In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 14‐2009
WESTFIELD INSURANCE COMPANY,
an Ohio corporation,
Plaintiff‐Appellee,
v.
SCOT VANDENBERG, et al.,
Defendants‐Appellants.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:12‐cv‐00040 — Harry D. Leinenweber, Judge.
____________________
ARGUED DECEMBER 9, 2014 — DECIDED AUGUST 6, 2015
____________________
Before POSNER, RIPPLE, and KANNE, Circuit Judges.
RIPPLE, Circuit Judge. Scot Vandenberg was injured when
he fell from the upper deck of a yacht anchored in Lake
Michigan. He filed suit in Illinois state court, alleging that
the owners and operators of the yacht were negligent. He
eventually settled with the defendants. Under the settlement
agreement, the defendants agreed to pay Mr. Vandenberg
$25 million through the assignment of their claims against
2 No. 14‐2009
their insurers. Westfield Insurance Company (“Westfield”)
was the insurance provider for Rose Paving Company
(“Rose Paving”), one of the defendants. Westfield disputed
that its insurance policies with Rose Paving covered the
yacht accident and brought a declaratory judgment action in
the district court. Mr. Vandenberg, as the assignee of
Rose Paving, opposed the action. The district court granted
Westfield’s motion for judgment on the pleadings; it decided
that the Westfield policies did not provide coverage for
Mr. Vandenberg’s injury. Mr. Vandenberg asks that we
review that determination. We now hold that the accident
occurring on the yacht is not covered by the insurance
policies and accordingly affirm the district court’s judgment.
I
BACKGROUND
A.
In September 2009, Mr. Vandenberg was attending a five‐
hour cruise on a chartered yacht when he fell from the upper
deck. The accident occurred when he turned to respond to
someone calling his name and, as he shifted his weight, the
bench upon which he was sitting tipped over. The bench
was not secured to the deck, nor did the upper deck have a
railing. The fall left Mr. Vandenberg paralyzed from the
chest down. The yacht was owned by RQM, Inc. (“RQM”), a
closely held corporation owned by Michael Rose, Carl
Quanstrom, and Alan Rose. Mr. Vandenberg alleged that
Rose Paving, a company run by Alan Rose, was a booking
agent that maintained a marketing relationship for the
chartering of the yacht.
No. 14‐2009 3
At the time of the accident, Rose Paving was insured by
Westfield under a commercial general liability (“CGL”)
policy and by an umbrella policy (collectively “the
policies”). The application for the CGL policy listed as
insureds Rose Paving Co., Rose Paving & Seal Coating Inc.,
1
and Bridgeview Investments. This application included a
“schedule of hazards,” which listed “concrete construction,”
2
“Contractors Executive Supervisors,” and “subcontractors.”
The application also asked whether the applicant owned,
hired, or leased any watercraft. Rose Paving marked the
3
“no” box. The umbrella section of the application similarly
asked whether the applicant owned or leased a watercraft.
Rose Paving did not answer that question.
The insurance contract included “common policy decla‐
rations” applicable to both the CGL and umbrella policies,
which listed Rose Paving’s business as “concrete construc‐
4
tion.” The CGL policy declarations also contained a “gen‐
eral liability schedule,” which listed the premises and opera‐
tions covered by the contract and included “contractors” and
“subcontracted work—in connection with construction, re‐
5
construction, repair or erection of buildings.” The CGL and
1 Bridgeview Investments was listed as an additional insured in its
capacity as the manager or lessor of Rose Paving’s business premises.
2 R.56‐2 at 49.
3 Id. at 50.
4 R.56‐1 at 54.
5 Id. at 60. The CGL policy declarations determine the scope of both
policies. Although the umbrella policy did not contain a similar liability
(continued…)
4 No. 14‐2009
umbrella policies further provided that Westfield would be
legally obligated to pay for damages “to which this insur‐
6
ance applies.” They then listed certain exclusions, including
liability that “aris[es] out of the ownership, maintenance, use
or entrustment to others of any … watercraft owned or op‐
7
erated by or rented or loaned to any insured.” Finally, the
policies provided that, by accepting coverage, Rose Paving
agreed that “[t]he statements in the Declarations are accurate
and complete,” that “[t]hose statements are based upon rep‐
resentations” Rose Paving made to Westfield, and that West‐
field “issued th[e] policy in reliance upon [those] representa‐
8
tions.”
