{ "id": 3612794, "name": "MIDLAND INSURANCE COMPANY, Plaintiff and Counterdefendant-Appellee, v. BELL FUELS, INC., Defendant and Counterplaintiff-Appellant (The Continental Insurance Company et al., Defendants)", "name_abbreviation": "Midland Insurance Co. v. Bell Fuels, Inc.", "decision_date": "1987-05-11", "docket_number": "No. 85-3176", "first_page": "780", "last_page": "786", "citations": [ { "type": "official", "cite": "159 Ill. App. 3d 780" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "491 N.E.2d 1207", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "opinion_index": 0 }, { "cite": "142 Ill. App. 3d 435", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3452040 ], "weight": 2, "pin_cites": [ { "page": "441" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/142/0435-01" ] }, { "cite": "486 N.E.2d 1379", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "139 Ill. App. 3d 289", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3567388 ], "pin_cites": [ { "page": "291" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/139/0289-01" ] }, { "cite": "461 N.E.2d 382", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "101 Ill. 2d 1", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3160770 ], "pin_cites": [ { "page": "16-17" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/101/0001-01" ] }, { "cite": "443 N.E.2d 457", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "pin_cites": [ { "page": "460" } ], "opinion_index": 0 }, { "cite": "457 N.Y.S.2d 209", "category": "reporters:state", "reporter": "N.Y.S.2d", "weight": 2, "pin_cites": [ { "page": "212" } ], "opinion_index": 0 }, { "cite": "57 N.Y.2d 489", "category": "reporters:state", "reporter": "N.Y.2d", "case_ids": [ 4386644 ], "weight": 2, "pin_cites": [ { "page": "496" } ], "opinion_index": 0, "case_paths": [ "/ny-2d/57/0489-01" ] }, { "cite": "235 N.E.2d 385", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "opinion_index": 0 }, { "cite": "91 Ill. App. 2d 449", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 2819813 ], "weight": 3, "pin_cites": [ { "page": "454" } ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/91/0449-01" ] }, { "cite": "496 N.E.2d 1229", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 4, "year": 1968, "opinion_index": 0 }, { "cite": "146 Ill. App. 3d 434", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3570587 ], "weight": 4, "year": 1968, "pin_cites": [ { "page": "436" }, { "page": "436" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/146/0434-01" ] }, { "cite": "504 N.E.2d 971", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1986, "opinion_index": 0 }, { "cite": "152 Ill. App. 3d 448", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3575733 ], "year": 1986, "pin_cites": [ { "page": "450" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/152/0448-01" ] } ], "analysis": { "cardinality": 610, "char_count": 13939, "ocr_confidence": 0.767, "pagerank": { "raw": 1.6673775246548928e-07, "percentile": 0.6953895767668308 }, "sha256": "e381c0deac97912630230e2777bb7903667f3f158ab30c5338dc7ece7571bed4", "simhash": "1:c0fff0df9a55a1bf", "word_count": 2221 }, "last_updated": "2023-07-14T21:36:20.000303+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "MIDLAND INSURANCE COMPANY, Plaintiff and Counterdefendant-Appellee, v. BELL FUELS, INC., Defendant and Counterplaintiff-Appellant (The Continental Insurance Company et al., Defendants)." ], "opinions": [ { "text": "JUSTICE O\u2019CONNOR\ndelivered the opinion of the court:\nDefendant, Bell Fuels, Inc. (Bell), appeals from a declaratory judgment finding that Midland Insurance Company (Midland) owed no coverage for the defense or indemnification of Bell with respect to a third-party contribution action brought against Bell by Ford Motor Company (Ford). We affirm.\nJames L. Howard, an employee of Bell, brought a personal injury action against Ford, A1 Piemonte Ford, Inc., Genway Corporation, and Genway Fleet Leasing Corporation based on an injury which occurred in the course of his employment with Bell and while driving a vehicle leased to Bell by Genway. Ford then filed a third-party contribution action against Bell, seeking damages beyond its pro rata share of relative culpability in the event that Ford was found liable to Howard.