Westfield Insurance Co. v. West Van Buren, L.L.C.

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Appellate Court Date: 2016.09.28
11:53:03 -05'00'

Westfield Insurance Co. v. West Van Buren, LLC, 2016 IL App (1st) 140862

Appellate Court WESTFIELD INSURANCE COMPANY, Plaintiff and
Caption Counterdefendant-Appellee, v. WEST VAN BUREN, LLC, an
Illinois Limited Liability Company, and 933 VAN BUREN
CONDOMINIUM ASSOCIATION, an Illinois Not-For-Profit
Corporation, Defendants (West Van Buren, LLC, an Illinois Limited
Liability Company, Defendant and Counterplaintiff-Appellant).

District & No. First District, Third Division
Docket No. 1-14-0862

Filed July 20, 2016

Decision Under Appeal from the Circuit Court of Cook County, No. 12-CH-2654; the
Review Hon. Rodolfo Garcia, Judge, presiding.

Judgment Affirmed.

Counsel on Ernest Summers III, Trina K. Taylor, and Kevin L. Morrow, all of
Appeal Faegre Baker Daniels, LLP, of Chicago, for appellant.

David S. Osborne and Justine K. Seigler, both of Lindsay, Rappaport
& Postel, LLC, of Chicago, for appellee.
 Panel JUSTICE LAVIN delivered the judgment of the court, with opinion.*
Presiding Justice Mason concurred in the judgment and opinion.
Justice Pucinski dissented from the judgment, with opinion.

OPINION

¶1 This case involves an insurance coverage dispute. The insurance company filed a
declaratory judgment action seeking a determination that it had no duty to defend the
additional insured in an underlying lawsuit. The parties filed cross-motions for summary
judgment, and the trial court ultimately ruled in favor of the insurance company. The
additional insured now appeals contending the insurance company had a duty to defend it in
the underlying lawsuit. We disagree and therefore affirm the trial court’s judgment in favor of
the insurance company.

¶2 BACKGROUND
¶3 In 2002, West Van Buren, LLC (Developer) constructed a condominium development at
933 W. Van Buren Street, Chicago, Illinois. The Developer subcontracted installation of the
roof to Total Roofing and Construction Services, Inc. (Total Roofing). The subcontract
provided that Total Roofing would insure and indemnify the Developer against liability for
Total Roofing’s work. Total Roofing, which constructed the roof in 2002, obtained a
commercial general liability policy through Westfield Insurance Company for
occurrence-based coverage (between February 6, 2001, and February 15, 2005).1 The policy
offered coverage for “occurrences,” defined as accidents, and also for “property damage.” In
addition, the policies also provided for a duty to defend in the event of a lawsuit. Consistent
with the subcontract, the relevant policies listed the Developer as an additional insured.
¶4 About a year after construction, the 933 Van Buren Condominium Association (Condo
Association) took charge of the building. Shortly thereafter, the Condo Association claimed
construction defects in the roof caused water to infiltrate into the building and individual
condominium units and also caused damage to personal and other property in the
condominium units. The Condo Association demanded that the Developer reconstruct the roof.
The Developer refused, and the Condo Association then paid for the repair work that cost in
excess of $309,000.
¶5 The Condo Association subsequently sought reimbursement for those expenses. In
October 2010, the Developer received a mediation request for the aforementioned alleged
repair work. The Developer, claiming it was an additional insured under the policy, notified
Westfield Insurance and requested a defense for the mediation. Westfield Insurance declined
to offer a defense, citing a number of reasons under the policy.

*
This case was reassigned to Justice Lavin in mid-March 2016.
1
West Van Buren concedes that the first and fourth policies are not implicated in this case. The
second policy was in effect during Total Roofing’s construction of the roof at the development. The
third policy was in effect during the date of loss assigned by Westfield Insurance. The parties have not
made clear which policy applies. It is of no moment because the policies both define “property damage”
and “occurrence” in the same manner, and those definitions are at the heart of this appeal. For the sake
of simplicity, we refer to these two policies as the “policy” unless otherwise indicated.

