United Fire & Casualty v. Keeley & Sons

Appellate Court of Illinois

United Fire & Casualty v. Keeley & Sons

DecidedMay 2, 2008

Docket5-06-0307 Rel

StatusPublished

This text of United Fire & Casualty v. Keeley & Sons (United Fire & Casualty v. Keeley & Sons) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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United Fire & Casualty v. Keeley & Sons, (Ill. Ct. App. 2008).

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Opinion

NO. 5-06-0307 N O T IC E

D e ci si o n fil e d 05/02/08. The text of IN THE this d e cisi on m ay be changed or

co rre cte d prio r to th e filin g of a APPELLATE COURT OF ILLINOIS P e t it io n for Re he aring or th e

d i sp o sitio n o f th e same. FIFTH DISTRICT _________________________________________________________________________ UNITED FIRE & CASUALTY COMPANY, ) Appeal from the a Corporation, ) Circuit Court of ) St. Clair County. Plaintiff-Appellant, ) ) v. ) No. 05-MR-181 ) KEELEY & SONS, INC., TERRY MARTIN, ) ARDITH WYNN, RICKEY VANOVER, ) EGYPTIAN CONCRETE COMPANY, and ) ALLEN HENDERSON & ASSOCIATES, ) INC., ) Honorable ) Patrick M. Young, Defendants-Appellees. ) Judge, presiding. _________________________________________________________________________

JUSTICE SPOMER delivered the opinion of the court:

United Fire & Casualty Company (United) appeals the circuit court's order granting

a summary judgment in favor of Keeley & Sons, Inc. (Keeley), and denying United's motion

for a summary judgment on its complaint for a declaratory judgment. For the following

reasons, we reverse and remand with directions to enter a summary judgment in favor of

United.

On June 20, 2005, United filed a two-count complaint for a declaratory judgment in

the circuit court of St. Clair County. The complaint alleged that United issued a commercial

general liability policy (the policy) to Keeley, which included a commercial umbrella liability

policy, with coverage effective from December 31, 2000, to December 31, 2001.

Previously, on May 29, 2001, Terry Martin, Ardith Wynn, and Rickey Vanover (the

employees), all of whom were employed by Keeley, fell from an I-beam and were injured.

The employees filed suit (the underlying lawsuit) against Egyptian Concrete Company and

1 others (the underlying defendants). Counts alleging spoliation of evidence were added

against Keeley on behalf of the employees, due to Keeley's alleged destruction or disposal

of the I-beam. United in turn sent a letter to Keeley, denying coverage for the spoliation

counts.

The underlying defendants filed counterclaims against Keeley, seeking contribution

and damages for spoliation of evidence. Upon receipt of notice of the counterclaims, United

sent a letter to Keeley, reaffirming its denial of coverage for all spoliation claims and further

denying coverage for the counterclaims for contribution.

In count I of the complaint for a declaratory judgment, United sought, inter alia, a

declaration that the policy afforded no coverage to Keeley for the defense of or

indemnification for the claims alleging spoliation of evidence. Count II of the complaint

sought, inter alia, a declaration that the policy afforded no coverage to Keeley for the

underlying defendants' counterclaims for spoliation and contribution and that United was

under no duty to defend or indemnify Keeley for those counterclaims or any other

counterclaims for contribution to be filed concerning injuries to the employees.

On January 17, 2006, United filed a motion for a summary judgment on counts I and

II of its complaint for a declaratory judgment. On February 21, 2006, Keeley filed a response

and cross-motion for a summary judgment. On May 22, 2006, the circuit court granted

Keeley's cross-motion for a summary judgment and denied United's motion for a summary

judgment. United filed a timely notice of appeal on June 20, 2006.

United brings the following sole issue on appeal, which we have restated as follows:

whether the policy issued by United to Keeley provides coverage for claims of spoliation of

evidence. Rulings on motions for a summary judgment are reviewed de novo. Dardeen v.

Kuehling, 213 Ill. 2d 329, 335 (2004).

"An insurance policy is a contract, and the general rules governing the interpretation

2 of other types of contracts also govern the interpretation of insurance policies." Hobbs v.

Hartford Insurance Co. of the Midwest, 214 Ill. 2d 11, 17 (2005). "The court's primary

objective in construing an insurance policy is to ascertain and give effect to the intentions of

the parties as expressed in the policy language." Illinois Farmers Insurance Co. v. Hall, 363

Ill. App. 3d 989, 993 (2006) (citing Gillen v. State Farm Mutual Automobile Insurance Co.,

215 Ill. 2d 381, 393 (2005)). "If the policy language is unambiguous, the policy will be

applied as written, unless it contravenes public policy." Hobbs, 214 Ill. 2d at 17. "Whether

an ambiguity exists turns on whether the policy language is subject to more than one

reasonable interpretation." Hobbs, 214 Ill. 2d at 17. "If the policy language is susceptible

to more than one reasonable meaning, it will be considered ambiguous and will be construed

against the insurer." Illinois Farmers Insurance Co., 363 Ill. App. 3d at 993 (citing Gillen,

215 Ill. 2d at 393). "Although 'creative possibilities' may be suggested, only reasonable

interpretations will be considered." Hobbs, 214 Ill. 2d at 17 (quoting Bruder v. Country

Mutual Insurance Co., 156 Ill. 2d 179, 193 (1993)). "Thus, we will not strain to find an

ambiguity where none exists." Hobbs, 214 Ill. 2d at 17. "Although policy terms that limit

an insurer's liability will be liberally construed in favor of coverage, this rule of construction

only comes into play when the policy is ambiguous." Hobbs, 214 Ill. 2d at 17.

As a threshold matter, we note that United addressed the issue of coverage for the

spoliation claims, as well as the counterclaims for contribution, in both its complaint for a

declaratory judgment and its motion for a summary judgment. Keeley, on the other hand,

referenced coverage for the spoliation claims in its cross-motion for a summary judgment,

but it did not address the coverage issue with regard to the counterclaims for contribution.

Likewise, in its order the circuit court addressed the issue of coverage only for the spoliation

claims and omitted any reference to the counterclaims for contribution. Nevertheless, the

circuit court granted Keeley's cross-motion for a summary judgment and denied United's

3 motion for a summary judgment. Although on appeal neither party briefed the issue of

coverage for the counterclaims for contribution or brought it up at oral argument, it was

nonetheless a substantive part of United's motion for a summary judgment, which was denied

in its entirety by the circuit court.

The issue of coverage for the counterclaims seeking contribution could be deemed

waived (forfeited) on appeal because it was not briefed. See A.J. Maggio Co. v. Willis, 316

Ill. App. 3d 1043, 1048 (2000). However, "the waiver doctrine is an admonition to the

parties and not a limitation upon the power of a reviewing court to address issues of law as

the case may require." Mayfield v. ACME Barrel Co., 258 Ill. App. 3d 32, 37 (1994) (citing

Schutzenhofer v. Granite City Steel Co., 93 Ill. 2d 208, 211 (1982)). However, the lack of

briefing in the circuit court and on appeal seems to suggest that the parties treated the

coverage for the contribution counterclaims as a "nonissue." This may be because coverage

for the contribution counterclaims is clearly excluded by the following language in the

commercial general liability policy:

"2. Exclusions

This insurance does not apply to:

***

e. Employer's Liability

'Bodily injury' to:

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