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In December 1999, plaintiff, National Union Fire InsuranceCompany of Pittsburgh, Pennsylvania (National), filed a complaintfor a declaratory judgment against R. Olson ConstructionContractors, Inc., d/b/a R. Olson Concrete Construction (Olson),and Leroy and Donna Schmidt (the Schmidts). National sought adetermination that it was not obligated to defend or indemnifyOlson in an action brought by the Schmidts (Schmidt action orunderlying action) against Olson for injuries Leroy Schmidt(Schmidt) suffered at a construction site while an employee ofMeyer Material Company (Meyer).

National had issued a comprehensive general liability policyin which Meyer was an insured and Olson was named in an endorsementas an additional insured with respect to liability arising out ofMeyer's operations for Olson. The endorsement specified that thepolicy would not cover Olson's liability arising from its ownnegligence or that of its servants, agents, or employees. Olsonwas a concrete subcontractor for the construction project andcontracted with Meyer to have Meyer deliver concrete to theconstruction site. Meyer employed Schmidt as a driver of one ofits concrete delivery trucks. Schmidt was allegedly injured whenhe fell down while washing down his ready mix concrete truck insidea building at the project site.

Schmidt filed a complaint (underlying complaint) against Olson and others, alleging that various negligent acts or omissions onthe part of Olson caused Schmidt's injuries. Based on the sameallegations, the underlying complaint also sought damages fromOlson, claiming that Donna Schmidt, Leroy's wife, suffered a lossof consortium. Meyer was not named as a defendant in theunderlying complaint. Olson tendered the defense of the Schmidtaction to National, which declined the tender. Olson in turn fileda third-party complaint for contribution among tortfeasors againstMeyer pursuant to the Joint Tortfeasor Contribution Act (740 ILCS100/1 et seq. (West 1998)). The third-party complaint alleged thatMeyer was guilty of the negligent acts or omissions thatproximately caused Schmidt's injuries and that, if Olson should befound liable to the Schmidts for the injuries alleged in theunderlying complaint, it will be because of the wrongful actionsand omissions of Meyer and Olson would be entitled to contributionshould a judgment for damages be entered against Olson.

National and Olson filed cross-motions for summary judgment. National's position, in essence, was that it should not be requiredto defend Olson in the underlying action because Olson could onlybe found liable if its own negligence proximately caused Schmidt'sinjuries and the National policy excluded coverage for Olson'sliability if it resulted from Olson's own negligence. The trialcourt granted Olson's motion, however, concluding that, even ifOlson were found liable in the Schmidt action for Olson's ownnegligence, some portion of Schmidt's possible award couldpotentially be attributable to acts arising out of Meyer's ongoingoperations performed for Olson; therefore, National had a duty todefend Olson in the Schmidt action. Olson timely appeals. Weconclude that National does not have a duty to defend Olson, and wereverse the judgment.

The record shows that there was an additional insuredendorsement entitled "ADDITIONAL INSURED--OWNERS, LESSEES ORCONTRACTORS (FORM B)" that modified the insurance provided underthe policy. The endorsement stated:

"This endorsement modifies insurance provided under thefollowing:

COMMERCIAL GENERAL LIABILITY COVERAGE PART

SCHEDULE

Name of Person or Organization:

CERTIFICATE HOLDERS LISTED ON FILE WITH THE INSURANCECOMPANY. ADDITIONALLY, COVERAGE SHALL NOT APPLY TO ANYLIABILITY RESULTING FROM THE CERTIFICATE HOLDER'S OWNNEGLIGENCE OR THE NEGLIGENCE OF ITS SERVANTS, AGENTS OREMPLOYEES.

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WHO IS AN INSURED (Section II) is amended to include as aninsured the person or organization shown in the Schedule, butonly with respect to liability arising out of your ongoingoperations performed for that insured."

Olson was supplied with a certificate of insurance thatspecified that the policy provides general liability insurancecoverage to Meyer. An attachment to the certificate states:

"ATTACHMENT to Certificate of Insurance dated January 1, 1997,naming Meyer Material Company as Insured and R. OlsonConstruction Co. as Certificate Holder:

Re: All Jobs

R. Olson Construction Co. Contrs. Inc. is named an additionalInsured as its interests may appear, with respect to workperformed by Meyer Material Company for all jobs, under theterms of ISO form No. CG20101185, Additional Insured--Owners,Lessees or Contractors (Form B), except that coverage shallnot apply to any liability resulting from R. OlsonConstruction Co. Contrs. Inc.'s own negligence or thenegligence of its servants, agents or employees."

