WSP U.S. Inc. v. Nautilus Ins. Co.
| Docket Number | 19 CV 6731 |
| Decision Date | 02 May 2023 |
| Parties | WSP USA INC., Plaintiff, v. NAUTILUS INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
Plaintiff WSP USA, Inc. was a contractor on a construction project for the CTA. WSP subcontracted some work, including the role of safety manager, to GSG Consultants. A worker on the project fell and sustained serious injuries. WSP seeks coverage from GSG's insurer, defendant Nautilus Insurance Company, as an additional insured on the policy. Both sides brought motions for summary judgment. Nautilus's motion is denied; WSP's motion is granted as to liability but denied as to damages.
Summary judgment is warranted when the movant shows that there is no genuine dispute of material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). A genuine dispute of material fact exists if the evidence is such that a reasonable jury could return a verdict in favor of the non-moving party. Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 248 (1986). The court views “the facts and draws reasonable inference in the light most favorable to the non-moving party.” Sullivan v. Flora, Inc., 63 F.4th 1130, 1141 (7th Cir. 2023). On cross-motions for summary judgment, a court must draw inferences “in favor of the party against whom the motion under consideration is made.” Markel Ins. Co. v. Rau, 954 F.3d 1012, 1016 (7th Cir. 2020) (citation omitted). “Cross-motions must be evaluated together, and the court may not grant summary judgment for either side unless the admissible evidence as a whole-from both motions-establishes that no material facts are in dispute.” Bloodworth v. Vill. of Greendale, 475 Fed. App'x 92, 95 (7th Cir. 2012). “The interpretation of an insurance contract is a legal issue that may be decided on a motion for summary judgment.” Am. Bankers Ins. Co. of Fla. v Shockley, 3 F.4th 322, 327 (7th Cir. 2021).
The Chicago Transit Authority operates the Loop Elevated rail lines in downtown Chicago. [119] ¶ 1.[1]As part of the CTA's capital improvement program, from 2011 to 2014, those rail lines were renewed and revitalized through a project called the “Loop Track Renewal Project.” [119] ¶ 2.
The CTA contracted with several parties to do the work on the Loop Track Renewal Project-general contractor, Ragnar Benson Construction LLC, and the plaintiff in this action, WSP USA, Inc. [119] ¶ 4.[2]In July 2011, the CTA hired WSP for construction management services in connection with the CTA's five-year Capital Improvement Program; the July 2011 contract is referred to the “Prime Agreement” or “Prime Contract.” [121] ¶ 9; [99]; [109-5]. WSP is an engineering consulting firm; one of the services they provide is construction management. [119] ¶ 9; [121] ¶ 1.[3]Construction management services do not build a structure, instead WSP was hired “to make sure that the contractor is building their work correctly.” [119] ¶¶ 10, 6.
The CTA assigned work on specific projects to WSP through Task Orders; it assigned WSP to work on the Loop Track Renewal Project through Task Order No. 1. [119] ¶ 5; [101]. The Task Order provided that WSP, as Construction Management Consultant, “shall provide construction management, quality assurance, safety oversight and field engineering support to CTA Engineering and Capital Construction [...].” [101] at 4. WSP's project manager on the Loop Track Renewal Project was responsible for ensuring the project had the right staff from WSP and “that [WSP] had our subconsultants in place and their - manage their agreements.” [109-1] at 114:2-19; [119] ¶ 40.
WSP in turn contracted with several other companies, including GSG Consultants, to fulfill its requirements to the CTA under the Prime Contract and Task Order No. 1.
WSP and GSG Consultants agreed that GSG would provide project construction management services on a task order basis for the CTA's five-year Capital Improvement Program. [121] ¶ 11; [119] ¶ 34; [109-6]; [106]. The subcontract provided that “duties will differ from project to project, but will generally include construction management, quality assurance and field engineering responsibilities” and further provided that the specific services to be performed would be defined in each task order. [106] at 3; [121] ¶ 13.
