Cook County Record

Monday, December 16, 2019

Appeals panel OK’s Empress Casino, insurers try to put cleaning company on the hook for ‘09 fire

By Dan Churney | Nov 21, 2016

Law money 09

A Chicago appeals panel ruled the former Empress Casino Joliet and its insurers can try to recoup $84 million in deductibles and claims from a kitchen grease removal service, but not from construction contractors, in connection with the 2009 blaze that gutted the casino during renovation work. 

The Nov. 16 ruling was authored by Justice James Fitzgerald Smith, of the First District Appellate Court of Illinois, with concurrence from Justices Cynthia Cobbs and Terrence Lavin. 

A fire wrecked the Empress Casino Joliet during remodeling in March 2009. The blaze was set off by a welder’s torch igniting grease in kitchen ductwork. Empress paid $2.6 million in deductibles, receiving $81 million in coverage payments from Axis Insurance, National Fire and Marine Insurance and Lloyd’s Syndicate. The lion’s share came from National Fire – $64 million. 

Empress and the insurers filed suit in Cook County Circuit Court against companies involved in the renovation project, which they blamed for the fire and the extent of damage. The companies were general contractor W.E. O’Neil Construction and subcontractors Global Fire Protection, Jameson Sheet Metal, the Linden Group and R.L. Millies & Associates. Empress alleged the companies did not implement proper safety measures, such as having fire extinguishers at hand and sprinklers in ductwork. Plaintiffs wanted defendants to make good their losses. 

Empress and the insurers also sued Averus Inc., which had been working directly for Empress to periodically clean and remove grease and other residue from ductwork. The suit alleged Averus fell down on the job, leaving ductwork coated with grease. 

The suit alleged the companies were negligent and committed willful and wanton misconduct. The suit also alleged breach of contract, except against Averus. Empress sought reimbursement for its deductibles and the insurers sought reimbursement for their payments to Empress. 

The contractor companies moved for summary judgment, contending the construction contract with Empress waived any future subrogation claims, leaving the insurance policies as the sole sources of recovery for Empress. Cook County Circuit Judge John Callahan Jr. agreed, dismissing the suit, causing Empress and the insurers to appeal. 

Appellate Justice Smith noted subrogation waivers are included in construction contracts to “facilitate timely completion” of projects and avoid litigation, by requiring insurance to cover any loss, regardless of fault.

Smith concluded the waiver did not apply to Averus, because the waiver pertained to Empress, the general contractor, W.E. O’Neil Construction, and O’Neil’s subcontractors. Averus was not subcontracted to O’Neil or any subcontractor, but rather was contracted to Empress. As a consequence, Smith reversed the lower court order regarding Averus, reinstating the case against the cleaning company. 

However, Smith affirmed the dismissal of the suit against the other defendants, pointing out the waiver was clear and encompassing. In Smith’s view, the “waiver will trump any indemnification obligations.” 

Smith further said given the “plain language” of the contract, it “makes no sense” to let Empress avoid responsibility for the deductibles. 

The Empress Casino Joliet reopened three months after the fire, renamed Hollywood Casino Joliet. The complex is owned by Penn National Gaming, of Wyomissing, Penn.

According to Cook County court records, Empress was represented by the firm of Cozen O'Connor, of Chicago.

W.E. O'Neil was defended by the firm of Franco & Moroney, of Chicago. And Averus was represented by the firm of Querrey Harrow, of Chicago. 

Want to get notified whenever we write about any of these organizations ?

Sign-up Next time we write about any of these organizations, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

Cozen O'Connor - ChicagoQuerrey and Harrow, Ltd.Illinois First District Appellate Court