Opinion
Case No. 99 C 3101
January 29, 2003
ORDER
Plaintiff Great West Casualty Co. ("Great West") moves this court to reconsider and vacate its orders of January 25, 2001 and June 15, 2001. For the reasons set forth below, Great West's motion is denied.
Background
A more detailed account of the relevant facts and the basis for the court's prior decisions are set forth in the orders that Great West now challenges: Great West Casualty Co. v. Marathon Oil Co., No. 99 C 3101, 2001 WL 103426 (N.D.Ill. Jan. 31, 2001) ("January 25th order" or "01/25/01 order") and Great West Casualty Co. v. Marathon Oil Co., No. 99 C 3101, 2001 WL 699957 (N.D.Ill. June 21, 2001) ("June 15th order" or "06/15/01 order"). As those orders explain, defendant Marathon Oil, Co. ("Marathon") and Great West's insured Heidenreich Trucking Inc. ("Heidenreich") have an agreement which requires Heidenreich "to defend and indemnify Marathon for any claims `arising out of or in any way connected with the presence of [Heidenreich's] drivers at Marathon's terminals,' except for claims `arising solely out of [Marathon's] negligence.'" 01/25/01 order at *1. To meet that contractual obligation, Heidenreich named Marathon as an "additional insured" on its liability policies issued by Great West. Id. After the estate of Heidenreich employee Paul J. Howe filed a civil action against Marathon, Howe v. Marathon Oil Co., No. 98 C 3707 (N.D.Ill.) ("Howe case"), Great West initiated this diversity action seeking a declaratory judgment against Marathon ordering that Great West has no duty to defend or indemnify Marathon in that litigation. Marathon filed a counterclaim seeking a declaration that Great West does owe it a duty to defend (and to indemnify) and also raised several affirmative defenses; Great West moved to dismiss the counterclaim and to strike the affirmative defenses.
Westlaw evidently uses the date an order is docketed by the clerk of the court rather than the date the order is entered by the court.
Resolution of this declaratory judgment action depends on the interpretation of one sentence in the additional-insured endorsement: "LIABILITY COVERAGE WHO IS AN INSURED is changed to include as an insured [Marathon] only if they are liable for the conduct of an insured shown in the WHO IS AN INSURED provisions [e.g., Heidenreich] and only to the extent of that liability." 01/25/01 order at *1 (quoting Compl., Ex. B). Great West contends that the additional-insured endorsement provides coverage to Marathon only in situations in which Marathon is held vicariously liable for Heidenreich's conduct. Marathon, on the other hand, contends that the proper construction of the additional-insured endorsement provides coverage for any liability that factually results from Heidenreich's conduct. Id. at *3.
In the January 25th order, the court found the relevant insurance policy language was ambiguous, resolved that ambiguity in favor of the insured, Marathon, and therefore denied Great West's motion to dismiss the counterclaim. Id. at * 5. In reaching that decision, the court considered both the underlying tort complaint and Marathon's third-party complaint from the Howe case to determine what evidence there was to suggest that a duty to defend existed. Id. at *3. Great West subsequently filed a motion asking the court to reconsider its determination that the policy was ambiguous (and thus to construe the policy language as Great West contends it should be construed). In its June 15th order, the court denied Great West's motion to reconsider the January 25th order for two reasons: because the motion relied primarily on four cases that Great West could have cited originally (and thus the motion to reconsider was improper) and because those "new" cases did not mandate a different result. 06/15/01 order at *3.
The court granted the motion to strike in part: it struck one of Marathon's five affirmative defenses. 01/25/01 order at *6.
Discussion
Now before the court is Great West's second motion to reconsider, challenging both the January 25th and the June 15th orders. This time, Great West contends that when ruling on Great West's motion to dismiss the counterclaim, the court should have considered only the underlying complaint in the Howe case, not Marathon's third-party complaint. The court already considered and rejected this argument in its January 25th order when Great West initially raised it. See 01/25/01 order at *2. Great West, however, asks the court to reconsider and vacate that ruling based on an order subsequently issued by the Second District of the Illinois Appellate Court, National Union Fire Insurance Co. v. R. Olson Construction Contractors, Inc., 769 N.E.2d 977 (Ill.App.Ct. 2002).
According to Great West, if the court examines only the underlying tort complaint in the Howe case, it will be evident that the Howe complaint contains only allegations of negligence against Marathon, not Heidenreich, and thus the court must find that Great West has no duty to defend Marathon. Great West's reliance on National Union is to no avail. The appellate court in National Union did rule that the trial court should not have considered the third-party complaint in the underlying tort litigation, and expressly declined to follow American Country Insurance Co. v. Cline, 722 N.E.2d 755 (Ill.App.Ct. 1999) and West Bend Mutual Insurance Co. v. Sundance Homes, Inc., 606 N.E.2d 326 (Ill.App.Ct. 1992), the cases on which this court relied in its January 25th order. But National Union did not, and cannot, overrule Cline or Sundance Homes — the Second District decided National Union while the First District decided Cline and Sundance Homes. At best, National Union shows there is a split between the Illinois appellate courts on this issue-which hardly constitutes a new development in the caselaw, and which is insufficient to warrant filing a motion for reconsideration.