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¶6 The mediation fell through, and on August 8, 2011, the Condo Association sued the
Developer and Total Roofing, 2 among others, in a multi-count complaint 3 for breach of
warranty, violating the Consumer Fraud and Deceptive Business Practices Act (815 ILCS
505/1 et seq. (West 2010)), fraud, and breach of the implied warranty of habitability. The
complaint asserted that water infiltrated the common elements and individual units. It noted
that each condominium purchase agreement provided by the Developer warranted against any
defects in material and workmanship in the common elements of the building. Yet, when these
units were sold, they allegedly “contained a number of hidden and latent defects that West Van
Buren [the Developer] intentionally failed to disclose, including but not limited to: a) defects in
the roofing system and the individual roofing components so as to allow water infiltration into
the Condo Building *** and b) West Van Buren’s failure to construct the Condo Building in
substantial conformity with the plans and specifications.” (Emphasis added.) The complaint
also asserted the Developer fraudulently covered up hidden and latent defects, also alleging:
“Moreover, individual unit owners experienced damage to personal and other property as a
result of the water infiltration.” The complaint asserted that the defendants were responsible
for $300,000 in damages and that had the unit owners been aware of the concealed defects,
they would not have purchased their units or at least would have negotiated a better purchase
price.
¶7 Within days of this lawsuit, the Developer notified Westfield Insurance and tendered the
defense, but Westfield declined to undertake it. Westfield Insurance nonetheless agreed to
defend Total Roofing under a reservation of rights. Westfield Insurance subsequently filed the
present declaratory action for a determination that it owed no duty to defend or indemnify the
Developer as the additional insured in the underlying case.4 The Developer, in turn, filed a
counterclaim alleging a duty to defend because the underlying complaint contained allegations
of personal property damage that were within the policy’s coverage and based on estoppel.
Westfield Insurance denied that the underlying complaint alleged a covered occurrence.
¶8 The parties filed cross-motions for summary judgment in the declaratory judgment action.5
At the hearing on the motions, Westfield Insurance acknowledged the underlying complaint
alleged personal property damage but argued that the Condo Association lacked standing to
assert such claims on behalf of individual unit owners.

2
The initial complaint named “Total Roofing Control” as a defendant. In an amended complaint the
Condo Association corrected the named party as “Total Roofing & Construction Services, Inc.” For the
sake of simplicity, we refer to the initial complaint, as the two are identical. See Cincinnati Cos. v. West
American Insurance Co., 183 Ill. 2d 317, 329 (1998) (generally, an insurer’s duty to defend is triggered
by actual notice of the underlying suit). Moreover, both parties on appeal rely on the initial complaint in
determining whether a duty to defend arose. We note that the Condo Association also filed a
second-amended complaint on October 11, 2012, adding a negligence count against only a roof
consulting firm.
3
The complaint actually included five counts. Count III, however, was for breach of fiduciary duty
only against three members of the Developer’s board.
4
Westfield Insurance filed the present declaratory action against the Developer on January 25,
2012. More than a year later, on September 10, 2013, Westfield Insurance also filed a declaratory
judgment action against Total Roofing claiming it owed no duty to defend or indemnify its insured.
5
The Condo Association filed a response that adopted the Developer’s arguments and requested
that the court grant the Developer’s summary judgment motion.

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¶9 The circuit court initially granted summary judgment for this declaratory action to the
Developer, but upon a motion to reconsider by Westfield Insurance, the court subsequently
vacated its judgment and granted summary judgment to Westfield Insurance. The court
concluded that since there was no duty to defend, then there was no duty to indemnify. The
Developer filed this timely appeal.

¶ 10 ANALYSIS
¶ 11 Summary judgment is properly granted when the pleadings, depositions, and admissions
on file, together with the affidavits, if any, show that there is no genuine issue of material fact
and the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West
2014). Where parties file cross-motions for summary judgment, they agree the case presents
only questions of law, and they invite the trial court to decide these legal questions on the basis
of the record. Pielet v. Pielet, 2012 IL 112064, ¶ 28. Our standard of review is de novo, and we
may affirm on any basis in the record regardless of whether the trial court relied on that basis or
its reasoning was correct. Id. ¶ 30; Chicago Title Insurance Co. v. Bass, 2015 IL App (1st)
140948, ¶ 13. The construction of an insurance policy, which presents a question of law, is
likewise subject to de novo review. Valley Forge Insurance Co. v. Swiderski Electronics, Inc.,
223 Ill. 2d 352, 360 (2006).
¶ 12 The Developer argues in the main that Westfield Insurance had a duty to defend the
Developer in the underlying action6 and the trial court therefore erred in granting summary
judgment in favor of Westfield Insurance. An insurance company’s obligation to represent its
insured depends on the allegations of the underlying complaint and the provisions of the
insurance policy. Diamond State Insurance Co. v. Chester-Jensen Co., 243 Ill. App. 3d 471,
476 (1993). The complaint must be liberally construed and all doubts resolved in favor of
coverage for the insured. Id. A duty to defend will arise when the allegations of the underlying
complaint may potentially come within the coverage of the policy. Id. at 476-77.
¶ 13 Thus, in order to address this matter, we turn to both the underlying complaint and the
language of the insurance policy itself. The general rules governing the interpretation of
contracts also govern the interpretation of insurance policies. Standard Mutual Insurance Co.
v. Lay, 2013 IL 114617, ¶ 24. As such, a court’s primary objective in analyzing an insurance
policy is to ascertain and give effect to the parties’ intentions as expressed by the policy
language, which we construe in its plain and ordinary meaning. Swiderski Electronics, Inc.,
223 Ill. 2d at 362-63. We view the policy as a whole so as to give effect to every provision if
possible. Id. at 362. As a result, if the policy language is unambiguous, generally the policy
will be applied as written. Lay, 2013 IL 114617, ¶ 24.

