In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 16‐1294 and 16‐1739
LEND LEASE (US) CONSTRUCTION INC.,
Plaintiff‐Appellant,
v.
ADMINISTRATIVE EMPLOYER SERVICES, INC. and TECHNOLOGY
INSURANCE COMPANY, INC.,
Defendants‐Appellees.
____________________
Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:15‐cv‐04318 — Samuel Der‐Yeghiayan, Judge.
____________________
ARGUED SEPTEMBER 16, 2016 — DECIDED OCTOBER 20, 2016
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Before POSNER, RIPPLE, and ROVNER, Circuit Judges.
POSNER, Circuit Judge. In 2014, Lend Lease construction
company, the construction manager of the River Point Tow‐
er Project—a project to build an ultramodern office building
in downtown Chicago—hired Cives Corporation to be a
subcontractor on the project. Cives in turn hired Midwest
Steel, Inc., to be a sub‐subcontractor. Midwest had, years be‐
fore, hired Administrative Employer Services, Inc. (AES) to
2 Nos. 16‐1294 and 16‐1739
supply Midwest with additional workers, who would be co‐
employed by Midwest and AES. These workers would work
on the River Point Project.
In order to provide workers’ compensation insurance to
all the workers on the project, Lend Lease entered into what
is called a “contractor controlled insurance program” with
an insurance company named Starr Liability & Indemnity
Co. The Starr policy provided for a $500,000 deductible; that
is, Lend Lease would have to pay the first $500,000 of any
claims, covered by the policy, of injured workers. All sub‐
contractors were supposed to join in the policy; Lend Lease
alleges that Midwest enrolled and therefore its workers were
covered. Lend Lease also alleges that AES had several years
earlier obtained workers’ compensation for its workers from
Technology Insurance Co. (referred to by the parties as
“TIC”), which meant that injured AES‐Midwest workers
could obtain workers’ compensation from either Starr (or
Lend Lease if it hadn’t used up its deductible) or TIC.
Later in 2014, four ironworkers, jointly employed by
Midwest and AES and performing work for Midwest (and
thus indirectly for Lend Lease, as the overall contract man‐
ger) were injured on the job and sought workers’ compensa‐
tion. Starr accepted coverage but under a reservation of
rights, because of the $500,000 deductible. The workers’
claims ultimately exceeded $500,000 (though by how much
we haven’t been told), so Lend Lease has had to pay its full
deductible and Starr has paid the remaining claims.
But with Midwest and AES having acknowledged that
they were the co‐employers of the injured workers, Lend
Lease filed a diversity suit against TIC, AES’s insurer, and
AES as well, seeking reimbursement of the $500,000 in
Nos. 16‐1294 and 16‐1739 3
workers’ compensation benefits that Lend Lease had paid to
the four workers. The district court dismissed the suit, how‐
ever, precipitating this appeal to us by Lend Lease.
Lend Lease alleges that the four injured workers were in‐
sured both by Starr and by TIC, and if this is right there
would be an argument for splitting the workers’ compensa‐
tion benefits between the two insurers—and indeed we
learned at oral argument that Starr has filed its own lawsuit
against AES and TIC. See Home Insurance Co. v. Cincinnati
Insurance Co., 821 N.E.2d 269, 316 (Ill. 2004) (“Contribution
as it pertains to insurance law is an equitable principle aris‐
ing among coinsurers … and is only available where the con‐
current policies insure the same entities, the same interests,
and the same risks.”) (emphasis added). But that’s not this
case; and in this case Lend Lease is not asking for a split be‐
tween coinsurers—what good would that do it? Instead it
argues that because it is a policyholder that paid a deducti‐
ble in conformity to the Starr policy, it is entitled to contribu‐
tion, or in the alternative to indemnification, from TIC, in the
amount of $500,000, which would erase Lend Lease’s de‐
ductible. Had it not been for the deductible, Starr would
have had to pay the entire workers’ compensation benefits
due the injured employees, so it saved money—but so did
Lend Lease, though probably less than the deductible. For
the deductible, by reducing Starr’s risk, doubtless had re‐
duced the insurance premiums charged Lend Lease by Starr,
by reducing Starr’s potential liability to workers injured
while employed on Lend Lease’s construction project. Any‐
way, Lend Lease made a deal with Starr and is bound by it.
Lend Lease also asks for a declaratory judgment that TIC
is obligated to pay the workers’ compensation benefits for
4 Nos. 16‐1294 and 16‐1739
the four injured workers, as well as the benefits for any fu‐
ture AES‐Midwest workers who are injured on the project.
Since we’ve rejected its claim for contribution or indemnifi‐
cation from TIC, there is no ground for the declaratory
judgment that it seeks.
Lend Lease makes a separate and distinct argument that
AES has been unjustly enriched because it “has paid less
premium for its workers compensation insurance policy (i.e.,
the TIC Policy), it has not had to satisfy any applicable de‐
ductible or self‐insured retention on the TIC Policy, and/or it
has not had the claims of the Injured Workers counted
against its insurance loss runs [reports that document claims
activity].” But AES was not obligated to purchase an insur‐
ance policy that would get Lend Lease out of paying its de‐
ductible.
Last, Lend Lease appeals the denial of its motion under
Federal Rule of Civil Procedure 59(e) asking the district
judge to change judgment from dismissal with prejudice to
dismissal without prejudice in order to allow Lend Lease to
file a fourth complaint that would add Starr as a plaintiff
and Midwest as a defendant, and assert new claims against
AES. But Lend Lease has already had three chances to plead
correctly—making this a case of three strikes and you’re
out—and Starr can litigate its own claims against TIC.
The judgment of the district court is
AFFIRMED.