Further, the appellate court in National Union was merely applying the "general rule" that to determine whether a duty to defend exists, courts look at "the complaint in the underlying action to determine whether the allegations show that the claim falls within or potentially within the coverage of the policy." National Union, 769 N.E.2d at 981. Significantly, however, the National Union court expressly recognized that the general rule may not apply in every case. Id. at 985. More importantly, none of the cases on which National Union relied were cases in which courts evaluated whether to consider the allegations in the third-party complaint as well as those in the underlying tort complaint-the issue was not presented. See, e.g., Zurich Ins. Co. v. Raymark Indus., Inc., 514 N.E.2d 150, 162 (Ill. 1987); Royal Ins. Co. of America v. Insignia Financ. Group, Inc., 751 N.E.2d 164, 173 (Ill.App.Ct. 2001); Konami (America), Inc. v. Hartford Ins. Co., 761 N.E.2d 1277, 1281 (Ill.App.Ct. 2002).
Courts look at the underlying complaint because they must construe the duty to defend broadly: the allegations against the insured in the underlying litigation, not the ultimate findings in that litigation, determine whether a duty to defend exists. Shriver Ins. Agency v. Utica Mut. Ins. Co., 750 N.E.2d 1253, 1256 (Ill.App.Ct. 2001). Courts therefore liberally construe the allegations as well as the language of the insurance policy itself. Id. Given such liberal construction rules, Great West's contention that the court should take a narrow approach here, overlooking the third-party complaint and focusing solely on the underlying tort complaint, strikes the court as unreasonable. "[A] court need not wear blinders and be limited to the allegations in the complaint." Travelers Ins. Cos. v. P.C. Quote, Inc., 570 N.E.2d 614, 617 (Ill.App.Ct. 1991).
Moreover, even though the court properly considered Marathon's third-party complaint in the Howe case in deciding that Great West had a duty to defend, it could have reached the same conclusion merely by examining the underlying tort complaint in the Howe case. The complaint filed by Howe's estate alleges that Howe "parked his Kenwood truck, exited the vehicle and walked over to utilize the card reader which was located adjacent to the passenger side of his truck . . . [A]fter [Howe] had exited his truck to utilize the card reader, his driverless Kenwood truck began to roll forward toward the steel gate." (Howe Compl. at ¶¶ 6-7.) A truck would not typically roll forward if the truck was in park or the parking brake was set. Accordingly, the court could reasonably infer the possibility of contributory negligence on Howe's part based on those allegations. Great West's argument that the Howe complaint contains only allegations of negligence against Marathon, not Heidenreich, is incorrect: negligence of Heidenreich's employee Howe may be attributed to Heidenreich. The possibility of contributory negligence is therefore sufficient for the court to find that the "allegations show that the claim falls within or potentially within the coverage of the policy." National Union, 769 N.E.2d at 981 (emphasis added); see Mgmnt. Supp. Assoc. v. Union Indemn. Ins. Co., 473 N.E.2d 405, 411 (Ill.App.Ct. 1984) ("The threshold that the complaint must satisfy to present a claim of potential coverage is low.")
Great West raised one other argument in the last pages of its reply brief. Relying on a recent, non-binding, unpublished decision from the Circuit Court of Cook County, Great West Casualty Co. v. Hapag-Lloyd (America), Inc., Case No. 98 CH 2002 (Sept. 12, 2002), Great West asked the court to reconsider and vacate its decision that the language of the additional-endorsement policy is ambiguous. The Circuit Court of Cook County in the Hapag-Lloyd case considered the same language that is at issue in this case, and, unlike this court, found the language to be plain and unambiguous. Aside from disagreeing with this court's prior rulings, that decision is unremarkable: its analysis fails to persuade the court that its January 25th and June 15th orders were erroneous.
As the court explained in its June 15th order, "[m]otions to reconsider `serve a limited function: to correct manifest errors of law or fact or to present newly discovered evidence.'" 06/15/01 order at *2 (quoting Rothwell Cotton Co. v. Rosenthal Co., 827 F.2d 246, 251 (7th Cir. 1987)). And although Great West evidently believes the court has made a "manifest error of law," its arguments are unpersuasive. Great West's motion to reconsider and vacate the court's orders of January 25th and June 15th is therefore denied.