B.
Before Westfield filed this declaratory action, the parties
had commenced several actions, the particulars of which are
9
not pertinent to our decision today. Mr. Vandenberg
(…continued)
schedule, it applied only if Westfield had been “obligated to pay the
‘retained limit’” under the CGL policy. R.56‐2 at 25; see also id. at 29
(“‘Retained limit’ means the available limits of ‘underlying insurance’
scheduled in the Declarations … .”).
6 R.56‐1 at 68 (CGL policy); R.56‐2 at 13 (umbrella policy).
7 R.56‐1 at 78; R.56‐2 at 15.
8 R.56‐1 at 86; R.56‐2 at 25.
9 To summarize briefly, in March 2010, Mr. Vandenberg filed an action
against RQM in the Circuit Court of Cook County, Illinois, seeking to
recover money damages for his injuries. In August 2010, RQM filed a
maritime action in federal court seeking exoneration from liability for the
(continued…)
No. 14‐2009 5
ultimately entered into a settlement agreement with the
defendants, disposing of the then‐pending state court and
maritime actions. Under this agreement, Rose Paving, along
with Carl Quanstrom, Michael Rose, Alan Rose,
Dough Management, and Location Finders International,
agreed to pay $25 million, to be satisfied solely through an
assignment of their rights of recovery under their insurance
policies. Rose Paving, Michael Rose, and Alan Rose agreed
to pay an additional $300,000 directly, and RQM’s insurer
agreed to pay $2 million. The settlement agreement was
accepted by the Circuit Court of Cook County, Illinois, on
October 10, 2012.
(…continued)
accident or a limitation of liability to the value of the yacht. The district
court enjoined Mr. Vandenberg from pursuing his claims against RQM
and ordered the parties to refrain from filing additional lawsuits.
Mr. Vandenberg then dismissed his first state court action. In August
2011, Mr. Vandenberg filed a second suit in the Circuit Court of Cook
County, Illinois. He alleged that the defendants were negligent because
they failed to provide railing or other protection on the top deck, allowed
Mr. Vandenberg to access the top deck of the yacht, failed to warn about
the lack of railings, and “[a]llowed a bench to be placed inches from the
rear of the unrailed top deck.” R.56‐1 at 41. The district court overseeing
RQM’s maritime action ordered Mr. Vandenberg to stay his state court
action.
Mr. Vandenberg also provided Westfield with an unfiled amended
complaint five months before settlement. The amended complaint
included allegations that Rose Paving negligently owned, maintained, or
used an unstable bench. The stay imposed by the district court in RQM’s
maritime action prevented Mr. Vandenberg from filing the amended
complaint.
6 No. 14‐2009
In January 2012, Westfield filed this declaratory action. It
sought a determination that it owed no duty under
Rose Paving’s insurance policies to defend or to indemnify
any of the defendants in the state court action. Westfield
alleged that the policies did not cover the underlying
accident because the operation of a seventy‐five‐foot yacht
fell outside the scope of the risks and liabilities for which the
policies provided coverage. Alternatively, Westfield
maintained that the “watercraft exclusion” barred coverage
and that Rose Paving’s conduct released Westfield from
contractual liability under the policies.
Westfield filed a motion for judgment on the pleadings.
Mr. Vandenberg, as the assignee of Rose Paving, responded
with a combined response and cross‐motion for summary
judgment. The district court granted Westfield’s motion for
judgment on the pleadings and denied Mr. Vandenberg’s
motion for summary judgment. The court concluded that the
insurance policies covered only Rose Paving’s construction
business. The court relied on the business description
provided in the common policy declarations, the “schedule
of hazards” listed in the application, and Rose Paving’s
representation that it did not own, hire, or lease any
watercraft.
The district court later denied Mr. Vandenberg’s motion
to alter the judgment under Federal Rule of Civil
Procedure 59(a). Mr. Vandenberg now appeals the court’s
No. 14‐2009 7
decision granting Westfield’s motion for judgment on the
10
pleadings.
II
DISCUSSION
Mr. Vandenberg asks us to review the district court’s
decision on the scope of the Westfield insurance policies. He
maintains that the policies provide coverage for his injuries
because of the broad terms employed in the text. More
precisely, he takes the view that, because the Westfield
policies do not exclude expressly accidents such as the one
on the yacht, the accident and his injuries are covered.