6
Westfield Insurance notes in its statement of facts that the underlying lawsuit was dismissed on
October 20, 2014. We have reviewed the Cook County circuit court clerk’s records, of which we may
take judicial notice (see In re Application of the County Treasurer & ex officio County Collector, 356
Ill. App. 3d 1102, 1111 (2005)), but they do not make clear what happened between the multiple parties
in the underlying lawsuit. Nonetheless, our records show there is currently a case pending in the
appellate court between the Developer (the appellant and cross-appellee) and Total Roofing (the
appellee and cross-appellant) arising from cross-claims filed in the underlying litigation. According to
their briefs, the underlying lawsuit by the Condo Association is currently no longer being actively
litigated. The Condo Association claims were dismissed, some with prejudice and some without.

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¶ 14 At the outset, we observe that throughout its brief, the Developer cites a copy of the
underlying complaint attached to the appendix. Illinois Supreme Court Rules 341(h)(6) and
(7), however, require that an appellant cite the record. See Ill. S. Ct. R. 341(h)(6), (7) (eff. Jan.
1, 2016). The Illinois Supreme Court Rules are not suggestions; they have the force of law and
must be complied with. Estate of Prather v. Sherman Hospital Systems, 2015 IL App (2d)
140723, ¶ 32. Where a brief has failed to comply with the rules, we may strike portions of the
brief or dismiss the appeal should the circumstances warrant. Id. Given the force that the
underlying complaint carries in this case, it would behoove the Developer to accurately cite it
in the record on appeal. Nonetheless, we conclude the location of the complaint is easily
ascertainable and thus we proceed in our review.
¶ 15 We also must note that it is questionable whether the appellant was even an additional
insured under the policy. The policy stated, “To the extent of the Named Insured’s ongoing
operations, the coverage afforded to the Additional Insured which may be imputed to the
Additional Insured.” This sentence is unclear. We find the only reasonable construction is that
the policy provided that the additional insured would be covered “to the extent of the Named
Insured’s ongoing operations.” Here, according to the underlying complaint, the Condo
Association discovered the water infiltration and leaking in 2003, which was about one year
after the roofing was installed. The fact that the roof was seemingly complete at the time of the
discovered leak would mean the subcontractor’s “operations” had ended and so too had the
Developer’s status as an additional insured. This has been perhaps left unexplored because
discovery was stayed during the declaratory action. We proceed in our review because even
assuming the Developer was an additional insured, we conclude the complaint and policy
unequivocally authorize the trial court’s result.
¶ 16 Here, the policy at issue defined “occurrence” as “an accident, including continuous or
repeated exposure to substantially the same general harmful conditions.” The policy also
defined “property damage” as “a. Physical injury to tangible property, including all resulting
loss of use of that property. All such loss of use shall be deemed to occur at the time of the
physical injury that caused it; or b. Loss of use of tangible property that is not physically
injured. All such loss of use shall be deemed to occur at the time of the ‘occurrence’ that
caused it.”
¶ 17 As stated, the complaint alleges the Developer breached contractual warranties and also
committed fraud in selling the condo units because it intentionally concealed hidden defects in
the roofing system and the individual roofing components “so as to allow water infiltration into
the Condo Building.” See Stoneridge Development Co. v. Essex Insurance Co., 382 Ill. App.
3d 731, 747 (2008) (implied warranty of habitability is contractual in character). In other
words, according to the complaint, the Developer failed to properly install the roof system and
failed to correct the defect. The allegation of intentional conduct was incorporated in all counts
of the complaint, and general negligence of the Developer was not alleged.
¶ 18 Analyzing the complaint in light of the policy, we conclude Westfield Insurance had no
duty to defend the Developer in the Condo Association’s underlying action for the following
three reasons. First, the policy essentially requires an accidental event to trigger coverage, yet
there is nothing accidental alleged in the complaint. The complaint either focuses on the
intentional bad acts of the Developer or nonfortuitous events, like the resulting damage to the
condo building due to shoddy workmanship, of which the Developer was allegedly aware. See
Viking Construction Management, Inc. v. Liberty Mutual Insurance Co., 358 Ill. App. 3d 34,

