Case Notes & Comments

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MONTHLY QUIZ: General Contractor (GC) is the named insured on its own commercial general liability (CGL) policy and as an additional insured on a Subcontractor’s (Sub) CGL policy, which was obtained from Insurer. When third-party Employee is injured onsite, GC’s insurance company disagrees with Insurer as to which company is the primary insurer and which is the excess insurer. Subcontractor’s CGL policy states that Insurer is an excess insurer unless the contract requires it to be primary. The subcontract agreement between GC and Sub is silent as to whether the required additional coverage on Sub’s policy is primary or excess. However, the certificate of insurance provided by Sub indicates that “[GC] is named as an additional insured as respects General Liability, as required by written contract.” In light of the above, which policy is primary? You be the judge. (Answer below).

CONDOMINIUM LAW / NEGLIGENCE: While in acommon areaof the condominium property, Plaintiffs and their dog were attacked byUnit Owner’s unleashed Dog. Plaintiffs sued, among others, the Condominium Association under a negligence theory, but not pursuant to the Illinois Animal Control Act. Plaintiffs alleged that the Association knew, based on an alleged prior attack and nuisance complaints, that the Dog’s “presence in the building… [was a] violation of the [Association’s] rules and regulations” and that Dog was “violent or had a propensity for violence.” Plaintiffs alleged that Association acted negligently “by failing to take steps to remove the [D]og and by failing to warn others of [Dog’s] dangerous nature.” Association argued that it owed Plaintiffs no such duty and the Trial Court agreed, dismissing the claim against Association for failure to state a claim. In affirming the dismissal, the Appellate Court reviewed the allegations, found that Dog Owner’s alleged rule violations and the general nuisance complaints revealed nothing about Dog’s alleged potential propensity for violence. Since Plaintiffs’ complaint failed to alleged any of the circumstances regarding the alleged prior attack, or the incident in question (e.g. provocation, injuries, leashed, etc.), Complaint did not sufficiently plead that Association had a duty to use reasonable care in preventing attack by Dog. Tyrka v. Glenview Ridge Condominium Association, 2014 IL App (1st) 132762 (June 20, 2014)

CONDOMINIUM ASSOCIATION LAW: Unit Owner filed an action against Condominium Association, its Board of Directors and the Board President for, among other things, violations of Association’s declaration and bylaws and the Illinois Condominium Property Act. In affirming the Trial Court’s grant of partial summary judgment in favor of Unit Owner on several issues, the Appellate Court held that, except for three exceptions (i.e. 1) discussion of litigation; 2) appointment, employment or dismissal of an employee; or, 3) rules and regulations violations, including unpaid assessments) all “board business”, which includes board discussions of any association business and workshop activities, must occur at open meetings open to all owners. Palm v. 2800 Lake Shore Drive Condominium Association, 2014 IL App (1st) 111290 (May 2, 2014)

SELF-INSURED LIABILITY BY IL VEHICLE CODE: Plaintiff was operating his vehicle when Driver, who was operating a rental car owned by self-insured Rental Agency, collided with Plaintiff’s vehicle. Plaintiff filed suit and a $600,000 default judgment was entered against Driver. During the citations proceedings, Rental Agency, filed an answer asserting that it bore a total financial responsibility of $100,000 per occurrence under the Illinois Vehicle Code (Code) (625 ILCS 5/1-100 et seq. (West 2006)) and that Rental Agency was only required to pay Plaintiff $25,000 of that total because $75,000 had already been expended in payments to the other occupants of Plaintiff’s vehicle. However, in interpreting the Code, the Appellate Court concluded that self-insured rental car companies’ minimum responsibility to pay judgments is not limited to the same minimum amounts that are required of an insurance policy, to $100,000 per occurrence or any other amount. Decision reversed.  Rental Agency is liable for $600,000.  Nelson v. Artley, 2014 IL App (1st) 121681 (Jun. 17, 2014) NOTE: Case refuses to follow Fourth District decision in Fellhauer v. Alhorn, 361 Ill. App.3d 792 (4th Dist. 2005), which reaches opposite conclusion. 

ANSWER TO QUIZ: Insurer wins, Sub’s policy is excess. Because there was no contract dictating that the additional insurance was primary, the additional coverage defaulted to being excess only. Further, the certificate of liability insurance that identified GC as an additional insured gave no indication as to whether that coverage was primary or excess. Decision affirmed. Certain Underwriters at Lloyd's, London v. Central Mut. Ins. Co., 2014 IL App (1st) 133145 (May 23, 2014)

Case Notes & Comments is intended for general information purposes and is not intended to serve as legal advice. For legal questions, or if you would like additional information as to how applicable law may relate to specific facts or circumstances, please contact the Leahy, Eisenberg & Fraenkel, Ltd. attorney with whom you regularly work, or Roland Keske at rsk@lefltd.com or at (312) 368-4554.