Westfield responds that the policies apply only to Rose
Paving’s construction business and, in the alternative, that
the accident falls under the watercraft exclusion contained in
11
the policies.
The interpretation of an insurance policy is a matter of
state law. See Koransky, Bouwer & Poracky, P.C. v. Bar Plan
Mut. Ins. Co., 712 F.3d 336, 341 (7th Cir. 2013). Because the
parties agree that Illinois law applies, we look to the
10 The district court had jurisdiction pursuant to 28 U.S.C. § 1332. We
have jurisdiction under 28 U.S.C. § 1291.
11 Westfield also maintains that it never breached its duty to defend
Rose Paving because it filed a declaratory action and that it is not bound
by the settlement because the settlement was overtly collusive, breached
multiple policy conditions, and forfeited coverage. Because we decide
that Westfield prevails under its first two theories, we do not address its
remaining contentions.
8 No. 14‐2009
decisions of the Supreme Court of Illinois for guidance. See
id. We review de novo the district court’s decision granting a
Rule 12(c) motion for judgment on the pleadings. See Matrix
IV, Inc. v. Am. Nat’l Bank & Tr. Co., 649 F.3d 539, 547 (7th Cir.
2011). For the reasons set out more fully below, we agree
with the district court that the policies do not provide
coverage for Mr. Vandenberg’s accident. We also conclude
that Rose Paving’s use of the yacht was excluded from
coverage by the policies’ watercraft exclusion.
A.
We first address the scope of the Westfield insurance
policies. Mr. Vandenberg makes two major arguments to
support his interpretation of the policies. First, he submits
that the business designation, on its own, is insufficient to
limit the scope of the policies. Second, he contends that,
under Illinois law, an insurer must “expressly exclude” a
risk from the insurance policy if the insurer does not intend
12
to insure against that particular risk. He therefore
maintains that because the Westfield policies do not
expressly exclude non‐construction‐related injuries, the
policies provide coverage.
Under Illinois law, “[a]n insurance policy is a contract,
and the general rules governing the interpretation of other
types of contracts also govern the interpretation of insurance
policies.” Hobbs v. Hartford Ins. Co. of the Midwest, 823 N.E.2d
561, 564 (Ill. 2005). When interpreting an insurance policy,
12 Appellant’s Br. 26.
No. 14‐2009 9
“our primary objective is to ascertain and give effect to the
intention of the parties, as expressed in the policy language.”
Id.; accord Crum & Forster Managers Corp. v. Resolution Tr.
Corp., 620 N.E.2d 1073, 1078 (Ill. 1993) (“[T]he primary
function of the court is to ascertain and enforce the
intentions of the parties as expressed in the agreement.”). To
achieve that goal, we “must construe the policy as a whole,
taking into account the type of insurance for which the
parties have contracted, the risks undertaken and purchased,
the subject matter that is insured and the purposes of the
entire contract.” Crum & Forster Managers Corp., 620 N.E.2d
at 1078; accord Oakley Transp., Inc. v. Zurich Ins. Co., 648
N.E.2d 1099, 1106 (Ill. App. Ct. 1995) (noting that “an
insurance policy is not to be interpreted in a factual vacuum
and without regard to the purpose for which the insurance
was written”).
After reviewing the insurance application and the terms
of the policies, we conclude that the district court correctly
determined that Westfield and Rose Paving intended to
enter into an insurance agreement under which Westfield
provided coverage only for Rose Paving’s construction‐
related business. We begin with the actual text of the
policies. In that respect, we first note that the policies’
“common policy declarations” list Rose Paving’s business as
13
“concrete construction.” The “general liability schedule”
also explains that Westfield is providing coverage for work
done “in connection with construction, reconstruction, repair
13 R.56‐1 at 54.
10 No. 14‐2009
14
or erection of buildings.” The policies thus reflect,
explicitly, the parties’ intent to insure only Rose Paving’s
construction business.
The situation before us today is closely akin to the one
before the Appellate Court of Illinois in Heritage Insurance
Co. v. Bucaro, 428 N.E.2d 979 (Ill. App. Ct. 1981). There, the
court determined that similar representations were sufficient
to limit the scope of an insurance policy. The court
determined that the underlying insurance policy did not
cover automobile acquisitions because “[t]he activities
enumerated in the policy concern[ed] operations relating to
automobile dismantling.” Id. at 982 (emphasis in original).
