Articles Posted in Indemnification Claims

The Illinois Appellate Court of the 1st District resolved a discovery dispute in an insurance coverage lawsuit between plaintiff-insured Motorola Solutions Inc. and the defendant-insurers Zurich Insurance Co. and Associated Indemnity Corp. The court held that absent an applicable cooperation clause, attorney-client privilege applies to any appropriate documents.

This was an insurance coverage dispute between Motorola and the two insurance companies that had to do with several personal injury lawsuits brought by former employees and contractors who claimed they had been exposed to chemicals in “clean rooms” located in Motorola’s manufacturing facilities. It was argued that the court should require defendants to defend and absorb defense costs for these personal injury actions.

Continue reading

This case was brought as a declaratory judgment action filed by the plaintiff, Pekin Insurance Co., seeking a declaration that it owed the defendant Lexington Station LLC no duty to defend it in a personal injury lawsuit filed by Marcos Botello against Lexington.

Pekin had issued a commercial general liability (CGL) policy to ACC Inc. The defendant, Marcos Botello, was injured during the effective policy period while working as an employee of ACC on a development project owned by Lexington. Botello filed a personal injury lawsuit against Lexington. Lexington in turn tendered the defense of the case to Pekin, which refused to tender and then filed this declaratory judgment action. Pekin argued that it had no duty to defend Lexington as an additional insured under the policy issued to ACC.

Westfield Insurance Co., as Lexington’s own CGL insurer, intervened in the declaratory action and argued, along with Lexington, that Pekin did owe a duty to defendant. The circuit court denied Pekin’s motion for summary judgment and granted Lexington and Westfield’s cross-motion for judgment on the pleadings, finding that Pekin had a duty to defend Lexington. Pekin appealed.  It argued that the court’s entry of judgment in favor of Lexington and Westfield was in error because (1) Botello’s complaint did not contain allegations that created a potential for a claim of vicarious liability against Lexington; and (2) the circuit court improperly considered a third-party complaint in coming to its conclusion.

Continue reading

Heron Salgado, a construction worker, was employed by Abel Building & Restoration in January 2011 when he was assigned to work at a job site at 51st Street. He was working on a scaffold design that was built, erected and maintained by Designed Equipment Acquisition Corp. While he was working at that site, he was injured twice. Once on Jan. 17, 2011, Salgado was injured when a heavy bucket fell and struck him. Two days later he was injured again when he fell into an “opening” in the scaffolding.

Salgado filed a lawsuit against Designed Equipment in December 2012. Designed tendered its defense for this case first to its own insurance company and then to Pekin Insurance Co. who were Abel’s insurers, maintaining that Abel was an “additional insured” under Abel’s policy with Pekin.

Pekin rejected the tender of defense and filed a complaint seeking declaratory judgment. Pekin first claimed that Designed was not an additional insured under the contractor’s endorsement and also that the lease between Abel and Designed was an “insured contract” and therefore void under the Construction Contract Indemnification for Negligence Act.

Continue reading

In a memorandum opinion written by a Cook County Circuit Court Chancery judge, it was ruled that an exhibit to the complaint did not control contrary allegations because the documents served as “mere evidence” rather than the foundation for a claim.

The judge’s opinion reflected that Illinois National Insurance Co. and American Home Assurance Co. filed the lawsuit as “subrogees of their insured Panduit Corp.” They claimed Arch Insurance Co. breached “its duty to indemnify Panduit” for an action in which Ronald Bayer allegedly “fell from a steel beam and was severely injured while working as an iron-worker for Area Erectors Inc.” at Panduit’s DeKalb, Ill., warehouse.

Bayer filed a lawsuit for his injury against Panduit and Garbe Iron Works. Panduit later filed a third-party complaint against Area Erectors for contribution.

Continue reading

On Oct. 16, 2007, union sprinkler fitter Frank Barnai was working at a Wal-Mart Store construction site in Joliet, Ill. He tripped over an electrical conduit protruding 6-12 inches from a concrete floor. Barnai was carrying a sprinkler pipe over his shoulder at the time of his fall. Barnai, 54, sustained a re-injury to his back. He had previously undergone lumbar fusion surgery at L4-5. As a result of this incident, Barnai underwent multiple revisions of the prior fusion and eventually required a multi-level spinal fusion from T-9 to S-1. Barnai is unable to return to work and is mostly confined to a wheelchair.

Barnai sued Wal-Mart, the owner, the general contractor, International Contractors Inc. and the company that installed the conduit, Nuline Technologies, for choosing not to inspect the work area for tripping hazards, failing to properly identify the tripping hazard, choosing not to mark the protruding conduit as a hazard and failing to ensure workers were not exposed to hazardous conditions.

