Allied World National Assurance Company v. City Of Chicago
Filing
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Enter MEMORANDUM, OPINION AND ORDER: For the reasons stated herein, the Court grants the Citys motion for partial summary judgment (Dkt. Nos. 20, 21, & 22) and denies Allied Worlds motion for summary judgment (Dkt. Nos. 23, 24, & 25). The Court dismisses Allied Worlds duty to indemnification claim without prejudice. Civil case terminated. Signed by the Honorable Virginia M. Kendall on 11/16/2015.Mailed notice(tsa, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
ALLIED WORLD NATIONAL ASSURANCE
COMPANY,
Plaintiff,
v.
CITY OF CHICAGO,
Defendant.
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No. 14 C 8343
Judge Virginia M. Kendall
MEMORANDUM OPINION AND ORDER
On November 8, 2010, Carlo Kintanar died after being involved in a motorcycle accident
in the 2600 block of South Damen Avenue in Chicago, Illinois. Jane Kintanar, Carlo’s wife, sued
the City of Chicago in the Circuit Court of Cook County, alleging that Carlo’s accident resulted
from a deteriorated roadway, improper placement of traffic signage, and a failure to warn of
rough terrain. See Kintanar v. City of Chicago, No. 10 L 13029. The City seeks a defense in the
Kintanar lawsuit furnished by Plaintiff Allied World National Assurance Company, an insurer,
pointing to an insurance policy between Allied World and Highway Safety Corporation, the
entity responsible for delivery and setup of traffic control devices. The City contends that it
qualifies as an additional insured within the provisions of that policy. Allied World has so far
denied the City’s request for a defense. After the filing of the Kintanar lawsuit, Allied World
instituted this action against the City, seeking a declaratory judgment pursuant to 28 U.S.C.
§ 2201(a) that it owes neither a duty to defend nor indemnify the City in the underlying suit.
(Dkt. No. 10.)
Allied World now moves for summary judgment on both counts of its complaint and
seeks a determination that it owes no duty to defend the City as a matter of law and that, without
a duty to defend, there can be no duty to indemnify. The City cross-moved for partial summary
judgment, contending that Allied World must defend the City in the Kintanar lawsuit and that
any determination on the duty to indemnify is premature. For the reasons that follow, the Court
grants the City’s motion for partial summary judgment (Dkt. Nos. 20, 21, & 22) and denies
Allied World’s motion for summary judgment (Dkt. Nos. 23, 24, & 25). The Court concludes
that Allied World must defend the City in the Kintanar lawsuit pursuant to the insurance policy
in play. The Court additionally dismisses Count II of Allied World’s declaratory judgment action
without prejudice. 1
BACKGROUND
As a threshold matter, the Court notes that both parties failed to comply with Northern
District of Illinois Local Rule 56.1, intermittently, when responding to the other’s factual
statements. Local Rule 56.1(b)(3)(B) requires parties to file responses to “each numbered
paragraph in the [opposing] party’s statement, including, in the case of any disagreement,
specific references to the affidavits, parts of the record, and other supporting materials relied
upon.” Cracco v. Vitran Exp., Inc., 559 F.3d 625, 632 (7th Cir. 2009) (quoting
L.R. 56.1(b)(3)(B)). The Court may disregard statements and responses that do not properly cite
to the record, see Cichon v. Exelon Generation Co., LLC, 401 F.3d 803, 809-10 (7th Cir. 2005),
1
The Court denies Allied World’s motion with respect to indemnification because its argument rests solely on a
finding that there is no duty to defend. Moreover, because the Kintanar lawsuit is ongoing and no liability on behalf
of the City has been established yet, the Court expresses no opinion on whether Allied World must indemnify the
City in the result of a finding of liability and dismisses Count II of Allied World’s complaint without prejudice. See
Lear Corp. v. Johnson Elec. Holdings Ltd., 353 F.3d 580, 583 (7th Cir. 2003) (“decisions about indemnity should be
postponed until the underlying liability has been established”); Nationwide Ins. v. Zavalis, 52 F.3d 689, 693 (7th
Cir. 1995) (“district court was correct to dismiss without prejudice the declaratory judgment action insofar as it
sought a determination of the company’s duty to indemnify Zavalis”); Grinnell Mut. Reinsurance Co. v. Reinke, 43
F.3d 1152, 1154 (7th Cir. 1995) (“[T]he duty to indemnify is unripe until the insured has been held liable.”).