\nBell tendered the case to its insurer, Midland, which refused to defend Bell. Midland then filed a declaratory judgment action asserting that it did not owe a defense to Bell by reason of certain policy exclusions. Bell brought a declaratory counterclaim against Midland, alleging that Midland had wrongfully refused to defend Bell and that Midland should be estopped to deny coverage under the terms and conditions of its policy due to its failure to defend. Midland and Bell both filed motions for summary judgment. After a hearing on the motions, the trial court granted Midland judgment on the pleadings. Bell now brings this appeal.\nThe question raised by this appeal is whether a comprehensive general liability policy containing an employee exclusion relieves the carrier of any duty to defend or indemnify when a third party brings a contribution against the insured employer.\nThe insurance policy in question initially provides as follows:\n\u201cI. COVERAGE\nThe company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of *** (e) bodily injury *** to which this insurance applies ***.\u201d\nThe exclusion in question states that coverage does not apply:\n\u201c(c) to bodily injury to any employee of the insured arising out of and in the course of his employment by the insured or to any obligation of the insured to indemnify another because of damages arising out of such injuries.\u201d\nBell maintains that the first part of the exclusion applies only to direct actions, i.e., to preclude coverage when the insured is sued by an injured employee. Bell also maintains that the second part of the exclusion should not apply in a contribution action between a third party and the employer since contribution is not a recognized form of indemnity.\nMidland maintains that the exclusion does apply to Ford\u2019s third-party contribution action because, for insurance coverage purposes, Ford\u2019s third-party complaint is an action seeking damages because of bodily injury to Bell Fuels\u2019 employee, Howard. Midland also contends that for insurance coverage purposes, Ford\u2019s third-party contribution action seeks to have third-party defendant Bell indemnify Ford with respect to Howard\u2019s injury and damages.\nFor the purpose of determining whether or not an action is entitled to the protection of a third-party defendant\u2019s insurance policy, the Illinois courts look at the nature of the underlying claim. (State Farm Fire & Casualty Co. v. Holeczy (1987), 152 Ill. App. 3d 448, 450, 504 N.E.2d 971; Aetna Casualty & Surety Co. v. Beautiful Signs, Inc. (1986), 146 Ill. App. 3d 434, 436, 496 N.E.2d 1229; Harvey Wrecking Co. v. Certain Underwriters at Lloyd\u2019s, London (1968), 91 Ill. App. 2d 449, 235 N.E.2d 385.) In Harvey Wrecking Co., this court considered a coverage in a similar fact situation which involved an exclusion almost identical to that in Midland\u2019s policy. An employee who had been injured in the course of his employment sued the owner of the premises where he had been working, and the owner in turn filed a third-party complaint against the injured employee\u2019s employer seeking express and implied indemnity.\nThe employer tendered its defense to the insurer, who declined to defend the employer. The employer argued that the indemnity action of the property owner against it was so distinct from the underlying action by the employee against the property owner as to fall outside the exclusion. This court disagreed and held that where the third-party action is sufficiently retentive of the characteristics of the underlying claim and the underlying claim falls within an exclusion, the third-party claim was also excluded from coverage as a matter of law. Harvey Wrecking Co. v. Certain Underwriters at Lloyd\u2019s, London (1968), 91 Ill. App. 2d 449, 454, 235 N.E.2d 385.\nMore recently, in Aetna Casualty & Surety Co. v. Beautiful Signs, Inc. (1986), 146 Ill. App. 3d 434, 496 N.E.2d 1229, the court construed an exclusion also almost identical to the exclusion at issue here. In Aetna, Dale Brazier, an employee of Beautiful Signs, was killed in an accident while working for his employer on the property of George Kontos. The administrator of Brazier\u2019s estate brought an action against Kontos, who then brought a third-party action against Beautiful Signs under the Illinois Contribution Among Joint Tortfeasors Act (Ill. Rev. Stat. 1985, ch. 70, par. 301 et seq.).\nAs Bell Fuels did here, Beautiful Signs tendered the case to its insurer, Aetna. Aetna instituted a declaratory judgment action asserting that coverage was precluded by an exclusion in the policy. The trial court held that the exclusion did not preclude coverage but the appellate court reversed.