Weiss v. Bituminous Cas. Corp.
| Decision Date | 18 November 1974 |
| Docket Number | No. 46367,46367 |
| Citation | 59 Ill.2d 165,319 N.E.2d 491 |
| Parties | Peter WEISS et al., Appellants, v. BITUMINOUS CASUALTY CORPORATION, Appellee. |
| Court | Illinois Supreme Court |
Hoffman & Davis, Chicago (Sol A. Hoffman and Alvin L. Kruse, Chicago, of counsel), for appellants.
Hinshaw, Culbertson, Moelmann, Hoban & Fuller, Chicago (Leonel I. Hatch, Jr., and D. Kendall Griffith, Chicago, of counsel), for appellee.
Plaintiffs, Peter Weiss and Raymond Lenobel, a partnership d/b/a Shamrock Scrap Iron & Metal Company, filed an action for a declaratory judgment in the circuit court of Cook County against defendant, Bituminous Casualty Corporation, to determine the latter's obligation under the terms of a liability insurance policy to defend a personal injury action brought against plaintiffs by Norman Zblewski. A summary judgment was entered for plaintiffs, and the appellate court reversed, holding that the circuit court erred in finding that the terms of the insurance policy required defendant to undertake plaintiffs' defense in the Zblewski action. (Weiss v. Bituminous Casualty Corp., 14 Ill.App.3d 637, 303 N.E.2d 174.) We granted leave to appeal. The issue presented concerns the correctness of the appellate court's interpretation of the terms of the insurance policy.
Insofar as this appeal is concerned, the facts are undisputed. Some time prior to March 7, 1969, a trailer owned and operated by C. W. Transport, Inc., a common carrier, was left at plaintiffs' place of business. Plaintiffs loaded the trailer with scrap magnesium in bulk in the form of borings, clippings and shavings. The load of magnesium was consigned for delivery to Ohio. The trailer was picked up by a driver from C. W. Transport and delivered to its local terminal. On March 7, 1969, Norman Zblewski, an employee of the carrier, picked up the trailer from the terminal and while on a Chicago expressway enroute to Ohio, the magnesium exploded and burned, seriously injuring him.
Zblewski's complaint alleged in pertinent part:
'That prior to and at the time of the occurrence complained of * * * Weiss and * * * Lenobel * * * were guilty of one or more of the following negligent acts or omissions:
(a) Loaded the trailer truck in such a manner that injury to plaintiff proximately resulted;
(b) Loaded magnesium shavings, clippings, and borings in the trailer in bulk;
(c) Loaded magnesium shavings, clippings, and borings in the trailer in a manner other than in sealed containers;
(d) Failed to provide for water tight or moisture proof loading of the magnesium borings, clippings, and shavings;
(e) Failed to warn plaintiff of the manner in which the magnesium borings, clippings, and shavings were loaded.
That as a proximate result of one or more of the aforesaid negligent acts or omissions of * * * Weiss and * * * Lenobel * * * Normal Zblewski became and was bodily injured * * *.'
Zblewski's complaint did not allege whether the contract for shipment with the carrier was made by plaintiffs or by the buyer in Ohio. It also did not allege whether the contract for the sale of the magnesium called for delivery at the buyer's place of business or at the plaintiffs' place of business.
Plaintiffs were insured under defendant's 'Manufacturers' and Contractors' Liability Insurance Policy.' The pertinent provisions of that policy stated:
'DECLARATIONS.
Item 3. The insurance afforded is only with respect to such of the following coverage parts as are indicated herein by specific premium charge or charges * * *.
MANUFACTURERS' AND CONTRACTORS' LIABILITY INSURANCE COVERAGE FOR PREMISES AND FOR THE NAMED INSURED'S OPERATIONS IN PROGRESS.
I. COVERAGE A--BODILY INJURY LIABILITY.
COVERAGE B--PROPERTY DAMAGE LIABILITY.
The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of
A. bodily injury or
B. property damage
to which this insurance applies, caused by an occurrence, And the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage (emphasis added) * * *.
This insurance does not apply:
(m) to bodily injury or property damage included within the completed operations hazard or the products hazard.'
The first page of the policy contains the following:
'DEFINITIONS
When used in this policy (including endorsements forming a part hereof):
'completed operations hazard' includes bodily injury and property damage arising out of operations * * * but only if the bodily injury or property damage occurs after such operations have been completed or abandoned and occurs away from premises owned by or rented to the named insured. 'Operations' include materials, parts of equipment furnished in connection therewith. Operations shall be deemed completed at the earliest of the following times:
(1) when all operations to be performed by or on behalf of the named insured under the contract have been completed,
(2) when all operations to be performed by or on behalf of the named insured at the site of the operations have been completed, or
(3) when the portion of the work out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as a part of the same project.
The completed operations hazard does not include bodily injury or property damage arising out of
(a) operations in connection with the transportation of property, unless the bodily injury or property damage arises out of the condition in or on a vehicle created by the loading or unloading thereof.'
Following the commencement of Zblewski's action, defendant refused to undertake plaintiffs' defense on the basis that Zblewski's complaint did not allege an occurrence or facts which came within the coverage of the insurance policy. Plaintiffs then filed this declaratory judgment action.
Plaintiffs cite McFadyen v. North River Insurance Co., 62 Ill.App.2d 164, 209 N.E.2d 833, which held that an insurer is obligated to defend an action againt its insured if the complaint filed against the insured alleged facts which are within, or potentially within, the coverage of the policy. Defendant accepts this as a correct statement of the law. Both parties are in agreement that the...
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