{ "id": 3607023, "name": "VIRGINIA SURETY COMPANY, INC., Appellant, v. NORTHERN INSURANCE COMPANY OF NEW YORK et al., Appellees", "name_abbreviation": "Virginia Surety Co. v. Northern Insurance", "decision_date": "2007-01-19", "docket_number": "No. 102036", "first_page": "550", "last_page": "570", "citations": [ { "type": "official", "cite": "224 Ill. 2d 550" } ], "court": { "name_abbreviation": "Ill.", "id": 8772, "name": "Illinois Supreme Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "362 Ill. App. 3d 571", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 4260674 ], "weight": 8, "pin_cites": [ { "page": "574" }, { "page": "573" }, { "page": "574" }, { "page": "574" }, { "page": "574" }, { "page": "574" }, { "page": "574-75" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/362/0571-01" ] }, { "cite": "154 Ill. 2d 90", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 4820940 ], "year": 1992, "pin_cites": [ { "page": "102" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/154/0090-01" ] }, { "cite": "215 Ill. 2d 146", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 4059916 ], "year": 2005, "pin_cites": [ { "page": "153" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/215/0146-01" ] }, { "cite": "213 Ill. 2d 141", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 8448460 ], "weight": 3, "year": 2004, "pin_cites": [ { "page": "153" }, { "page": "153" }, { "page": "153" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/213/0141-01" ] }, { "cite": "349 Ill. App. 3d 857", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5435089 ], "year": 2004, "pin_cites": [ { "page": "868" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/349/0857-01" ] }, { "cite": "70 Ill. 2d 1", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5805433 ], "weight": 5, "year": 1977, "pin_cites": [ { "page": "11-13" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/70/0001-01" ] }, { "cite": "70 Ill. 2d 41", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5805318 ], "weight": 3, "year": 1977, "pin_cites": [ { "page": "44" }, { "page": "46", "parenthetical": "noting, \"Although stated in terms of partial indemnity rather than contribution, the prayer for relief clearly seeks contribution based on the relative degree to which the employer's misuse of the product or assumption of the risk contributed to cause plaintiffs injuries\"" }, { "page": "46" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/70/0041-01" ] }, { "cite": "101 Ill. 2d 1", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3160770 ], "weight": 4, "year": 1984, "pin_cites": [ { "page": "8, 14" }, { "page": "10" }, { "page": "10-11, 13-14" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/101/0001-01" ] }, { "cite": "146 Ill. 2d 155", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5597125 ], "weight": 3, "year": 1991, "pin_cites": [ { "page": "164-65" }, { "page": "165" }, { "page": "165" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/146/0155-01" ] }, { "cite": "178 Ill. 2d 540", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 385515 ], "year": 1997, "opinion_index": 0, "case_paths": [ "/ill-2d/178/0540-01" ] }, { "cite": "175 Ill. 2d 201", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 295806 ], "weight": 11, "year": 1997, "pin_cites": [ { "page": "210" }, { "page": "210" }, { "page": "210" }, { "page": "216-17" }, { "page": "217-18" }, { "page": "218" }, { "page": "207" }, { "page": "207" }, { "page": "210" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/175/0201-01" ] }, { "cite": "266 Ill. App. 3d 489", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 887265 ], "weight": 4, "year": 1994, "pin_cites": [ { "page": "494" }, { "page": "494" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/266/0489-01" ] }, { "cite": "357 Ill. App. 3d 1002", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 4135271 ], "weight": 2, "year": 2005, "pin_cites": [ { "page": "1006" }, { "page": "1006" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/357/1002-01" ] }, { "cite": "305 Ill. App. 3d 1088", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1208108 ], "weight": 3, "year": 1999, "pin_cites": [ { "page": "1093" }, { "page": "1093" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/305/1088-01" ] }, { "cite": "309 Ill. App. 3d 686", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 349581 ], "weight": 4, "year": 2000, "pin_cites": [ { "page": "691" }, { "page": "692" }, { "page": "692-93" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/309/0686-01" ] }, { "cite": "321 Ill. App. 3d 909", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 132336 ], "weight": 3, "year": 2001, "pin_cites": [ { "page": "914" }, { "page": "914-15" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/321/0909-01" ] }, { "cite": "337 Ill. App. 3d 698", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 894546 ], "weight": 11, "year": 2003, "pin_cites": [ { "page": "706" }, { "page": "706" }, { "page": "706" }, { "page": "708", "parenthetical": "McLaren, J., dissenting" }, { "page": "709", "parenthetical": "McLaren, J., dissenting" }, { "page": "709", "parenthetical": "McLaren, J., dissenting" }, { "page": "711", "parenthetical": "McLaren, J., dissenting" }, { "page": "711", "parenthetical": "McLaren, J., dissenting" }, { "page": "712", "parenthetical": "McLaren, J., dissenting" }, { "page": "706" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/337/0698-01" ] }, { "cite": "6 Ill. 2d 365", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2708300 ], "year": 1955, "opinion_index": 0, "case_paths": [ "/ill-2d/6/0365-01" ] }, { "cite": "179 Ill. 2d 367", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 801349 ], "weight": 2, "year": 1997, "pin_cites": [ { "page": "427" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/179/0367-01" ] }, { "cite": "97 Ill. 2d 104", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5516573 ], "year": 1983, "pin_cites": [ { "page": "121-22" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/97/0104-01" ] } ], "analysis": { "cardinality": 1109, "char_count": 36697, "ocr_confidence": 0.788, "pagerank": { "raw": 4.0196496244516487e-07, "percentile": 0.9065858665891332 }, "sha256": "9405555b419c93ba4347b401a27d644d42c15113adb5e253c14f7bc6807c4751", "simhash": "1:71ada7c6c4aaf0cd", "word_count": 5844 }, "last_updated": "2023-07-14T18:42:05.779579+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "VIRGINIA SURETY COMPANY, INC., Appellant, v. NORTHERN INSURANCE COMPANY OF NEW YORK et al., Appellees." ], "opinions": [ { "text": "JUSTICE FITZGERALD\ndelivered the judgment of the court, with opinion.\nChief Justice Thomas and Justices Freeman, Kilbride, Garman, Karmeier, and Burke concurred in the judgment and opinion.\nOPINION\nThe plaintiff, Virginia Surety Company, Inc. (Virginia Surety), challenges the appellate court\u2019s decision to affirm the Will County circuit court\u2019s summary judgment order in favor of defendant, Northern Insurance Company of New York (Northern). The issue is Northern\u2019s liability to its insured, De Graf Concrete Construction, Inc. (De Graf), under a commercial general liability (CGL) policy for a single-count third-party contribution action brought against De Graf. For the following reasons, we affirm the judgment of the appellate court.\nBACKGROUND\nTwo contracts are central to this case: a construction subcontract between general contractor Capital Construction Group, Inc. (Capital), and its subcontractor De Graf, and a CGL policy purchased by De Graf from Northern. Under the construction subcontract between Capital and De Graf, De Graf was to perform cement masonry work at a jobsite in Addison, Illinois. The contract also required De Graf employees to work on the jobsite. The construction subcontract included the following provision:\n\u201cTo the fullest extent permitted by law, the Subcontractor WAIVES ANY RIGHT OF CONTRIBUTION AGAINST AND shall indemnify and hold harmless the Owner, Contractor, Architect, Architect\u2019s consultants, and agents and employees of any of them from and against claims, damages, losses, and expenses, including but not limited to attorneys fees, arising out of or resulting from performance of the Subcontractor\u2019s Work under this Subcontract, provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death or to injury to or destruction of tangible property (other than the Work itself) including loss of use therefrom, WHICH IS caused in whole or in part by negligent acts or omissions of the Subcontractor, the Sub-contractor\u2019s subcontractors, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, regardless of whether or not such claim, loss, or expense is caused in part by a party indemnified hereunder.\u201d\nDe Graf obtained a CGL policy from defendant Northern. The Northern CGL policy generally excludes coverage for bodily injuries to De Graf\u2019s employees. However, under an exception to this exclusion, Northern would pay sums for \u201cliability assumed by the insured under an \u2018insured contract.\u2019 \u201d The policy defines this \u201cinsured contract\u201d as\n\u201cThat part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for \u2018bodily injury\u2019 or \u2018property damage\u2019 to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.\u201d\nOn June 4, 1997, a De Graf employee, James Smith, was injured while working at the job site. Smith filed a workers\u2019 compensation claim against De Graf. In addition, Smith filed a complaint in the circuit court against Capital, alleging that Capital\u2019s negligence contributed to his injury. Capital thereafter filed a third-party complaint for contribution against De Graf. Capital\u2019s sole request for relief was for contribution. De Graf tendered the third-party complaint to Virginia Surety, from whom De Graf had purchased a \u201cWorker\u2019s Compensation and Employer\u2019s Liability\u201d policy. De Graf also tendered the third-party complaint to Northern under its CGL policy. Virginia Surety accepted the tender and defended De Graf against the third-party complaint, the outcome of which is not present in the record. Northern refused to defend or indemnify De Graf.\nVirginia Surety then filed a complaint for declaratory judgment (735ILCS 5/2 \u2014 701 (West 2000)) against Northern in the circuit court of Will County. Virginia Surety outlined the provisions from the subcontract and the Northern policy described above. The complaint alleged that the subcontract between De Graf and Capital is an \u201cinsured contract\u201d within the meaning of the Northern policy of insurance. In its prayer for relief, Virginia Surety sought a declaration that Northern was obligated to defend and indemnify De Graf under the CGL policy. Virginia Surety also sought an award of damages for amounts previously paid to defend and indemnify De Graf. Northern filed an answer and a counterclaim for declaratory judgment against Virginia Surety. It sought a declaration that it did not owe a duty to defend or indemnify De Graf as to the third-party action under its CGL policy. Eventually, the parties filed cross-motions for summary judgment. The circuit court held that the subcontract between De Graf and Capital was not an \u201cinsured contract\u201d under the policy, and that Northern did not have an obligation to defend or indemnify De Graf. The circuit court therefore granted Northern\u2019s motion for summary judgment and denied Virginia Surety\u2019s motion for summary judgment.