Westfield Insurance Co. v. Judlau Contracting, Inc.

2022 IL App (2d) 210188-UNo. 2-21-0188
Order filed January 28, 2022
NOTICE: This order was filed under Supreme Court Rule 23(b) and is not precedent
except in the limited circumstances allowed under Rule 23(e)(1).
______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
SECOND DISTRICT
______________________________________________________________________________
WESTFIELD INSURANCE COMPANY, ) Appeal from the Circuit Court
) of Du Page County.
Plaintiff and Counterdefendant and, )
Third-Party Plaintiff-Appellant, )
)
v. ) No. 19-MR-808
)
JUDLAU CONTRACTING, INC. and )
GERALD SEVER, )
)
Defendants, )
)
(Judlau Contracting, Inc., Counterplaintiff- )
Appellee; West Bend Mutual Insurance )
Company, Third-Party Defendant and )
Counterplaintiff-Appellee; Cincinnati ) Honorable
Specialty Insurance Company, Third-Party ) Paul M. Fullerton,
Defendant). ) Judge, Presiding.
JUSTICE SCHOSTOK delivered the judgment of the court.
Justices Hudson and Birkett concurred in the judgment.
ORDER
¶1 Held: Circuit court did not err in determining that plaintiff insurance company was
obligated to provide defense to defendant on a primary, noncontributory basis.
¶2 This case involves an insurance coverage dispute. A worker on a construction site that the
defendant Judlau Contracting, Inc. oversaw was injured. After that worker filed a personal injury
2022 IL App (2d) 210188-Ucomplaint against Judlau, Judlau sought defense coverage from the plaintiff, Westfield Insurance
Company. Westfield responded by filing a declaratory judgment action alleging that it did not
owe Judlau a defense. Judlau filed a counterclaim against Westfield seeking a declaration that
Westfield did owe a duty to defend. The circuit court of Du Page County granted Judlau judgment
on the pleadings, finding that Westfield was obligated to provide a defense to Judlau in the
underlying lawsuit on a primary, noncontributory basis. The circuit court also entered an order
pursuant to Supreme Court Rule 304 (eff. March 8, 2016) that there was no reason to delay
enforcement or appeal of its order. Westfield then filed a third-party complaint against West Bend
Mutual Insurance Company and Cincinnati Insurance Company, claiming that Westfield’s
insurance coverage was “excess by coincidence” to the coverage provided to Judlau as an
additional insured by West Bend and Cincinnati Insurance. 1 West Bend filed a counterclaim for
declaratory judgment, arguing that Westfield’s policy was primary to and noncontributory with
any coverage provided by West Bend. The circuit court granted West Bend judgment on the
pleadings and entered an order pursuant to Supreme Court Rule 304. Westfield now appeals from
the circuit court’s orders in favor of Judlau and West Bend, raising several meritless contentions.
¶3 On November 15, 2017, while working on a construction site near the I-294 southbound to
I-80 eastbound ramp from Dixie Highway in Harvey, Gerald Sever was struck by an automobile
driven by Porscher Ellerbe. At the time of the accident, Sever was employed by Quality Saw and
Seal, Inc., a subcontractor on the construction project that was overseen by Judlau. Judlau and
Quality Saw had previously entered a written contract which required Quality Saw to obtain
1
No briefing occurred between Cincinnati and Westfield, and the case against Cincinnati
remains pending.
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2022 IL App (2d) 210188-Uinsurance on its behalf which would be “primary and noncontributory.” Quality Saw purchased
such a policy from Westfield.
¶4 After Sever filed his personal injury complaint against Judlau, Judlau target-tendered its
defense and indemnity against the Sever lawsuit to Quality Saw and Westfield on a primary and
noncontributory basis. Westfield responded to Judlau’s target tender by filing a declaratory
judgment action alleging that Westfield did not owe Judlau a defense as an additional insured. The
circuit court rejected Westfield’s argument and entered judgment on behalf of Judlau.
¶5 Westfield raises two arguments directed against the circuit court’s judgment as to Judlau.
