2019 IL App (4th) 180411
Ill. App. Ct.2019Background
- Core Construction was the general contractor at a State Farm site; Schindler was a subcontractor tasked with escalator work and was to provide insurance naming Core and State Farm as additional insureds.
- Schindler’s policy extended additional-insured coverage for bodily injury "caused, in whole or in part, by" Schindler’s acts or omissions during its operations.
- Michael Dineen, a Schindler employee, was injured on the job and sued Core and State Farm; he did not name Schindler or allege Schindler’s negligence in the underlying complaint.
- Core tendered defense to Schindler’s insurer, Zurich; Zurich refused, contending the underlying complaint did not allege Schindler’s negligence and therefore did not trigger additional-insured coverage.
- Core sued for declaratory relief; the trial court granted Zurich and Schindler’s motion for judgment on the pleadings. On appeal, the Fourth District reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Zurich owed a duty to defend Core as an additional insured | The underlying complaint’s silence about the employer’s negligence must be read in light of the Workers’ Compensation Act; the complaint potentially alleges injuries caused in whole or in part by Schindler, so coverage may be triggered | Underlying complaint contains no allegation that Schindler was negligent, so Zurich’s additional-insured endorsement is not implicated and no duty to defend exists | Reversed: insurer has a duty to defend because silence about the employer can reflect tort immunity under the Workers’ Compensation Act; potential that Schindler’s acts contributed means coverage may be triggered |
| Whether the court may consider the broader procedural context (e.g., third-party claims, Act) when evaluating duty to defend | The complaint must be read in context (Workers’ Compensation Act, possible third‑party/third‑party pleadings); courts may look beyond the complaint in this context | Insurer relied on the face of the underlying complaint alone to deny coverage | Court treated the complaint in its statutory context and relied on precedent allowing consideration of surrounding pleadings/context when assessing duty to defend |
Key Cases Cited
- Pekin Insurance Co. v. Wilson, 237 Ill. 2d 446 (insurer’s duty to defend is determined by comparing underlying complaint to policy; interpret policy de novo)
- State Building Venture v. O’Donnell, 239 Ill. 2d 151 (standard of review for judgment on the pleadings)
- United Services Automobile Ass’n v. Dare, 357 Ill. App. 3d 955 (doubts on duty to defend resolved for insured; low threshold to trigger duty to defend)
- American Economy Insurance Co. v. Holabird & Root, 382 Ill. App. 3d 1017 (trial court may consider evidence beyond the underlying complaint so long as it doesn’t decide issues critical to underlying action)
- Ramara, Inc. v. Westfield Insurance Co., 814 F.3d 660 (silence about employer’s acts in underlying complaint can reflect workers’ compensation immunity and should not defeat duty to defend)