\nThe appellate court affirmed. 362 Ill. App. 3d 571. The appellate court first noted the parties\u2019 arguments reflected the split in the appellate districts regarding whether a subcontract as listed above can be considered an \u201cinsured contract.\u201d 362 Ill. App. 3d at 574. The appellate court distinguished those cases, however, because Capital\u2019s complaint only sought contribution under \u201cIllinois Contribution Among Joint Tortfeasors Act\u201d and requested contribution against De Graf in the event that judgment was entered in favor of James Smith against Capital in the original action. 362 Ill. App. 3d at 573. The appellate court stated, \u201cunlike the third-party plaintiffs in Hankins, Royal and Mulligan, Capital did not file a claim for indemnification against De Graf.\u201d 362 Ill. App. 3d at 574. The court noted the difference between claims for contribution and claims for indemnity:\n\u201c \u2018There is an important distinction between contribution, which distributes the loss among the tortfeasors by requiring each to pay his proportionate share, and indemnity, which shifts the entire loss from one tortfeasor who has been compelled to pay it to the shoulders of another who should bear it instead.\u2019 \u201d 362 Ill. App. 3d at 574, quoting W Prosser, Torts \u00a751, at 310 (4th ed. 1971).\nThe court noted, \u201cAn \u2018insured contract\u2019 exception to an employer\u2019s liability exclusion only applies when one contracting party agrees to indemnify the other contracting party from and against the other party\u2019s own negligence.\u201d 362 Ill. App. 3d at 574. For the exception to apply, De Graf must have \u201c \u00a3assume[d] the tort liability of another party to pay for \u201cbodily injury.\u201d \u2019 Thus, the \u2018insured contract\u2019 issue is joined only when indemnification is sought.\u201d 362 Ill. App. 3d at 574. Since Capital did not seek indemnification, the court found that Northern did not have a duty to defend De Graf and affirmed the circuit court. 362 Ill. App. 3d at 574-75. We granted Virginia Surety\u2019s petition for leave to appeal. 177 Ill. 2d R 315(a).\nANALYSIS\nSummary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992); 735 ILCS 5/2 \u2014 1005(c) (West 2002). A circuit court\u2019s entry of summary judgment is subject to de novo review (General Agents Insurance Co. of America, Inc. v. Midwest Sporting Goods Co., 215 Ill. 2d 146, 153 (2005)), and the construction of an insurance policy, which presents a question of law, is likewise reviewed de novo (Central Illinois Light Co. v. Home Insurance Co., 213 Ill. 2d 141, 153 (2004)). Similarly, an indemnity agreement is a contract and is subject to contract interpretation rules. See Mountbatten Surety Co. v. Szabo Contracting, Inc., 349 Ill. App. 3d 857, 868 (2004). The cardinal rule is to give effect to the parties\u2019 intent, which is to be discerned from the contract language. Central Illinois Light Co., 213 Ill. 2d at 153. If the contract language is unambiguous, it should be given its plain and ordinary meaning. Central Illinois Light Co., 213 Ill. 2d at 153.\nIn Illinois, an employer\u2019s liability for an injury to its employee may come in several forms. The employer\u2019s exposure to pay benefits to an injured employee pursuant to the Illinois Workers\u2019 Compensation Act (820 ILCS 305/1 et seq. (West 2000)) is the most common. The Act provides a schedule for identifying the compensation for specific injuries and generally places financial limits on the employer\u2019s liability. See 820 ILCS 305/7, 8 (West 2000). The employer gives up its common law defenses to the employee\u2019s claim, such as the employee\u2019s contributory fault in causing his own injuries, in exchange for limited liability. 820 ILCS 305/5, 11 (West 2000).\nAn injured employee may also have a cause of action against a third party to the employment relationship, such as a general contractor, whose negligence allegedly caused or contributed to the employee\u2019s injuries. The Workers\u2019 Compensation Act does not limit the employee\u2019s recovery from a third party. Although the employee is barred from bringing a civil suit directly against his employer, the third-party nonemployer may file a third-party suit against the employer for \u201ccontribution\u201d toward the employee\u2019s damages. 740 ILCS 100/1 et seq. (West 2000). The contribution lawsuit presents a second type of liability exposure for the employer.\nThe concept of contribution contemplates that each party whose fault contributed to an injury should pay its pro rata share of the common liability. 740 ILCS 100/2, 3 (West 2000). Until 1978, employers were immune from third-party contribution suits as well as from direct civil suits by an injured employee. Skinner v. Reed-Prentice Division Package Machinery Co., 70 Ill. 2d 1 (1977). We found in Skinner v. Reed-Prentice Division Package Machinery Co., 70 Ill. 2d 1 (1977), that if a manufacturer was held liable on the basis of strict liability in tort, and if the employer-buyer negligently used the product, the manufacturer could recover on a third-party complaint against the employer-buyer. This holding was based on governing equitable principles, which \u201crequired that ultimate liability for plaintiffs injuries be apportioned on the basis of the relative degree to which the defective product and the employer\u2019s conduct proximately caused them.