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 42, 54 (2005) (there is no occurrence when a subcontractor’s defective workmanship
necessitates removing and repairing work and where the damages claimed are the natural and
ordinary consequences of defective workmanship); see also Stoneridge Development Co., 382
Ill. App. 3d at 752 (same); Crawford Laboratories, Inc. v. St. Paul Insurance Co. of Illinois,
306 Ill. App. 3d 538, 544 (1999) (an accident by its very nature contemplates an event that is
unforeseen and neither intended nor expected). Although the dissent states the failure to do
something (like properly construct a roof) can constitute an accident, this is not supported by
the bulk of case law. See Viking Construction Management, Inc. v. Liberty Mutual Insurance
Co., 358 Ill. App. 3d 34, 42, 54 (2005) (there is no occurrence when a subcontractor’s defective
workmanship necessitates removing and repairing work and where the damages claimed are
the natural and ordinary consequences of defective workmanship); see also Stoneridge
Development Co., 382 Ill. App. 3d at 752 (same); Crawford Laboratories, Inc. v. St. Paul
Insurance Co. of Illinois, 306 Ill. App. 3d 538, 544 (1999) (an accident by its very nature
contemplates an event that is unforeseen and neither intended nor expected); but see
Milwaukee Mutual Insurance Co. v. Larsen, 2011 IL App (1st) 101316, ¶ 28 (faulty window
system that allegedly damaged personal property deemed possible occurrence, in part due to
negligence). Any alleged damage to the common or personal property was not an accident and
therefore not the result of any occurrence. Thus, those allegations in the underlying complaint
do not potentially fall within the policy coverage. See State Farm Fire & Casualty Co. v.
Tillerson, 334 Ill. App. 3d 404, 409 (2002).
¶ 19 Second, the allegations of the complaint likewise do not fall within the definition of
property damage under the policy’s plain language. In the seminal case, Travelers Insurance
Co. v. Eljer Manufacturing, Inc., 197 Ill. 2d 278, 308 (2001), our Illinois Supreme Court held
that “physical” injury occurs when property is altered in appearance, shape, color, or in other
material dimension and does not take place when an economic injury occurs, such as the
diminution in value. Yet, the allegations in the Condo Association’s underlying complaint
sought only to hold the Developer responsible for the shoddy workmanship of its roofing
subcontractor. The complaint sought damages of some $300,000 for repair and remediation of
the roof and also alleged that had the unit owners known of the defects, they either would not
have purchased the condo units or would have negotiated the price. As such, these damages
and the allegations related only to diminished value and economic harm. However, as the court
in Eljer observed, where the language of an insurance policy explicitly requires physical
injury, it cannot be construed to provide coverage on the basis of loss or diminished use simply
resulting from the failure of a component to perform as promised. Id. at 311. Defective work
and products are purely economic losses. Id. at 314; see also CMK Development Corp. v. West
Bend Mutual Insurance Co., 395 Ill. App. 3d 830, 841 (2009) (no coverage for homeowners
pursuing a breach of contract claim for loss due to repair or replacement of defective work or
diminished home value); Viking Construction Management, Inc., 358 Ill. App. 3d at 54-56 (no
property damage where allegations in underlying complaint point to repair and replacement of
defective product or construction). Otherwise, the policy would function as a performance
bond. Eljer Manufacturing, Inc., 197 Ill. 2d at 311.
¶ 20 Third, in reaching the above-stated conclusions, we must reject the Developer’s argument
that the underlying complaint triggered a duty to defend because the complaint alleged actual
physical harm to personal property. While construction defects that damage something other
than the project itself can constitute an occurrence and property damage (see Stoneridge

