Ladd Const. Co. v. Insurance Co. of North America
| Decision Date | 19 June 1979 |
| Docket Number | No. 78-317,78-317 |
| Citation | 29 Ill.Dec. 305,73 Ill.App.3d 43,391 N.E.2d 568 |
| Parties | , 29 Ill.Dec. 305 LADD CONSTRUCTION COMPANY, a corporation, Plaintiff-Appellant, v. INSURANCE COMPANY OF NORTH AMERICA, a corporation, Defendant-Appellee. |
| Court | United States Appellate Court of Illinois |
Louis J. Perona, Perona & Perona, Spring Valley, for plaintiff-appellant.
Robert T. Park, Katz, McAndrews, Durkee & Telleen, Rock Island, for defendant-appellee.
This is an appeal from an order of the Circuit Court of Bureau County which dismissed the complaint of the plaintiff, Ladd Construction Company. The dismissed complaint had sought damages from the defendant, Insurance Company of North America, on the grounds that it had wrongfully refused to defend the plaintiff under the terms of a general liability policy.
The plaintiff construction company owned real property in the village of Ladd in Bureau County. Located on this property was a conical shaped slag or gob pile, being approximately 100 feet high, 1,000 feet long and 700 feet in width. A "gob" or "slag" pile consists of the residue which remains or is discarded after mined coal has been processed. A predecessor in title to the plaintiff had operated a coal mine and had created the gob pile. Tracks of the Burlington Northern Inc., a railway company, were located adjacent to the gob pile and in 1972 and for a time thereafter the slag pile began to collapse and slide so as to cover and block a portion of Burlington's tracks. The sliding and collapsing occurred after the plaintiff, Ladd Construction Company, undertook to remove a portion of the gob pile so as to create a level area.
Burlington Northern, Inc., brought suit in equity against Ladd Construction Company praying for relief as follows:
"13. Wherefore, the plaintiff prays that this Court will issue its mandatory writ of injunction directing the defendant, within a short day to be fixed by the Court:
(a) To remove all the debris from its gob pile which encroaches on the plaintiff's right of way; and
(b) To remove sufficient additional material from the gob pile itself so that what is left will remain in place without further collapse or slide.
14. The plaintiff asks for such other and further relief as equity and good conscience require."
The insurance policy purchased by the plaintiff, Ladd Construction Company, from defendant, Insurance Company of North America, was known as a "multiple liability insurance policy" and was in effect at all times pertinent to this litigation. The policy provided in part:
After being sued by Burlington, the plaintiff, Ladd Construction Company, requested that the defendant Insurance Company of North America, undertake the defense of the plaintiff pursuant to the terms of the aforementioned contract of insurance. The defendant refused to defend on the grounds that "there had been no occurrence within the definition of that term * * *" and " * * * there has been no property damage to the plaintiff's property within the definition of that term * * *." The plaintiff employed private counsel who negotiated a monetary settlement with Burlington and thereafter, as previously stated, the plaintiff instituted the litigation from which this appeal ensued.
The first issue presented for review is whether the defendant insurance company had an obligation to defend a federal court suit filed against the plaintiff.
We agree with the plaintiff that in Illinois a liability insurer is obligated to defend a suit if the complaint alleges facts which bring the claim potentially within the coverage of the policy. (Midwest Contract Equip. Co. v. Bituminous Casualty Corp. (1969), 112 Ill.App.2d 134, 251 N.E.2d 349.) A refinement of the heretofore stated issue is whether the complaint in the Burlington law suit against the plaintiff prayed for relief which might bring the claim within the policy coverage. In examining the policy of insurance in question it is clear that the defendant was required to defend any suit against the insured seeking damages on account of bodily injury or property damage. Turning to Burlington's complaint against the plaintiff, an examination of the same discloses that no bodily injury was alleged, nor in this court's opinion were there any allegations as to property damage which would bring it within the purview of the terms of the insurance policy. As interpreted we fail to find any allegation by Burlington as to actual or direct damages to property, but instead Burlington sets forth allegations which would sustain a claim that it had suffered economic damages from loss of the use of its railroad tracks. Burlington's complaint did not seek monetary damages, but instead equitable relief in the form of a mandatory injunction which would require or command the plaintiff, Ladd Construction Company, to remove debris from its gob pile which had slid or collapsed on the railroad's tracks. Prior to making this prayer for relief the complaint of Burlington, after alleging the collapse of the gob pile, referred to it as a "public and private nuisance" and described its remedy at law inadequate because:
"(a) the trespass is continuing and increasing in quantity each day; (b) the ability of the respondent to respond in damages is uncertain; (c) although often asked, the defendant has steadfastly refused to remove its debris from the plaintiff's property; and (d) because it would require a multiplicity of actions at law to give plaintiff complete relief."
The above allegations contained in Burlington's complaint establish the need for equitable relief in the form of an injunction and specifically list reasons which serve to negate a prayer for relief in the form of money damages.
No Illinois case has specifically dealt with the duty of an insurer to defend a suit for injunction, however, this question has been presented to and determined by courts of other states and by our federal courts.
A case with a factual situation strikingly similar to that in the instant case is Aetna Casualty and Surety Co. v. Hanna (5 Cir. 1955), 224 F.2d 499, 53 A.L.R.2d 1125. In Aetna an action was brought against an insured by the owner of adjoining land who sought a mandatory injunction to compel the insured to remove from the adjoining owner's land trash and other fill material which had been washed thereon from the insured's land, and to build a restraining wall to prevent further encroachment. In Aetna no money damages were sought from the insured by the adjoining landowner. In Aetna the insurance policy in question required the company to defend the insured in any suit alleging injury, sickness, disease, or destruction and seeking damages on account thereof.
In Aetna the United States Court of Appeals (fifth circuit Florida) held that the insurer was not required to defend a suit seeking equitable relief. The reasoning contained in the reviewing court's opinion in Aetna is so well formulated that we set forth the same at some length:
"An insuring obligation is a contract, and coverage exists only if assumed by the terms of the policy. (Footnote omitted.) To determine the question of coverage and duty to defend, we should look to the policy to see if coverage is provided against mandatory injunctive orders. We conclude: that it is not; that to so construe the policy is to do violence to its plain and unambiguous provisions, and to wholly ignore large portions of the context in which words are used.
Insofar as coverage is concerned, the obligation is solely 'to pay,' not to remove fill dirt, rocks and boulders, under Court order or otherwise. It is equally unreasonable to view the obligation as providing reimbursement to the Insured, for the undertaking is to pay 'On behalf of ' the Insured whatever he 'shall become obligated to pay by reason of the liability imposed upon him by law * * * For damages because of injury to or destruction of property, * * *'.
Clearly, the policy covers only payments to third persons when those persons have a legal claim for damages against the Insured on account of injury to or destruction of property. The obligation of the insurer to pay is limited to 'damages', a word which has an accepted technical meaning in law. Black's Law Dictionary (3d Ed.) p. 499 defines damages as:
The opinion in Desrochers v. New York Casualty Co. (1954), 99 N.H. 129, 106 A.2d 196, also supports the decision reached by the trial court in the instant case. We find the following language in the Desrochers opinion to be pertinent to a determination of this appeal 106 A.2d 196, 198.
The above quoted reasoning set forth by the New Hampshire Supreme Court is equally applicable to the...
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