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and disputes are not adequately created “by evasive denials that do not fairly meet the substance
of the material facts asserted.” Bordelon v. Chicago Sch. Reform Bd. of Trs., 233 F.3d 524, 528
(7th Cir. 2000). Both parties are guilty of evasive, overarching denials of some of the other’s
statements of fact without proper evidentiary support. The Court therefore deems admitted those
facts which are disputed but unsupported. See Zuppardi v. Wal-Mart Stores, Inc., 770 F.3d 644,
648-49 (7th Cir. 2014) (“it is within the district court’s discretion to strictly enforce local rules
regarding summary judgment”).
Additionally, Allied World objects to a number of the City’s statements of fact regarding
the setup of the traffic control devices pertinent to the underlying action, arguing that they are
inadmissible because they are supported by the testimony of individuals who were not present at
the work site the day of the setup. The Court summarily rejects this group of objections.
Although testimony and affidavits must be based on personal knowledge to be admissible, see
Ledbetter v. Good Samaritan Ministries, 777 F.3d 955, 957 (7th Cir. 2015), Federal Rule of
Evidence 406 provides that “[e]vidence of . . . an organization’s routine practice may be admitted
to prove that on a particular occasion the . . . organization acted in accordance with the . . .
routine practice.” An individual may therefore have personal knowledge of a situation without
offering eyewitness testimony. Accordingly, the evidence on which the City bases a number of
its most integral statements of fact is admissible and Allied World’s general objection is more
properly classified as one of weight and credibility than admissibility.
The following facts are undisputed unless expressly noted.
A.
The Contract Between the City and Highway Safety
On February 1, 2004, the City and Highway Safety entered into a contract for the “Rental
and Placement of Traffic Control Devices” (“the Contract”), requiring Highway Safety to
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provide signs, barricades, and traffic arrow boards at the City’s request. (Def. 56.1 St. ¶ 8;
Traffic Control Contract.) The City and Highway Safety continually extended the term of the
Contract until July 31, 2010, at which point the parties continued a working relationship in the
absence of the Contract. (Def. 56.1 St. ¶¶ 9-11.) The Contract required Highway Safety to
“furnish, deliver, place and pick up, . . . various Traffic Control Devices on a rental basis, all in
accordance with the terms and conditions” of the contract. (Pl. 56.1 St. ¶ 29.) The Contract
additionally required Highway Safety to maintain a liability insurance policy naming the City as
an additional insured for “liability arising directly or indirectly from the work” of Highway
Safety. (Pl. 56.1 St. ¶ 30; Def. 56.1 St. ¶ 13.) Highway Safety was obligated to provide a training
program to its employees on safety and worksite hazards associated with the traffic control
devices. (Def. 56.1 St. ¶ 12.)
The Contract required Highway Safety to “furnish, deliver, place and pick-up” traffic
control devices on a rental basis. (Def. 56.1 St. ¶ 15.) Regarding equipment placement and
reconfiguration, the Contract mandated that Highway Safety be available at any time to place or
reset any traffic control device on a City street. (Traffic Control Contract at 52-53.) The Contract
additionally required Highway Safety to personally superintend any work done at any site. (Def.
Stmt. of Add’l Facts ¶ 3.)
B.
Arrangement of Traffic Control Devices and Signs
On November 1, 2010, the City began a water management project near 2608 South
Damen Avenue in Chicago, Illinois. (Pl. 56.1 St. ¶ 11.) The portion of Damen Avenue near the
City’s worksite is a two-way street with two lanes each going North and South. (Pl. 56.1 St. ¶ 6.)
To protect the City’s workers on Damen Avenue, Terrence Sanchez, a City employee in the
Department of Water Management, ordered Highway Safety to provide traffic control devices
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for placement near the worksite. (Pl. 56.1 St. ¶ 31; Def. 56.1 St ¶¶ 25-26, 32.) Sanchez had no
training or experience on traffic safety. (Def. 56.1 St. ¶ 31.) The City requested two directional
arrow boards, 25 lighted barricades, and four signs, two of which were left to Highway Safety’s
discretion. (Pl. 56.1 St. ¶ 32; Def. 56.1 Resp. ¶¶ 32, 35.) These items were commonly used for
lane closures. (Def. 56.1 St. ¶ 36.) Collectively, these traffic control devices were placed north of
2608 South Damen in an effort to redirect traffic around the City’s project. (Pl. 56.1 St. ¶¶ 1213.) There were no traffic control devices at the precise point of the ensuing accident. (Pl. 56.1
St. ¶ 14.)
