{ "id": 4270390, "name": "OHIO CASUALTY INSURANCE COMPANY, Plaintiff-Appellee, v. OAK BUILDERS, INC., Defendant-Appellant (David Huerta, Defendant-Appellee)", "name_abbreviation": "Ohio Casualty Insurance v. Oak Builders, Inc.", "decision_date": "2007-06-01", "docket_number": "No. 1-05-2279", "first_page": "997", "last_page": "1004", "citations": [ { "type": "official", "cite": "373 Ill. App. 3d 997" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "219 Or. 110", "category": "reporters:state", "reporter": "Or.", "case_ids": [ 4915900 ], "year": 1959, "pin_cites": [ { "page": "129" } ], "opinion_index": 0, "case_paths": [ "/or/219/0110-01" ] }, { "cite": "266 Ill. App. 3d 829", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 887304 ], "weight": 4, "year": 1994, "pin_cites": [ { "page": "836" }, { "page": "836" }, { "page": "836" }, { "page": "836" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/266/0829-01" ] }, { "cite": "48 Ill. 2d 71", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2906633 ], "weight": 12, "year": 1970, "pin_cites": [ { "page": "76" }, { "page": "76" }, { "page": "77-82" }, { "page": "80" }, { "page": "78-79" }, { "page": "76" }, { "page": "80" }, { "page": "79" }, { "page": "80" }, { "page": "80" }, { "page": "80" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/48/0071-01" ] }, { "cite": "223 Ill. 2d 407", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3604958 ], "year": 2006, "pin_cites": [ { "page": "416" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/223/0407-01" ] }, { "cite": "222 Ill. 2d 472", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3601736 ], "year": 2006, "pin_cites": [ { "page": "476" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/222/0472-01" ] }, { "cite": "213 Ill. 2d 141", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 8448460 ], "weight": 2, "year": 2004, "pin_cites": [ { "page": "153" }, { "page": "153" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/213/0141-01" ] }, { "cite": "156 Ill. 2d 384", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 777543 ], "weight": 2, "year": 1993, "pin_cites": [ { "page": "391" }, { "page": "391" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/156/0384-01" ] } ], "analysis": { "cardinality": 588, "char_count": 17965, "ocr_confidence": 0.733, "pagerank": { "raw": 1.2867979297044265e-07, "percentile": 0.618856736435213 }, "sha256": "7e3c87d11f944fa11c5c94fcb2f47d287003880b0a8543e62d74c3c353cd6172", "simhash": "1:89f75c136de0d0a1", "word_count": 2775 }, "last_updated": "2023-07-14T16:22:18.400209+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "OHIO CASUALTY INSURANCE COMPANY, Plaintiff-Appellee, v. OAK BUILDERS, INC., Defendant-Appellant (David Huerta, Defendant-Appellee)." ], "opinions": [ { "text": "JUSTICE TULLY\ndelivered the opinion of the court:\nThis appeal concerns a declaratory judgment action that was brought in the circuit court of Cook County by plaintiff-appellee, Ohio Casualty Company (Ohio Casualty). Ohio Casualty sought a declaratory judgment that its policy did not provide coverage to defendant-appellant, Oak Builders, Inc. (Oak Builders), for an underlying action brought against Oak Builders by David Huerta (Huerta). In the alternative, Ohio Casualty sought a declaratory judgment that any coverage Ohio Casualty\u2019s policy did provide to Oak Builders was excess to Oak Builders\u2019 coverage under a different insurance policy, which was issued to Oak Builders by American Family Insurance Company (American Family). Following a hearing on cross summary judgment motions filed by both Ohio Casualty and Oak Builders, the circuit court held that the \u201cadditional insured endorsement\u201d in Ohio Casualty\u2019s policy provided coverage for Huerta\u2019s suit, but that the coverage provided by Ohio Casualty\u2019s policy was \u201cexcess\u201d to the coverage provided under Oak Builders\u2019 policy with American Family. In essence, the circuit court concluded that Ohio Casualty would be liable only if the amount owed in the Huerta suit exceeded the maximum amount recoverable under Oak Builders\u2019 policy with American Family.\nOn appeal, Oak Builders argues that the circuit court\u2019s judgment should be reversed because the coverage provided by Ohio Casualty\u2019s \u201cadditional insured endorsement\u201d was coprimary rather than excess and, therefore, Ohio Casualty and Oak Builders should be hable for a pro-rata share of the settlement or judgment in the underlying lawsuit brought by Huerta. For the following reasons, we reverse and remand with directions.