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 Development Co., 382 Ill. App. 3d at 752-53), they do not in this case. We agree with the trial
court that these allegations were meant to simply bolster the contention that water infiltration
generally occurred and caused damages. They do not trigger potential coverage under the
policy. The individual condo unit owners themselves were not parties to the complaint, and the
Condo Association did not purport to act on behalf of any individual condo unit owners. See
765 ILCS 605/9.1(b) (West 2002) (condo board can act in representative capacity as to matters
involving “the common elements or more than one unit”). Contrary to the dissent’s assertion,
the complaint did not seek damages for any personal property damage. In addition, we note
that while we confine our analysis to the allegations in the initial complaint, we find it
instructive that even the second-amended complaint (and third complaint filed) did not add as
parties the individual condo unit owners or identify these owners and their specific claims for
damages. As Westfield Insurance notes, “factual allegations certainly are important to a
coverage determination, but only if those allegations are directed to a theory of recovery.”
ISMIE Mutual Insurance Co. v. Michaelis Jackson & Associates, LLC, 397 Ill. App. 3d 964,
971 (2009). Moreover, we cannot read into the complaint something that is not there, but rather
we are confined to what was actually alleged. See Pekin Insurance Co. v. Roszak/ADC, LLC,
402 Ill. App. 3d 1055, 1063 (2010). We do not believe a free-standing reference to a fact, that
is not attached to any particular theory of recovery or particular party in the complaint, can
trigger a duty to defend. See Acuity v. Lenny Szarek, Inc., 128 F. Supp. 3d 1053, 1059-62 (N.D.
Ill. 2015) (analogous facts and finding same); cf. Larsen, 2011 IL App (1st) 101316, ¶¶ 20-21
(duty to defend in defective construction even though complaint did not expressly describe
damages to personal property).
¶ 21 This case is similar to Diamond State. There, the State’s underlying complaint against
Chester-Jensen (a refrigeration and heating manufacturer) sought damages for
Chester-Jensen’s role in a failed air-conditioning system installed in the Thompson Center
building. The State’s complaint alleged breaches of contract and warranty, claiming economic
damages and that the defective system injured the employees who became ill or otherwise lost
time from work because of the excessive heat in the building. In affirming that there was no
duty to defend and in analyzing the aforementioned allegations under the policy provision on
bodily injury, the appellate court stated:
“[Chester-Jensen’s] proposed interpretation would distort the meaning of this
provision and extend its reach so as to provide coverage for any liability where bodily
injury is a tangential factor. It is manifest that the core of the State’s claim for damages
against Chester-Jensen is a claim for its economic losses. The fact that the State’s claim
for its economic losses as a result of diminished productivity may have been
occasioned in part by the illness of its employees does not transmute its economic
claim for which it seeks recovery from Chester-Jensen into one for ‘bodily injury.’ ”
Diamond State, 243 Ill. App. 3d at 477-78.
This court noted the State did not bring the action on behalf of the employees or seek recovery
for them on account of their illness or bodily injury and held there was no property damage
either. See also Bituminous Casualty Corp. v. Gust K. Newberg Construction Co., 218 Ill. App.
3d 956, 964 (1991) (finding same and that allegations regarding injured employees not offered
for recovery but as evidence of failed air system).
¶ 22 Likewise, in this case the Condo Association’s allegations of personal property damage
were not offered for the purposes of recovery. These allegations were purely tangential to the

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 Condo Association’s claim for damages for repair and remediation of the roof. Further, even if
the Condo Association sought to recover amounts attributed to property damage sustained by
individual unit owners,7 such amounts, vis-a-vis the Condo Association, are economic losses
and not property damage. As a result, the trial court properly disregarded these allegations in
determining Westfield Insurance’s duty to defend. See also id. For the reasons stated, the
underlying complaint, even liberally construed in the Developer’s favor, does not offer
allegations toward a theory of recovery that fits within the potential coverage of the policy. In
affirming that there was no potential coverage, we find no need to examine the exclusions in
this case. See id. at 966.
¶ 23 In an effort to save itself, the Developer appears to argue that Westfield Insurance should
have raised the issue of “standing” as an affirmative defense in the underlying lawsuit by the
Condo Association. Had there been a duty to defend, the Developer’s argument might make
sense. See Express Valet, Inc. v. City of Chicago, 373 Ill. App. 3d 838, 855 (2007) (a reviewing
court is entitled to have the issues on appeal clearly defined and cohesive legal argument
presented). As there was no duty to defend, we must disregard this circular argument.
Moreover, the analysis above makes clear that the issue does not necessarily involve standing
but the more nuanced consideration of whether the underlying complaint sufficiently raised a
theory of recovery together with supporting facts that trigger potential coverage under the
insurance policy. While the Condo Association might have had the capacity to represent the
individual unit owners, nowhere in the complaint did it purport to do so.
¶ 24 Therefore, we must also reject the Developer’s related argument that our determination
about “standing” has a preclusive effect as to the underlying lawsuit. The Developer cites legal
principles from Maryland Casualty Co. v. Peppers, 64 Ill. 2d 187 (1976), which was also a
duty to defend case in which an underlying lawsuit alleged alternative counts of intentional and
negligent conduct. The court for the declaratory action in Peppers had concluded the injury at
issue was intentionally inflicted, but the supreme court determined this finding on an “ultimate
fact” was premature and might preclude recovery under other theories in the underlying
lawsuit. Id. at 197. The Developer appears to draw an analogy here as to “standing.” We repeat
that the issue in this case is more nuanced than the Developer acknowledges, and determining
whether a complaint triggers a duty to defend with its allegations is far different from drawing
a conclusion on an issue of fact. This argument is also questionable given that the underlying
complaint is no longer being actively litigated. Regardless, “standing” is not a factual issue but
a legal one, and thus the Peppers principle cited by the Developer is demonstrably
inapplicable.
¶ 25 Based on the foregoing, we also conclude the trial court did not err in granting Westfield
Insurance’s motion to reconsider the trial court’s initial judgment in favor of the Developer.
The Developer argues the trial court granted the motion to reconsider on a basis not raised in
the motion. We disagree. The motion to reconsider raised a number of issues but significantly
incorporated Westfield Insurance’s legal memorandum supporting summary judgment. The
initial trial court judgment in favor of the Developer clearly was the product of a
misapplication of the law, and the trial court also expressed on the record that it did not fully
analyze the present case when it granted the initial summary judgment, thus warranting