Sanchez testified that he made requests for traffic control devices for particular locations
on City streets and that part of the request pertained to the size of the area needed for
construction. (Def. 56.1 St. ¶¶ 28-29.) Allied World suggests that the City retained ultimate
control over the selection and placement of the traffic control devices, but Sanchez testified that
the extent of the City’s instruction to Highway Safety involved telling Highway Safety where the
City’s team was working and how much room it needed. (Pl. 56.1 St. ¶¶ 33-34; Def. 56.1 St.
¶ 34; Def. Stmt. of Add’l Facts ¶ 2; Sanchez Dep. at 16.) Of course, if a City employee did not
approve of Highway Safety’s placement of the devices, he or she could tell Highway Safety to
reconfigure the setup. (Pl. 56.1 St. ¶¶ 35-37; Dkt. No. 21 Ex. C-1, Traffic Control Contract at
53.) The order forms permitted Highway Safety to deliver and place traffic control devices
without consulting a City employee. (Def. 56.1 St. ¶ 33; Dkt. No. 21, Ex. 10.)
Michael Calderone, an Assistant District Superintendent for the City, testified that he
never ordered either a specific amount or type of traffic control device for any project. (Def. 56.1
St. ¶¶ 37, 41.) Calderone stated that the City’s water management unit does not set up traffic
control devices, does not instruct Highway Safety how or where to set them up, and does not
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interact with Highway Safety while it places the devices. (Def. 56.1 St. ¶¶ 42-44; Calderone Dep.
at 90-91.) Similarly, Claude Driver, a water repair employee for the City, testified that
contractors generally erect the sawhorses and that the City did not erect the arrow boards near the
site of the accident. (Def. 56.1 St. ¶¶ 48-49, 51.)
C.
The Underlying Wrongful Death Lawsuit
Carlo Kintanar was driving his motorcycle southbound on Damen Avenue on
November 8, 2010. (Pl. 56.1 St. ¶ 7.) Neither the City nor Highway Safety had yet removed the
traffic control devices near the City’s water management construction. While driving south,
Carlo allegedly came into contact with a rough, deteriorated portion of road. (Pl. 56.1 St. ¶ 8.)
Carlo fell off his motorcycle and was struck by another vehicle traveling south. (Pl. 56.1 St. ¶ 9.)
Carlo died later that day from the injuries he sustained from the accident. (Pl. 56.1 St. ¶¶ 5, 10.)
On November 16, 2010, Jane Kintanar, Carlo’s wife, filed a lawsuit against the City
stemming from the accident. 2 (Pl. 56.1 St. ¶ 15; Def. 56.1 St. ¶ 19.) The Kintanar lawsuit’s main
allegations include assertions that (1) the City had a duty to inspect and maintain the roadway;
(2) the City “allowed and permitted unreasonably dangerous depressions, potholes and other
hazardous road defects to exist in the roadway”; (3) the City failed to “barricade, block off,
cordon off, or otherwise segregate” the hazardous conditions from traffic; (4) “the signage and
construction barricades selected and placed by the City of Chicago failed to warn motorists” of
the road’s defects; and (5) Highway Safety provided the City with traffic control devices for use
near 2608 South Damen Avenue. (Pl. 56.1 St. ¶¶ 16-20l Def. 56.1 St. ¶¶ 20-23.) Most pertinent
to the current discussion, the Kintanar lawsuit alleges that the City, by and through its agents,
failed to barricade certain rough terrain and erected barricades and other forms of partial lane
closures that caused traffic to be channeled into a defective portion of the Damen roadway.
2
Jane amended her complaint three times, most recently on November 14, 2014. (Def. 56.1 St. ¶ 19.)
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(Def. 56.1 St. ¶ 24.) Jane did not name Highway Safety as a defendant in the Kintanar lawsuit.
(Pl. 56.1 St. ¶ 21.)
Jane retained Joseph A. Filippino as a controlled expert witness in her lawsuit against the
City. (Def. 56.1 St. ¶ 54.) Filippino, a professional engineer experienced in roadway
maintenance, believes that traffic at the site of the accident was expressly directed over a
hazardous roadway surface. (Def. 56.1 St. ¶¶ 55-56.) Filippino stated that the placement of
signage and barricades near the accident site violated City regulations by channeling two lanes of
traffic into one directly over a deteriorated portion of roadway. (Def. 56.1 St. ¶ 57.)
D.
The Insurance Policy
Allied World issued Highway Safety a commercial general liability policy (Policy No.
