Articles Posted in Indemnification Claims

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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.

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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.

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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.

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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.

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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.

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Gamesa Technology Corp. entered into a contract with Minnesota-based Outland Renewable Energy to provide maintenance for Gamesa’s wind turbines. Iberdrola Renewables Inc. runs the Gamesa-made turbines at the Cayuga Wind Farm located in Livingston County, Ill.

While servicing a Cayuga turbine, one of Outland’s employees, Aaron McCoy, was electrocuted when the turbine unexpectedly re-energized. McCoy filed a personal injury lawsuit in state court against Iberdrola Renewables and Gamesa. The case was removed from state court to federal court on diversity of citizenship grounds. Iberdrola Renewables impleaded Outland Renewable Energy LLC, claiming indemnification based on the contract and the Illinois Joint Tortfeasor Contribution Act.

Outland then filed 22 counterclaims, which included indemnification raising federal and state anti-trust claims and other state law claims. Outland was not successful in seeking a preliminary injunction against Gamesa’s allegedly unfair competitive practices.

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The Illinois Appellate Court has affirmed a decision dismissing Six Flags from a Cook County lawsuit. The case arose following the death of Thomas Lee of Pleasant Prairie, Wis. Lee was a heavy equipment mechanic for a Wadsworth, Wis., contractor hired by Six Flags to dismantle the structure of its Splashwater Falls ride.

In March 2008, Lee and his co-workers disconnected and removed a motor on the ride’s platform, leaving an opening 43 feet above the ground.

As Lee was connecting cables from a crane to equipment, he fell through the opening and died. His wife, Donna Lee, filed a lawsuit against Six Flags in Cook County in July 2010 alleging that the theme park owner knew of the dangerous conditions and failed to exercise reasonable care to protect workers who were working on dismantling the ride.

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The plaintiff, Michigan Indiana Condominium Association, is a 119-unit residential condominium complex (the “Complex”).  Optima was the general contractor and selected a variety of subcontractors to do the construction work.  Construction was completed in June 2002.  One of the contractors was Jenni and Loucon.  Loucon was the masonry contractor.  On Sept. 2, 2003, Loucon was dissolved as an Illinois corporation.  Jenni was likewise dissolved on Jan. 1, 2006.

In the spring of 2010, the plaintiffs discovered latent defects in the Complex.  On Aug. 29, 2011, the plaintiffs filed a complaint for damages against Optima and other defendants.  Plaintiffs sought damages under breach of implied warranty of habitability and breach of implied warranty of good workmanship.  Optima added as third-party defendants Jenni and Loucon as well as others.  Optima alleged breach of contract and breach of implied warranties against Jenni and Loucon.  Optima sought indemnification and contribution.  Because both corporations had been dissolved, Optima served its notice upon the Secretary of State pursuant to Section 5.25 of the Illinois Business Corporation Act of 1983 (805 ILCS 5/1.01 et seq.)

Jenni and Loucon moved jointly to dismiss Optima’s third-party complaint pursuant to Section 2-615(a)(5) and (a)(9) of the Illinois Code of Civil Procedure.  Jenni and Loucon argued that since the third-party action against them was initiated more than 5 years after their dissolution (it was 6 years and 3 months after Jenni’s dissolution and 8 years and 8 months after Loucon’s dissolution), the Illinois Secretary of State was not authorized to act as the dissolved corporation’s agent under the Act.  Accordingly, they argued that service of summons on each was improper, and the court lacked personal jurisdiction.  On Nov. 29, 2012, the Circuit Court judge granted Jenni’s and Loucon’s joint motion to dismiss and dismissed them with prejudice. This appeal was taken by Optima.

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The 7th Circuit Court of Appeals in Chicago has reversed a district court judge’s decision in a case involving an indemnification clause in a contract.

Robert Krien was an employee of Riley Construction.  Riley was the general contractor on a construction project located in Wisconsin.  Riley in turn, hired Harsco Corporation to supply the scaffolding for the construction work.  Krien was injured when he fell from the scaffolding after a plank broke beneath him.  The parties settled Krien’s injury claim for $900,000.

Before the settlement, Harsco had filed a third-party complaint against Riley seeking indemnification for any damages Harsco might pay by way of judgment or settlement.  Then the parties filed cross-motions for summary judgment, and the district court judge granted Riley’s motion.  Harsco took this appeal to the U.S. Court of Appeals in Chicago.

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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.”

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