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U.S. States Fire Insurance Co. v. Hartford Insurance Co., No. 1-99-1847

1st District, February 23, 2000

THIRD DIVISION

JUSTICE WOLFSON delivered the opinion of the court:

The issue in this case is simple--whether a party is an insured under the terms of an insurance policy. But to answer the question we must examine policy language not previously interpreted by any Illinois court.

FACTS

On May 1, 1994, R. Carlson & Sons, Inc. (Carlson), the contractor for a project to install new machinery at Modern Drop Forge Company (Modern Drop), entered into an oral contract with Field Technologies (Field) whereby Field agreed to provide millwrights and equipment for the project. Carlson claimed Field also agreed to have Carlson named as an insured in Field's comprehensive general liability insurance policy and to provide Carlson with a certificate of insurance. Field denied insurance coverage was a part of the oral agreement.

Field provided no certificate of insurance to Carlson before May 21, 1994, when one of Field's employees, Warren Tomaska (Tomaska), was injured while working at Modern Drop. Two days after this incident, however, Carlson requested and received a certificate of insurance from Field. A certificate of insurance was issued by Warren Insurance Agency, listing Carlson as an additional insured on Field's insurance policy with Hartford Insurance Company (Hartford).

In January 1995, Tomaska filed suit against Carlson to recover for injuries he sustained while working at Modern Drop on May 21, 1994. Carlson tendered the defense of the suit to Hartford. Hartford refused the tender, claiming Carlson was not an insured.

Carlson and Carlson's insurer, United States Fire Insurance Company (U.S. Fire), brought a declaratory judgment action against Hartford seeking a declaration that Hartford had the duty to defend and indemnify Carlson in the underlying negligence action brought by Tomaska.

The trial court, ruling on cross-motions for summary judgment, found that, at the time of Tomaska's accident, Carlson was neither a named insured nor an additional insured under the terms of the Hartford policy. For a person or organization to be an "additional insured" under the policy, the court said, there had to be some form of written agreement by the named insured to provide insurance coverage.

In an order dated April 22, 1999, the trial court granted summary judgment in favor of Hartford.

U.S. Fire and Carlson appeal this decision. Though other arguments were raised at trial, this appeal comes down to a single question: whether the Hartford policy requires that the agreement to provide insurance must be written. We conclude that it does and for that reason we affirm the trial court.

DECISION

We review de novo the trial court's grant of summary judgment in this case. State Farm Mut. Auto. Ins. v. Universal Underwriters Group, 285 Ill. App. 3d 115, 120, 674 N.E.2d 52 (1996). The sole issue before us is the construction of the Hartford insurance policy -- a question of law. Outboard Motor Marine Corp. v. Liberty Mutual Insurance Corp., 154 Ill. 2d 90, 108, 607 N.E.2d 1204 (1992).

We construe an insurance policy as a whole, giving policy words their plain, ordinary, and popular meaning, at the same time striving to fulfill the intent of the parties. Outboard Marine, 154 Ill. 2d at 108. A policy term is ambiguous only if it is susceptible to more than one reasonable interpretation. Lapham-Hickey Steel Corp. v. Protection Mutual Ins. Co., 166 Ill. 2d 520, 655 N.E.2d 842 (1995).

Though an insurance policy generally will be construed liberally in favor of coverage, of paramount importance is the reasonable construction of the policy. Travelers Insurance Companies v. P.C. Quote, Inc., 211 Ill. App. 3d 719, 570 N.E.2d 614 (1991). A strained, forced, unnatural, or unreasonable construction, or one which would lead to an absurd result, must not be adopted. Universal Underwriters Group, 285 Ill. App. 3d at 121; see also, 45 C.J.S. Insurance