MEMORANDUM OPINION AND ORDER
Plaintiff and Defendants have filed cross motions for summary judgment seeking Declaratory Judgment as to an exclusion provision’s applicability to an insurance policy. For- the following reasons, the Court grants Plaintiffs motion for summary judgment and denies Defendants’motions.
BACKGROUND
I. Northern District of Illinois Local Rule 56.1
Local Rule 56.1(a)(3) requires the moving party to provide “a statement of material facts as to which the moving party contends there is no genuine issue.” Cracco v. Vitran Exp., Inc.,
Local Rule. ,56.1 “is designed, in part, to aid the district court, ‘which does not have the advantage, of the parties’ familiarity with the record and often cannot afford to-spend the time combing the record to locate the relevant information,’ in determining whether a trial is necessary.” Delapaz v. Richardson,
Here, the Court has not considered statements of fact set forth by either side that fail to comply with Local Rule 56.1, and it has deemed as admitted those statements of fact to which the opposing party failed to properly respond. See Cracco,
II. Relevant Facts..
A. Jurisdiction and Venue
Essex Insurance Company (“Essex”) is a Delaware Corporation with its principal place of business in Glen Allen, Virginia. (R. 61, Essex Stmnt. of Facts, at HI.) RHO Chemical' Company, Inc. (“RHO”) is an Illinois corporation with its principal place of business in Joliet, Illinois. (Id. at ¶2.) General Surfactants, Inc. (“GSI”) is an Illinois Corporation with its principal place of business in Joliet, Illinois; (Id. at ¶6.) GSI is not a named insured and does not other* wise qualify as an insured under the insurance policy at issue, (Id. at ¶7.) Robert Rolih is the president of RHO, the president of GSI, and a citizen .of Illinois. (Id. at ¶3.). Lorraine Rolih is Robert Rolih’s wife and a citizen of Illinois. (Id. at ¶4.) RHO and the Rolihs are named insureds under Essex Insurance Policy No. 3DF8043 (“insurance policy”). (Id. at ¶5.) Milan Stavin-oha (“Stavinoha”) is a citizen of Illinois and the plaintiff in the underlying lawsuit filed on April 11, 2014 entitled Milan Stavinoha v. RHO Chemical Company, Inc., General Surfactants, Inc., Robert Rolih, and Lorraine Rolih, No. 14 L 302, (Id. at ¶8.) The underlying case is currently pending in the Circuit Court of the 12th Judicial Circuit in Will County, Illinois. (Id.)
Both parties seek relief under the Declaratory Judgment Act, - 28 U.S.C. §§ 2201, 2202. “The Declaratory Judgment Act allows a party., .who expects to eventually be sued, to determine his rights and liabilities without. waiting, for his adversary, the presumptive plaintiff, to bring suit. That act, however, is not an independent grant of federal subject-matter jurisdiction[.]” DeBartolo v. Healthsouth Corp.,
B. Underlying Lawsuit
Stavinoha .filed a lawsuit in state court against RHO, GSI, and the Rolihs, claiming he suffered severe injuries on April 27, 2012, when portions of a building’s roof fell out from under him- at - 30 Industry Avenue, Joliet, Illinois. (R. 9-4, Stavinoha
Defendants then filed a Third Party Complaint in the underlying action seeking contribution against P&P, whom they admitted was Stavinoha’s employer. (R. 61 at 140.) In their Third Party Complaint, Defendants allege that P&P sent Stavin-oha to repair the roof of a building on Industry Avenue pursuant, to an oral agreement between P&P and the Rolihs. (Id.) Defendants conclude that Stavinoha was repairing the roof when the roof collapsed, causing him severe injuries, and maintain that P&P bears responsibility for Stavinoha’s injuries as his employer. (Id.)
Further undisputed facts apart from the underlying complaints illustrate that.Sta-vinoha was injured while repairing the building’s roof under P&P’s employment. First, on June 12, 2012, Stavinoha filed a claim for worker’s compensation benefits with the Illinois Industrial Commission due to his April 27, 2012 injuries received in the course and scope of his P&P employment. (Id. at 121.) Since then, Stavin-oha successfully received benefits pursuant to his claim against P&P. (Id. at 122.) Second, on or about April 25, 2014, Defendant Robert Rolih reported Stavinoha’s underlying personal injury lawsuit to his insurance agency, admitting that “a roofer went up on the roof to repair it and fell thru [sic] the concrete panels.” (Id. at 116.)
