Dominick's Finer Foods, Inc. v. American Mfrs. Mut. Ins. Co.

Decision Date29 October 1987
Docket NumberNo. 86-1730,86-1730
Citation516 N.E.2d 544,163 Ill.App.3d 149,114 Ill.Dec. 389
Parties, 114 Ill.Dec. 389 DOMINICK'S FINER FOODS, INC., Plaintiff-Appellant, v. AMERICAN MANUFACTURERS MUTUAL INSURANCE COMPANY, Defendant-Appellee.
CourtUnited States Appellate Court of Illinois

Thomas J. Andrews, Charles P. Rantis; Johnson, Cusack & Bell, Ltd., Chicago (Thomas H. Fegan, of counsel), for plaintiff-appellant.

McKenna, Storer, Rowe, White & Farrug, Chicago (James P. DeNardo, Richard M. Clark, Christine L. Olson, of counsel), for defendant-appellee.

Justice JOHNSON delivered the opinion of the court:

Plaintiff, Dominick's Finer Foods, Inc. (hereinafter referred to as Dominick's), appeals from a declaratory judgment action in which it sought a determination that defendant, American Manufacturers Mutual Insurance Company (hereinafter referred to as American), was obligated to defend and indemnify it in an underlying tort action. Dominick's based this assertion upon a vendor's endorsement provision in an insurance policy issued by American to Coca-Cola Bottling Company of Chicago and Wisconsin, Inc. (hereinafter referred to as Coca-Cola) in which it was named as an additional insured. American refused to defend, declining coverage. Both Dominick's and American filed motions for summary judgment. The trial court entered judgment in favor of American, declaring that the vendor's endorsement only covered claims arising from the product itself. Dominick's appeals, raising three issues: (1) whether the occurrence alleged is within the purview of the vendor's endorsement and, therefore, imposes on American a duty to defend Dominick's; (2) whether the occurrence alleged falls within the parameters of the vendor's endorsement, thereby requiring American to defend and indemnify Dominick's; and (3) whether the trial court erred when it construed the vendor's endorsement to provide coverage only for claims arising out of the product itself.

We affirm.

The record reveals that on March 21, 1983, George Peters, an employee of Coca-Cola, was injured while making a delivery of Coca-Cola's products to a Dominick's food store. Peters filed suit against Dominick's on September 28, 1984, seeking damages for personal injury. In his complaint, Peters claimed to have been injured when he slipped and fell on a Dominick's loading dock. He alleged that his accident was the result of the slippery and dangerous condition of the dock. Peters does not claim that his injuries were attributable to the containers of Coca-Cola products he was delivering.

Dominick's tendered defense of the Peters lawsuit to American pursuant to an insurance policy American issued to Coca-Cola containing a vendor's endorsement which named Dominick's as an additional insured. American refused to provide a defense to Dominick's, claiming that the occurrence alleged in the Peters complaint was not within the coverage provided by the vendor's endorsement. Dominick's brought this action for declaratory judgment. On cross-motions for summary judgment, the trial courtruled in favor of American. Dominick's appeals.

The vendor's endorsement considered here provides as follows:

"Additional Insured (Vendors--Broad Form)

It is agreed that the "Persons Insured" provision is amended to include any person or organization designated below (herein referred to as 'vendor'), as an insured, but only with respect to the distribution or sale in the regular course of the vendor's business of the named insured's products designated below subject to the following additional provisions:

1. The insurance with respect to the vendor does not apply to:

(a) any express warranty unauthorized by the named insured;

(b) bodily injury or property damage arising out of

(i) any physical or chemical change in the form of the product made intentionally by the vendor (ii) repacking, unless unpacked solely for the purpose of inspection, demonstration, testing or the substitution of parts under instruction from the manufacturer and then repacked in the original container;

(iii) demonstration, installation, servicing or repair operations, except such operations performed at the vendor's premises in connection with the sale of the product; or

(iv) products which after distribution or sale by the named insured have been labeled or relabeled or used as a container, part or ingredient or any other thing or substance by or for the vendor."

Dominick's contends that American has a duty to defend it against the Peters action for two reasons. First, it argues that "delivery" of Coca-Cola's products is contained within the meaning of "distribution." It next argues that the vendor's endorsement is an amendment to the general liability and products liability policy American issued to Coca-Cola and, therefore, extends both types of coverage to the additionally insured vendor. American contends that the declared and unambiguous intent of the vendor's endorsement is to provide coverage only for claims arising out of the product and that it does not cover vendors for their own negligence.

The question here presented requires analysis of the intended purpose of a vendor's endorsement. No reported Illinois case has determined the breadth of coverage provided by this policy extension. We note, however, that all the reported decisions involving this provision considered claims which arose from the product itself. (See Sears, Roebuck & Co. v. Reliance Insurance Co. (7th Cir.1981), 654 F.2d 494; Sears, Roebuck & Co. v. Zurich...

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