The court relied on the description of hazards, which
“include[d] salvage or junking of parts, and store
operations,” and that the policy listed the insured’s business
as “Automobile Dismantling.” Id. at 981. “Due to the limited
nature of the policy purchased,” the court concluded that it
was “implausible to assume that protection was expected for
liability of the type that has been created here.” Id. at 982.
The Illinois court’s methodology and conclusion reinforces
our view of the proper interpretation of the Westfield
policies.
The insurance application also supports our
interpretation. See Dash Messenger Serv., Inc. v. Hartford Ins.
Co. of Ill., 582 N.E.2d 1257, 1263 (Ill. App. Ct. 1991) (relying
on the insurance application to determine the risks for which
the parties contracted); see also A.D. Desmond Co. v. Jackson
Nat’l Life Ins. Co., 585 N.E.2d 1120, 1122 (Ill. App. Ct. 1992)
14 Id. at 60.
No. 14‐2009 11
(“When, as in this case, an insurance policy is issued which
makes the application for insurance part of the policy, the
application becomes and is construed as part of the entire
insurance contract.”). The policies at issue here provide that
Rose Paving agreed that “[t]he statements in the
Declarations are accurate and complete,” that “[t]hose
statements are based upon representations” Rose Paving
made to Westfield, and that Westfield “issued th[e] policy in
15
reliance upon [those] representations.” Rose Paving stated
in its application that it was engaged in the construction
business. Consistent with that representation, the parties
listed in the schedule of hazards the risks that they intended
to cover, including “concrete construction,” ”Contractors
16
Executive Supervisors,” and “subcontractors.” Rose
Paving’s representations in the insurance application
therefore reinforce our construction of the text of the
insurance policies and our conclusion that the parties did
not intend to cover an accident occurring on the yacht.
Mr. Vandenberg submits that it is inappropriate to rely
on the business designation in the insurance contract. We
need not determine whether, in all cases, Illinois courts
would consider a business designation contained in an
insurance policy, standing alone, to be a sufficient indication
of party intent to circumscribe the scope of an insurance
agreement. Here, our decision need not rely solely on the
business designation. As we have noted earlier, the business
designation and the general liability schedule contained in
15 R.56‐1 at 86; R.56‐2 at 25.
16 R.56‐2 at 49.
12 No. 14‐2009
the contract, as well as the incorporated representations in
the insurance application, express, uniformly, the parties’
intent to limit the scope of the insurance policies to Rose
Paving’s known business, construction. See Heritage Ins. Co.,
428 N.E.2d at 981–82 (holding that, because the description
of hazards included only “Automobile Dismantling” and the
business of the insured was listed as “Automobile
Dismantling,” “it is evident that the policy provides
coverage only for occurrences arising out of specified
activities [automobile dismantling] taking place on the
insured premises”). The district court correctly recognized
that Rose Paving “operated multiple independent businesses
(paving and yacht charters), purchased insurance for only
one of those businesses (paving), and later sought coverage
17
for a different business (yacht charters).” In this case,
therefore, the business designation contained in the
insurance contract, when read with the other evidence of the
parties’ intent, substantiates forcefully that the parties
entered into an agreement to insure only Rose Paving’s
construction business.
Nor can we accept Mr. Vandenberg’s contention that the
policies provide coverage for any and all liabilities unless
they are explicitly excluded. In assessing this submission,
our task is, of course, to determine the intent of the parties,
as expressed by the insurance policy. See Hobbs, 823 N.E.2d
at 564; Crum & Forster Managers Corp., 620 N.E.2d at 1078.
