Westfield Insurance Co. v. Keeley Construction, Inc.

2020 IL App (1st) 191876
FIRST DISTRICT
SIXTH DIVISION
October 2, 2020
No. 1-19-1876
WESTFIELD INSURANCE COMPANY, ) Appeal from the
) Circuit Court of
Plaintiff and Counterdefendant-Appellant, ) Cook County.
)
v. )
)
KEELEY CONSTRUCTION, INC.; HAMILTON )
PARTNERS, INC.; and SANDRA KLEIN-KOZIOL, ) No. 17 CH 011105
as Special Administrator of the Estate of )
Timothy Koziol, )
)
Defendants-Appellees. )
)
(Amerisure Insurance Company, Individually and as ) Honorable
Subrogee of Keeley Construction, Inc., Counterplaintiff- ) Anna Helen Democopoulos,
Appellee). ) Judge Presiding.
JUSTICE HARRIS delivered the judgment of the court, with opinion.
Presiding Justice Mikva and Justice Griffin concurred in the judgment and opinion.
OPINION
¶1 Plaintiff, Westfield Insurance Company (Westfield), filed a complaint seeking a
declaration that it did not owe a duty to defend or indemnify defendants Keeley Construction, Inc.
(Keeley), and Hamilton Partners, Inc. (Hamilton), as additional insureds on its policy. Keeley and
Hamilton filed counterclaims for declaratory judgment, alleging that the subcontract agreement
required them to be named as additional insureds on Westfield’s policy. Keeley and Hamilton filed
motions for summary judgment, and Westfield filed a cross-motion for summary judgment. The
circuit court granted Keeley’s and Hamilton’s motions and denied Westfield’s cross-motion. On
appeal, Westfield contends that the court erred in granting summary judgment where the
subcontract between Keeley and William T. Connelly, Inc. (Connelly), Westfield’s insured, only
No. 1-19-1876
required Connelly to name Keeley or Hamilton as additional insureds on the certificate of
insurance. For the following reasons, we affirm.
¶2 I. JURISDICTION
¶3 On August 20, 2019, the circuit court entered its order granting summary judgment in favor
of Keeley and Hamilton. Westfield filed its notice of appeal on September 17, 2019. Accordingly,
this court has jurisdiction pursuant to Illinois Supreme Court Rule 301 (eff. Feb. 1, 1994) and Rule
303 (eff. July 1, 2017), governing appeals from final judgments entered below.
¶4 II. BACKGROUND
¶5 A. Prime Contract Between Hamilton and Keeley
¶6 Keeley entered into a contract with Hamilton to serve as the general contractor for the
construction of an industrial building located in Bensenville, Illinois. This contract, hereinafter
referred to as the “prime contract,” provided:
Ҥ 5.3 SUBCONTRACTUAL RELATIONS
By appropriate agreement, written where legally required for validity, the
Contractor shall require each Subcontractor, to the extent of the Work to be performed by
the Subcontractor, to be bound to the Contractor by terms of the Contract Documents, and
to assume toward the Contractor all the obligations and responsibilities, including the
responsibility for safety of the Subcontractor’s Work, which the Contractor, by these
Documents, assumes toward the Owner and Architect.
***
ARTICLE 10 INSURANCE AND BONDS
§ 10.1 The Contractor shall purchase and maintain insurance and provide bonds as set forth
in Article 11 of AIA Document A201-2007.
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***
§ 10.2 The Additional insured for this project are as follows:
Hamilton Partners, Inc.
Bensenville 1, LLC.”
¶7 B. Subcontract Between Keeley and Connelly
¶8 For the Bensenville project, Keeley contracted with Connelly to perform electrical work.