The Schmidts' unverified complaint alleged, among otherthings, that on January 15, 1997, Olson occupied, operated,managed, maintained and controlled the construction project siteknown as Turnberry Lakes Building No. 4 in Hanover Park and thatOlson was acting as a subcontractor engaged in the business ofdoing concrete work inside the building at the project site. Schmidt was at the site driving a truck to deliver ready mixconcrete. While Schmidt was washing down his truck inside thebuilding in the area designated for the trucks to be washed down,there were objects and debris on the ground, including a piece ofreinforcing bar, on which Schmidt "struck his foot, lost hisbalance, and fell to the ground."

Schmidt further alleged that Olson had a duty to exerciseordinary care to see that the premises were reasonably safe for theuse of those entering upon the premises and that, notwithstandingthat duty, Olson committed various acts and omissions in that itdesignated a wash-down area when it knew or in the exercise ofreasonable care should have known that the area was dangerous andunsafe and involved an unreasonable risk of harm to the truckdrivers; directed the drivers to wash their trucks in the area;failed to inspect the area; failed to clean up and remove objectsfrom the area; failed to provide adequate illumination of the area;and failed to warn Schmidt of the dangerous condition of the area. According to the underlying complaint, these acts and omissionsproximately caused Schmidt's injuries. Similar allegations weremade against other entities involved in the construction project. However, the underlying complaint did not allege that Meyer wasnegligent or contributed to Schmidt's injuries.

When Olson filed its third-party complaint against Meyerseeking contribution, Olson made similar allegations of negligenceagainst Meyer. Olson also alleged that Meyer was Schmidt'semployer and owed a duty to exercise ordinary care to provide safeworking conditions and to provide proper training and supervisionto its employees and that Meyer breached its duty toward Schmidtand these breaches of this duty proximately resulted in injuries toSchmidt.

The record contains a letter in which Olson tendered itsdefense of the Schmidt action to National. Olson also noted in theletter that it had placed its own, separate insurance carrier onnotice of the matter but had requested that it not become involvedin the matter. National refused to accept Olson's tender becausethe underlying complaint alleged that Olson was being sued for itsown negligence or that of its agents, servants, or employees.

In appeals from summary judgment rulings, our review is denovo. Delaney v. McDonald's Corp., 158 Ill. 2d 465, 467 (1994). Summary judgment is to be granted only if the pleadings,affidavits, depositions, admissions, and exhibits on file show thatthere is no genuine issue as to any material fact and that themovant is entitled to judgment as a matter of law. 735 ILCS 5/2--1005(c) (West 2000); Busch v. Graphic Color Corp., 169 Ill. 2d 325,333 (1996).

The construction of an insurance policy similarly presents aquestion of law and is also subject to de novo review. Where thewords of an insurance policy are clear and unambiguous, courtsshould give effect to the plain and obvious meaning of those words.Butera v. Attorneys' Title Guaranty Fund, Inc., 321 Ill. App. 3d601, 603-04 (2001). Although provisions that limit or excludeinsurance coverage must be construed liberally in favor of theinsured and against the insurer, if an exclusion is clear andunambiguous and does not contravene public policy, it will beapplied as written. Shriver Insurance Agency v. Utica MutualInsurance Co., 323 Ill. App. 3d 243, 248 (2001).

National first argues that the additional insured endorsementclearly and unambiguously excludes coverage for the allegations inthe underlying complaint because the only manner in which Olson canbe liable in the underlying action is if Olson is found negligentand the policy excludes such liability even if it arose out ofMeyer's operations. Olson states that it is not surprising thatMeyer is left out of the Schmidt complaint as Schmidt does not havea common-law remedy against his employer, Meyer.

Olson asserts that it is fair for a court to consider a third-party complaint in determining coverage since injured employees arenot likely to include claims against their employers. Olson relieson Great American Insurance Co. v. West Bend Mutual Insurance Co.,311 Ill. App. 3d 534 (2000) (under former Structural Work Act (Act)(Ill. Rev. Stat. 1987, ch. 48, par. 60 et seq.), reviewing courtdetermined that trial court could look to third-party complaint todecide whether insurer had duty to defend on the basis of imputedor vicarious liability of a party in control of the work); see also West Bend Mutual Insurance Co. v. Sundance Homes, Inc., 238 Ill.App. 3d 335 (1992) (related case). We agree with National'sposition.