The defendants contended that Barnai was contributorily negligent for not watching where he was walking and argued that he was aware of the dangerous conditions because he had walked past the area hundreds of times before he fell.

Continue reading

Scot Vandenberg and his wife maintained that their allegations in an unfiled tort complaint triggered insurance coverage for an accident that injured Scot, paralyzing him during a party he attended on a 75-foot yacht.

Scot was severely injured when he fell off a bench at the edge of a top deck of the yacht to a lower deck. The original complaint he filed against the companies that owned and maintained the yacht (along with several corporate officers) alleged that the defendants were negligent because there was no railing on the upper level of the yacht.

Two of the defendants sued in this case were insured by Maryland Casualty under a policy that excluded coverage for bodily injury claims involving the ownership, maintenance or use of a watercraft.

Continue reading

The Illinois Appellate Court has reversed a summary judgment order that was entered by a Cook County judge in favor of Safeway Insurance Co. In this case, Jeffrey and Stephanie Hadary were injured in a car crash when Carlos Velez was driving a car he rented from Hertz Corp. The Hadarys claimed that they had suffered injuries that amounted to damages in excess of $40,000, which was the insurance limits of Velez’s insurance carrier, American Access Casualty Co., which had limits of $20,000 per person and $40,000 per accident. The Hadarys reportedly declined to buy the “liability insurance supplement” when they rented the car from Hertz.

Under Illinois’ financial responsibility law, Hertz was bound to provide a bond, an insurance policy or certificate of self-insurance that promised to pay judgments against its customers and anyone driving a Hertz vehicle with a customer’s consent. Section 9-105 of the Illinois Vehicle Code required Hertz to provide this liability coverage with limits of (a) $50,000 for injury to one person or damage to property and (b) $100,000 for injuries to two or more persons.

After American Access paid its $40,000 policy limits to Hadarys, who paid $57 as a premium for underinsured motorist coverage from Safeway Insurance Co. with limits of $100,000 per person and $300,000 per occurrence, they alleged that Velez was an underinsured motorist.

Continue reading

In a case that involved thousands of toxic tort liability cases, the Illinois Appellate Court has ruled that an industrial manufacturer must turn over documents it alleged were privileged to a company indemnifying it.

In March 1999, automotive systems manufacturer BorgWarner Inc. acquired Kuhlman Corp. and its subsidiaries, including Kuhlman Electric Corp (KEC).

Since the 1950s, KEC has operated a facility in Mississippi that produces electrical transformers. As part of the Kuhlman Corp. sale, KEC represented that there was no soil contamination on its Mississippi property.

Continue reading

The U.S. Court of Appeals for the 7th Circuit in Chicago has reversed the decision of a U.S. District Court judge wherein an agreement between the parties, Hennessy Industries Inc. and National Union Fire Insurance Co. of Pittsburgh, required arbitration of any dispute that mandated an interpretation of the agreement. In this case, Hennessy Industries manufactured car parts. Since the 1980s, Hennessy has been the named defendant in many lawsuits for asbestos-related personal-injury cases. Hennessy has been looking to National Union Fire Insurance Co. of Pittsburgh for insurance coverage for these claims. The two companies entered into a cost-sharing agreement in 2008.

When the lawsuits for asbestos-related injuries started coming in, Hennessy requested that National Union indemnify it for settlement and defense costs as provided for in their agreement. The two parties, however, could not come to an agreement as to what was owed. Hennessy demanded arbitration in line with the agreement, which provided for arbitration of disputes between the parties.

Hennessy filed suit in 2013 under 215 ILCS 5/155(1), maintaining that National Union’s delays in granting coverage of the asbestos claims had been vexatious and unreasonable.

Continue reading

Robert Lodholtz was seriously injured in 2011 while working at a plant owned by Pulliam Enterprises in Indiana. Lodholtz filed a personal-injury lawsuit against Pulliam in the Indiana state court. Pulliam called on Granite State Insurance Co., its primary liability insurer, along with New Hampshire Insurance Co., to defend and indemnify it against the lawsuit.

Granite State refused to indemnify Pulliam stating that Lodholtz as an employee should pursue his claim for worker’s compensation. Lodholtz disagreed arguing that he was employed by another company while he worked at Pulliam’s plant and therefore had no basis for a worker’s compensation claim.

Pulliam chose not to file an answer to the complaint, so Lodholtz moved for default judgment, which was granted. Lodholtz then agreed with Pulliam not to pursue the default judgment and in return Pulliam assigned to Lodholtz its rights against Granite State. Granite State then moved to intervene in Lodholtz’s lawsuit. The Indiana state court denied the motion to intervene.

Continue reading