C. Essex Insurance Policy And Exclusion Provision
At the time of Stavinoha’s injuries, Essex insured RHO and the Rolihs. (Id. at 15.) Under Paragraph 1(a), the policy states:
We [Essex] will pay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for “bodily injury” or. “property damage” to which this insurance does not apply. We may, at our discretion, investigate any “occurrence” and settle any claim or “suit” that may result.
(R. 23-1 at 9; R. 46, RHO Stmnt. Of Facts, at 19.) The insurance policy also contains a “Combination General , Endorsement Form - MEGL'0001 05/10” that includes an exclusion for bodily injury claims made by contractors and their employees. Specifically, Paragraph 7. (“exclusion provision”) states:
Unless stated elsewhere in this policy, the following exclusion applies only to injury, loss, or damages sustained in Illinois and/or New York State:
This insurance does not apply to “bodily injury,” “property damage,” “personal and advertising injury,”- or any injury, loss, or damages, including consequential injury, loss or .damage, arising out of, caused or contributed to by any injury sustained by any contractor, self-employed contractor, and/or subcontractor, or any “employee,” “leased worker,” casual worker, contract worker, “temporary worker,” or “volunteer worker” of same. This exclusion applies to any obligation to share damages with or repay someone else who must pay damages
*786 because of the injury, as well as liability assumed under any “insured contract.”
(R. 23-1 at 38; R. 61 at ¶23.) The term “contractor” does not appear in quotation marks to designate it as having a special meaning in the insurance policy. (R. 46 at 1113.) The crux of the present lawsuit is whether Stavinoha and his injuries fall within this provision. If not, Essex has no duty to defend or indemnify RHO and the Rolihs in the underlying lawsuit.
D. Essex Reservation of Rights Letter
On June 13, 2014, Essex sent a Reservation of Rights letter to its insureds, RHO and the Rolihs. (R. 61 at ¶24.) Essex informed them that it did not believe the contract provided coverage for the underlying Stavinoha lawsuit, given the specific exclusion provision detailed above. (Id.) The insurer agreed, however, to participate in RHO and the Rolih’s defense against Stavinoha’s lawsuit pursuant to a full reservation of all rights. (Id.) Essex informed them that “in agreeing to participate in the defense of RHO and the Rolihs or conducting any investigation relating thereto, Essex is not waiving any of its rights to deny coverage or to refuse to defend or continue defending RHO and the Rolihs at any future time.” (R. 23-3 at 6; R. 61 at ¶24.) In relevant part, Essex’s Reservation of Rights letter informed RHO and the Rolihs that
Essex does not believe that the reservation of rights creates a material coverage conflict of interest between it and RHO and the Rolihs in the provision of their defense against the Stavinoha Complaint. If there was a material coverage conflict of interest, RHO and the Rolihs would have the right to counsel of its choosing at the expense of Essex. However, the mere fact of a reservation ■of rights alone does not automatically give rise to a material coverage conflict requiring independent counsel.
(R. 23-3 gt 7 (citing Stoneridge Dev. v. Essex Ins. Company,
Moreover, the Reservation of Rights letter explained why Essex did not believe a conflict existed in the defense of RHO and the Rolihs, and invited them to contact Essex with any disagreement or concerns. (R. 61 at 1126.) The Reservation of Rights letter also denied that Essex owed any coverage to GSI, because GSI was not an insured under’ the policy. (Id. at ¶27.) Essex agreed, however, to provide a courtesy defense to GSI to allow defense counsel to continue efforts to try to get GSI dismissed from the Stavinoha case. (Id.)
On May 19, 2014, Michael Holy of Le-ahy, Eisenberg & Fraenkel, Ltd., appointed by Essex, entered his appearance on behalf of RHO, the Rolihs, and GSI in the underlying Stavinoha lawsuit. (Id. at ¶28.) On June 30, 2014, Scott Hoster of Dystrup, Roster & Jarot, P.C., the personal attorney for RHO, the Rolihs, and GSI, filed his appearance in the underlying matter. (Id. at ¶29.) At no time has Hoster advised Essex of any belief on his part that retaining Holy as defense counsel was a conflict of interest. (Id. at ¶30.) Per the Will County Circuit Court file, Attorney Hoster attended all case management conferences for the underlying Stavinoha lawsuit, and no one has filed substantive motions. (Id. at ¶31.)