The subcontract agreement listed Keeley as “The Contractor” and Hamilton as “The Owner.” The
agreement provided:
“Contractor and Subcontractor agree as follows:
1. Subcontract Documents.
1.1 For the purposes of this Agreement, the ‘Subcontract Documents’ shall consist of
his Agreement and the following:
Keeley Construction, Inc.’s prime Agreement
***
Exhibit C—Certificate of Insurance Requirements, showing the Contractor,
Owner, Tenant and anyone required by Contractor upon 24 hours written notice as
‘Additionally Insured’
***
These documents form the Agreement, and are as fully a part of the Agreement as if
attached to this Agreement or repeated herein. The Agreement represents the entire and
integrated Agreement between the parties hereto and supersedes prior negotiations,
representations or agreements, either written or oral. The Subcontractor assumes toward
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No. 1-19-1876
Contractor all of the same obligation, rights, duties, and redress that the Contractor assumes
toward the Owner, Tenant (if applicable) and Architect under the prime agreement.”
¶9 Section 6.1 of the subcontract addressed insurance and bonds. It stated:
“Prior to starting Work, Subcontractor, at its expense, shall obtain and maintain in
force, on all operations, insurance in accordance with the Certificate of Insurance
Requirements attached hereto as Exhibit C. The policies of insurance shall be in such form
and shall be issued by such company satisfactory to Contractor.
***
EXHIBIT C
CERTIFICATE OF INSURANCE REQUIREMENTS (2 Pages)
Rider attached to and made a part of Subcontract Agreement between Keeley
Construction, Inc. (‘Contractor’) and Connelly Electric (‘Subcontractor’). These insurance
requirements will be made a part of Subcontract Agreement No. 07064.S04 between
Keeley Construction, Inc. and Connelly Electric and its Subcontractor(s).
***
Keeley’s receipt of Subcontractor’s Certificate of Insurance that conforms to the
insurance requirements contained in this Exhibit C is a condition precedent to payment to
Subcontractor. Prior to submitting Subcontractor’s Certificate of Insurance to Contractor,
Subcontractor shall review the insurance requirements contained in this Exhibit C of the
Subcontract Agreement and insure that Subcontractor’s insurance and Certificate of
Insurance comply with the insurance requirements contained in this Exhibit C of the
Subcontract Agreement.
***
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No. 1-19-1876
2. The Certificate of Insurance must name as Additional Insured at no additional
cost to Contractor the following:
Keeley Construction, Inc.;
The Owner;
The Tenant (if applicable);
Others identified in attached Exhibit C- Insurance Certificate Sample; and
Anyone required by Contractor upon 24 hours written notice
***
4. Commercial General Liability must be on a Primary/Non-contributory basis for
the additional insured with respect to work performed by Subcontractor and sub-
subcontractors. IT IS MANDATORY THAT ADDITIONAL INSUREDS ARE
INCLUDED ON CERTIFICATE OF INSURANCE AS FOLLOWS:
The entities identified in Paragraph 2, above, are named as Additional
Insured(s) on a primary and non-contributory basis on the General Liability policy
with respect to the job designated above ***.
The entities identified in Paragraph 2, above, are named as Additional
Insured(s) on a primary and non-contributory basis on the General Liability policy
including products-Completed Operations with respect to the job designated above
***.”
Exhibit C also provided “minimum limits required on all Certificates of Insurance” for workers’
compensation insurance, commercial general liability insurance with coverage endorsements for
additional insureds, commercial automobile liability insurance with coverage endorsements for
additional insureds, and umbrella/excess liability insurance.
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¶ 10 C. The Certificate of Insurance and Westfield’s Policy
¶ 11 In accordance with the requirements of Exhibit C, Connelly issued a Certificate of
Insurance (COI) naming Keeley and Hamilton as “Additional Insureds.” The COI also contained
the following disclaimer:
“THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY
AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND,
EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT
BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR
PRODUCER, AND THE CERTIFICATE HOLDER.”
