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Pekin Insurance Co. v. AAA-1 Masonry & Tuckpointing, Inc.

Court of Appeals of Illinois, First District, Fifth Division

May 19, 2017

PEKIN INSURANCE COMPANY, Plaintiff-Appellant,
v.
AAA-1 MASONRY & TUCKPOINTING, INC., and EMIL PIEKUTOWSKI, Defendants Scottsdale Insurance Company, Intervenor-Appellee.

         Appeal from the Circuit Court of Cook County. No. 14 CH 1303 Honorable Moshe Jacobius, Judge Presiding.

          JUSTICE HALL delivered the judgment of the court with opinion. Presiding Justice Gordon and Justice Lampkin concurred in the judgment and opinion.

          OPINION

          HALL JUSTICE.

         ¶ 1 This appeal arises out of an insurance coverage dispute involving a personal injury action (Underlying Suit) filed on September 16, 2013, by Emil Piekutowski against defendants AAA-1 Masonry & Tuckpointing, Inc. (AAA), Chicago Scaffolding, Inc. (CSI), Lakeshore Land Ventures LLC, Hilco Management, Inc., and Hilco Realty Management, Inc. Piekutowski v. AAA-1Masonry & Tuckpointing, No. 13-L-10341 (Cir. Ct. Cook Co.). Plaintiff, Pekin Insurance Company (Pekin) filed its initial declaratory action against AAA seeking a declaration that it owed no duty to defend AAA in the Underlying Suit. Subsequently, defendant-intervener, Scottsdale Insurance Company (Scottsdale) intervened in the declaratory action and filed a counterclaim seeking a declaration from the circuit court that (1) Pekin has a duty to defend AAA in the Underlying Suit pursuant to the policy entered into between Pekin and its named insured Alpha 1 Construction Inc. (Alpha), whereby AAA was named an additional insured and (2) that Pekin owed Scottsdale reimbursement for costs incurred defending AAA. The parties submitted cross-motions for summary judgment, and the circuit court entered judgment in favor of Scottsdale on both counts on December 22, 2015. On January 21, 2016, the circuit court granted Pekin's motion for a finding pursuant to Rule 304(a) of the Illinois Supreme Court Rules (Ill. S.Ct. R. 304(a) (eff. Feb. 26, 2010)). As a result, Pekin filed its timely notice of appeal on January 21, 2016.

         ¶ 2 BACKGROUND

         ¶ 3 A. The Pekin Policy

         ¶ 4 AAA and Alpha entered into an agreement for construction services and labor on August 6, 2007 (Subcontract). In the Subcontract, Alpha agreed to name AAA as an additional insured on its commercial general liability insurance policy. The Subcontract stated that Alpha was an independent contractor of AAA and that Alpha was to maintain full control over its respective crews, employees, assistants, helpers and workers. The Subcontract further provided that the work was to be performed solely by Alpha and not by AAA.

         ¶ 5 Pekin issued a policy of insurance to Alpha as named insured for the effective policy period of June 1, 2012, to June 1, 2013. The policy contained an "additional insured" endorsement, which provided that an additional insured was "any person or organization for whom you are performing operations, when you and such person or organization have agreed in a written contract effective during the policy period *** that you must add that person or organization as an additional insured on a policy of liability insurance." The endorsement further provided that additional insureds were covered "only with respect to vicarious liability for 'bodily injury' or 'property damage' imputed from [the named insured] to the Additional Insured as a proximate result of your ongoing operations performed for that Additional Insured during the Policy Period." The endorsement specifically excluded liability "arising out of or in any way attributable to the claimed negligence or statutory violation of the Additional Insured, other than vicarious liability which is imputed to the Additional Insured solely by virtue of the acts or omissions of the Named Insured."

         ¶ 6 B. Piekutowski Complaint

         ¶ 7 In the Underlying Suit, Alpha is not named as a defendant; however, Piekutowski alleges that on September 20, 2011, prior to and at the time of his injury, the defendants "individually and by and through agents, servants and employees, " owned and/or were in charge of the construction of a building located at 2930 North Commonwealth Avenue in Chicago. On that date, Alpha and AAA were operating under the Subcontract regarding the construction, and Piekutowski was employed by Alpha and performing work at the construction site when he fell from a scaffold and sustained permanent injuries.

         ¶ 8 Piekutowski alleged that defendants, individually and through agents, servants and employees, "participated in coordinating work being done and designated various work methods, maintained and checked work progress and participated in the scheduling of the work and the inspection of the work, " and were responsible for complying with standards promulgated by the Occupational Safety and Health Administration (OSHA). The complaint further alleges that defendants had the authority to stop the work, refuse the work and materials and order changes in the work, in the event the work was being performed in a dangerous manner, or for any other reason. Piekutowski goes on to allege numerous "careless and negligent acts and/or omissions" on the part of the named defendants, of which he claims one or more was a proximate cause of his injuries.

         ¶ 9 C. CSI Third-Party Complaint

         ¶ 10 On September 18, 2014, CSI filed a third-party complaint against Alpha seeking contribution. CSI alleged that AAA "rented equipment, including a swing stage and supporting equipment from [CSI], " and that Piekutowski was using the swing stage and supporting equipment in furtherance of his work when he was injured. The CSI complaint goes on to allege a number of negligent acts or omissions on the part of Alpha, that Alpha had a duty to Piekutowski to supervise and provide a safe work environment, that Alpha was responsible for the work being performed pursuant to OSHA ...


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