility for the proper coordination, accounting and
management of the Project. Each contractor presented their
respective bids for the Project, assumed all responsibility
for the accuracy of their respective bids and was responsible
for the costs of its portion of the Project. Additionally,
each contractor “severally assume[d] all obligations
and responsibilities to IDOT” and agreed to indemnify
and hold the other harmless for any breach of their
respective obligations under the Project.
Agreement further provides that ETS was “solely
responsible” for the westbound lanes of the Project,
while SIAC was “solely responsible” for the
eastbound lanes; including testing, incentive
payments/deductions, and any required corrective actions that
may be imposed by IDOT. Each contractor was “free to
conduct its respective business in whatever manner it [saw]
fit” and neither contractor was “entitled to make
nor be bound by any representations, actions, or liabilities
whatsoever done by the other party.”
“joint venture” was responsible for obtaining
general liability insurance required by the IDOT:
“Such insurance shall be in the name of the joint
venture, with ETS and SIAC as additional insured…Each
respective Contractor shall indemnify and hold harmless the
Joint Venture and their agents from and against all claims,
damages, losses, and expenses including attorney's fees
arising out of or resulting from the performance of that
Contractor's work (Doc. 118-10, p. 2).
September 8, 2004, ETS and SIAC obtained general liability
insurance on behalf of the “joint venture”,
issued by Bituminous Insurance Company, Policy CLP3216156
(Doc. 118-12). At the time of the accident, ETS and SIAC were
also insured by several individual policies in addition to
the Bituminous policy. ETS was individually insured by Zurich
Commercial Umbrella Liability, Policy AUC 930332403 (policy
limits $10, 000, 000) and another Bituminous policy, Policy
CLP320823B (policy limits $1, 000, 000) (Docs. 106-8, 106-9).
Similarly, SIAC was insured by: Liberty Mutual Insurance
Company, Policy RG-2-631-004090-605 (policy limits $2, 000,
000); Clarendon National Insurance Company Excess (Umbrella)
Liability Policy XLB00411049 (policy limits $2, 000, 000);
Liberty International Underwriters Insurance Company, Excess
Liability Policy LQ1-B71-073-091-051 (policy limits $25, 000,
000); and ACE American Insurance Company, Excess Liability
Policy XCP G22082589 (policy limits $25, 000, 000) (Docs.
106-21 to 106-24).
the 2005 accident, ETS notified the Tedrick Group, its
insurance broker (Doc. 106-10, pp. 32-38). In his deposition,
Roger Tedrick testified that the Tedrick Group opened a claim
because it was their policy to put the insurance company on
notice following a fatality. Id. The accident was
immediately reported to Bituminous. Id. After
Plaintiffs filed the underlying action in 2007, the Tedrick
Group notified ETS's umbrella coverage insurer, Zurich,
of the claim because it implicated a potential policy limits
were represented in the underlying case by Komron Allahyari.
On April 25, 2007, Richard Green entered his appearance for
“Defendants E.T. Simonds Construction and Southern
Illinois Asphalt Company, Inc., joint venture” (Doc.
118-37). On May 13 or 14, 2007, Allahyari and Green discussed
the underlying action via telephone (Doc. 106-4). According
to Allahyari, during this conversation, Green affirmatively
represented that Defendants were performing the repaving as a
joint venture and that there was only one insurance policy,
the Bituminous policy, with policy limits in the amount of
$1, 000, 000 per occurrence. Id. Again, according to
Allahyari, on May 14, 2007, he made a policy-limit settlement
demand based on Green's representation that $1, 000, 000
represented the limits of all insurance policies applicable
to the claims raised by Plaintiffs in the underlying action
(Docs. 106-4, Doc. 106-15, 106-16, pp. 37-38).
emailed Allahyari Defendants' Rule 26(a)(1) disclosures
on May 15, 2007 (Doc. 106-13). Section C of the disclosures
state: “At the time of the occurrence the joint venture
was insured by Bituminous Casualty Insurance Company with
policy limits of $1, 000, 000, a copy of Certificate of
Insurance is attached” (Doc. 106-5). No other insurance
policies were identified and Defendants never amended their
initial disclosures or provided any of their other insurance
policies to the Plaintiffs in the underlying action (Doc.