C013084/001; “the Policy”) from November 30, 2009 to November 30, 2010. (Pl. 56.1 St. ¶ 24;
Def. 56.1 St. ¶ 5.) The Policy provided coverage to Highway Safety for sums Highway Safety
became legally obligated to pay as damages from “bodily injury” or “property damage.”
(Def. 56.1 St. ¶ 6.) Highway Safety was the primary insured under the Policy, but the Policy also
included an additional ensured endorsement that created potential coverage for entities Highway
Safety became associated with. (Pl. 56.1 St. ¶¶ 25-26.) Specifically, the additional insured
endorsement attached to the Policy stated:
Who Is An Insured is amended to include any person or
organization to whom you become obligated to include as an
additional insured under this policy, as a result of any contract or
agreement you enter into which requires you to furnish insurance
to that person or organization of the type provided by this policy,
but only with respect to liability arising out of your operations or
premises owned by you or rented to you.
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(Pl. 56.1 St. ¶ 27; Dkt. No. 25-2, Policy at 52.) The City sought defense and indemnity from
Allied World as an additional insured after the institution of the Kintanar lawsuit. (Pl. 56.1 St.
¶ 28.)
LEGAL STANDARD
Summary judgment is appropriate where “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a); Common Cause Ind. v. Individual Members of the Ind. Election Comm’n, 800
F.3d 913, 916 (7th Cir. 2015). Consistent with any summary judgment motion, the Court
“construe[s] all facts and draw[s] all reasonable inferences in favor of the non-moving party”
when reviewing cross-motions for summary judgment. See Advance Cable Co., LLC v.
Cincinnati Ins. Co., 788 F.3d 743, 746 (7th Cir. 2015). To survive summary judgment, the
nonmovant must demonstrate that there is a genuine issue of material fact for trial “such that a
reasonable jury could return a verdict in her favor.” Cincinnati Life Ins. Co. v. Beyrer, 722
F.3d 939, 951 (7th Cir. 2013). “Evidence supporting or opposing summary judgment must be
admissible if offered at trial, except that affidavits, depositions, and other written forms of
testimony can substitute for live testimony.” Malin v. Hospira, Inc., 762 F.3d 552, 555 (7th
Cir. 2014). A factual dispute does not defeat summary judgment if the dispute does not involve a
material fact and “[w]hen opposing parties tell two different stories, one of which is blatantly
contradicted by the record, so that no reasonable jury could believe it, a court should not adopt
that version of the facts for purposes of ruling on a motion for summary judgment.” See Burton
v. Downey, No. 14-3591, 2015 WL 5894126, at *5 (7th Cir. Oct. 8, 2015) (quoting Scott v.
Harris, 550 U.S. 372, 380 (2007)).
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DISCUSSION
The City seeks a conclusion that Allied World owes it a duty to defend in the underlying
Kintanar lawsuit, while Allied World requests a declaration that it owes neither a duty to defend
nor indemnify the City. Allied World’s argument regarding indemnification rests entirely on a
finding that it need not defend the City. See Amerisure Mut. Ins. Co. v. Microplastics, Inc., 622
F.3d 806, 810 (7th Cir. 2010) (the duty to defend is broader than the duty to indemnify under
Illinois law). The current dispute is therefore singular: the Court must determine whether Allied
World must defend the City in the Kintanar lawsuit. If it does, the City is entitled to partial
summary judgment. If it does not, Allied World would receive summary judgment in its favor.
For the reasons that follow, the Court concludes that no genuine dispute of material fact exists
with respect to the duty to defend and grants the City’s motion for partial summary judgment.
As an initial matter, the Court applies Illinois substantive law. Neither Allied World nor
the City argues that the choice of law rules of Illinois require the Court to apply the substantive
law of any other state. See Citadel Group Ltd. v. Wash. Reg’l Med. Ctr., 692 F.3d 580, 587 n.1
(7th Cir. 2012) (courts “do not worry about conflict of laws unless the parties disagree on which
state’s law applies”). When neither party raises a conflict of law issue in a diversity case, the
Court applies the law of the state in which it sits. See Koransky, Bouwer & Poracky, P.C. v. Bar
Plan Mut. Ins. Co., 712 F.3d 336, 341 (7th Cir. 2013) (citation omitted). Under Illinois law, “the
interpretation of an insurance policy is a question of law that is properly decided by way of
summary judgment.” Twenhafel v. State Auto Prop. and Cas. Ins. Co., 581 F.3d 625, 628 (7th
Cir. 2009) (internal quotation marks and citation omitted).