\nFACTS\nOn June 17, 2002, Huerta brought an action in the circuit court against Oak Builders, among others, alleging injuries as a result of negligence at a construction site. At the time of the accident at issue in Huerta\u2019s personal injury action, Huerta was assigned to perform construction work at the site pursuant to a contract between his employer, JAZ Construction, Inc. (JAZ Construction), and Oak Builders. JAZ Construction was insured by Ohio Casualty under a contractor\u2019s liability policy. The contractor\u2019s liability policy issued to JAZ Construction by Ohio Casualty contained an \u201cadditional insured endorsement,\u201d which provided insurance coverage to Oak Builders as an additional insured. In addition to being insured pursuant to Ohio Casualty\u2019s \u201cadditional insured endorsement,\u201d Oak Builders was insured under a commercial general liability policy issued by American Family.\nIn response to Huerta\u2019s complaint, Oak Builders tendered defense to Ohio Casualty pursuant to its status as an \u201cadditional insured\u201d under JAZ Construction\u2019s policy. On November 19, 2002, Oak Builders also filed a third-party complaint against JAZ Construction denying all liability and negligence alleged against it in Huerta\u2019s complaint. Additionally, Oak Builders\u2019 third-party complaint sought contribution from JAZ Construction, as Huerta\u2019s employer, on the grounds that JAZ Construction had committed one or more negligent acts or omissions resulting in Huerta\u2019s claimed injuries.\nOn March 3, 2001, Ohio Casualty filed a declaratory judgment seeking a declaration that Oak Builders was not an additional insured under JAZ Construction\u2019s policy for purposes of Huerta\u2019s complaint. Ohio Casualty also sought a declaration that, even if Oak Builders was an additional insured for purposes of Huerta\u2019s complaint, Ohio Casualty\u2019s policy provided Oak Builders with exclusively excess coverage. Ohio Casualty filed a motion for judgment on the pleadings. In addition, Oak Builders filed a motion for summary judgment in which it argued it qualified as an additional insured on the policy issued by Ohio Casualty to JAZ Construction and that Ohio Casualty\u2019s policy provided primary coverage to Oak Builders.\nFollowing a hearing, the circuit court granted Oak Builders\u2019 motion for summary judgment in part, finding that Oak Builders was an additional insured on the policy issued by Ohio Casualty to JAZ Construction. The circuit court also found, however, that the Ohio Casualty policy provided \u201cexcess\u201d coverage rather than \u201cprimary\u201d coverage to Oak Builders because the Ohio Casualty policy\u2019s \u201cadditional insured endorsement\u201d provided fundamentally excess coverage. The circuit court granted Ohio Casualty\u2019s motion for judgment on the pleadings as to this second issue.\nOak Builders filed a motion for reconsideration of the circuit court\u2019s ruling that the Ohio Casualty policy provides exclusively excess coverage to the policy issued by American Family. Oak Builders sought a finding that the Ohio Casualty policy and the American Family policy both provide primary coverage to Oak Builders and, therefore, Ohio Casualty has a duty to share the cost of defending and indemnifying Huerta\u2019s suit against Oak Builders. The circuit court denied Oak Builders\u2019 motion for reconsideration and this timely appeal followed.\nDISCUSSION\nThis appeal concerns a dispute over the interpretation of \u201cother insurance\u201d clauses contained in the two insurance policies issued to Oak Builders. One insurance policy was issued to Oak Builders by American Family pursuant to a commercial general liability policy and the other insurance policy was issued to Oak Builders by Ohio Casualty pursuant to an \u201cadditional insured endorsement.\u201d Ohio Casualty asserts that the American Family policy provides \u201cfundamentally primary\u201d coverage to Oak Builders and the \u201cother insurance\u201d clause in Ohio Casualty\u2019s \u201cadditional insured endorsement\u201d renders Ohio Casualty\u2019s coverage \u201cfundamentally excess.