Here, we believe that the text and structure of the policies
makes clear that the parties intended to insure against the
17 R.89 at 10.
No. 14‐2009 13
risks of operating a construction company. If the parties
intended to exclude a risk associated with running such a
business, we would expect them to have recited that
exclusion in the contract. A policy does not need to exclude
from coverage liability that was not contemplated by the
parties and not intended to be covered under their
agreement. See Dash Messenger Serv., Inc., 582 N.E.2d at 1263
(noting that an insurer should expressly exclude a risk from
coverage “if an insurer does not intend to insure against a
risk likely to be inherent in the insured’s business” (emphasis
added)). Because Rose Paving’s policies were manifestly
designed to cover only its construction business, however,
we would not expect those policies to address risks not
18
inherent in that business. To hold otherwise would require
18 Other courts, when faced with analogous circumstances, have adopted
similar interpretations. See Steadfast Ins. Co. v. Dobbas, No. CIV. S‐05‐0632
FCD JFM, 2008 WL 324023, at *6 (E.D. Cal. Feb. 5, 2008) (holding that,
because the policy describes the business of the insured as “Railroad
Contractor” and “[t]he Declarations page tailored for this particular
policy limited the coverage of the policy based upon the business
description,” the “policy unambiguously provide[d] coverage … only for
injuries relating to the business of ‘Railroad Contractor’” (emphasis in
original)); Gemini Ins. Co v. S & J Diving, Inc., 464 F. Supp. 2d 641, 650
(S.D. Tex. 2006) (holding that the insurance policy applied “only to
marine survey operations” and not to the company’s involvement with
an outdoor rock concert because it would be unreasonable “to conclude
that the policy covers any and all activity, not specifically excluded,
when the insured negotiated as, and described itself to be, a marine
operation”); Cooper v. RLI Ins. Co., No. CV 9403617128, 1996 WL 367721,
at *8 (Conn. Super. Ct. June 3, 1996) (holding that the CGL policy “does
not provide coverage for accidents associated with business activity
different from the business activity for which coverage was initially
sought”); cf. Phila. Indem. Ins. Co. v. 1801 W. Irving Park, LLC, No. 11 C
(continued…)
14 No. 14‐2009
the parties to conjure up and exclude explicitly any and all
activities in which Rose Paving might engage. Such a
speculative exercise in hypotheticals would be nonsensical.
In sum, Mr. Vandenberg has not provided a cogent
rationale to support his conclusion that Westfield and
Rose Paving intended to enter into an insurance contract of
endless scope, covering any and all businesses operated by
Rose Paving. Construing the policies as a whole, we
conclude that both Westfield and Rose Paving intended that
the insurance policies provide coverage only for Rose
Paving’s construction‐related business. Accordingly, the
policies do not provide coverage for Mr. Vandenberg’s
19
injury on the yacht.
(…continued)
1710, 2012 WL 3482260, at *5 (N.D. Ill. Aug. 13, 2012) (holding that the
insurance policy provided coverage because the insured “was a single
entity that performed multiple services as a part of its condominium
development business—which was a named insured on the Policies”).
19 Mr. Vandenberg also submits that, because the umbrella policy does
not have the same limitations as the CGL policy, it was intended to apply
beyond Rose Paving’s construction business. He relies on the absence of
a business description in the separate umbrella policy document. But, as
Westfield points out, the identification of Rose Paving’s business is
contained in a document labeled “common policy declarations” that
summarizes the entire agreement. R.56‐1 at 54. Specifically, the
document states that “this policy consists of the following coverage
parts” and lists the “commercial umbrella coverage part.” Id.
Mr. Vandenberg fails to invite our attention to any documentation that
would support a determination that Westfield, through the umbrella
policy, intended to insure activities beyond Rose Paving’s construction
business.
No. 14‐2009 15
B.
The policies’ watercraft exclusion provides an
independent basis for affirming the district court’s
judgment. The Westfield policies exclude from coverage
“‘[b]odily injury’ … arising out of the ownership,
maintenance, use or entrustment to others of
any … watercraft owned or operated by or rented or loaned
20
to any insured.” In his state court complaint,
Mr. Vandenberg alleged that Rose Paving negligently had
“[f]ailed to provide railing or equivalent protection of the
top deck peripheral areas which were accessible to
passengers,” “[f]ailed to prevent
SCOT VANDENBERG … from accessing the top deck of the
yacht,” “[a]llowed … SCOT VANDENBERG[] to access
areas of the top deck which did not have railings or
equivalent protection,” “[f]ailed to warn … SCOT
VANDENBERG[] of the lack of railings or equivalent
protection on the top peripheral areas of the top deck,” and
“[a]llowed a bench to be placed inches from the rear of the
21
unrailed top deck.”
20 Id. at 78; R.56‐2 at 15.
21 R.45‐1 at 8–9. In his unfiled amended complaint, Mr. Vandenberg
alleged that Rose Paving negligently “[p]rovided a wobbly bench to be
used by SCOT VANDENBERG from which he fell.” R.13‐1 at 4.