\nThe appellate court noted that the general liability policy issued by Aetna to Beautiful Signs was designed to exclude coverage for employee injuries because such injuries were covered through worker\u2019s compensation insurance. The court stated that although much was made of the fact that the suit was a third-party action, it was Brazier\u2019s injuries for which Beautiful Signs would become liable. The court concluded that if a jury made an award to Kontos on the third-party action, it would not be for a duty that existed between Beautiful Signs and Kontos, but for injuries to Brazier, precisely the type of situation for which the exclusion was drafted. Aetna Casualty & Surety Co. v. Beautiful Signs, Inc. (1986), 146 Ill. App. 3d 434, 436, 496 N.E.2d 1229.\nOn review of the facts here and in light of Aetna, we concur with the trial court that the exclusion should apply. Howard was injured in the course of his employment with Bell while driving a Ford vehicle leased to Bell by Genway. He brought a personal injury action against Ford, which then brought a third-party action against Bell seeking contribution if Ford was found liable to Bell.\nIn form, Ford\u2019s action against Bell seeks to recover economic damages, i.e., to recover any dollar loss it might incur either as a result of judgment in favor of Howard or as a result of settlement with Howard. In substance, however, the damages for which Bell would be liable would be for Howard\u2019s personal injuries. Midland\u2019s policy does not provide any insurance protection to Bell for suits for purely economic losses. Coverage is provided only for bodily injury losses.\nBell urges us to adopt a contrary view expressed by the Court of Appeals of New York in Insurance Co. of North America v. Dayton Tool & Die Works, Inc. (1982), 57 N.Y.2d 489, 457 N.Y.S.2d 209, 443 N.E.2d 457. That court considered an identical issue with respect to the same exclusions. The court found that the first half of the exclusion could not apply to a contribution action because conceptually an action for contribution against the employer \u201cdoes not render the employer directly responsible to the employee; it only affects the employer's liability to third parties.\u201d (Insurance Co. of North America v. Dayton Tool & Die Works, Inc. (1982), 57 N.Y.2d 489, 496, 457 N.Y.S.2d 209, 212, 443 N.E.2d 457, 460.) The court then held that the second half of the exclusion did not apply to actions for contribution, noting that since indemnity differs from contribution, any exclusion which referred to obligations to indemnify could not be broadly extended by implication to include actions for contribution as well.\nAlthough the court in Dayton Tool reached a contrary result, it is not consistent with Illinois law as set forth in, e.g., Aetna Casualty & Surety Co. v. Beautiful Signs, Inc. (1986), 146 Ill. App. 3d 434, 496 N.E.2d 1229, and Harvey Wrecking Co. v. Certain Underwriters at Lloyd\u2019s, London (1968), 91 Ill. App. 2d 449, 235 N.E.2d 385. Moreover, in reaching its decision, the New York court adopted a highly technical approach to the term \u201cindemnify\u201d derived from prior New York case law. As did the court in Dayton Tool, Bell equates the word \u201cindemnify,\u201d which is used throughout Midland\u2019s policy, with the legal term of art \u201cindemnity.\u201d Bell then asserts that because Ford is not seeking \u201cindemnity,\u201d the exclusion does not apply.\nIt is amply demonstrated in Midland\u2019s brief that the verb \u201cindemnify\u201d encompasses more than the legal concept of indemnity. Webster\u2019s New Collegiate Dictionary (9th ed. 1983) defines \u201cindemnify\u201d as \u201cto make compensation to for incurred hurt, loss or damage\u201d and lists the word \u201cpay\u201d as a synonym. (Webster\u2019s New Collegiate Dictionary 612 (9th ed. 1983).) Black\u2019s Law Dictionary defines the word \u201cindemnify\u201d as meaning \u201c[t]o save harmless; to secure against loss or damage; to give security for the reimbursement of a person in case of an anticipated loss falling on him.\u201d (Black\u2019s Law Dictionary 692 (5th ed. 1979).) While many dictionaries do not include \u201cinsure\u201d among the definitions of \u201cindemnify\u201d (see, e.g., Webster\u2019s Third New International Dictionary 1147 (1986); Webster\u2019s New Collegiate Dictionary 612 (9th ed. 1983); Black\u2019s Law Dictionary 692 (5th ed. 1979)),. the term \u201cindemnity,\u201d in contrast, is generally more narrowly defined to mean \u201cinsure.