West Bend Mutual Insurance Company v. DJW-Ridgeway Building Consultants, Inc.
40 N.E.3d 194
Ill. App. Ct.2015Background
- Plaintiff West Bend insured subcontractor Jason the Mason under a CGL policy containing an "Additional Insured – Contractor’s Blanket" endorsement that extends coverage to any person the insured is required to add by a "written contract or written agreement" executed before the injury.
- Ridgeway was the general contractor; Jason the Mason was the masonry subcontractor on the Village Commons project; worker delaTorre was injured in April 2008 and sued Ridgeway, Lake Effect, and Jason the Mason.
- Ridgeway sought defense tender from West Bend, claiming Ridgeway was an additional insured under Jason the Mason’s West Bend policy based on a signed Proposal (Aug/Nov 2007) and an attached unsigned Subcontract Agreement (dated Nov 8, 2007) that required the subcontractor to name Ridgeway as an additional insured and produce insurance certificates (Exhibit A set out coverage limits and listed umbrella coverage as excess).
- Ridgeway obtained (through the broker R-H) a certificate stating Ridgeway was named as an additional insured on a "primary non-contributory basis," but the certificate disclaimed any alteration of policy coverage.
- West Bend refused defense, sued for declaratory judgment; cross-motions for summary judgment were filed. Trial court granted judgment for Ridgeway; appellate court reviews whether a binding written agreement existed and whether additional-insured coverage was primary or excess.
Issues
| Issue | Plaintiff's Argument (West Bend) | Defendant's Argument (Ridgeway) | Held |
|---|---|---|---|
| Whether a "written contract or written agreement" was "executed" before the injury so as to require Jason to add Ridgeway as an additional insured | The Subcontract Agreement was unsigned and therefore not "executed" as required by the policy; no executed written agreement exists | The Proposal (signed by both) together with the attached unsigned Agreement constitute a single written agreement; Jason manifested assent by performing the work and by procuring the required certificate of insurance | The Proposal and attached Agreement together constituted an executed written agreement; assent shown by conduct, so the policy’s written-agreement requirement is met |
| Whether additional-insured coverage (as required by the agreement) is primary or excess under the policy language | Even if Ridgeway is an additional insured, the policy endorsement makes additional-insured coverage excess unless a written contract "specifically" requires primary/noncontributory coverage; West Bend says that requirement is not specifically met | Exhibit A to the Agreement requires commercial general liability limits (occurrence and aggregate) and expressly labels only the umbrella coverage as excess, so the general liability portion is primary; thus the written agreement specifically requires primary coverage | Exhibit A’s allocation of coverages shows general liability as primary and umbrella as excess; the agreement sufficiently and specifically requires primary coverage, so West Bend owes a duty to defend |
Key Cases Cited
- Adams v. Northern Illinois Gas Co., 211 Ill. 2d 32 (determining summary-judgment standard and contract interpretation principles)
- Founders Insurance Co. v. Munoz, 237 Ill. 2d 424 (plain meaning rule for undefined policy terms)
- State Farm Fire & Casualty Co. v. Martinez, 384 Ill. App. 3d 494 (insurance policy is a contract)
- Landmark Properties, Inc. v. Architects Int’l–Chicago, 172 Ill. App. 3d 379 (party may be bound by unsigned contract through conduct)
- Suga v. Suga, 35 Ill. App. 2d 355 (use of expressio unius interpretive canon)