However, an insurer’s duty to defend is limited to those allegations
contained in the operative complaint. See Mass. Bay Ins. Co. v. Unique
Presort Servs., Inc., 679 N.E.2d 476, 478 (Ill. App. Ct. 1997) (“It is well
settled that the allegations of the complaint are dispositive of the
insurer’s duty to defend and not the findings of the underlying
(continued…)
16 No. 14‐2009
Mr. Vandenberg submits that, under Illinois law, the
negligent maintenance, ownership, and use of the bench was
a concurrent cause of his injuries and, therefore, the
watercraft exclusion does not preclude coverage. Westfield
maintains that the watercraft exclusion bars coverage under
the policies because the use of the yacht was intertwined
inextricably with all theories of recovery.
We have recognized previously that, under Illinois law,
an insurance policy does not provide coverage for claims
that are “intertwined” with an excluded liability. See
Nautilus Ins. Co. v. 1452‐4 N. Milwaukee Ave., LLC, 562 F.3d
818, 822 (7th Cir. 2009). In Nautilus, we addressed whether a
claim seeking compensation for property damage was
barred by the insurance policy’s contractor‐subcontractor
exclusion. See id. at 821–23. We concluded that “the presence
of an alternative theory of relief … is insufficient to trigger
coverage” when the plaintiff does not allege an “injury
independent of the” injury sustained as a result of the
excluded liability. Id. at 823. Thus, we found it determinative
(…continued)
litigation.”); Oakley Transp., Inc. v. Zurich Ins. Co., 648 N.E.2d 1099, 1102
(Ill. App. Ct. 1995) (noting that a “court must ordinarily confine its
inquiry to a comparison of the allegations of the underlying complaint
and the relevant provisions of the insurance policy in determining a duty
to defend”). Indeed, the Appellate Court of Illinois recently decided that
Mr. Vandenberg’s unfiled complaint should not be considered under the
doctrine of “true but unpleaded facts.” See Md. Cas. Co. v. Dough Mgmt.
Co., No. 1‐14‐1520, 2015 WL 4002569, at *9 (Ill. App. Ct. June 30, 2015).
The court held “that the self‐serving allegations in an unfiled amended
complaint cannot be presumed true and are not the type of facts
intended to be covered by the true but unpleaded facts doctrine.” Id.
No. 14‐2009 17
that “the statutory claims in the underlying complaints
[sought] recovery for the same loss as all the other claims—
the property damage arising out of the faulty excavation
performed by [the defendant’s] contractors and
subcontractor—and coverage for that property damage is
excluded by the contractor‐subcontractor exclusion.” Id. at
822 (emphasis in original).
In reaching our conclusion in Nautilus, we relied, in part,
on the decision of the Supreme Court of Illinois in Northbrook
Property & Casualty Co. v. Transportation Joint Agreement, 741
N.E.2d 253 (Ill. 2000). In Northbrook, the court held that a
policy exclusion bars coverage for injuries associated with
excluded conduct, even if a plaintiff proceeds under an
alternative theory of recovery that implicates the excluded
conduct only indirectly. The Illinois court explained:
The policy excludes injuries arising from the
school districts’ use or operation of a motor
vehicle. Allegations that the school districts
inadequately planned and inspected bus routes
or failed to warn bus drivers of potential
hazards along the routes are nothing more
than rephrasings of the fact that the students’
injuries arose from the school districts’ use or
operation of a motor vehicle. Contrary to the
appellate court’s holding, the students’
complaints failed to allege that the injuries
arose from events wholly independent of any
negligent operation of the bus. Northbrook
therefore has no duty to defend the school
districts in the underlying lawsuits.
18 No. 14‐2009
Id. at 254–55 (citation omitted) (internal quotation marks
omitted). Thus, in order to succeed, the allegations in
Mr. Vandenberg’s complaint must be “wholly independent
22
of any negligent operation of the [watercraft].” Id. at 254
(internal quotation marks omitted).