\u201d Stevens v. Silver Manufacturing Co., 70 Ill. 2d 41, 44 (1977), citing Skinner, 70 Ill. 2d 1. In doing so, we discarded certain outmoded concepts of indemnity in favor of contribution. Skinner, 70 Ill. 2d at 11-13.\nThrough decisions of this court and the enactment of the Joint Tortfeasor Contribution Act, Illinois employers became potentially liable for unlimited contribution. See Skinner, 70 Ill. 2d 1; Doyle v. Rhodes, 101 Ill. 2d 1 (1984), citing Ill. Rev. Stat. 1981, ch. 70, par. 301 et seq.; 740 ILCS 100/1 et seq. (West 2000). An Illinois employer enjoyed limited liability to its employee under the Workers\u2019 Compensation Act, but was exposed to unlimited contribution liability for the same injuries as a third-party defendant in the employee\u2019s civil suit. In other words, the employer could be \u201cthird partied\u201d into its employee\u2019s suit against a nonemployer tortfeasor and be ordered to pay a sum according to its pro rata share of fault in causing the employee\u2019s injury. Doyle, 101 Ill. 2d at 8, 14. The result was to deprive the employer of the limited liability conferred by the Workers\u2019 Compensation Act.\nIn 1992, this court attempted to balance the competing interests of the employer, as a participant in the workers\u2019 compensation system, and the equitable interests of the third-party defendant in not being forced to pay more than its established fault. Kotecki v. Cyclops Welding Corp., 146 Ill. 2d 155, 164-65 (1991). In Kotecki, we held that an employer\u2019s maximum liability in a third-party suit for contribution is limited to its liability to its employee under the Workers\u2019 Compensation Act. Kotecki, 146 Ill. 2d at 165. This balance allowed nonemployer defendants, such as general contractors, to recover limited contribution from the employer, and also extended the limited liability protection of the Workers\u2019 Compensation Act to contribution claims. Kotecki, 146 Ill. 2d at 165.\nThereafter, Illinois courts held that an employer may waive its Kotecki protection by contract and thereby be liable for its full pro rata share of contribution. Liccardi v. Stolt Terminals, Inc., 178 Ill. 2d 540 (1997); Braye v. Archer-Daniels-Midland Co., 175 Ill. 2d 201 (1997); see also Herington v. J.S. Alberici Construction Co., 266 Ill. App. 3d 489 (1994). These cases are based upon an interpretation of what are loosely labeled \u201cindemnity provisions\u201d contained in contracts to which the employer was a party, which act as provisions allowing for contribution. See, e.g., Estate of Willis v. Kiferbaum Construction Corp., 357 Ill. App. 3d 1002, 1006 (2005); Herington, 266 Ill. App. 3d at 494. Typically, an \u201cindemnity provision\u201d will require a subcontractor to \u201cindemnify and hold harmless\u201d a general contractor or owner for the general contractor\u2019s liability for injury to person or property happening in connection with the subcontractor\u2019s work. Illinois courts have found that a third party seeking this type of \u201cpartial indemnity\u201d is truly seeking contribution. Stevens, 70 Ill. 2d at 46 (noting, \u201cAlthough stated in terms of partial indemnity rather than contribution, the prayer for relief clearly seeks contribution based on the relative degree to which the employer\u2019s misuse of the product or assumption of the risk contributed to cause plaintiffs injuries\u201d); Estate of Willis, 357 Ill. App. 3d at 1006; Herington, 266 Ill. App. 3d at 494.\nStated another way, in these provisions, an employer agrees to unlimited liability by waiving the Kotecki limitation as to contribution claims. Braye, 175 Ill. 2d at 210. As such, the employer is waiving its affirmative defense provided by the Workers\u2019 Compensation Act. Braye, 175 Ill. 2d at 210. Nothing in Kotecki prohibits an employer from volunteering to remain liable for its pro rata share of damages proximately caused by its negligence; Kotecki simply allows the employer to avail itself of the Kotecki cap on its liability. Braye, 175 Ill. 2d at 210.\nWe note that such contracts are governed by the Illinois Construction Contract Indemnification for Negligence Act (Anti-Indemnification Act) (740 ILCS 35/0.01 et seq. (West 2000)), which voids any agreement in a construction contract to indemnify or hold harmless a person from that person\u2019s own negligence. The purpose of the Anti-Indemnification Act is to foster workplace safety by preventing a party from insulating itself from liability through use of a contractual indemnification provision which may deter the exercise of ordinary care. Braye, 175 Ill. 2d at 216-17. For example, the Anti-Indemnification Act would render void a contractual provision in which a subcontractor agreed to pay all damages resulting from an injury to its employee, even the pro rata share of a general contractor who was partially at fault. 740 ILCS 35/1 (West 2000).\nThus, in Braye v. Archer-Daniels-Midland Co., 175 Ill. 2d 201 (1997), we found that a so-called \u201cindemnity provision\u201d in a construction contract did not require a contractor-employer to indemnify a premises owner for the owner\u2019s negligence. Braye, 175 Ill. 2d at 217-18. The employer\u2019s employee had sued the owner for a jobsite injury, and the owner filed a third-party complaint for contribution against the employer. We deemed the employer to have waived its Kotecki protection and thus could be held liable in contribution for its full share of fault in causing its employee\u2019s injuries. The provision merely permitted \u201cunlimited contribution\u201d from the employer to the owner and, therefore, did not violate the Anti-Indemnification Act. 175 Ill. 2d at 218.