¶ 12 On the COI, Connelly listed Westfield’s policy as providing commercial general liability
insurance. Keeley and Hamilton were not specifically named as additional insureds in the
Westfield policy. However, the policy included an endorsement which provided additional
coverage to:
“ANY PERSONS OR ORGANIZATIONS WHEN YOU HAVE AGREED IN
WRITING IN A CONTRACT OR AGREEMENT THAT SUCH PERSONS OR
ORGANIZATIONS BE ADDED AS AN ADDITIONAL INSURED.”
¶ 13 D. Underlying Action and Summary Judgment Motions
¶ 14 Timothy Koziol worked as an electrician for Connelly. He was operating a scissor lift for
the Bensenville project, extending himself 20 to 25 feet in the air, when the lift unexpectedly tipped
over. Timothy fell and hit his head on the concrete floor, sustaining serious injuries that resulted
in his death. On March 7, 2017, Sandra Klein-Koziol, as special administrator of Timothy’s estate,
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filed a complaint for wrongful death naming as defendants Keeley, Hamilton, and M-J-T-J
Contractors & Builders, Inc. 1
¶ 15 Keeley tendered the defense of the Koziol action to Connelly and Westfield, pursuant to
the subcontract and Westfield’s policy. Westfield filed a declaratory judgment, seeking a
declaration that neither Keeley nor Hamilton was an additional insured under its policy. Westfield
argued that Connelly never agreed in a written contract to add Keeley and Hamilton as additional
insureds on the Westfield policy.
¶ 16 Amerisure Insurance Company (Amerisure), Keeley’s insurer, was allowed to intervene on
its own behalf and as subrogee of Keeley. Amerisure filed a counterclaim for declaratory judgment,
seeking a declaration that Westfield owes a primary duty to defend Keeley in the underlying action
pursuant to the subcontract and Westfield’s policy. Amerisure also sought reimbursement from
Westfield for all fees, costs, and expenses incurred in defending Keeley in the underlying action.
Westfield filed a cross-motion for summary judgment, arguing that it did not owe a duty to defend
Keeley or Hamilton in the underlying action because the subcontract only required Connelly to
name them as additional insureds in the COI. This requirement, Westfield argued, was insufficient
to trigger an obligation to defend under its policy.
¶ 17 The trial court granted Amerisure and Keeley’s motion for summary judgment, finding that
the subcontract is “replete with references to insurance policies as opposed to mere ‘certificates of
insurance,’ alone.” (Emphasis in original.) The court concluded:
“Where a contract calling for insurance references both ‘certificates of insurance,’
and ‘insurance policies’ in the same breath, it is clear that, construing the language as a
1
M-J-T-J Contractors & Builders, Inc., is not a party to this appeal.
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No. 1-19-1876
whole, both insurance policies and certificates of insurance evidencing those policies are
required. The parties’ intent to require inclusion as an additional insured under the
insurance policy is clear.”
The court also granted Hamilton’s motion for judgment on the pleadings and denied Westfield’s
cross-motion for summary judgment. Westfield now appeals.
¶ 18 III. ANALYSIS
¶ 19 Summary judgment is appropriate if the pleadings, depositions, and admissions on file,
along with any affidavits, show that no genuine issue of material fact exists and the moving party
is entitled to judgment as a matter of law. West Bend Mutual Insurance Co. v. Athens Construction
Co., 2015 IL App (1st) 140006, ¶ 18. When cross-motions for summary judgment are filed, the
parties invite the court to decide the issue as a question of law. Fremont Casualty Insurance Co.
v. Ace-Chicago Great Dane Corp., 317 Ill. App. 3d 67, 73 (2000).
¶ 20 Westfield’s commercial general liability (CGL) policy provided additional coverage to
persons or organizations that Connelly agreed in a written contract would be named as additional
insureds. Westfield contends, however, that the subcontract only required Connelly to name
Keeley and Hamilton as additional insureds on the COI, and there was no agreement to add them
on a CGL policy. Westfield argues that because the subcontract did not require Connelly to name
Keeley and Hamilton as additional insureds on the policy, it had no duty to defend or indemnify
Keeley and Hamilton in the underlying Koziol litigation.