deposition taken in this case, Green testified that he spoke
with Bill Simonds, Mark Etters and another individual about
the disclosures (Doc. 106-13, pp. 20-21). However, he did not
inquire whether SIAC or ETS had any additional insurance
policies (Doc. 106-14, pp. 27-28). His general practice was
to identify all available insurance policies later in the
discovery process after receiving interrogatories and a
request to produce (Doc. 106-13, pp. 42-43). Bill Simonds,
James Jones and Mark Etters of ETS testified duri ng thei r
depos it ions that they did not recall speaking with Green
regarding the initial disclosures and that they never saw the
disclosures (Doc. 102-4, pp. 118-119, Doc. 118-16, pp. 31-32,
Doc. 118-17, pp. 38-39).
settled their claims for the Bituminous joint venture $1,
000, 000 policy limits (Doc. 106-17) and the case was
dismissed at the parties' request following the
Court's approval of the minor settlement in February 2008
(see Turubchuk v. E.T. Simonds Const.Co.,
07-CV-216-WDS). During his deposition, Allahyari testified
that he would have withdrawn the May 14, 2007 settlement
demand had he known about the additional policies (Doc.
106-4, 106-16, p. 38).
filed this action nearly six years later, seeking damages for
Defendants' failure to disclose their individual
policies. Plaintiffs maintain that if Defendants had
disclosed the individual policies, they would not have
settled for the “policy limits” of the only
policy disclosed to them. Plaintiffs assert claims for
intentional misrepresentation, fraudulent concealment,
negligent misrepresentation and constructive fraud.
contends that summary judgment is warranted on several
grounds: (1) Plaintiffs' claims are barred pursuant to
the Illinois litigation privilege; (2) Illinois does not
recognize a cause of action for misconduct which occurred in
prior litigation; (3) it is not liable for Richard
Green's actions; (4) Plaintiffs' claims are barred by
the effect of the release in the underlying action; (5)
Plaintiffs cannot establish the necessary elements of their
misrepresentation claims; and (6) ETS and SIAC were operating
as a joint venture on the Project and its individual
insurance policies would not have provided coverage in the
judgment is proper only if the moving party can demonstrate
that there is no genuine issue as to any material fact and
the movant is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986); see also RuffinThompkins v.
Experian Information Solutions, Inc., 422 F.3d 603, 607
(7th Cir. 2005). The moving party bears the burden of
establishing that no material facts are in genuine dispute;
any doubt as to the existence of a genuine issue must be
resolved against the moving party. Lawrence v. Kenosha
County, 391 F.3d 837, 841 (7th Cir. 2004). A moving
party is entitled to judgment as a matter of law where the
non-moving party “has failed to make a sufficient
showing on an essential element of her case with respect to
which she has the burden of proof.” Celotex,
477 U.S. at 323.
Illinois, “[a]n attorney at law is absolutely
privileged to publish defamatory matter concerning another in
communications preliminary to a proposed judicial proceeding,
or in the institution of, or during the course and as a part
of, a judicial proceeding in which he participates as
counsel, if it has some relation to the proceeding.”
Atkinson v. Affronti, 861 N.E.2d 251, 255 (2006).
The absolute litigation privilege applies “only when
the following conditions have been met: the publication was
made in a judicial proceeding; had some connection or logical
relation to the action; was made to achieve the objects of
the litigation; and involved litigants or other participants
authorized by law.” Kurczaba v. Pollock, 742
N.E.2d 425, 438 (2000).
privilege is limited to protection against defamation and
false light actions, neither of which do Plaintiffs assert in
the instant action. See Zdeb v. Baxter Int'l,
Inc., 697 N.E.2d 425, 429-30 (1998); Scheib v.
Grant, 22 F.3d 149, 156 (7th Cir. 1994). ETS has cited
no authority in support of its effort to utilize the
litigation privilege as a shield to allegations of
misrepresentation, fraud and ...