22 The decisions of the Appellate Court of Illinois reflect the distinction
between dependent and independent claims. Compare Mass. Bay Ins. Co.,
679 N.E.2d at 479 (“In this case, the underlying plaintiffs’ count XXVII is
specifically dependent upon the fact that their injuries occurred in a
vehicle accident. This drug‐testing regulation would not apply to the
underlying plaintiffs’ negligence action if their injuries had been caused
by some instrumentality other than a vehicle. Thus, the negligence
alleged in count XXVII is inextricably intertwined with the policy’s
excluded instrumentality, namely, the vehicle.”), with Mount Vernon Fire
Ins. Co. v. Heaven’s Little Hands Day Care, 795 N.E.2d 1034, 1043 (Ill. App.
Ct. 2003) (“[W]e find after reviewing the allegations in the underlying
complaint that the victim’s death resulted from nonvehicular conduct on
the part of Heaven’s Little Hands and its employees. The allegations in
the complaint assert multiple theories of negligence including a failure to
maintain a proper census of the children attending the day‐care facility.
Had Leon kept an accurate head count of the children inside the van or if
someone inside Heaven’s Little Hands had noticed Tyrelle’s absence
soon after the van in question had arrived at the day care facility, Tyrelle
would not have died. In short, the van is the situs, rather than the cause,
of Tyrelle’s death.”), and Louis Marsch, Inc. v. Pekin Ins. Co., 491 N.E.2d
432, 437 (Ill. App. Ct. 1985) (“Thus if a trier of fact concluded that Marsch
had failed in its duty to Chizmar under the Road Construction Injuries
Act, the fact that the dump truck was the instrumentality which
ultimately injured Chizmar would be but one of two concurrent causes
of the injury, one excluded under the Aetna policy, the other not so
excluded. If the liability of an insured arises from negligent acts which
constitute non‐auto‐related conduct, the policy should be applicable
regardless of the automobile exclusion or the fact that an automobile was
involved in the occurrence.”), and U.S. Fid. & Guar. Co. v. State Farm Mut.
Auto. Ins. Co., 437 N.E.2d 663, 666 (Ill. App. Ct. 1982) (“In the present
(continued…)
No. 14‐2009 19
The Appellate Court of Illinois recently reaffirmed these
principles and applied them to the same state court
complaint at issue here. In Maryland Casualty Co. v. Dough
Management Co., No. 1‐14‐1520, 2015 WL 4002569 (Ill. App.
Ct. June 30, 2015), the court addressed whether an
identically worded watercraft exclusion in an insurance
contract barred coverage for the injuries that
Mr. Vandenberg sustained on the yacht. See id. at *7. In that
action, Maryland Casualty Co., the insurer that had
provided coverage to Dough Management, maintained that
it had no duty to defend or indemnify Dough Management
under its insurance policy. See id. at *2–3. The court noted
that the “policy specifically exclude[d] coverage for any
bodily injury ‘arising out of the ownership, maintenance,
use, or entrustment to others of any … watercraft owned or
operated by or rented or loaned to any insured.’” Id. at *7
(second alteration in original). The court concluded that “the
Vandenbergs only alleged [in their state court complaint]
that the insureds failed to properly maintain the yacht by
failing to provide a railing on the top deck, allegations that
fall squarely under the watercraft exclusion.” Id. “Therefore,
based on the personal injury complaint,” the court
continued, “the Vandenbergs’ claims are excluded under the
CGL policy.” Id.
(…continued)
case, the complaint alleges negligent acts which are potentially within
the coverage of the policy, such as the failure to adequately supervise the
children and the negligent operation of the day care center. These
alleged acts are separate and distinct from any allegations relating to the
negligent operation of the automobile.”).
20 No. 14‐2009
With the guidance of the Appellate Court of Illinois, we
reach the same conclusion. Mr. Vandenberg fell from the top
deck of the yacht after the bench on which he was sitting
tipped over. Because the top deck of the yacht did not have a
railing, he fell a substantial distance, resulting in his injuries
and paralysis. In his state court complaint, Mr. Vandenberg
recognized that his injury would not have occurred if
Rose Paving had provided a railing or prevented him from
accessing the top deck of the yacht. Thus, the accident and
Mr. Vandenberg’s resulting injuries were not “wholly
independent of” the negligent operation, maintenance, or
use of the yacht. Northbrook Prop. & Cas. Co., 741 N.E.2d at
254 (internal quotation marks omitted). Mr. Vandenberg’s
injuries therefore come under the policies’ watercraft
exclusion, and the policies do not provide coverage.
Conclusion
The judgment of the district court is affirmed.
AFFIRMED