Whether an insurer has a duty to defend depends on acomparison of the allegations of the underlying complaint to therelevant policy provisions. Shriver, 323 Ill. App. 3d at 247. When a declaratory judgment action is brought to determine ainsurer's duty to defend, a court must look solely to the complaintin the underlying action to determine whether the allegations showthat the claim falls within or potentially within the coverage ofthe policy. Zurich Insurance Co. v. Raymark Industries, Inc., 118Ill. 2d 23, 52 (1987); Royal Insurance Co. of America v. InsigniaFinancial Group, Inc., 323 Ill. App. 3d 58, 63-64 (2001); seeKonami (America), Inc. v. Hartford Insurance Co. of Illinois, 326Ill. App. 3d 874 (2002) (in Illinois, an insurer's duty to defendmust be based on an examination of the underlying complaint). If it is clear from the face of the underlying complaint thatthe allegations failed to state facts that bring the case within,or potentially within, the policy's coverage, the insurer mayproperly refuse to defend the insured. State Farm Fire & CasualtyCo. v. Hatherley, 250 Ill. App. 3d 333, 336 (1993). However, aninsurer may also be required to defend if the insurer possessesknowledge of true but unpleaded facts that, when taken togetherwith the allegations in the complaint, indicate that the claim iswithin or potentially within the policy coverage. Shriver, 323Ill. App. 3d at 247.

A trial court may consider evidence beyond the underlyingcomplaint only if such evidence does not tend to determine an issuecrucial to the underlying lawsuit. Royal, 323 Ill. App. 3d at 64.

Only if the coverage issue involves such ancillary matters aswhether the insured paid the premiums or whether he is the properinsured under the policy can the court look beyond the complaint.State Farm Fire & Casualty Co. v. Shelton, 176 Ill. App. 3d 858,867 (1988). Thus, for example, an insurer may challenge theexistence of a duty to defend by offering evidence that theinsured's actions fell within a policy exclusion so long as acrucial issue in the underlying lawsuit will not be determined. This practice is consistent with the prerogative of a party topresent the type of evidence normally allowed when a courtconsiders a motion for summary judgment in a declaratory judgmentproceeding. However, at this stage, a court must not adjudicatedisputed facts crucial to determining liability in the underlyingaction. See Shelton, 176 Ill. App. 3d at 866-67. The scope of adeclaratory judgment action to determine the duty to defend isnecessarily limited because problems of res judicata or collateralestoppel may otherwise arise out of the declaratory judgmentcourt's determination of issues crucial to the insured's liabilityin the personal action. Shelton, 176 Ill. App. 3d at 867.

Olson had the burden to establish that the allegations in theSchmidt action triggered coverage under National's policy but hasfailed to do so. See Roberts v. Allstate Life Insurance Co., 243Ill. App. 3d 658, 660 (1993). The Schmidt complaint sets fortha negligence theory of liability. It alleges that Olson'snegligent acts or omissions proximately caused Schmidt's injuries. However, the policy exclusion clearly states that Olson's ownnegligence is not covered. All of the allegations against Olsonare for its own negligence and not for Meyer's negligence. Thecomplaint does not allege that Olson was somehow strictly liable or vicariously liable for Meyer's conduct. There is no indicationthat Meyer was anything but an independent contractor, so Olsoncannot be vicariously liable for the negligent acts of Meyerresulting in harm to Meyer's employee. There are no allegations inthe underlying complaint that Olson was vicariously liable becauseit retained control over the operative details of Meyer's work. See Connaghan v. Caplice, 325 Ill. App. 3d 245, 250 (2001).

Olson argues that the trial court properly considered theallegations of its third-party complaint to find that Olson waspotentially liable; that the National endorsement was ambiguous;and that the exclusion is against public policy and void because itappears to provide illusory coverage. We disagree on all points.

We adhere to the rule that a trial court must look only to theunderlying complaint to determine whether there is a duty todefend. Issues similar to those raised by Olson were addressed inAmerican Country Insurance Co. v. Cline, 309 Ill. App. 3d 501(1999), which relied on American Country Insurance Co. v. KraemerBrothers, Inc., 298 Ill. App. 3d 805 (1998). We find Clineinstructive.

In Cline, the complaint arose out of an underlying tort action in which Robert Cline sought damages for injuries he allegedlysustained while working for Hinsdale Electric Company, asubcontractor on a construction site. Pepper Construction Companyof Illinois was the general contractor, and Andersen ConsultingCompany, Inc., owned the site. American Country Insurance Companyfiled a complaint seeking a declaratory judgment that it had noduty to defend any of the defendants, Cline, Pepper, and Andersen. Hinsdale had agreed to and did obtain comprehensive generalliability insurance from American, naming both Pepper and Andersenas additional insureds. An endorsement stated that the coverageafforded to an additional insured was solely limited to liabilityspecifically resulting from the conduct of the named insured thatmay be imputed to the additional insured. The endorsement providedno coverage to an additional insured for liability arising out ofthe claimed negligence of the additional insured by virtue of theconduct of the named insured.

