Westfield Insurance v. FCL Builders, Inc.
407 Ill. App. 3d 730
Ill. App. Ct.2011Background
- FCL is a general contractor hired for a construction project; Suburban Ironworks performs the steel work and subcontracts to JAK, which employed Oshana.
- Suburban must obtain CGL insurance covering Suburban, FCL, and itself as general contractor; Suburban’s subcontractors must also carry the same coverage and name FCL as insured.
- Suburban subcontracted steel erection to JAK, and the master Suburban–FCL contract was incorporated into the JAK–Suburban contract.
- The JAK–Suburban contract required JAK to obtain insurance that would cover JAK, Suburban, and FCL, and JAK purchased a CGL policy from Westfield with an endorsement modifying insureds.
- Oshana was injured on the job; he sued FCL and Suburban for safety-related duties; Westfield refused to defend or indemnify FCL, prompting a declaratory judgment action; circuit court granted Westfield summary judgment, and FCL appeals.
- The court analyzed whether the Westfield policy’s additional insured endorsement requires a direct written agreement between JAK and the entity seeking coverage, concluding it does.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FCL qualifies as an additional insured under JAK’s Westfield policy. | Westfield: no written agreement between JAK and FCL; only direct contracts with JAK trigger coverage. | FCL: Suburban–JAK contract incorporated FCL’s obligation to be added; written agreement exists via incorporation and certificate. | FCL not an additional insured; no direct written agreement between JAK and FCL. |
Key Cases Cited
- Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384 (1993) (insurance contract interpretation; summary judgment standard applicable)
- Schultz v. Illinois Farmers Insurance Co., 237 Ill. 2d 391 (2010) (construction of policy terms; de novo review on appeal)
- Founders Insurance Co. v. Munoz, 237 Ill. 2d 424 (2010) (ambiguity standard in policy interpretation)
- West American Insurance Co. v. J.R. Construction Co., 334 Ill. App. 3d 75 (2002) (broader additional insured provision; direct written agreement distinction)
- United Stationers Supply Co. v. Zurich American Insurance Co., 386 Ill. App. 3d 88 (2008) (certificate of insurance effect on coverage; policy controls when terms conflict)
- Pekin Insurance Co. v. American Country Insurance Co., 213 Ill. App. 3d 543 (1991) (certificate language and coverage interpretation)
- Gallagher v. Lenart, 226 Ill. 2d 208 (2007) (contract interpretation and extrinsic evidence considerations)