More Form Insurance Policy Language to Check On
We take a lot of joy in writing about these coverage cases when we see them because they are turning out to be a patchwork of distinctions and guidelines that can allow you the ability to interpret some language in your own policies.
Today’s case is Mota Construction Co. v. Westfield Insurance Co. (1st Dist. Doc. No. 1-07-3208). The case involves a suit brought by a worker of a Mota subcontractor for injury on the job. The worker sued Mota, the GC on the project, and another subcontractor, GM Sloan, for injuries the worker alleges happened during his painting and drywall work on a project when he tripped over some material at the site.
The complaint alleged that Mota was negligent as a GC for not maintaining a safe worksite, that Mota was also negligent because it retained control over the site had a duty to properly supervise the work and not let injuries happen, and that GM Sloan was negligent because it failed to maintain a safe work site during its work on the project.
Westfield was the carrier for GM Sloan. The policy that GM Sloan had which Mota was named an additional insured on had a provision in the additional insured endorsement that stated:
“This endorsement provides no coverage to the additional insured [Mota] for liability arising out of the claimed negligence of the additional insured [Mota], other than that which may be imputed to the additional insured by virtue of the conduct of the named insured [GM Sloan].”
16 months after learning of the claim, Westfield denied coverage and argued that the claims made against Mota by the injured worker were not for claims that could be imputed to GM Sloan, but alleged Mota’s own negligence. The trial court agreed and Mota was forced to look to the policy of the injured worker’s employer for coverage. Mota appealed.
The appellate disagreed and held that because the complaint contained a count that alleged that Mota maintained control over the manner and means of the work of the subcontractors (including GM Sloan) and contained allegations of negligence against GM Sloan, there was a possibility that GM Sloan’s negligence would be imputed to Mota and thus, there was a duty to defend on the part of Westfield.
The court went on to state that imputed liability was implied by the allegations that a GC maintains control over the sub’s work because it means that a GC could be held vicariously liable for harm to third-parties caused by a sub’s negligence – which is vicarious liability imputed to the GC. The court distinguished this from the direct liability alleged in a case where the GC failed to properly inspect, manage, and supervise a jobsite… but when these direct negligence allegations are combined with allegations against as sub in a different count, the possibility of imputed liability exists.
The court also distinguished the policy clause in this case from one which included the word “solely” in a different case where the policy granted coverage to the additional insured for liability arising “solely” out of the claimed negligence of the additional insured.
Additionally, for those keeping track, the court also found that in any event, the 16 month delay in brining the claim against Mota meant that Westfield had waived its ability to assert its policy defenses. So time was against Westfield as well. The appellate court reversed the ruling by the trial court and sent the case back to the trial court to determine the appropriate relief for Mota now that a different insurance company had been defending it.
Pay attention to the policy language of your subs, look out for the magic word “solely” in an additional insured endorsement, and definitely consult with someone to make sure the policy you’re getting from your sub is what you’re contracting for.
I have a real basic question.
In this case the plaintiff named both Mota and Sloan as defendants and then Mota tendered the defense to Sloan (a sub contractor) based upon the additional insured language in the Sloan policy.
What would have happened if only Mota was named and Sloan was not even mentioned in the complaint? Could Mota still argue, based upon extrinsic evidence, that Sloan was potentially at fault and that Mota's liablity was potentially a result of vicariously liability?
What if in the present case, there was extrinsic evidence that other subs were potentially at fault, could Mota have tendered to all or any of them?
Keith,
This is an interesting question, and is partially resolved in the opinion.
It appears from the opinion that naming Sloan was an integral part in the determination that coverage was owed to Mota under the Sloan policy. Unless there was some form of liability extended to Mota through the acts of Sloan, it doesn't appear that the Sloan policy would have been read in a manner that afforded Mota coverage.
The opinion also addresses the availability of coverage from other subs on the basis of either being named by the plaintiff or becoming third-parties based on a possible third-party action brought by Mota.
If Sloan had not been named, it is unlikely that coverage would have been extended to Mota under the Sloan policy.
The court in this case notes that the consideration of third-party cases is before the Illinois Supreme Court:
American Economy Insurance Co. v. Holabird & Root, 229 Ill. 2d 617, 897 N.E.2d 249 (2008). The decision in that case should give us better insight as to whether Mota could tender to other subs if there was evidence of their negligence and a third-party action.