7
Tellingly, counsel for the Condo Association refused to answer the trial court’s question on this
point.

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 correction. Stevens v. Village of Oak Brook, 2013 IL App (2d) 120456, ¶ 37 (a court has the
inherent authority to reconsider and correct its rulings, and this power extends to interlocutory
rulings as well as to final judgments); Pence v. Northeast Illinois Regional Commuter R.R.
Corp., 398 Ill. App. 3d 13, 16 (2010) (noting standards for motions to reconsider and further
that a trial court may deny a motion for summary judgment and later change its position and
grant the same motion).
¶ 26 Having determined there was no duty to defend the Developer in the underlying action, we
also affirm the trial court’s determination that there was no duty to indemnify. See Gust K.
Newberg Construction Co., 218 Ill. App. 3d at 966. We disregard the Developer’s request to
stay the indemnity issue. The Developer offered no legal citation to support its request, thus
waiving it. See Ill. S. Ct. R. 341(h)(7) (eff. Jan. 1, 2016) (points not argued are waived).
Furthermore, although a court should refrain from adjudicating issues of fact in an insurance
declaratory action that will have a preclusive effect in the underlying case (see United States
Fidelity & Guaranty Insurance Co. v. Jiffy Cab Co., 265 Ill. App. 3d 533, 537 (1994) (citing
Murphy v. Urso, 88 Ill. 2d 444, 455 (1981))), nothing in the trial court’s determination that the
Condo Association’s complaint did not allege “property damage” within the meaning of the
policy foreclosed the litigation of any issue of fact relevant to the Developer’s liability for
faulty workmanship. And, in any event, because the Condo Association’s claims are no longer
pending, the request is moot.

¶ 27 CONCLUSION
¶ 28 We affirm the judgment of the circuit court granting summary judgment in favor of
Westfield Insurance.

¶ 29 Affirmed.

¶ 30 JUSTICE PUCINSKI, dissenting.
¶ 31 Regretfully, I cannot join in the majority’s decision, as the majority’s rationale and holding
are against several well-established principles and rules of law in the area of insurance defense.
¶ 32 First, the majority analyzes the underlying complaint and the policies to determine whether
there is in fact coverage, which is appropriate only at a later stage when determining
indemnity. In reviewing the threshold matter whether there is a duty to defend, we examine the
underlying complaint and the insurance policies to determine whether there is the possibility of
recovery under the policies, not whether in fact there is indeed coverage. As has been long
established, the duty to defend is much broader than the duty to indemnify. Outboard Marine
Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 125 (1992). The duty-to-defend
threshold is “minimal”; the complaint need present only “a possibility,” not probability, of
recovery under the policy. Bituminous Casualty Corp. v. Gust K. Newberg Construction Co.,
218 Ill. App. 3d 956, 960 (1991). “The duty to defend is much broader than the duty to
indemnify because the duty to defend is triggered if the complaint potentially falls within a
policy’s coverage, whereas the duty to indemnify is triggered only when the resulting loss or
damage actually comes within a policy’s coverage.” (Emphases omitted.) Country Mutual
Insurance Co. v. Bible Pork, Inc., 2015 IL App (5th) 140211, ¶ 16 (citing Stoneridge
Development Co. v. Essex Insurance Co., 382 Ill. App. 3d 731, 741 (2008)).