¶ 21 Westfield’s contention requires us to interpret the subcontract agreement. Our primary
objective in construing a contract is to give effect to the parties’ intent. Thompson v. Gordon, 241
Ill. 2d 428, 441 (2011). The language of the contract, given its plain and ordinary meaning, is the
best indicator of that intent. Gallagher v. Lenart, 226 Ill. 2d 208, 233 (2007). Where the terms of
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the contract are unambiguous, they will be applied as written. Salce v. Saracco, 409 Ill. App. 3d
977, 981 (2011). In construing a contract, we do not view a clause or provision in isolation.
Gallagher, 226 Ill. 2d at 233. Rather, we construe the contract as a whole, viewing each provision
in light of the other provisions. Id. The trial court’s interpretation of a contract is reviewed de novo.
Id. at 219.
¶ 22 The parties do not dispute that Exhibit C was part of the subcontract or that Exhibit C
required Connelly to name Keeley and Hamilton as additional insureds on the COI. As Westfield
noted, a COI is not an independent agreement. Lezak & Levy Wholesale Meats, Inc. v. Illinois
Employers Insurance Co. of Wausau, 121 Ill. App. 3d 954, 955 (1984). Therefore, Keeley and
Hamilton cannot rely on the COI, without more, as evidence of a written contract in which
Connelly agreed to name them as additional insureds. See also Athens Construction Co., 2015 IL
App (1st) 140006, ¶ 28 (finding that the COI is not evidence of the parties’ intent to name an
additional insured if the plain language of the subcontract does not contain such a requirement).
Instead, we look at the language of the subcontract agreement and its documents as a whole to
make that determination.
¶ 23 Section 6.1 of the subcontract, titled “Insurance and Bonds,” states that
“[p]rior to starting Work, Subcontractor, at its expense, shall obtain and maintain in force,
on all operations, insurance in accordance with the Certificate of Insurance Requirements
attached hereto as Exhibit C. The policies of insurance shall be in such form and shall be
issued by such company satisfactory to Contractor.” (Emphases added.)
Thus, section 6.1 requires Connelly to “obtain and maintain in force” insurance policies that
conform to the requirements of Exhibit C.
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¶ 24 The plain language of Exhibit C also indicates that its requirements apply to insurance
policies. The third paragraph of Exhibit C directs the subcontractor to “review the insurance
requirements in this Exhibit C *** and insure that Subcontractor’s insurance and Certificate of
Insurance comply with the insurance requirements contained in” Exhibit C. (Emphasis added.)
Although Exhibit C is titled “Certificate of Insurance Requirements,” it is clear that these
requirements apply not only to the COI, but also to insurance policies Connelly must “obtain and
maintain in force” under the subcontract.
¶ 25 Exhibit C requires Connelly to name Keely and “The Owner” as additional insureds. The
subcontract lists Hamilton as the “Owner.” Exhibit C also requires general liability insurance “on
a Primary/Non-contributory basis for the additional insured with respect to work performed by
Subcontractor and sub-subcontractors.” As we have found, these requirements apply to the COI
and to any insurance policy Connelly must “obtain and maintain in force” pursuant to Exhibit C.
Accordingly, since the subcontract requires Connelly to obtain general liability insurance and to
name Keeley and Hamilton as additional insureds, they are additional insureds covered by
Westfield’s policy.
¶ 26 Westfield disagrees, citing United Stationers Supply Co. v. Zurich American Insurance
Co., 386 Ill. App. 3d 88 (2008), and Athens Construction Co., as support. In United Stationers, the
CGL policy at issue contained similar language that an insured is “ ‘any person or organization for
whom you are performing operations when you and such person or organization have agreed in
writing in a contract or agreement that such person or organization be added as an additional
insured on your policy.’ ” Id. at 93. The certificate of insurance stated that United Stationers
Supply Co. (United Stationers) was an additional insured, but it contained a disclaimer that it “ ‘is
issued as a matter of information only and confers no rights upon the certificate holder. This
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certificate does not amend, extend or alter the coverage afforded by the policies below.’ ” Id. at
94.