\u201d As such, Ohio Casualty argues that American Family should be solely responsible for defending and indemnifying the suit brought by Huerta. Oak Builders, on the other hand, contends that both the American Family policy and the Ohio Casualty policy provide \u201cprimary\u201d coverage and the \u201cexcess\u201d other insurance clauses in the two insurance policies are mutually repugnant. Oak Builders asserts that, because both policies provide \u201cprimary\u201d coverage and the two \u201cexcess\u201d other insurance clauses are mutually repugnant, American Family and Ohio Casualty should share the cost of defending and indemnifying the action brought by Huerta. We agree with Oak Builders.\nA court\u2019s primary objective in construing the language of an insurance policy is to ascertain and give effect to the intentions of the parties as expressed by the language of the policy. Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384, 391 (1993). Like any contract, an insurance policy is to be construed as a whole, giving effect to every provision, if possible, because it must be assumed that every provision was intended to serve a purpose. Central Illinois Light Co. v. Home Insurance Co., 213 Ill. 2d 141, 153 (2004). If the words used in the policy, given their plain and ordinary meaning, are unambiguous, they must be applied as written. Crum & Forster Managers Corp., 156 Ill. 2d at 391. However, if the words used in the policy are ambiguous, they will be strictly construed against the drafter. Central Illinois Light Co., 213 Ill. 2d at 153. It is well settled that the construction of an insurance policy is a question of law and is an appropriate subject for disposition by way of summary judgment. Illinois Farmers Insurance Co. v. Marchwiany, 222 Ill. 2d 472, 476 (2006). Since the construction of an insurance policy is a question of law, our review is de novo. Nicor, Inc. v. Associated Electric & Gas Insurance Services, Ltd., 223 Ill. 2d 407, 416 (2006).\nAs stated, this case presents a dispute regarding the interpretation of the \u201cother insurance\u201d clauses contained in the American Family policy and in the Ohio Casualty policy. Our supreme court, in Putnam v. New Amsterdam Casualty Co., 48 Ill. 2d 71 (1970), provided guidance regarding the different types of \u201cother insurance\u201d clauses and the manner in which disputes involving \u201cother insurance\u201d clauses should be resolved. In Putnam, our supreme court noted that there are generally three types of \u201cother insurance\u201d clauses that tend to appear in insurance contracts: \u201cpro-rata\u201d clauses, \u201cexcess\u201d clauses, and \u201cescape\u201d clauses. Putnam, 48 Ill. 2d at 76. The Putnam court explained the three types of \u201cother insurance\u201d clauses as follows:\n\u201cThe typical pro-rata clause provides that when an insured has other insurance available, the company will be liable only for the proportion of the loss represented by the ratio between its policy limit and the total limits of all available insurance. The excess clause allows coverage only \u2018over and above\u2019 other insurance. The escape clause holds the policy null and void with respect to any hazard as to which other insurance exists.\u201d Putnam, 48 Ill. 2d at 76.\nAfter explaining the three different types of \u201cother insurance\u201d clauses, the Putnam court adopted the majority rule for resolving \u201cother insurance\u201d disputes and concluded that \u201cother insurance\u201d provisions should be reconciled whenever possible to effectuate the intent of the parties. Putnam, 48 Ill 2d at 77-82. While our supreme court adopted the view that \u201cother insurance\u201d provisions should be reconciled whenever possible, the Putnam court also confirmed that \u201cwhen two policies contain the same sort of \u2018other insurance\u2019 clause, the clauses will be deemed incompatible.\u201d Padilla v. Norwegian-American Hospital, Inc., 266 Ill. App. 3d 829, 836 (1994), citing Putnam, 48 Ill. 2d at 80. The Putnam court reasoned that \u201cthis approach is fair when there is no rational basis for applying the clause of one policy and refusing to apply the identical clause of another policy.\u201d Putnam, 48 Ill. 2d at 78-79.\nIn this case, the American Family policy\u2019s \u201cother insurance\u201d clause provides, in relevant part, as follows:\n\u201cOther Insurance:\nIf valid and collectible insurance is available to [Oak Builders] for a loss we cover under Coverages A or B of this Coverage Part, [American Family\u2019s] obligations are limited as follows:\nA. Primary Insurance\nThis insurance is primary except when B, below, applies. If this insurance is primary, our obligations are not affected unless any of the other insurance is also primary. Then we will share with all that other insurance by the method described in C, below.