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MONTHLY QUIZ: Elf is an employee of Santa Claus and Hanukah Harry in their jointly owned toy factory. One snowy holiday evening, Elf is making a delivery of newly made toys from the North Pole toy factory to a storage warehouse owned and operated by Grinch. Grinch had hired Abominable Snowman to shovel the warehouse’s parking lot, and Snowman pushed the snow into enormous piles up against the north side of the warehouse. Witnesses testify that it then melted during the day, flowed onto the parking lot, and refroze at night as an “ice flow” covering the entire lot. Santa and Harry had asked Grinch to remove the ice, but Grinch failed to do so. While negotiating the lot to make his delivery, Elf slips and falls. Elf brings a claim against Grinch and Snowman in the court of Father Time. Grinch and Snowman move for summary judgment on the basis that Elf lacks sufficient evidence to prove whether the ice was an unnatural accumulation. Who wins? You be the judge. (Answer below.)
ADDITIONAL INSUREDS - INSURER HAS DUTY TO DEFEND & INDEMNIFY GENERAL CONTRACTOR: General Contractor (GC) hired Insured-Subcontractor in conjunction with roofing Project. In turn, Subcontractor retained Company to perform a portion of the work and Company rented a boom-lift. Subcontractor procured a general liability policy (Policy) naming GC as additional insured (AI), which included an endorsement that did not apply to claims “arising out of the sole negligence of [GC].” GC’s Employee was killed when Company’s boom-lift flipped over. Employee’s Estate filed a suit naming GC, Company and two additional defendants. Subcontractor was neither named nor mentioned in the complaint. GC filed a declaratory judgment action seeking defense and indemnity from Subcontractor’s Insurer. Trial court found that since complaint did not mention Subcontractor, Insurer had no duty to defend or indemnify GC. On appeal, GC argued that “but for” Subcontractor’s retention of Company, Employee would not have been killed. In reversing trial court and finding coverage, appellate court held that “sole negligence” exception applied only where underlying allegations deal solely and exclusively with an additional insured’s negligence. The court reasoned that the claims were not exclusively or solely directed at GC. Appellate court also found that Insurer was estopped from disputing coverage as it had failed to either defend GC under a reservation of rights, or bring a declaratory action in a timely fashion. GC was entitled to defense and indemnity. A-1 Roofing Co., v. Navigators Ins. Co., No. 1-10-0878, 2011 WL -- (1st Dist. Nov. 21, 2011)
ADDITIONAL INSUREDS - INSURER HAS NO DUTY TO DEFEND GENERAL CONTRACTOR BASED UPON CERTIFICATE: Subcontractor procured a general liability policy (Policy) from Insurer that did not name General Contractor (GC) as an additional insured. Shortly thereafter, Subcontractor’s insurance agent issued a certificate of insurance that also did not reference GC. Per its terms, the certificate was issued merely as a matter of information and neither conferred any rights nor amended, extended or altered any coverages provided by the Policy. GC’s Employee was subsequently injured on the Project and sued his employer, GC, and Subcontractor. GC tendered suit to Insurer. Insurer denied tender and filed a declaratory action. In Illinois, where the certificate refers to a policy and expressly disclaims any coverage other than that contained in the policy itself, the policy governs the extent and terms of coverage. In concluding that Insurer had no duty to defend GC, court found that since GC was not listed on the certificate and was given the disclaimer language, GC was on notice that there was a question as to its status as an additional insured. Owners Ins. Co. v. Seamless Gutter Corp., et al., 2011 IL App (1st) 082924 (1st Dist. Nov. 14, 2011)
UNINSURED MOTORISTS / WORKERS’ COMPENSATION: Driver-Employee was injured in motor-vehicle accident allegedly caused by an uninsured driver while driving a truck owned by his Employer. Employee sought uninsured motorist coverage under Employer’s vehicle Policy, which contained a limitation provision stating that “no one will be entitled to receive duplicative payments for the same elements of ‘loss.’” Held: Plaintiff could seek certain elements of his claim under Policy, such as disfigurement, increased risk of harm and pain and suffering but not others, such as loss of a normal life, the discounted amounts of medical bills and expenses and loss of earnings. In so doing, the Court also held that “the term ‘loss of a normal life’ has almost universally been interpreted as a component of disability which compensates for a change in the plaintiff’s lifestyle.” Burcham v. West Bend Mut. Ins. Co., 2011 IL App (2d) 101035 (2nd Dist. Nov. 21, 2011)
ELECTRONIC DATA - INSURED’S COMPLAINT DISMISSED BECAUSE COMPANY DID NOT SPECIFY HOW ITS COMPUTER SYSTEM GOT VIRUS: Company procured commercial Policy that provided coverage for “direct physical loss …or damage to Covered Property… caused by… a Covered Cause of Loss,” but excluded loss or damage to data and software, except as provided in additional coverages. While it claimed that “a virus was introduced” into its computer system that disrupted business and deleted, damaged or disrupted numerous computer files and libraries, Company did not indicate who or what introduced the virus. In the alternative, Company claimed that “dishonest acts” committed by employees caused the loss. Insurer denied Company’s claim for coverage and Company sued. The court considered several endorsements, such as a Media Endorsement that extended coverage to damage caused by a virus, but excluded losses by dishonest employees. In dismissing Complaint , Court reasoned that the only allegation regarding who or what introduced the virus related to the dishonest acts of its employees, which was excluded. Apps Commc'n, Inc. v. Hartford Cas. Ins. Co., 11 C 3994, 2011 WL 4905628 (N.D. Ill. Oct. 14, 2011)
ANSWER TO QUIZ: Elf has presented enough evidence of Grinch and Snowman’s negligence to present to a jury. Grinch, as landowner, has a duty to provide safe ingress and egress into his warehouse. Snowman has a duty to exercise reasonable care in removing snow. Here, Elf presented sufficient evidence that Snowman created an unnatural accumulation and that Grinch had both actual and constructive notice of the conditions. Hornacek v. 5th Av. Property Mgmnt, 2011 IL App (1st) 103502 (1st Dist. Sept. 30, 2011)