This case revolves around the answer to one ultimate question: whether, under the
undisputed facts, the City qualified as an additional insured under the Policy such that Allied
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World must defend it in the Kintanar lawsuit. Although an insurer’s duty to defend is “broader
than its duty to indemnify, . . . it is not unlimited.” See Amerisure, 622 F.3d at 810 (citing Am.
Family Mut. Ins. Co. v. W.H. McNaughton Builders, Inc., 843 N.E.2d 492, 497 (Ill. App. Ct.
2006)). To determine the scope of the duty to defend applicable to an insurance policy, courts
compare the “factual allegations of the underlying complaint . . . to the language of the insurance
policy.” Amerisure, 622 F.3d at 810 (citing Gen. Agents Ins. Co. of Am., Inc. v. Midwest Sporting
Goods, 828 N.E.2d 1092, 1098 (Ill. 2005)). “If the facts alleged in the underlying complaint fall
within, or potentially within, the policy’s coverage, the insurer’s duty to defend arises.” Santa’s
Best Craft, LLC v. St. Paul Fire and Marine Ins. Co., 611 F.3d 339, 346 (7th Cir. 2010). In
Illinois, an insurer may refuse to defend a putative insured party “only if it is clear from the face
of the underlying complaint that the allegations set forth in the complaint fail to state facts that
bring the case within, or potentially within, the coverage of the policy.” See Health Care Indus.
Liab. Ins. Program v. Momence Meadows Nursing Ctr., Inc., 566 F.3d 689, 694 (7th Cir. 2009)
(quoting Valley Forge Ins. Co. v. Swiderski Elecs., Inc., 860 N.E.2d 307, 315 (Ill. 2006) (internal
quotation marks omitted). In addition, Allied World must defend the City if it has knowledge of
“true but unpleaded facts which when taken together with the allegations in the complaint
indicate that the claim is potentially covered by the policy.” See Travelers Ins. Cos. v. Penda
Corp., 974 F.2d 823, 827-28 (7th Cir. 1992) (citation omitted); Maryland Cas. Co. v. Dough
Mgmt. Co., 36 N.E.3d 953, 961 (Ill. App. Ct. 2015). Any doubt or ambiguity is resolved in favor
of the insured. Nat’l Cas. Co. v. McFatridge, 604 F.3d 335, 338 (7th Cir. 2010).
Despite the official extinguishing of the Contract on July 31, 2010, Allied World does not
advance an argument that Highway Safety was under no obligation to provide the City with
commercial general liability insurance at the time of the accident. The Court therefore does not
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address the timing of the Contract. Without a dispute concerning the viability of the agreement
between the City and Highway Safety or a dispute concerning whether the City qualifies as an
additional insured under the language of the policy, the Court need only determine whether
aspects of the Kintanar lawsuit potentially arise out of Highway Safety’s operations. See Panfil v.
Nautilus Ins. Co., 799 F.3d 716, 722 (7th Cir. 2015) (“Because we cannot say that [the
underlying complaint] is not potentially within the coverage of the Policy, we hold that [the
insurer] had a duty to defend the plaintiffs in the underlying lawsuit.”).
They do. In this context, the Kintanar lawsuit’s operative complaint and the Policy must
both be liberally construed in favor of finding coverage for the City. See U.S. Fid. & Guar. Co.
v. Wilkin Insulation Co., 578 N.E.2d 926, 930 (Ill. 1991). Two of the Kintanar lawsuit’s main
allegations are that (1) the City failed to barricade or block off certain unsafe areas of Damen
Avenue and (2) the City erected barricades and partially closed lanes that caused traffic to be
channeled into deteriorated portions of roadway. (Def. 56.1 St. ¶ 24.) These allegations, taken in
tandem with the City’s uncontested evidence, supported by the testimony of three City
employees, that Highway Safety employees, and not the City itself, would place and position the
barricades at issue based on their safety training and knowledge, demonstrate that the liability in
the Kintanar lawsuit at least potentially arises from Highway Safety’s operations. See Panfil, 799
F.3d at 722 (“We emphasize that the bar to finding a duty to defend is low.”). This conclusion is
bolstered by the fact that the Contract itself states both that Highway Safety does the actual
placement and rearrangement of the traffic control devices and that Highway Safety is obligated
to “personally superintend” the placement of the devices. (Traffic Control Contract at 6, 52-53.)