\u201d Black\u2019s Law Dictionary defines \u201cindemnity\u201d as \u201c[a] collateral contract or assurance, by which one person engages to secure another against an anticipated loss or to prevent him from being damnified by the legal consequences of an act or forbearance on the part of one of the parties or of some third person.\u201d Black\u2019s Law Dictionary 692 (5th ed. 1979).\nThe legal distinctions between indemnity and contribution have been discussed at length in numerous cases, among them Doyle v. Rhodes (1984), 101 Ill. 2d 1, 16-17, 461 N.E.2d 382, where the court stated:\n\u201c[indemnity, *** unlike contribution, has the effect of shifting the entire loss from the defendant to another party ***. An action for contribution shifts only part of the loss depending on the comparative responsibility of the parties ***.\u201d\nSee also Heinrich v. Peabody International Corp. (1985), 139 Ill. App. 3d 289, 291, 486 N.E.2d 1379 (\u201cContribution and indemnity are distinct legal concepts: the elements of the actions differ as well as the measure of recovery\u201d).\nAt issue here is not whether indemnity differs from contribution but whether it was the expectation of the parties in drafting the second clause of exclusion \u201cc\u201d that any obligation to contribute to a third party a share of the money paid by him as damages for bodily injury to an employee of the insured is encompassed within the concept \u201cindemnify\u201d as used in exclusion \u201cc.\u201d We believe that it was. We interpret exclusion \u201cc\u201d to exclude from coverage an obligation of the insured to indemnify for damages resulting from injury to Bell\u2019s employee whether the obligation is asserted by way of contribution or indemnification.\nBell also relies on Howalt v. Ohio Casualty Insurance Co. (1986), 142 Ill. App. 3d 435, 491 N.E.2d 1207. The plaintiff in Howalt injured a co-employee, Mozden, who then brought an action against the employer, Mozden Construction Company. Mozden Construction Company then brought a third-party complaint for contribution against Howalt. The comprehensive general liability insurer, Ohio Casualty Insurance Company, refused to defend Howalt, relying upon a co-employee exclusion which barred liability coverage to any employee of the named insured for bodily injury to \u201canother employee of the same employer arising out of or in the course of his employment.\u201d\nThe trial court found that this co-employee exclusion did not apply in the third-party contribution action brought against the co-employee in the original action for bodily injuries, notwithstanding that their employer was apparently also insured separately under a policy covering workers\u2019 compensation claims. The appellate court affirmed, holding that the co-employee exclusion did not bar contribution claims against an employee arising from injury to a co-employee. (Howalt v. Ohio Casualty Insurance Co. (1986), 142 Ill. App. 3d 435, 441, 491 N.E.2d 1207.) The exclusion at issue in Howalt, however, by its terms applied only to a claim by one employee against a fellow employee. There was no additional or alternative exclusion that denied coverage for contribution or indemnification claims asserted against a tortfeasor employee which arose out of an injury to a co-employee.\nWe conclude that the trial court correctly found that there is no coverage available under the Midland Insurance Company policy for the defense or indemnity of Bell Fuels, Inc., with respect to the third-party action brought against it by Ford Motor Company in the underlying action.\nJudgment affirmed.\nQUINLAN, P.J., and CAMPBELL, J., concur.", "type": "majority", "author": "JUSTICE O\u2019CONNOR" } ], "attorneys": [ "Querrey, Harrow, Gulanick & Kennedy, Ltd., of Chicago (Victor Piekarski and Michael Resis, of counsel), for appellant.", "Williams & Montgomery, Ltd., of Chicago (Barry L. Kroll, Patrick F. Klunder, and Lloyd E. Williams, Jr., of counsel), for appellee." ], "corrections": "", "head_matter": "MIDLAND INSURANCE COMPANY, Plaintiff and Counterdefendant-Appellee, v. BELL FUELS, INC., Defendant and Counterplaintiff-Appellant (The Continental Insurance Company et al., Defendants).\nFirst District (1st Division)\nNo. 85 \u2014 3176\nOpinion filed May 11, 1987.\nQuerrey, Harrow, Gulanick & Kennedy, Ltd., of Chicago (Victor Piekarski and Michael Resis, of counsel), for appellant.\nWilliams & Montgomery, Ltd., of Chicago (Barry L. Kroll, Patrick F. Klunder, and Lloyd E. Williams, Jr., of counsel), for appellee." }, "file_name": "0780-01", "first_page_order": 802, "last_page_order": 808 }