\nInevitably, both employers and their insurance carriers were faced with the question of whether their insurance policies would cover the employer\u2019s remaining portion of liability when an employer elected to waive the Kotecki protections. In other words, the nature of the employer\u2019s \u201cKotecki waiver\u201d exposure \u2014 the employer\u2019s liability in contribution above its \u201cKotecki cap\u201d\u2014 remained in doubt for purposes of standard CGL policies and some employer\u2019s liability policies. The districts of our appellate court are split on this issue.\nThe first case, Hankins v. Pekin Insurance Co., 305 Ill. App. 3d 1088 (1999), decided by the Fifth District of the appellate court, arose in a nonconstruction setting. The \u201cindemnity provision\u201d and the CGL insurance policy\u2019s definition of \u201cinsured contract\u201d were similar to those in this case. The court ruled that the \u201cindemnity provision\u201d did not constitute an \u201cinsured contract\u201d under the policy\u2019s definition of that term because, by agreeing to be held liable for unlimited contribution, the employer was simply agreeing to accept the full share of its \u201cown negligence\u201d and was not accepting the \u201ctort liability of another party.\u201d In other words, an \u201cinsured contract\u201d is one where the insured agrees to indemnify the other party against that party\u2019s own negligence. Hankins, 305 Ill. App. 3d at 1093. Because the employer\u2019s potential liability under the provision did not come within the employer\u2019s \u201cinsured contract\u201d coverage, the insurer had no obligation to defend or indemnify it with respect to a third-party claim for indemnification. Hankins, 305 Ill. App. 3d at 1093.\nThe next case reached a contrary result when the appellate court construed a workers\u2019 compensation and employer\u2019s liability policy. In Christy-Foltz, Inc. v. Safety Mutual Insurance Casualty Corp., 309 Ill. App. 3d 686 (2000), the Fourth District of the appellate court found a \u201cKotecki waiver\u201d in a contract between an employer and the owner of a work site. Christy-Foltz, 309 Ill. App. 3d at 691. The court found that, by agreeing to waive the right to invoke Kotecki as an affirmative defense, the employer had \u201cvoluntarily assumed liability\u201d for its pro rata share of damages proximately caused by its own negligence. Christy-Foltz, 309 Ill. App. 3d at 692. As a result, the liability over and above the \u201cKotecki cap\u201d would be allocated pursuant to the Contribution Act. Any such liability would constitute \u201closs\u201d under the terms of the policy. This \u201closs\u201d would not be covered because the policy excluded coverage for \u201closs\u201d which was \u201cvoluntarily assumed\u201d under contract. 309 Ill. App. 3d at 692-93.\nNext, the Second District in Michael Nicholas, Inc. v. Royal Insurance Co. of America, 321 Ill. App. 3d 909 (2001), also rejected the Hankins decision. The Second District found the policy provided coverage. It stated,\n\u201cBy defining \u2018insured contract\u2019 in terms of assuming another party\u2019s \u2018tort liability,\u2019 [the CGL insurer] left open the possibility that its insured could agree to be responsible for another party\u2019s liability in a tort action even if that liability was not based on that party\u2019s own negbgence. That portion of [the general contractor\u2019s] liability to [the injured subcontractor\u2019s employee] (which was assumed by plaintiff pursuant to its Kotecki waiver) that is attributable to [subcontractor\u2019s] negligence is in fact imposed on [the general contractor] by law, i.e., joint and several liability.\u201d Michael Nicholas, Inc., 321 Ill. App. 3d at 914.\nThe court further found that the contract did not run afoul of the Anti-Indemnification Act. The court stated that it was \u201cdifficult to envision any situation where the exception would apply in plaintiffs line of work because if plaintiff ever agreed to indemnify another party for its own negligence, the contract would be unenforceable.\u201d 321 Ill. App. 3d at 914-15.\nThe Second District subsequently reaffirmed this decision in West Bend Mutual Insurance Co. v. Mulligan Masonry Co., 337 Ill. App. 3d 698 (2003), over a dissent. Mulligan involved the same contractual \u201cindemnity\u201d provision and the same definition of \u201cinsured contract.\u201d The court relied on the reasoning of Michael Nicholas, stating:\n\u201cThere is nothing in the policy, however, stating that the \u2018insured contract\u2019 exception applies only when the insured agrees to assume liability greater than its percentage of fault. Here, if defendant\u2019s Kotecki cap is lower than the amount of [the employee\u2019s] damages that is attributable to defendant\u2019s negbgence, then, under principles of joint and several hability, [the general contractor] can be held liable in tort for the difference. Relying on the indemnification clause, [the general contractor] attempted to recover that amount. If defendant has waived its Kotecki cap, then it has assumed tort liability that otherwise would have been imposed against [the general contractor].\u201d (Emphasis omitted.) West Bend, 337 Ill. App. 3d at 706.