In October 2007, John Walls suffered a work injury at I-Maxx Metalworks Inc. when “a stair stringer and/or perimeter cable protection failed.”
Walls filed suit against I-Maxx, Turner Construction, Frontier Construction and against Waukegan Steel Sales. The lawsuit alleged that Waukegan Steel negligently chose not manage, operate and maintain the work premises in a safe way, failed to inspect, failed to provide a safe workplace or provide proper fall protection.
By the contract with subcontractors, I-Maxx was solely responsible for the “means, method and safety of employees while on the job site.”
Further, I-Maxx was obliged to maintain liability insurance to cover Waukegan as an additional insured for injuries caused by I-Maxx’s acts or omissions. I-Maxx bought this insurance through Emcasco. The policy of insurance covered only Waukegan for acts or omissions that were “a specific and direct result” of I-Maxx’s conduct.
Waukegan maintained that Emcasco had a duty to defend it and indemnify it. However, Emcasco denied Waukegan’s request that it tender its defense. Emcasco maintained that the accusations of direct negligence were outside of the scope of the insurance.
In the lawsuit, Walls alleged that Waukegan was negligent for failing to inspect the premises, failing to provide proper support for the stringer, failing to provide a proper perimeter cable system, all of which was not attributable to I-Maxx. Emcasco filed a declaratory judgment action asking the court that it not be required to indemnify or defend Waukegan due to the exclusion language in the additional insurance clause of the policy.
Waukegan looked for guidance and support in the third-party complaints that Turner and Frontier filed against I-Maxx. Both third-party complaints stated that I-Maxx was responsible for the worksite safety issues.
On Oct. 7, 2011, after reviewing the third-party complaints and finding the alleged direct negligence by I-Maxx, the trial judge granted summary judgment in favor of Waukegan, deciding that, “where there is the possibility that at least one allegation is potentially covered by an insurance policy, their insurer has a duty to defend.” Emcasco took this appeal.
Emcasco argued that the trial court should not have reviewed the third-party complaints to determine if the insurance policy applied. Emcasco argued that the trial judge was required to review only the underlying complaint and the insurance policy.
The Illinois Appellate Court disagreed. In other Illinois Supreme Court cases, to limit the insurer’s duty to defend the underlying complaint, the Supreme Court said it was perfectly legitimate to review third-party complaints under the circumstances.
In this case, the third-party complaints were filed by parties other than Emcasco. That is, they were filed by a party not seeking declaratory judgment. The appellate court found that if the complaint raises the potential for the allegations to fall within the insurance policy, Emcasco is legally obligated to defend against them.
In this case, the court also reviewed the intent of the parties. The court found that both Waukegan and I-Maxx’s intent was to shield Waukegan from both potential vicarious liability by way of the insurance policy. For those reasons, the appellate court affirmed the trial judge’s order that Emcasco had a duty to defend Waukegan although the court acknowledged that potentially, Waukegan could be find directly liable for Walls’ injuries, in which case Emcasco would not have a duty to indemnify.
Illinois Emcasco Insurance Company v. Waukegan Steel Sales, Inc. and John Walls, No. 2013 IL App. (1st) 120735.
Kreisman Law Offices has been handling work injuries and construction site injuries for individuals and families who have been harmed, injured or died as a result of the carelessness or negligence of another for more than 37 years in and around Chicago, Cook County and its surrounding areas, including Glenview, Schiller Park, River Grove, Bedford Park, Oak Lawn, Harvey, Dolton, Burr Ridge, Chicago (Wicker Park, North Center, Lake View, Edgewater, West Loop, Chinatown), Brookfield and Westchester, Ill.
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