Sole Negligence Exclusions
Walsh Construction was the general contractor for an Illinois water reclamation district construction project. Luise, Inc. was a subcontractor of Walsh. Walsh requested coverage as an additional insured under Luise’s liability insurance policy, which was purchased from Scottsdale Insurance Company. The language for the additional insured provision excluded coverage for accidents “arising out of the sole negligence of the additional insured.” A Walsh employee backed a bulldozer into Luise’s dump truck. The employee driving the truck sued Walsh and the water district but later dropped the water district from its claim. Scottsdale sued for declaratory judgment in federal district court arguing that there was no duty to defend Walsh because of the sole negligence exclusion. Subsequently, Walsh filed a third party complaint for contribution against Luise. The district court granted summary judgment against Walsh, concluding that Scottsdale was not obligated to defend Walsh. Scottsdale Ins. Co. v. Walsh Const. Co., No. 10 C 1565 (Sept. 29, 2011).
Walsh argued that the sole negligence exclusion did not apply because both drivers may have been negligent. Walsh further argued that the employee’s complaint initially included the water district as well. The court stated there is no case law to substantiate an inference that Walsh is not solely negligent just because the water district at one time was named as a defendant. the court further explained that Walsh’s theories cannot be supported by the employee’s complaint if the complaint does not allege any supporting facts and would cause the court to speculate regarding certain facts as to how the accident occurred. A court will not read into the complaint facts that are not there. Here, the facts alleged in the complaint were outside the bounds of the policy coverage.
Walsh also relied on their third-party complaint and testimonial evidence, and argued under Pekin Insurance Company v. Wilson that the Illinois Supreme Court considered a third-party complaint where the insurance policy contained an exception to coverage exclusion provision. 237 Ill.2d 446 (2010). Here, however, there was no such exception. The district court further went on to say that in L.J. Dodd Construction Company v. Federated Mutual Insurance the court held that a trial court may not look to a third-party complaint absent some unusual or compelling circumstance. Similarly, in National Fire Insurance v. Walsh Construction Company, the court applied the same rule in finding that the facts alleged in the complaint fell squarely into the sole negligence exclusion. 392 Ill. App. 3d 312 (Ill. App. Ct., 1st Dist. 2009) (citing American Economy Ins. Co., v. DePaul University, 383 Ill. App. 3d 172 (2008)) (declining to allow an additional insured to bolster its claim of coverage by referencing its own third-party claim). Here too, Walsh’s testimonial evidence is not entitled to an exception and the complaint is sufficient to find Scottsdale had no duty to defend.