\nThe court stated that plaintiff\u2019s argument that an insured who waives a Kotecki cap is merely waiving an affirmative defense and is not assuming tort liability that did not already exist is a \u201ctechnical distinction.\u201d West Bend, 337 Ill. App. 3d at 706. \u201cIndemnification clauses like the one at issue here are intended to shift tort liability that otherwise would be imposed against the indemnitee.\u201d West Bend, 337 Ill. App. 3d at 706.\nJustice McLaren vigorously dissented. West Bend, 337 Ill. App. 3d at 708 (McLaren, J., dissenting). He noted, \u201cAs the discussion of Michael Nicholas reveals, a party\u2019s tort liability is not necessarily based on that party\u2019s own negligence.\u201d West Bend, 337 Ill. App. 3d at 709 (McLaren, J., dissenting). According to Justice McLaren, the majority characterized aspects of tort liability that are preexisting and imposed by operation of law as being assumed under the terms of the indemnification contract in question. Justice McLaren stated,\n\u201cHowever the analysis contained in Michael Nicholas characterizes aspects of tort liability that are preexisting and imposed by operation of law, as being assumed under the terms of the indemnification contract in question. The major deficiency *** is that they ignore the distinction between those matters that are imposed by law and those that have been assumed by the insured through the indemnification contract. The joint and several liability analysis in Michael Nicholas presumes that the insured assumed the joint and several liability of all the joint and several tortfeasors. *** Joint and several liability is not assumed by a tortfeasor; if it were, it could be disclaimed or avoided by mere iteration.\u201d (Emphasis in original.) West Bend, 337 Ill. App. 3d at 709 (McLaren, J., dissenting).\nJustice McLaren pointed out that if the joint and several liability were assumed, then it would mean that the nonemployer-indemnitee would be able to obtain total satisfaction of the judgment entered in the original cause of action in violation of the Indemnification Act and would constitute a waiver of all the immunities provided to an employer-indemnitor pursuant to the Workers\u2019 Compensation Act. West Bend, 337 Ill. App. 3d at 711 (McLaren, J., dissenting). Further, \u201cthe waiver of the Kotecki cap is a waiver of a right to a credit or offset that is provided by law and would reduce the amount of money due from the insured. [Citation.] Neither reducing nor increasing the out-of-pocket expense of the employer/indemnitor means that the proportionate shares of liability have been altered.\u201d (Emphasis in original.) West Bend, 337 Ill. App. 3d at 711 (McLaren, J., dissenting). He concluded, \u201cI believe the only reasonable interpretation is that the employer/indemnitor agreed to indemnify the nonemployer/indemnitee for the employer/ indemnitor\u2019s own negligence consistent with the prior precedent as determined in Hankins.\u201d West Bend, 337 Ill. App. 3d at 712 (McLaren, J., dissenting).\nWith this precedent in mind, we turn to the present agreement between Capital Construction and De Graf under the terms of Northern\u2019s CGL policy. The parties\u2019 arguments on this matter are essentially reflective of the split in the appellate court: Northern urges this court to adopt the reasoning of the Fifth District in Hankins and Justice McLaren\u2019s dissent in West Bend; Virginia Surety contends this court should adopt the reasoning of the Second District in Michael Nicholas and the West Bend majority and also the Fourth District in Christy-Foltz. We agree with Northern that under the plain language of Northern\u2019s CGL policy with De Graf, the agreement between De Graf and Capital could not be an \u201cinsured contract.\u201d\nNorthern\u2019s policy provides that an insured contract is one under which De Graf \u201cassumes the tort liability of another party to pay for \u2018bodily injury\u2019 or \u2018property damage\u2019 to a third person or organization.\u201d The policy further provides that \u201ctort liability means a liability that would be imposed by law in the absence of any contract or agreement.\u201d Therefore, to determine whether the De Graf-Capital \u201cindemnity\u201d agreement is an insured contract under the policy, we must first look to the agreement itself and determine whether the agreement obligated De Graf to assume the tort liability of Capital.\nThe agreement in this case is unambiguous. By the plain language of the agreement, De Graf, as the indemnifying party, is required to \u201cindemnify\u201d Capital only for De Grafs own negligence. The meaning of \u201cindemnify\u201d is illuminated by the contractual language stating that De Graf, \u201cto the fullest extent permitted by law *** shall indemnify and hold harmless\u201d Capital for claims \u201carising out of or resulting from the performance of the subcontractor\u2019s work\u201d and \u201closs *** which is caused in whole or in part by negligent acts or omissions of the Subcontractor.\u201d Further, this is despite any common liability on the part of Capital for Smith\u2019s injury, as the contract states, \u201cregardless of whether or not such claim, loss, or expense is caused in part by a party indemnified hereunder.\u201d\nThe confusion may be due to the use of the word \u201cindemnity\u201d when the effect of the provision is nothing more than a simple anticipatory waiver of an affirmative defense in a contribution action. Virginia Surety\u2019s contention therefore ignores the distinction between \u201cindemnity\u201d and \u201ccontribution.