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Turubchuk v. E.T. Simonds Construction Co.

United States District Court, S.D. Illinois

February 3, 2017

LILIYA TURUBCHUK, et al., Plaintiffs,



         Pending 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.


         In 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.

         Plaintiffs 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.

         In 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.

         The 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.”

         The “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).

         On 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).

         Following 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 case. Id.

         Plaintiffs 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).

         Green 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. 106-14, 106-17).

         In his 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).

         Plaintiffs' 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).

         Plaintiffs 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.


         ETS 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 underlying action.

         Summary 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.

         Absolute Litigation Privilege

         In 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).

         This 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 ...

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