First, Westfield asserts that there is no basis to establish that Judlau was intended to be an
additional insured in the contract between Judlau and Quality Saw. Reading sections 13 and 14 of
the Judlau-Quality Saw contract together, it is apparent that Judlau was intended to be an additional
insured under the Westfield policy that Quality Saw procured. However, Westfield insists that
section 13 is void because it requires Quality Saw to indemnify Judlau for Judlau’s own
negligence, which is contrary to public policy. Westfield points out that section 13 identifies who
the “Indemnified Parties” are, with one of the entities being Judlau. In section 14, Westfield asserts
that the contract does not specify who the additional insureds are intended to be other than they
are the “Indemnified Parties,” which is a reference to those identified in section 13. Westfield
maintains that because section 13 is completely void, it is impossible to determine who the
“Indemnified Parties” in section 14 are. Thus, Westfield insists that there is nothing in the contract
to establish that Judlau was intended to be an additional insured.
¶6 We reject Westfield’s argument for two reasons. First, even if the indemnity provisions in
section 13 are void, there is no need to excise that entire section from the contract. Braye v. Archer-
Daniels-Midland Co., 175 Ill. 2d 201, 217 (1997) (construction of contract that renders the
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2022 IL App (2d) 210188-Uagreement enforceable rather than void is preferred). There is nothing contrary to public policy
about section 13 identifying who Quality Saw and Judlau sought to be indemnified. Second, even
if the indemnity provisions in section 13 were void, that would have no impact on the insurance
provisions in section 14. That is because a promise to obtain insurance is different from a promise
to indemnify (W.E. O’Neil Construction v. General Casualty, 321 Ill. App. 3d 550, 556-57 (2001))
as it advances the public policy of ensuring compensation for injured workers (Bosio v. Branigar
Organization, Inc., 154 Ill. App. 3d 611, 614 (1987)). Westfield’s reliance on Transcontinental
Insurance Co. v National Union Fire Insurance Co., 278 Ill. App. 3d 357, 365 (1996) and Hodges
v. Archer Daniels Midland Co., 2020 WL 5578427, *1 (C.D. 2020), is misplaced as both cases
involved a general contractor seeking indemnity from a subcontractor for the general contractor’s
negligence.
¶7 Westfield’s second argument is that there is no factual basis to trigger additional-insured
status for Judlau under the business auto coverage form of the Westfield policy. Westfield
contends that it did not owe any coverage under the policy because the vehicle that struck Sever
was not owned, operated, or maintained by Quality Saw.
¶8 Westfield’s business auto coverage policy sets forth that it provides coverage to any
“Insured” for an accident resulting from the “ownership, maintenance or use of a covered ‘auto.’”
Item Two of the Declarations describes what is a “covered auto,” and contains the symbol “1”
under “Auto Designation Symbol,” which the policy defines as “Any Auto.” As such, the
Westfield policy promises automobile liability coverage to any “Insured” for an accident resulting
from the ownership, maintenance, or use of “Any Auto.”
¶9 Judlau qualifies as any “Insured” for two reasons. First, the “Business Auto Endorsement”
broadens the “Who Is An Insured” provision by making an “Insured” any organization to which
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2022 IL App (2d) 210188-UQuality Saw agreed in a written contract to provide insurance. Second, Paragraph C of the “Who
is Insured” provision provides coverage to Judlau to the extent of its liability for the acts of Quality
Saw.
¶ 10 As such, based on the language of Westfield’s policy, the Judlau-Quality Saw contract, and
the allegations of the complaint in the Sever lawsuit, Westfield owed a duty to defend Judlau. The
circuit court therefore properly granted Judlau judgment on its counterclaim that Westfield owed
it a duty to defend.
¶ 11 In so ruling, we are unpersuaded by Westfield’s reliance on Cincinnati Insurance Co. v.
Moen, 940 F. 2d 1069, 1074 (7th Cir. 1991). That case did not involve a business auto coverage
policy and the insurer’s promise to cover “any auto.”
¶ 12 We next turn to Westfield’s arguments against West Bend. After the circuit court
determined that Westfield had to defend Judlau, Westfield filed an action against West Bend
arguing that West Bend should be obligated to defend Judlau instead. The circuit court rejected
that argument and entered judgment in favor of West Bend.
¶ 13 On appeal, Westfield argues that its policy is excess by coincidence to coverage provided
by West Bend. A policy that is excess by coincidence means that the insurance provided under
one policy that would otherwise be primary is excess because that policy contains an “other
insurance” clause stating that the policy is excess based on the happening of certain circumstances
set forth in the policy. River Village I, LLC v. Central Insurance Companies, 396 Ill. App. 3d 480,
487 (2009). “In such instances, the ‘other insurance’ excess provision requires the insured to
exhaust the policy limits of the other co-insurers before being able to trigger a defense and
indemnification duty in that insurer.” Id. Whether a policy will apply on a primary basis or excess
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2022 IL App (2d) 210188-Ubasis is based on the language of the insurance contract. Federal Insurance Co. v. St. Paul Fire
and Marine Insurance Co., 271 Ill. App. 3d 1117, 1122 (1995).