\u201d Contribution is defined as \u201c[t]he right that gives one of several persons who are liable on a common debt the ability to recover ratably from each of the others when that one person discharges the debt for the benefit of all; the right to demand that another who is jointly responsible for a third party\u2019s injury supply part of what is required to compensate the third party.\u201d Black\u2019s Law Dictionary 352-53 (8th ed. 2004). Indemnity is the \u201cReimbursement or compensation for loss, damage, or liability in tort; esp., the right of a party who is secondarily liable to recover from the party who is primarily liable for reimbursement of expenditures paid to a third party for injuries resulting from a violation of a common-law duty.\u201d Black\u2019s Law Dictionary 784 (8th ed. 2004).\nWith these definitions in mind, we look to the definition of \u201ctort liability\u201d in the CGL policy. The policy\u2019s \u201cinsured contract\u201d provision says, \u201cTort liability means a liability that would be imposed by law in the absence of any contract or agreement.\u201d Therefore, we must walk through the procedural steps of this case to understand if De Graf assumed any \u201cliability imposed by law\u201d upon Capital. In other words, we must determine if the subcontract above is a true indemnification provision, or a poorly labeled anticipatory waiver of an affirmative defense.\nPreliminarily, it is clear that ordinary rules of common law liability impose liability upon Capital for Capital\u2019s own negligence towards Smith. Next, De Graf is liable for its own negligence under ordinary rules of common law liability. However, De Graf enjoys the option to limit its common law liability to Smith by asserting the affirmative defense provided by the Workers\u2019 Compensation Act for the amount of its negligence up to the Kotecki cap. This leaves the portion of De Grafs liability due to its pro rata share of the common liability above the Kotecki cap. Is this portion of liability \u201cimposed by law in the absence of any contract or agreement\u201d on Capital or De Graf?\nBoth Capital and De Graf are jointly and severally liable for the portion of De Grafs liability above the Kotecki cap. However, the Contribution Act states, \u201cThe right of contribution exists only in favor of a tortfeasor who has paid more than his pro rata share of the common liability, and his total recovery is limited to the amount paid by him in excess of his pro rata share. No tortfeasor is liable to make contribution beyond his pro rata share of the common liability.\u201d 740 ILCS 100/2(b) (West 2000). The law therefore allows Capital to sue De Graf for De Grafs remaining pro rata portion of the common liability. Under the terms of the Contribution Act, Capital is not liable to make contribution beyond its pro rata share of the common liability.\nNext, if Capital brings a contribution claim against De Graf, De Graf remains liable for its pro rata share of the common liability. 740 ILCS 100/2(b) (West 2000). Under Kotecki, however, De Graf may assert the Workers\u2019 Compensation Act as an affirmative defense in an action in contribution. Braye, 175 Ill. 2d at 207, citing Doyle, 101 Ill. 2d at 10. Our decision in Braye allows De Graf to bargain away this affirmative defense by contract in anticipation of litigation. Here, De Graf has waived its affirmative defense provided by the Workers\u2019 Compensation Act and is liable for unlimited contribution, undiminished by the workers\u2019 compensation limitation. Accordingly, this demonstrates that the Workers\u2019 Compensation Act is a shield provided by the legislature, which, at De Grafs election, it may use to avoid Lability. This idea is bolstered by our statement in Braye that \u201can employer\u2019s potential for tort liability exists unless and until the defense of the Workers\u2019 Compensation Act is established.\u201d Furthermore, \u201cthe legislature intended the Contribution Act to apply to an employer in a third-party action regardless of an employer\u2019s immunity from a direct action by the employee.\u201d Braye, 175 Ill. 2d at 207, citing Doyle, 101 Ill. 2d at 10-11, 13-14.\nThe legislature intended that De Graf be hable for its pro rata share of the negligence, regardless of any immunity provided by the Workers\u2019 Compensation Act. Absent De Grafs waiver, Capital would be obligated to pay a greater portion of the common liability only at De Graf\u2019s election to raise its affirmative defense. As we previously stated, \u201cnothing in Kotecki prohibits an employer from agreeing to remain liable for its pro rata share of damages proximately caused by its negligence.\u201d (Emphasis added.) Braye, 175 Ill. 2d at 210. Therefore, absent any contract or agreement, De Grafs portion of the common liability above the Kotecki cap is not \u201cimposed by law\u201d upon Capital, but remains with De Graf.\nReturning to the definitions of \u201ccontribution\u201d and \u201cindemnity\u201d above, it is clear both Capital and De Graf are jointly and severally liable for the same injury. Further, both parties are primarily liable for Smith\u2019s injuries; neither party is secondarily liable. As explained above, the waiver of the Kotecki cap does not shift liability. Rather, the employer chooses to remain liable by not asserting an affirmative defense. The legal effect to be given an instrument is not determined by the label it bears or the technical terms it contains. Bonde v. Weber, 6 Ill. 2d 365 (1955); see Herington, 266 Ill. App. 3d 489. Indeed, this court in Stevens v. Silver Manufacturing Co., 70 Ill. 2d 41, 46 (1977), construed a third party\u2019s prayer for \u201cpartial indemnity\u201d as a contribution claim because the prayer was based on the relative degree to which the employer\u2019s misuse of the product or assumption of the risk contributed to cause plaintiffs injuries. Thus, we disagree with the West Bend court\u2019s conclusion that, \u201cIndemnification clauses like the one at issue here are intended to shift tort liability that otherwise would be imposed against the indemnitee\u201d (West Bend, 337 Ill. App. 3d at 706) because the De Graf-Capital contract is not a true indemnification clause.