On November 11, 2014, James Marsh, coverage counsel of record for RHO, the Rolihs and GSI, sent a letter to Essex arguing that Essex’s reservation of rights created a conflict of interest requiring independent defense counsel. (Id. at ¶34.) Later, on November 25, 2014, Essex wrote to Marsh noting that the November 11, 2014 letter was the first indication that a conflict of interest arising out of Essex’s defense potentially injured RHO and the
On January 8, 2015, Marsh advised Essex that “Mr. and Mrs. Rolih, RHO Chemical, and General Surfactants have chosen Attorney William Kozol of the Joliet firm Rathbun, Cservenyak & Kozol to represent them as independent counsel in the underlying Will County lawsuit.” (Id. at ¶37.) On January 22, 2015, Essex reported to Marsh that all parties, including the Rolihs and RHO, knew that Stavinoha, working for P&P, was performing roof repairs at the time of the injury. (Id. at ¶38.) Thus, asserted Essex, these known facts could not give rise to a material conflict of interest. (Id.)
SUMMARY JUDGMENT STANDARD
Summary judgment is proper when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). A genuine issue of material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party” Anderson v. Liberty Lobby, Inc.,
ANALYSIS
On August 27, 2014, Essex timely sought Declaratory Judgment in this action and filed its Amended Complaint for Declaratory Judgment on September 5, 2014. (R. 9.) On November 11, 2014, RHO and the Rolihs filed their Counter Complaint for Declaratory Judgment. (R. 23.) Now, all parties have filed cross-motions for summary judgment. (R. 56; R. 60.) First, Defendants assert that Essex has a duty to defend RHO and the Rolihs in the underlying lawsuit, because the exclusion provision (1) is not clear and free from doubt and (2) is inapplicable to the facts at issue. Second, Defendants argue in the alternative that Essex breached its duty of good faith by failing to adequately warn RHO and the Rolihs of an actionable conflict of interest. Essex, however, contends that it has no duty to defend or indemnify Defendants, because the exclusion provision is (1) unambiguous and (2) applicable to the facts. Further, Essex argues that there was no conflict of interest and Defendants did not suffer any prejudice. The Court addresses each argument in turn.
I. Essex Insurance Policy’s Exclusion Provision
A. Illinois Insurance Contract Principles
The parties agree that Illinois law governs the Court’s interpretation of the insurance policy at issue. “Under lili-
Specifically, “an insurer has no duty to defend where ‘there clearly was no coverage or potential for coverage.’ ” Panfil v. Nautilus Ins. Co.,
B. The Essex Insurance Policy’s Exclusion Provision Is Unambiguous
Defendants RHO and the Rolihs argue that “paragraph 7 of the combination General endorsement is vague and ambiguous.” (R. 57 at 3.) Thus,-Defendants conclude, the exclusion provision does not clearly exclude them from Essex’s coverage.
In relevant part, the exclusion provision provides that, “[t]his insurance does not apply to ‘bodily injury*- .,. ‘personal and advertising injury,’ or any injury... including . consequential injury .., arising out of, caused or contributed to. by any injury sustained by any contractor, self-employed contractor, and/or subcontractor, or any ‘employee,’ ‘leased-worker,’ casual worker, contract worker, ‘temporary worker,’ or ‘volunteer,-worker’ of same.” (R. 23-1 at 38; R. 61 at ¶23.) This language is susceptible to one meaning: the insurance policy excludes from coverage certain injuries sustained, in relevant part, by contractors or their employees or volunteers. According to’the insurance policy, this exclusion provision “applies only to injury, loss, or damages sustained in Illinois and/or New York.” (R. 23-1 at 38; R. 61 at ¶23.) Although an Illinois state court has not yet construed this language, a New York state court has construed it. In Essex Ins. Co. v. Mondone, Mondone sought to “recover damages for personal injuries he allegedly sustained while working as an electrical contractor at a residential property” where Essex’s insureds were also contractors.