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¶ 33 The majority closely parses the underlying complaint and construes the insurance policy
not only narrowly but also against the insured to conclude there is no duty to defend. The
correct analysis actually is to do the opposite.
¶ 34 According to the majority, “the policy essentially requires an accidental event to trigger
coverage, yet there is nothing accidental alleged in the complaint,” thus ostensibly arguing that
the allegations of the underlying complaint are not potentially within coverage for an
“occurrence.” Supra ¶ 18. The majority reasons that “[a]ny alleged damage to the common or
personal property was not an accident and therefore not the result of any occurrence.”
Actually, the policies define “occurrence” as “an accident, including continuous or repeated
exposure to substantially the same general harmful conditions.” The second amended
complaint in the underlying Association lawsuit alleges that there were construction defects in
the roofing of the development, which over time resulted in water infiltrating into the building,
individual condominium units, “and other property,” including damage to “personal and other
property” within the condominium units. The Association’s second amended complaint also
alleges that the water infiltration was caused by “the failure to complete the roofing system
under the patio concrete pavers and the failure to coat the top layer of fiberglass with hot
asphalt.” As a result of that failure, “any water that accumulated over the roof membrane for a
long period of time caused water to bleed through the existing roof membrane.” I do not read
the word “accident” in the policy definition of an occurrence as to exclude failures to perform
certain acts. Further, the policy definition of an occurrence explicitly includes “continuous or
repeated exposure to substantially the same general harmful conditions,” which is what is
alleged.
¶ 35 The majority also concludes that the allegations of the Association lawsuit “do not fall
within the definition of property damage under the policy’s plain language,” and instead
“sought only to hold the Developer responsible for the shoddy workmanship of its roofing
subcontractor.” Supra ¶ 19. The majority further finds that the Association lawsuit alleged
only economic damages for the repair of the roof and not property damage. But the
Association’s second amended complaint does allege property damage under the policies. The
policy defines “property damage” as “[p]hysical injury to tangible property, including all
resulting loss of use of that property. All such loss of use shall be deemed to occur at the time
of the physical injury that caused it.” The second amended complaint in the underlying
Association lawsuit alleges that the construction defects in the roofing resulted in water
infiltrating into the building into individual condominium units, “and other property,”
including damage to “personal and other property” within the condominium units. The
complaint thus alleged “[p]hysical injury to tangible property” that is within primary coverage
of Westfield’s policies. I note that at the hearing on the motions below, Westfield
acknowledged that the Association complaint alleged damage to personal property. Westfield
chose to argue instead that the Association did not have standing to assert these claims for
damage to the personal property of the condominium unit owners.
¶ 36 The majority finds that the allegations in the Association lawsuit “were meant to simply
bolster the contention that water infiltration generally occurred and caused damages,”
meanwhile conceding that allegations of construction defects that damage something other
than the project itself can constitute an occurrence and property damage. The majority
minimizes the allegations of property damage to the personal and other property of the unit
owners as “purely tangential” to the Association’s claim for damages for repair and

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 remediation of the roof. The majority’s only citation to support this “purely tangential”
analysis of the allegations in the underlying complaint is to Diamond State, but Diamond State
did not cite any authority for this lone statement. See Diamond State, 243 Ill. App. 3d at 477
(“Appellant’s proposed interpretation would distort the meaning of this provision and extend
its reach so as to provide coverage for any liability where bodily injury is a tangential factor.”).
I can find no other reported Illinois case that has used such an analysis. Also, Diamond State is
not even on point because it involved purely economic losses as a result of the diminished
productivity of the insured’s workers under a claim for bodily injury. In this case we are
presented with a claim for property damage, not bodily injury, and we are presented with
allegations seeking damages for property damage, not purely economic loss. The fact that
monetary damages are sought to also repair the roof does not transform this case into an
economic loss case. The damages alleged are property damages, which include alleged
property damage to the personal and other property of the individual condominium unit
owners.
¶ 37 An insurer’s duty to defend does not hinge on the draftsmanship in the underlying
complaint of the relative amount of damages sought for particular injuries, and clearly alleged
allegations of property damages are not disregarded as “purely tangential” to other allegations.
“ ‘The question of coverage should not hinge on the draftsmanship skills or whims of the
plaintiff in the underlying action.’ ” Illinois Emcasco Insurance Co. v. Northwestern National
Casualty Co., 337 Ill. App. 3d 356, 361 (2003) (quoting International Insurance Co. v.
Rollprint Packaging Products, Inc., 312 Ill. App. 3d 998, 1007 (2000)). “[T]he duty to defend
does not require that the complaint allege or use language affirmatively bringing the claims
within the scope of the policy.” Rollprint Packaging Products, Inc., 312 Ill. App. 3d at 1007.
“ ‘The insurer’s duty to defend does not depend upon a sufficient suggestion of liability raised
in the complaint; instead, the insurer has the duty to defend unless the allegations of the
underlying complaint demonstrate that the plaintiff in the underlying suit will not be able to
prove the insured liable, under any theory supported by the complaint, without also proving
facts that show the loss falls outside the coverage of the insurance policy.’ ” American
Economy Insurance Co. v. Holabird & Root, 382 Ill. App. 3d 1017, 1022 (2008) (quoting
Illinois Emcasco Insurance Co., 337 Ill. App. 3d at 361). See also Farmers Automobile
Insurance Ass’n v. Danner, 2012 IL App (4th) 110461.
¶ 38 Further, “ ‘[a]s the threshold for pleading a duty to defend is low, any doubt with regard to
such duty is to be resolved in favor of the insured.’ ” Holabird & Root, 382 Ill. App. 3d at 1023
(quoting United Services Automobile Ass’n v. Dare, 357 Ill. App. 3d 955, 963 (2005)). Under
Illinois law, even one potentially viable theory of recovery is enough to trigger the duty to
defend. See Pekin Insurance Co. v. XData Solutions, Inc., 2011 IL App (1st) 102769, ¶ 7 (there
is a duty to defend even if only one of several alleged theories of recovery falls within potential
coverage).
¶ 39 I also disagree with the majority’s analysis of the standing issue. The majority dismisses
the Developer’s argument regarding standing as “circular” and contends that the real issue is
the “more nuanced consideration of whether the underlying complaint sufficiently raised a
theory of recovery.” Supra ¶ 23. But the majority makes the same argument as Westfield, that
the individual unit owners were not parties to the Association lawsuit and that the Association
did not purport to act on behalf of the individual unit owners. Whether an individual or entity is
a proper party to assert rights is indeed an issue regarding standing, and the Association did not