Cline's complaint alleged that he was injured at the site whenan electric conduit pipe fell upon the ladder he was working on andcaused him to fall. The complaint alleged, among other things,that Pepper was actively engaged in the supervision, management,and control of the construction and that Andersen was activelysupervising the work in progress and that Pepper and Andersencarelessly and negligently failed to secure the conduit pipe,failed to design and provide for adequate support for the piping,and failed to warn that the pipe was not secure.

Pepper tendered its defense of the Cline suit to American, butAmerican refused the tender. Pepper then filed a third-partycomplaint against Hinsdale seeking contribution and alleging breachof contract. The trial court granted summary judgment to Pepperand Andersen and denied American's motion for judgment on thepleadings. American appealed.

The Cline court first determined that the trial court erred infinding that the additional insured endorsement was illusory andvoid as against public policy. The reviewing court noted thatlimiting coverage only to a narrow class of claims recognized thatbusinesses in the construction industry carry coverage forliability arising out of their own work; it was assumed that Pepperwould have its own general liability coverage.

The Cline court relied on Kraemer Brothers, where that courtconsidered a similar policy endorsement limiting coverage andrejected a similar argument by Kraemer, the additional insured,that the insurer's coverage was illusory because it was virtuallyimpossible to conceive of a factual scenario where Kraemer could beheld vicariously liable for a subcontractor's acts and omissions. The Kraemer court found, for example, that the imputed negligencecoverage in the policy could include claims based on strictliability such as where the general contractor had a nondelegableduty or where inherently dangerous activities were involved.Kraemer Brothers, 298 Ill. App. 3d at 814; see Cline, 309 Ill. App.3d at 508. As in Kraemer, the Cline court concluded that thelimited coverage was neither illusory nor void as against publicpolicy.

The Cline court also agreed that, since an insurer's duty todefend depends on whether the underlying complaint alleges factswithin or potentially within the coverage of the insurance policy, the insurer had no duty in that case to defendant because Cline'scomplaint did not allege negligence on the part of the namedinsured (Hinsdale), nor did it allege negligence that could beimputed to the additional insureds. Cline, 309 Ill. App. 3d at512. The Cline court explained:

"[T]he named insured, Hinsdale, is never named as a defendantin the Cline complaint, while the additional insureds areaccused of several acts of negligence. Therefore, it isunclear how the additional insured endorsement grantingcoverage to additional insureds 'solely limited to liabilityspecifically resulting from the conduct of the Named Insuredwhich may be imputed to the Additional Insured' has beensatisfied, considering Hinsdale has not been accused of anywrongful conduct." Cline, 309 Ill. App. 3d at 514.

The court further observed that, even if it were to look tothe allegations in Pepper's third-party complaint for contribution,the court would have to presume that both the named insured and theadditional insureds were responsible and this would be outside the ambit of the coverage provided in the endorsement, which limitedcoverage to liability solely and specifically resulting from theconduct of the named insured. In addressing this issue, the courtobserved that a contribution claim presumes that both the third-party plaintiff and the third-party defendant are liable, since thethird-party plaintiff will only require contribution if it wasfirst held liable to the underlying plaintiff. Cline, 309 Ill.App. 3d at 514 n.2.

In addressing the issue whether the trial court could findpotential liability by examining the third-party complaint inaddition to the underlying complaint, the Cline court was merelyresponding to an argument raised by Pepper and Andersen that thecourt should follow West Bend Mutual Insurance Co. v. SundanceHomes, Inc., 238 Ill. App. 3d 335 (1992), a case that consideredallegations in both the underlying complaint and a third-partycomplaint to find a duty to defend. However, Sundance Homesconcerned an alleged violation of the Structural Work Act, a causeof action separate and distinct from one based on common-lawnegligence. See National Union Fire Insurance Co. of Pittsburgh,Pennsylvania v. Glenview Park District, 158 Ill. 2d 116, 121-22(1994) (claim is based on wilful violation of the Act where theperson having charge of the work knew, or in the exercise ofordinary care, would have known of the dangerous condition; Actprotects work activities of particularly hazardous nature; duty todefend must be determined solely from allegations in underlyingcomplaint). We observe that the Act has been abolished. See 740ILCS 150/0.01 through 9 (West 1994) (repealed by Pub. Act 89--2,