Construction Injury Not Excluded in Insurance Policy Dispute; Atlantic Casualty Insurance Co. v. Paszko Masonry, Inc.

Atlantic Casualty Insurance Co. insured Paszko Masonry as it worked on the construction of an apartment building in Downers Grove, Ill., along with three other companies, Prince Contractors Inc., Chicago Masonry Construction and 4929 Forest LLC..

Robert Rybaltowski was an employee of the waterproofing company, Raincoat Solutions, which had submitted a bid to the general contractor, Prince Contractors, to perform caulking work on the building. 

On the condition that Raincoat bring its employee to the jobsite to show that Raincoat’s employee was competent, the general contractor would approve the submitted bid for the caulking work. 

Rybaltowski was the Raincoat employee brought by his supervisor to the jobsite to show him the caulking technique. Rybaltowski was not to be paid for the demonstration. After the demonstration, a beam supporting masonry equipment fell on Rybaltowski, causing him serious injuries. It was about half an hour after the accident that the general contractor Prince and Raincoat signed the caulking agreement. 

Rybaltowski sued Paszko, which was insured by Atlantic Casualty. Paszko claimed that its insurance policy applied and Atlantic should handle the lawsuit and claim. But the insurer, Atlantic, claimed that Rybaltowski’s accident was not covered because of an exclusion for a specific type of contractor. The U.S. District Court for the Northern District of Illinois granted summary judgment in favor of Atlantic. The construction companies appealed that decision.

The U.S. Court of Appeals found that the exclusion provision in the insurance policy was poorly drafted. It did not clearly set out what the definition of “contractor” was for the purposes of that exclusion.

The panel of three justices stated that it was unclear whether Raincoat was a contractor for the purposes of the policy merely because that is what companies in construction are referred to or whether it became a contractor once it signed a subcontractor agreement; the question was about when it provided its services or whether the demonstration it provided even qualified as a service.

The court stated that ambiguous terms in an insurance agreement are determined in favor of the insured. The issue was whether the demonstration that Rybaltowski was involved in was a service. It was uncertain given the review of the insurance contract and because of that, it was not broad enough to exclude Rybaltowski’s injuries from that day.

The court of appeals reversed the district court’s grant of summary judgment and sent the case back for further proceedings. 

Atlantic Casualty Insurance Co. v. Paszko Masonry, Inc. and Rybaltowski, et al., Nos. 12-2405, 12-2485 (7th U.S. Circuit Court of Appeals).

Kreisman Law Offices has been handling construction site injury cases 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 Elgin, Downers Grove, Des Plaines, Glen Ellyn, Hinsdale, LaGrange Park, Lockport, Mokena, Naperville, Chicago (Wicker Park), Chicago (Uptown), Chicago (Roscoe Village) and Chicago (Pullman), Ill.

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