December 2009 Case Notes & Comments

“They say that time changes things, but you actually have to change them yourself." ~ Andy Warhol

MONTHLY QUIZ: COVERAGE FOR CONSTRUCTION DEFECTS: One snowy holiday eve, Santa Claus and Hanukah Harry discover water damage to their shared toy warehouse. They make claim against Grinch Contracting for construction defects that caused the damage. Having no defense, Grinch settles with Santa and Harry. Grinch now sues his insurer for its previous refusal to defend and indemnify him against the claim. Query: Who wins the declaratory judgment action, and why? You be the judge. (Answer below).

INSURANCE LAW NOTES COMES TO YOU FROM LEAHY, EISENBERG & FRAENKEL, LTD: Your editor, Steve Frew, has recently moved to Leahy, Eisenberg & Fraenkel, Ltd. along with Bryan Luce.

ILLINOIS SUPREME COURT: DEFENDANTS FORFEIT SETOFF CLAIMS THEY FAIL TO PLEAD: A defendant doctor was held liable, and then claimed a setoff of the settlement amounts previously paid by other defendants. The Illinois Supreme Court held that the doctor forfeited his claim for a setoff by not pleading it to give the parties against whom the setoff is claimed “notice and an opportunity to defend against the [setoff] claim.” Thornton v. Garcini, 2009 WL 3471065 (Ill.S.Ct. Oct. 29, 2009).

LEF WINS APPEAL – INSURER NOT REQUIRED TO PROVIDE COVERAGE TO ADDITIONAL INSUREDS: LEF’s client prevailed as appellee in the First Appellate District. A subcontractor contractually agreed to provide insurance for the general contractor, but its policy specifically stated that coverage was provided only if the contract required primary and noncontributing coverage, which this contract did not. The general contractor selectively tendered to the sub’s insurer, seeking defense and indemnification. The trial and appellate courts ruled that the insurer was not required to provide any coverage to the general contractor. River Village I, v. Central Insurance Companies, ---N.E.2d---, 2009 WL 4041944 (First District, November 20, 2009).

SECOND DISTRICT EXPANDS LEGAL DUTY BEYOND EXPRESS TERMS OF CONTRACT: Two engineering companies were sued for negligent redesign of a bridge and traffic interchange when a car vaulted over the median. Though engineers’ contracts only required design to rebuild the bridge deck and median as it existed, the contracts also required the engineers to use “the degree of skill and diligence normally employed by professional engineers.” Relying on this language, the 2nd District held that the engineers had a legal duty to examine median barrier to determine if it was dangerous and notify the relevant parties of any defects. Thompson v. Gordon, ---N.E.2d---, 2009 WL 3969619 (Ill.App.2 Dist., November 19, 2009).

ANSWER TO QUIZ: Grinch loses, of course. The property damage was to Grinch’s own work, not to property of others. To provide coverage for Grinch’s own faulty work would transform a CGL policy into something akin to a performance bond. CMK Development Corporation v. West Bend Mutual Insurance, __Ill.App.3d__, (First District, No. 1-08-1155, October 30, 2009).

Past Publications

2024

March 2024
January 2024

2023

December 2023
October 2023
September 2023
August 2023
May 2023
March 2023
February 2023

2022

December 2022
October 2022
August 2022
July 2022
April 2022
March 2022
January 2022

2021

December 2021
October 2021
August 2021
July 2021
May 2021
April 2021
March 2021
January 2021

2020

December 2020
November 2020
October 2020
September 2020
August 2020
February 2020
January 2020

2019

December 2019
October 2019
September 2019
July 2019
May 2019
March 2019
February 2019
January 2019

2018

December 2018
October 2018
August 2018
June 2018
May 2018
April 2018
March 2018
February 2018

2017

December 2017
November 2017
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
March 2017
February 2017

2016

December 2016
October 2016
September 2016
August 2016
July 2016
June 2016
March 2016
January 2016

2015

December 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015

2014

December 2014
October 2014
September 2014
July 2014
June 2014
April 2014
April 2014
March 2014
February 2014
January 2014

2013

December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
January 2013

2012

December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012

2011

December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011

2010

December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010

2009

December 2009