¶ 27 The court found that this language on the certificate served as a warning to United
Stationers “that it could not simply rely upon the certificate for the terms and conditions of
coverage, including whether it was an additional insured under the CGL policy.” Id. at 105. Since
there was no specific language in the written agreement that United Stationers be named as an
additional insured under the CGL policy, the court determined that United Stationers was not an
additional insured under the CGL policy. Id. at 105-06.
¶ 28 In Athens Construction Co., the agreement required the subcontractor to name Athens
Construction Co., Inc. (Athens), as an additional insured on the certificate of insurance. The
provision did not specify any type of insurance. The certificate also contained a disclaimer that it
conferred no rights on Athens, nor did it alter coverage. Athens Construction Co., 2015 IL App
(1st) 140006, ¶¶ 26-28. Although the subcontractor was obligated to obtain CGL insurance,
“[n]owhere in the subcontract was [it] required to name Athens as an additional insured” on that
policy. Id. ¶ 29. As a result, we found “that the certificate of insurance does not serve as evidence
of the parties’ intent to name Athens as an additional insured, given that the actual, plain language
of the subcontract does not contain such a requirement.” Id. ¶ 28. We affirmed the trial court’s
finding that Athens was not an additional insured under the CGL policy.
¶ 29 Unlike United Stationers and Athens Construction Co., the subcontract here explicitly
required Connelly to obtain insurance in accordance with the requirements set forth in Exhibit C.
Exhibit C required Connelly to name Keeley and Hamilton as additional insureds and to obtain
CGL insurance on a primary and non-contributory basis that covered the additional insureds.
Westfield’s CGL policy provided additional coverage to “persons or organizations when [Connelly
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has] agreed in writing in a contract or agreement that such persons or organizations be added as an
additional insured.” Since Connelly agreed in the subcontract to name Keeley and Hamilton as
additional insureds, they are covered by the plain terms of Westfield’s CGL policy. Therefore, the
trial court’s grant of summary judgment in favor of Keeley and Hamilton, and its denial of
Westfield’s cross-motion for summary judgment, was proper.
¶ 30 On appeal, Westfield raises an additional argument that to the extent Keeley and Hamilton
use the COI to alter, amend, or extend the coverage of an insurance policy, such provisions are
void under section 155.45 of the Illinois Insurance Code (215 ILCS 5/155.45 (West 2016)).
Westfield did not raise this issue before the trial court. “Arguments not raised before the circuit
court are forfeited and cannot be raised for the first time on appeal.” U.S. Bank National Ass’n v.
Prabhakaran, 2013 IL App (1st) 111224, ¶ 24. Nonetheless, since we find that the subcontract
agreement itself required Connelly to name Keeley and Hamilton as additional insureds on the
CGL policy, and there is no need to rely on the COI alone as evidence of the requirement, this
argument does not apply.
¶ 31 IV. CONCLUSION
¶ 32 For the foregoing reasons, the judgment of the circuit court is affirmed.
¶ 33 Affirmed.
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No. 1-19-1876
No. 1-19-1876
Cite as: Westfield Insurance Co. v. Keeley Construction, Inc., 2020 IL
App (1st) 191876
Decision Under Review: Appeal from the Circuit Court of Cook County, No. 17-CH-
011105; the Hon. Anna Helen Democopoulos, Judge, presiding.
Attorneys David S. Osborne and Lauren E. Rafferty, of Lindsay, Pickett,
for & Postel, LLC, of Chicago, for appellant.
Appellant:
Attorneys Donald E. Elder and Anthony N. Balice, of Emerson & Elder,
for P.C., of Chicago, for appellee Keeley Construction, Inc.
Appellee:
John D. Hackett and Christopher C. Cassidy, of Cassiday Schade
LLP, of Chicago, for appellee Hamilton Partners, Inc.
No brief filed for other appellee.
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