Allied World’s argument that it owes no duty to defend because Highway Safety was not
named as a defendant in the Kintanar lawsuit is unavailing. The Court “may consider material
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outside the complaint that sheds light on the coverage issue.” Penda Corp., 974 F.2d at 828; see
also U.S. Fid. & Guar. Co. v. Wilkin Insulation Co., 550 N.E.2d 1032, 1036-37 (Ill. App. Ct.
1989 (“To hold otherwise would allow the insurer to construct a formal fortress of the third
party’s pleadings and to retreat behind its walls, thereby successfully ignoring true but unpleaded
facts within its knowledge that require it, under the insurance policy, to conduct the putative
insureds’ defense.”). Accordingly, the Kintanar lawsuit’s allegations that address the positioning
and placement of traffic control devices, despite failing to claim that Highway Safety was the
responsible party, coupled with the uncontested evidence provided by the City that Highway
Safety is generally responsible for erecting the traffic control devices, brings the underlying
lawsuit potentially within the purview of the Policy.
Nor is it beyond doubt that the Kintanar lawsuit hinges only on the fact that the City
allegedly allowed Damen Avenue to deteriorate. Although the Kintanar lawsuit contends that
Carlo was thrown from his motorcycle because of the condition of the road, it simultaneously
maintains that he only traveled down that portion of roadway because of the barricades and
arrow boards directing him to do so. Under Illinois law, there can be multiple causes contributing
to a single injury and Allied World’s contention that the unsafe road alone caused the accident
does not remove the Kintanar lawsuit from the Policy’s coverage. See Levy v. Minn. Life Ins.
Co., 517 F.3d 519, 524 (7th Cir. 2008) (“Illinois law defines proximate cause as any cause
which, in natural or probable sequence, produced the injury complained of. It need not be the
only cause, nor the last or nearest cause. It is sufficient if it concurs with some other cause acting
at the same time, which in combination with it, causes the injury.”) (internal annotation marks,
quotation marks, and citation omitted). Here, the accident would not have occurred in the
location where it occurred were it not for the placement of the barricades, signs, and arrow
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boards. Highway Safety’s operations in setting up the traffic control devices were integral to the
accident taking place and were not merely “condition[s] that had to exist for the event in question
to occur.” See James River Ins. Co. v. Kemper Cas. Ins. Co., 585 F.3d 382, 386 (7th Cir. 2009)
(“claim need not have been foreseeable to be deemed to arise from an act by the insured”).
Accordingly, the record before the Court shows that collectively, both the condition of the road
and Highway Safety’s placement of the traffic control devices at the very least potentially caused
the alleged injury. Because the Kintanar lawsuit potentially emanates from Highway Safety’s
operations, Allied World must defend the City in the underlying litigation.
Here, Allied World must defend the City “unless it is clear from the face of the
underlying complaint that the allegations fail to state facts which bring the case even potentially
within the policy’s coverage.” See Panfil, 799 F.3d at 719 (quoting Lyerla v. AMCO Ins.
Co., 536 F.3d 684, 688 (7th Cir. 2008) (internal quotation marks and citation omitted). The Court
is not presented with that limited scenario. The allegations in the underlying complaint, even
when viewed in the light most favorable to Allied World, potentially trigger coverage under the
policy. Combined with the undisputed facts 3 that Highway Safety physically sets up the signage
and traffic control devices near City work sites, has discretion to leave the devices if no City
employee is present, and ultimately must superintend the placement of any device, the liability
under the Kintanar lawsuit potentially involves Highway Safety operations. Allied World must
therefore defend the City as an additional insured under the Policy. The Court accordingly grants
the City’s motion for partial summary judgment and denies Allied World’s motion for summary
judgment.
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Again, the Court denies Allied World’s blanket objection to City employees’ testimony regarding the City’s usual
practice when working with Highway Safety. Whether or not Sanchez, Calderone, or Driver were present at the site
of the underlying accident, they may competently testify to the City’s general relationship with Highway Safety
pursuant to Fed. R. Evid. 406. Allied World has offered no evidence demonstrating that the City strayed from its
usual practice in this instance.
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CONCLUSION
For the reasons stated herein, the Court grants the City’s motion for partial summary
judgment (Dkt. Nos. 20, 21, & 22) and denies Allied World’s motion for summary judgment
(Dkt. Nos. 23, 24, & 25). The Court dismisses Allied World’s duty to indemnification claim
without prejudice.
________________________________________
Virginia M. Kendall
United States District Court Judge
Northern District of Illinois
Date: 11/16/2015
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