L.J. Dodd Construction, Inc. v. Federated Mutual Insurance Co

In L.J. Dodd Construction, Inc. v. Federated Mutual Insurance Co., 365 Ill. App. 3d 260, 848 N.E.2d 656, 302 Ill. Dec. 357 (2006), the Second District affirmed the circuit court's determination that the CGL carrier had no duty to defend the general contractor in an underlying construction negligence suit. The general contractor was an additional insured on a subcontractor's CGL policy, with a similar exclusion for liability resulting from the general contractor's "'sole negligence.'" L.J. Dodd Construction, Inc., 365 Ill. App. 3d at 261. The injured employee worked for a second-level subcontractor that subcontracted with the primary insured of the CGL policy at issue. In his negligence complaint, the injured worker alleged that an employee of the general contractor "negligently ran over him with a forklift." L.J. Dodd Construction, Inc., 365 Ill. App. 3d at 261. The general contractor tendered its defense in the underlying negligence suit to the CGL carrier of the first-level subcontractor. The CGL policy provided additional insured coverage if liability arose out of the primary insured's "'ongoing operations performed for the general contractor.'" L.J. Dodd Construction, Inc., 365 Ill. App. 3d at 261. The injured worker was not an employee of the primary insured and, thus, the Second District confronted the issue whether the injured worker was engaged in "ongoing operations" on behalf of the primary insured, which, in turn, was performed for the general contractor. The general contractor asserted that the "ongoing operations" coverage applied because the injured worker would not have been on the jobsite "'but for'" the primary insured's work for the general contractor. L.J. Dodd Construction, Inc., 365 Ill. App. 3d at 263. While the primary insured subcontracted with the employer of the injured worker, the general contractor argued that the "but for" connection between the primary insured and the general contractor "is sufficient to establish that the general contractor's potential liability to the injured party arose out of the primary insured's ongoing operations on behalf of the general contractor." L.J. Dodd Construction, Inc., 365 Ill. App. 3d at 263. Rather than sort through the connections among the three parties--the general contractor, the first-level subcontractor and the second-level subcontractor--the court dispensed with the general contractor's argument for coverage under the "ongoing operations" clause by noting that "the Policy excludes coverage for liability resulting from the general contractor's sole negligence." L.J. Dodd Construction, Inc., 365 Ill. App. 3d at 264. The Second District rejected the general contractor's claim that it "was possible that someone or something besides the general contractor was responsible so that the Policy's 'sole negligence' coverage exclusion did not apply." L.J. Dodd Construction, Inc., 365 Ill. App. 3d at 261. In examining the negligence complaint, the court found that the injured worker claimed the general contractor "single-handedly, negligently caused the injuries." L.J. Dodd Construction, Inc., 365 Ill. App. 3d at 266. There were no facts, either pleaded or "'true but unpleaded'" that "might show that, despite the injured employee's assertions, someone or something other than the general contractor's negligence is responsible for the employee's injuries." L.J. Dodd Construction, Inc., 365 Ill. App. 3d at 264. While the court made note that the negligence complaint failed to even mention the primary insured, no significance in that observation was noted in the court's analysis on the "sole negligence" exclusion. L.J. Dodd Construction, Inc., 365 Ill. App. 3d at 263. Rather, the court compared the allegations in the underlying complaint to the policy at issue to conclude that the complaint failed to state any claim that was within or potentially within the coverage. L.J. Dodd Construction, Inc., 365 Ill. App. 3d at 264.