RHO and the Rolihs argue otherwise. Specifically, they contend that in order for the exclusion provision to apply, Stavin-oha’s injury must have “caused or contributed to another injury, or caused another injury to ‘arise out of his injury.” (R. 57 at 3.) Put differently, ‘ Defendants argue that two separate injuries are required to trigger the exclusion provision. This argument amounts to nothing more’ than a “creative possibility].” Wehrle,
Further, Defendants argue that the insurance policy does not define the term “contractor,” rendering the exclusion provision determinatively ambiguous. Specifically, RHO and the Rolihs contend that because the policy does not define the term “contractor,” the Court must not engage in “guess work” and should interpret the term liberally in favor of coverage. (R. 57 at 4.) Defining “contractor,” however, requires no such guessing. “[A]mbiguous terms are construed against the drafter but, in construing a policy, ‘governing legal authority must, of course, be taken into account as well, for a, policy term may be considered unambiguous where it has acquired an established legal meaning,’ ” Ace Am. Ins. Co.,
C. The. Essex Insurance Policy’s Exclusion Provision is Applicable
Next, Defendants assert -that the exclusion provision’s “application to the facts presented here is not clear and free from doubt, as required by Illinois law.” (R. 57 at 2.) Even reviewing the facts in the light most favorable to Defendants, this argument fails,
First, Defendants contend that the second sentence in the exclusion provision renders the exclusion as a whole inapplicable to the current facts. Specifically, that sentence states: “[t]his exclusion applies to any obligation to share damages with or repay someone else who must pay damages because of the injury, as well as liability assumed under any ‘insured contract.’ ” (R. 61 at ¶23.) Defendants maintain that “there is nothing in this second sentence of paragraph 7 to indicate that it does not serve to limit the applicability of the first sentence of paragraph 7.” (R. 57 at 4.) Under a plain reading, there is nothing in the second sentence, however, indicating that it does serve to limit the first sentence’s applicability. Thus, even if it is true that “[n]owhere in the underlying lawsuit it is [sic] alleged that Rho Chemical or the Rolihs haye an obligation to share damages with or repay someone else who must pay damages bécause of the injury alleged by Stavinoha,” the exclusion provision’s first part, independent from what follows, still applies to the facts at issue, (Id.)
Second, Defendants argue that Stavinoha and P&P were not contractors and, as a result, do not fall within the exclusion provision’s framework. Specifically, Defendants assert that “there was no contract entered into between Rho Chemical and Stavinoha.” (R. 57 at 5.) Defen
As a result, the insurance policy’s exclusion provision is both unambiguous and applicable to the facts at issue. As such, Essex-does not have a duty to defend or indemnify Defendants RHO and the Rol-ihs.
II. Conflict of Interest
Finally, Defendants argue that Essex breached its duty of good faith by failing to warn Defendants of an actionable conflict of interest. (R. 57 at 8.) In response, Essex contends that there' was no conflict of interest and that, regardless, Defendants were not prejudiced. (R. 62 at 11.)
“Under Illinois law, ... when an insurer believes that a policy does not provide coverage, it can provide a defense under a reservation of rights or obtain a declaratory judgment as to its rights and obligations.” Willis Corroon Corp. v. Home Ins. Co.,
Regarding the alleged conflict of interest, the factual issues in the underlying suit had the potential to allow Essex’s retained counsel to “lay the groundwork” for the current denial of coverage. Id, Specifically, one of the determinative issues in the underlying complaint against Defendants is whether P&P is a contractor and Stavinoha, a contractor’s employee; As these legal chai-acterizations dictate who may bear responsibility for the alleged negligence below, it is possible the associated underlying factual determinations :are related enough to Essex’s exclusion provision — also hinged on “contractor” status— to cause a conflict of interest.
Defendants forget, however, that “[prejudice resulting from a conflict of interest.. .will not be presumed and the burden of establishing it rests with the insured and must be proved by clear, concise, and unequivocal evidence.” Nautilus Ins. Co.,
CONCLÚSIÓN
For the foregoing reasons, the Court grants Plaintiffs motion for summary judgment and denies Defendants’ motion for summary judgment.
Notes
. Defendant Stavinoha filed a response to Essex’s motion for summary judgment in which he makes insurance policy arguments similar to RHO and the Rolihs (R. 65), but the Court focuses on the latter’s insurance policy arguments, because “the tort plaintiff [in the underlying suit] has no authority to interpret the insurance contract." Atlantic Cas. Ins. Co.,
. Essex relies on several cases where courts construed insurance provisions that were different, albeit similar, from Paragraph 7. (R. 62 at 7-8.) The Essex provision in Mondone, however, matches the provision here.