\nFurther, we reject Virginia Surety\u2019s, as well as the Christy-Foltz, Michael Nicholas, and West Bend courts\u2019 assertion that the employer somehow assumes the joint and several liability of the third-party nonemployer. This argument may conflate the indivisible nature of joint and several liability with the equitable apportionment of common liability embodied in the Contribution Act. 740 ILCS 100/2 (West 2000). It is clear, from the Contribution Act, that \u201c[n]o tortfeasor is liable to make contribution beyond his own pro rata share of the common liability.\u201d 740 ILCS 100/2 (West 2000). Virginia Surety also argues, however, that De Graf would somehow \u201cassume\u201d the joint and several liability of Capital for De Grafs own negligence. The false premise in this argument is the belief that this joint and several liability is somehow divisible. As we explained in Best v. Taylor Machine Works, 179 Ill. 2d 367 (1997), \u201c \u2018The feasibility of apportioning fault on a comparative basis does not render an indivisible injury \u201cdivisible\u201d for purposes of the joint and several liability rule. A concurrent tortfeasor is liable for the whole of an indivisible injury when his negligence is a proximate cause of that damage.\u2019 \u201d Best, 179 Ill. 2d at 427, quoting Coney v. J.L.G. Industries, Inc., 97 Ill. 2d 104, 121-22 (1983). Thus, it makes no difference if the Kotecki cap is lower than the amount of the employee\u2019s damages that is attributable to employer\u2019s negligence. Under principles of joint and several liability, the third party does not then become liable for the difference. Instead, it always was jointly and severally liable regardless of the Kotecki cap and it additionally always retained the right to sue in contribution. The distinguishing factor is the employer\u2019s use of the affirmative defense of the Workers\u2019 Compensation Act.\nThe Anti-Indemnification Act also does not prohibit this contract. As explained above, the contract merely waives De Grafs affirmative defense; it does not result in De Grafs assumption of Capital\u2019s tort liability. We also reject Virginia Surety\u2019s argument that because of the anti-indemnity statute applicable to Illinois construetion contracts, every single \u201cinsured contract\u201d situation De Graf might encounter will involve an unenforceable contract, and so Northern\u2019s exception \u201cwould almost never apply\u201d and be \u201cof no value to the insured.\u201d This reasoning ignores that the CGL coverage Northern issued to De Graf is not limited to suits arising out of construction contracts. Nor is the policy limited to suits brought under Illinois law. For example, De Graf may enter a contract to hire a maintenance company to service its equipment or clean its building, where the other party is to be indemnified by De Graf.\nIn sum, De Graf and Capital intended the provision in the subcontract to be a waiver of De Graf\u2019s anticipated affirmative defense in a potential contribution action rather than any purported assumption of Capital\u2019s joint and several liability. Therefore, the policy\u2019s definition of \u201cinsured contract\u201d has not been met. De Graf did not assume Capital\u2019s \u201ctort liability,\u201d because it has not assumed Capital\u2019s \u201ctort liability\u201d which the policy defines as \u201cliability that would be imposed by law in the absence of any contract or agreement.\u201d\nAccordingly, we agree with the appellate court that Northern is not under a duty to defend or indemnify De Graf under the CGL policy. Hence, the circuit court properly granted summary judgment in favor of Northern. To the extent that Michael Nicholas, West Bend, and Christy-Foltz would hold otherwise, they are overruled.\nCONCLUSION\nFor the foregoing reasons, we affirm the judgment of the appellate court.\nAffirmed.\nWirginia Surety added Capital Construction as a necessary party defendant, but no relief was sought against Capital.", "type": "majority", "author": "JUSTICE FITZGERALD" } ], "attorneys": [ "Rusin Maciorowski & Friedman, Ltd., of Chicago (Gregory G. Vacala, Allison H. McJunkin and Rodney C. Bashford, of counsel), for appellant.", "Cremer, Kopon, Shaughnessy & Spina, LLC, of Chicago (Francis A. Spina, of counsel), for appellee Northern Insurance Company of New York." ], "corrections": "", "head_matter": "(No. 102036.\nVIRGINIA SURETY COMPANY, INC., Appellant, v. NORTHERN INSURANCE COMPANY OF NEW YORK et al., Appellees.\nOpinion filed January 19, 2007.\nRehearing denied March 26, 2007.\nRusin Maciorowski & Friedman, Ltd., of Chicago (Gregory G. Vacala, Allison H. McJunkin and Rodney C. Bashford, of counsel), for appellant.\nCremer, Kopon, Shaughnessy & Spina, LLC, of Chicago (Francis A. Spina, of counsel), for appellee Northern Insurance Company of New York." }, "file_name": "0550-01", "first_page_order": 560, "last_page_order": 580 }