\nB. Excess Insurance\nThis insurance is excess over:\n(2) Any other primary insurance available to you covering liability for damages arising out of the premises or operations for which you have been added as an additional insured by attachment or endorsement.\u201d (Emphasis added.)\nThe \u201cother insurance\u201d clause in the Ohio Casualty \u201cadditional insured endorsement,\u201d which makes Oak Builders an additional insured because it was a \u201cperson or organization whom [JAZ Construction, the named insured, was] required to name as an additional insured on this policy under a written policy or agreement,\u201d provides, in relevant part, as follows:\n\u201cAny coverage provided hereunder shall be excess over any other valid and collectible insurance available to [Oak Builders] whether primary, excess, contingent or on any other basis unless a contract specifically requires that this insurance be primary or you request that it apply on a primary basis.\u201d (Emphasis added.)\nAfter reviewing both of these \u201cother insurance\u201d provisions, it is clear that both are \u201cexcess\u201d clauses. Indeed, both clauses specifically use the word \u201cexcess\u201d and both clauses clearly convey the intent to have insurance coverage only \u201cover and above\u201d other available insurance. See Putnam, 48 Ill. 2d at 76. We must attempt to reconcile \u201cother insurance\u201d clauses whenever possible. However, when, as here, we are faced with two primary insurance policies that contain the same sort of \u201cother insurance\u201d clauses- \u2014 specifically, \u201cexcess\u201d insurance clauses \u2014 the policies are mutually repugnant and incompatible. See Putnam, 48 Ill. 2d at 80; Padilla, 266 Ill. App. 3d at 836. Faced with these two insurance policies, both of which provide primary coverage for the type of suit brought by Huerta and both of which contain \u201cother insurance\u201d clauses stating that the coverage provided is \u201cexcess,\u201d we must conclude that the two \u201cexcess\u201d clauses cancel each other out and American Family and Ohio Casualty should share the costs associated with defending and indemnifying the suit brought by Huerta.\nIn an effort to avoid having to share the cost of defending and indemnifying the suit brought by Huerta against Oak Builders, Ohio Casualty asserts two arguments. First, Ohio Casualty contends that the coverage it provides to Oak Builders \u201cis expressly identified as excess coverage in the Ohio Casualty policy.\u201d In other words, Ohio Casualty asserts that Oak Builders\u2019 insurance coverage with American Family is \u201cfundamentally primary coverage,\u201d while Oak Builders\u2019 coverage with Ohio Casualty is \u201cfundamentally excess.\u201d What Ohio Casualty overlooks, however, is that both the American Family policy and the Ohio Casualty \u201cadditional insured endorsement\u201d provide primary coverage and the intent and purpose of each policy\u2019s \u201cother insurance\u201d clause is to convert otherwise primary coverage into excess insurance when other primary insurance covers the loss. Since both policies provide primary coverage and both policies contain the same sort of excess \u201cother insurance\u201d clauses, the \u201cother insurance\u201d clauses are irreconcilable in that following the express terms of one policy would be in direct conflict with the express terms of the other policy; that is, if each \u201cexcess\u201d clause was given effect, neither policy would provide primary coverage. In fact, the only way that the two conflicting \u201cexcess\u201d clauses could be reconciled would be to read the Ohio Casualty \u201cadditional insured endorsement\u201d first and then determine that American Family\u2019s coverage is \u201cprimary\u201d and Ohio Casualty\u2019s coverage is \u201cexcess.\u201d There is no plausible reason for reading Ohio Casualty\u2019s policy first and we believe that Ohio Casualty\u2019s approach would lead to an arbitrary result that was not contemplated by the parties.