Pekin Insurance v. Recurrent Training Center, Inc.
948 N.E.2d 668
Ill. App. Ct.2011Background
- Pekin Insurance issued a CGL policy to Recurrent Training Center for 3/1/2005–3/1/2006; Palwaukee crash killed Turek and three others after training at Savoy facility.
- Underlying plaintiffs assert Negligent training by Recurrent Training Center; Morgan Stanley and HK Golden Eagle seek contribution against RTC.
- Policy covers bodily injury or property damage from an occurrence within the United States and during the policy period, with defense duties tied to those damages.
- Declarations show coverage for products/completed operations; but RTC location listed for premises is Savoy (RTE 45 S, Champaign Willard Airport, Savoy, IL).
- A designated-premises endorsement limits coverage to injuries arising from the owners’ premises and activities incidental to those premises; it excludes off-premises injuries and negligent training under those terms.
- RTC tendered defense; Pekin accepted defense subject to rights reservation; Pekin filed for declaratory judgment arguing no duty to defend given the endorsement and off-premises occurrence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do the designated-premises endorsement and its scope limit Pekin's defense duty? | RTC injuries arose off Savoy premises; endorsement limits coverage to designated premises. | Completed-operations coverage and policy as a whole create broader exposure than the premises-only endorsement. | Endorsement controls; coverage limited to designated premises and off-premises injuries not covered. |
| Is there ambiguity in 'arising out of' across policy parts affecting coverage? | Phrase used differently in completed-operations vs. designated-premises creates ambiguity. | Phrase has a single plain meaning; not ambiguous. | No ambiguity; 'arising out of' interpreted to limit to premises-related occurrences. |
| Does the completed-operations coverage provide separate protection beyond the designated-premises endorsement? | Completed-operations coverage supplements premises coverage, creating broader protection. | Endorsement and policy language, not completed-operations, controls scope; off-premises injuries excluded. | Designated-premises endorsement controls; completed-operations does not broaden coverage to off-premises injuries. |
Key Cases Cited
- Schnackenberg v. United States Fire Ins. Co., 88 Ill.2d 1 (1981) (ambiguity-free geographic-level coverage; premises limit applies)
- Bucaro v. Heritage Insurance Co., 101 Ill.App.3d 919 (1981) (premises-based occurrence required to tie to insured premises)
- Dash Messenger Service, Inc. v. Hartford Insurance Co., 221 Ill.App.3d 1007 (1991) (off-premises injury may be within standard risk spectrum, but context matters)
- Pasalka v. American Service Insurance Co., 363 Ill.App.3d 385 (2006) (ambiguous policy terms construed against insurer; plain meaning preferred)