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 have to plead or prove its own standing. See Lebron v. Gottlieb Memorial Hospital, 237 Ill. 2d
217, 252 (2010) (“[L]ack of standing is an affirmative defense, which is the defendant’s
burden to plead and prove.”). Section 9.1(b) of the Illinois Condominium Property Act
explicitly provides that the board of managers of a condominium association “shall have
standing and capacity to act in a representative capacity in relation to matters involving the
common elements or more than one unit, on behalf of the unit owners, as their interests may
appear.” 765 ILCS 605/9.1(b) (West 2002). This issue is thus a red herring. While the majority
uses the issue of proper parties and standing as a coverage issue, as Westfield does, it is in fact
an affirmative defense to be raised in the underlying litigation and not either an exclusion in the
policy or a basis to decline a tender of defense.
¶ 40 In Milwaukee Mutual Insurance Co. v. J.P. Larsen, Inc., 2011 IL App (1st) 101316, this
court held that the insurer had a duty to defend a construction defect claim based upon
allegations of damage to the personal property of condominium unit owners. Unlike the cases
cited by the majority, Milwaukee Mutual is on all fours with this case and should govern the
outcome here.
¶ 41 There is no ground for an insurer to reject a tender of defense where there is potential
liability on the basis of an affirmative defense available to its insured. The only appropriate
action for an insurer in such a circumstance is to defend its insured and then raise that
affirmative defense on behalf of its insured. See Illinois Emcasco Insurance Co., 2013 IL App
(1st) 120735, ¶ 22. In Illinois Emcasco Insurance Co., this court rejected an attempt by the
insurer to limit its insured’s right to a defense based on a defense in the underlying action. The
plaintiff insurer argued in a declaratory judgment action that the court should rule it had no
duty to defend its insured by arguing that the general contractor may not have retained
sufficient control so as to be vicariously liable for the subcontractor’s negligence. This court
held, however, that “at this juncture, the question is not whether Waukegan is vicariously
liable. Rather, the issue is whether Emcasco has a duty to defend Waukegan because it could
potentially be found vicariously liable for Walls’ injuries.” (Emphasis in original.) Illinois
Emcasco Insurance Co., 2013 IL App (1st) 120735, ¶ 22. I agree with the Developer that if
there is a potentially meritorious defense to the Association lawsuit, such as standing,
Westfield should have defended the claim and raised the defense.
¶ 42 Finally, I find it instructive that Westfield chose to defend Total Roofing in the Association
lawsuit, as Westfield must have determined that the complaint triggered its duty to defend
Total Roofing. The circuit court below initially also found this fact instructive in its first ruling
in favor of the Developer, before it granted Westfield’s motion to reconsider and entered
judgment in favor of Westfield. Why Westfield accepted Total Roofing’s tender of defense but
rejected the Developer’s tender of defense is inexplicable, as the same allegations are involved,
in the same complaint, under the same policies, and the Developer was an additional insured
under the same policies. While the majority questions whether the Developer was an additional
insured after the operations were completed, the policy contained an additional insured
endorsement that did not terminate the Developer’s additional insured status upon completed
operations. I believe the circuit court had it right the first time. I would reverse.

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