¶ 14 In determining whether Westfield’s policy applies on a primary or excess basis, we look to
two key provisions of the Westfield policy. The first provision states:
“Primary and Noncontributory—Other Insurance Condition
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART
The following is added to the Other Insurance and supersedes any provision to the contrary:
Primary and Noncontributory Insurance
This insurance is primary to and will not seek contribution from any other insurance
available to an additional insured under your policy provided that:
(1) The additional insured is a Named Insured under such other insurance; and
(2) You have agreed in writing in a contract or agreement that this insurance would be
primary and would not seek contribution from any other insurance available to the
additional insured.”
¶ 15 The Judlau-Quality Saw Contract complies with subparagraph (2) of this endorsement.
However, as Judlau is not a named insured under the West Bend policy, it does not comply with
subparagraph (1) of the endorsement.
¶ 16 The second relevant provision in the Westfield policy is contained in the Contractor Series
Endorsement. Section L of the Contractor Series Endorsement provides:
“Other Insurance Condition Amended
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2022 IL App (2d) 210188-UWhen required by written contract with any additional insured owner, lessee, or contractor
to provide insurance on a primary and noncontributory basis, Condition 4 [other insurance
of Section IV, Commercial General Liability Conditions] is deleted and replaced by the
following:
4. Other Insurance
If other valid and collectible insurance is available for a loss we cover under Coverage A
[bodily injury] or B [property damage] of this Coverage Part, our obligations are limited
as follows:
a. Primary Insurance
This insurance is primary and noncontributory except when b. below applies.
b. Excess Insurance”
Section “b” then lists four conditions when Westfield’s insurance would be considered excess.
Westfield does not argue that any of those conditions apply in this case.
¶ 17 The first relevant provision indicates that Westfield’s policy applies on an excess basis
because not all the conditions necessary for it to apply on a primary basis exist. However, the
second relevant provision clearly indicates that the Westfield policy is to apply on a primary basis.
The circuit court resolved this inconsistency by determining that the second provision was more
specific than the first provision because the latter provision was in Westfield’s signature series of
endorsements that provides expanded coverage for contractors such as Judlau. We agree with the
circuit court. It is well established that, where an inconsistency exists in a contract, a more specific
provision controls over a more general one. Nationwide Mutual Fire Insurance Co. v. T & N
Master Builder & Renovators, 2011 IL App (2d) 101143, ¶ 25. As the Contractor’s Endorsement
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2022 IL App (2d) 210188-Uwas added to comply with the Judlau-Quality Saw contract, that is the more specific provision and
obligates Westfield to provide insurance on a primary and noncontributory basis. Id.¶ 18 In so ruling, we reject Westfield’s argument that the first provision controls because it
includes language that it “supersedes any provision to the contrary.” In making this argument,
Westfield overlooks that the first provision also indicates that it is modifying the Commercial
General Liability Coverage Part and the Products Completed Operations Liability Coverage Part.
The first provision makes no reference whatsoever to the second provision found in the
Contractor’s Endorsement. To read the first provision as expansively as Westfield suggests would
essentially render the second provision superfluous. That we cannot do. See Old Second National
Bank v. Indiana Insurance Co., 2015 IL App (1st) 140265, ¶ 19 (court will not interpret an
insurance policy in such a way that any of its terms are rendered meaningless or superfluous).
¶ 19 Finally, we note that Westfield dedicates significant time to explaining why West Bend’s
policy should be found to be the primary insurance for Judlau. We need not delve into Westfield’s
argument on this point because even if were to find that the West Bend policy was primary, that
would just make West Bend’s policy co-primary to Westfield’s. Under the target tender rule, the
fact that Judlau tendered its defense to Westfield does not give Westfield a cause of action against
West Bend. See John Burns Construction Co. v. Indiana Insurance Co., 189 Ill. 2d 570, 578
(2000).
¶ 20 For the foregoing reasons, the judgment of the circuit court of Du Page County is affirmed.
¶ 21 Affirmed.
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