CHICAGO — Noting there is a possibility a contractor they insured could yet be ordered to pay for injuries suffered on a job site by another company's employee, a state appeals panel has refused to let an insurance company walk away from the workplace injury case.
Late last year in an unpublished order, a three-justice panel of the Illinois First District Appellate Court in Chicago upheld a Cook County judge's ruling requiring Pekin Insurance Co. to defend construction firm Ledcor in a workplace injury case.
Justice Jesse Reyes delivered the judgment of the court, and Rochford and Lampkin concurred in the order issued under Supreme Court Rule 23, which limits its use as precedent.
Pekin had issued a commercial general liability plan to Procaccio Painting and Drywall Co. Inc. as a named insured, and Ledcor Construction Inc. as an additional insured.
A worker, identified as William Gregory, was injured at a Chicago worksite and filed a complaint against Ledcor, Procaccio and other defendants.
When Ledcor handed over the defense of Gregory’s lawsuit to Pekin, the company refused to take up the defense, and later filed for a declaratory judgment in Cook County Circuit Court, maintaining under its policy, it should not be required to defend Ledcor in this case.
Ledcor, however, maintained its agreement with Procaccio included indemnification provisions in which Procaccio assumed responsibility for damage or injuries caused by its work, thus limiting Ledcor’s liability.
Ultimately, the Cook County Circuit Court determined in August 2016 that Pekin had a duty to defend Ledcor, prompting an appeal from Pekin.
The appeals court, however, backed the lower court's findings.
“An insurer’s duty to defend is broader than its duty to indemnify,” Justice Reyes wrote. “In a declaratory judgment action where the issue is whether the insurer has a duty to defend, a court ordinarily looks first to the allegations in the underlying complaint and compares those allegations to the relevant provisions of the insurance policy.”
Moreover, the court noted that the alleged conduct has more weight than the labeling of the claim in a complaint.
Ultimately, Reyes noted that Gregory’s complaint featured common language, such as Ledcor “participated in coordinating the work being done.” This would indicate he would know the level of the relationship between Ledcor and Procaccio, according to the decision.
“We acknowledge that, pursuant to the allegations in the underlying complaint, Ledcor might be found to be independently liable to Gregory, but those allegations do not preclude the possibility that Ledcor could be found liable solely by virtue of the acts or omissions of Procaccio,” Reyes wrote. “Where the facts alleged support multiple theories of recovery, there is a duty to defend if any one of those theories potentially falls within the policy coverage.”
Moreover, the court also noted that the independent contractor relationship between Procaccio and Ledcor didn’t clear Pekin of its responsibilities to insure. The contract also could reasonably point to Procaccio as an agent of Ledcor. As a result, Ledcor could be held liable for Procaccio’s negligence.
As a result, the judges “conclude that the possibility of Ledcor’s vicarious liability for Procaccio’s negligence brings this action within the broad duty to defend.”
Pekin is represented in the case by the firm of Pretzel & Stouffer, of Chicago.
Ledcor is represented by the firm of Cassiday Schade, of Chicago.