\nSecond, Ohio Casualty asserts it should not be responsible for sharing with American Family the cost of defending and indemnifying the suit brought by Huerta because the two \u201cexcess\u201d clauses are not identical and, therefore, the two clauses can be reconciled. It is true that the \u201cexcess\u201d clause in the Ohio Casualty policy\u2019s \u201cadditional insured endorsement\u201d and the \u201cexcess\u201d clause in the American Family policy do not contain identical verbiage and, in Putnam, our supreme court rejected the proposition that all \u201cother insurance\u201d clauses are repugnant, \u201c \u2018regardless of the nature of the clause.\u2019 \u201d Putnam, 48 Ill. 2d at 79, quoting Lamb-Weston, Inc. v. Oregon Auto Insurance Co., 219 Or. 110, 129, 341 E2d 110, 119 (1959). However, the Putnam court described the three different types of \u201cother insurance\u201d clauses and concluded that where \u201cother insurance\u201d clauses of the same type are in conflict, it is \u201cimpossible to give effect to the intent of all parties.\u201d Putnam, 48 Ill. 2d at 80. Indeed, in Padilla, relying on our decision in Putnam, we confirmed that \u201cwhen two policies contain the same sort of \u2018other insurance\u2019 clause, the clauses will be deemed incompatible.\u201d (Emphasis added.) Padilla, 266 Ill. App. 3d at 836, citing Putnam, 48 Ill. 2d at 80. As discussed above, the American Family policy\u2019s and the Ohio Casualty\u2019s \u201cadditional insured endorsement\u201d both contain similar \u201cother insurance\u201d clauses; specifically, both policies contain \u201cexcess\u201d insurance clauses. Since the policies at issue in this case both contain the same type of \u201cother insurance\u201d clauses, we must conclude that the two clauses cannot be reconciled and the parties should share the cost of defending and indemnifying the lawsuit brought by Huerta.\nIn sum, we hold that both the American Family policy\u2019s and the Ohio Casualty policy\u2019s \u201cadditional insured endorsement\u201d provide primary insurance and both contain the same sort of excess \u201cother insurance\u201d clauses. As such, both insurance companies intended to offer excess insurance if and when other primary insurance was available. We conclude that the \u201cexcess\u201d insurance clauses are mutually repugnant and cancel each other out since the only way to give effect to one insurer\u2019s intention would be arbitrarily to read one policy\u2019s excess clause first and undermine the intention of the insurer whose policy\u2019s \u201cexcess\u201d insurance clause was read second. Finally, we hold that where, as here, \u201ctwo policies contain the same sort of \u2018other insurance\u2019 clause, the clauses will be deemed incompatible.\u201d (Emphasis added.) Padilla, 266 Ill. App. 3d 829, 836, citing Putnam, 48 Ill. 2d at 80. In such cases, the loss is prorated between the policies.\nCONCLUSION\nWe reverse the judgment of the circuit court and remand the cause for a calculation of the respective liabilities under the American Family policy and the Ohio Casualty policy in accordance with this opinion and the language of the contracts.\nReversed and remanded with directions.\nO\u2019MARA FROSSARD and GALLAGHER, JJ., concur.\nHuerta is the plaintiff in the underlying action pending in the circuit court. Ohio Casualty named Huerta as \u201ca necessary but nominal party\u201d to its declaratory judgment action. Ohio Casualty sought no specific relief from Huerta; on the contrary, Huerta was joined \u201csolely in order to be bound by the judgment entered\u201d in Ohio Casualty\u2019s declaratory judgment action.", "type": "majority", "author": "JUSTICE TULLY" } ], "attorneys": [ "Carol Proctor, Joshua G. Vincent, and Timothy G. Shelton, all of Hinshaw & Culbertson LLP of Chicago, for appellant.", "Robert Marc Chemers, Scott L. Howie, and Darryl L. Awick, all of Pretzel & Stouffer, Chtrd., of Chicago, for appellee Ohio Casualty Insurance Company." ], "corrections": "", "head_matter": "OHIO CASUALTY INSURANCE COMPANY, Plaintiff-Appellee, v. OAK BUILDERS, INC., Defendant-Appellant (David Huerta, Defendant-Appellee).\nFirst District (5th Division)\nNo. 1-05-2279\nOpinion filed June 1, 2007.\nCarol Proctor, Joshua G. Vincent, and Timothy G. Shelton, all of Hinshaw & Culbertson LLP of Chicago, for appellant.\nRobert Marc Chemers, Scott L. Howie, and Darryl L. Awick, all of Pretzel & Stouffer, Chtrd., of Chicago, for appellee Ohio Casualty Insurance Company." }, "file_name": "0997-01", "first_page_order": 1015, "last_page_order": 1022 }