WSP assigned GSG to work on the Loop Track Renewal Project through Task Order No. 1. [121] ¶¶ 15-16; [109-8]. The WSP-GSG Task Order No. 1 states that GSG will provide a [109-8] at 4; [119] ¶ 35; [121] ¶ 17, 19.[4] A safety manager “review[s] the contractor's safety program, safety plan submitted for a project, provide[s] recommendations to the CTA for acceptance or corrections that need to be made” and then “make[s] sure that the contractor is following their safety plan during the construction of the project.” [109-1] at 107:17-108:1; [121] ¶ 20.[5]
GSG hired Joy Banks to be the safety manager for the Loop Track Renewal Project. [121] ¶ 21; [119] ¶ 36.[6] Banks testified that during the Loop Track Renewal Project she was responsible for providing “oversight to the contractor as they perform their work, review their process plans, discuss upcoming safety plans, [make] safety observations, [and] manage unusual occurrence reports.” [121] ¶ 22. In her deposition for the Lopez case, Banks stated that her job was to observe the contractors performing their work and if anything required immediate corrective action, she would speak with the general contractor or correct the issue herself. [121] ¶ 32.
Banks's work included safety oversight as it relates to fall protection. [121] ¶ 23. One of the ways that Banks communicated with the contractor was to write safety observations reports that noted when she observed safety violations and what corrective actions she took; those reports included violations of fall protection requirements. [121] ¶ 24. Banks was on site during weekend work; she discussed her schedule directly with the not with GSG. [124] ¶ 6; [119] ¶ 41.[7]She worked on a shift basis and was not expected to observe and report on safety violations when she was not on shift. [124] ¶ 4.[8] When Banks was not working, there was no expectation that she or anyone else from GSG would be responsible for reporting safety issues. [124] ¶ 5.[9]
WSP also subcontracted with Program Management Control Services for track construction and track specialist support. [119] ¶ 12. As a track specialist, PMCS performed “field engineering or inspector responsibilities related to the track construction” and provided “inspection and project control services.” [119] ¶ 13. A track specialist/field engineer's job duties were defined in the Task Order between the CTA and WSP as “monitoring the construction contract work on a daily basis to ensure the project is completed in accordance [with] CTA's safety, quality, cost and schedule objectives.” [124] ¶ 1; [109-8] at 12.
The Prime Contract required WSP to obtain commercial general liability insurance, with limits of $2 million per occurrence, and add the CTA as an additional insured on the policy. [121] ¶ 10. WSP had a commercial insurance policy with Liberty Insurance Corporation, policy number TB7-621-094060-022, with a policy period from October 1, 2012 to October 1, 2013. [119] ¶ 29.[10]
The WSP-GSG contract incorporated all the terms and conditions of the Prime Agreement (between WSP and CTA) and stated, “Subcontractor [GSG] assumes toward [WSP] all the obligations and responsibilities which [WSP], by the Prime Agreement, assumes towards the Client, and Subcontractor [GSG] shall be bound to observe all such terms and conditions to the same extent as [WSP] is bound to the Client.” [109-6] at 3 (N000345); [119] ¶ 35. Those obligations and responsibilities included obtaining commercial general liability insurance and adding WSP as an additional insured. [121] ¶ 12; see WSP USA Inc. v. Nautilus Ins. Co., No. 19 CV 6731, 2021 WL 4804082, at *5 (N.D. Ill. Oct. 14, 2021).[11]GSG had an Environmental Combined Policy from Nautilus Insurance Company, Policy Number ECPO1519891-12, with a policy period of August 13, 2012 to August 13, 2013. [121] ¶ 2; [119] ¶ 43. The policy was issued by Nautilus and serviced by Berkley Specialty Underwriter Managers and its successors. [119] ¶ 44. The policy includes commercial general liability coverage. [121] ¶ 5. The policy identifies GSG as located in Chicago, Illinois. [121] ¶ 3.
On March 10, 2013, Carlitos Lopez, a laborer working on the Loop Track Renewal Project, fell from the “L” track and suffered injuries. [119] ¶ 22; [121] ¶¶ 2526.[12] The parties submit evidence about the fall from three reports-one written by Loren Whitney, the Ragnar Benson corporate safety director, on March 11, 2013, a second written by Eric Goetschel, the area manager, on March 11, 2013, and a third written by Nick Vargas and Charles Begin on March 12, 2013. See [109-14] at 1, [1043], [104-1].[13] According to the Vargas-Begin report, Lopez was “installing a tie on the Brown and Purple Line BN track from the outer loop” when he fell from the track to the ground. [119] ¶ 23. Lopez had been issued “personal fall protection equipment, including a full body harness, retractable lifeline, and a rail slider to facilitate tie off.” [104-3] at 2; [119] ¶ 24.
Whitney's report states that Lopez was wearing his issued fall...
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