Mid-Am Builders. Inc. v. Federated Mutual Ins. Co

In Mid-Am Builders. Inc. v. Federated Mutual Ins. Co., 194 F. Supp. 2d 822, 825 (C.D. Ill. 2002), the court found that a general contractor was an additional insured on its subcontractor's liability insurance policy because the general contractor's letter of transmittal mailed to the subcontractor requested that the general contractor be named as an additional insured. Mid-Am Builders, 194 F. Supp. 2d at 825-26. The record in that case revealed that the subcontract entered into between the general contractor and the subcontractor did not list the names of any additional insureds. Mid-Am Builders, 194 F. Supp. 2d at 823. However, on the same date that the subcontract was mailed, the general contractor sent a letter of transmittal to the subcontractor, specifically instructing the subcontractor to name it as an additional insured, by stating: "please issue a current certificate of insurance with Mid-Am Builders [the contractor] as additional insured." Mid-Am Builders, 194 F. Supp. 2d at 823-24. The subcontractor's president signed the subcontract agreement, but did not sign the letter of transmittal. However, in response to the letter of transmittal, the subcontractor's vice president called an agent of the subcontractor's insurance provider and requested that the subcontractor be named as an additional insured on the general contractor's policy. Mid-Am Builders, 194 F. Supp. 2d at 824. Five days after the written subcontract was executed, a certificate of insurance was issued to the general contractor listing it as an additional insured. Mid-Am Builders, 194 F. Supp. 2d at 824. Under these facts, the district court found that the general contractor qualified as an additional insured because the letter of transmittal, read together with the subcontract, satisfied the written agreement requirement of the insurance policy's blanket endorsement provision. Mid-Am Builders, 194 F. Supp. 2d at 828. The court, relying on Pecora v. Szabo Jr., 94 Ill. App. 3d 57, 418 N.E.2d 431, 49 Ill. Dec. 577 (1981) and McDonald's Corp. v. Butler Co., 158 Ill. App. 3d 902, 511 N.E.2d 912, 110 Ill. Dec. 735 (1987), noted that under Illinois law different instruments executed together as part of one transaction or agreement are to be read together and construed as constituting a single instrument. Mid-Am Builders, 194 F. Supp. 2d at 824-25. The district court found that since the letter of transmittal was sent to the subcontractor at the same time as the subcontract agreement and concerned the same transaction, they should be construed together. Mid-Am Builders, 194 F. Supp. 2d at 827. Moreover, the court held that although the subcontractor did not specifically sign the transmittal letter sent to it by the general contractor, the subcontractor's act of contacting its insurance agent and requesting that a certificate of insurance naming the general contractor as an additional insured be issued soon after signing the subcontract agreement, evidenced an intent by the parties that the general contractor be provided with insurance, so as to require the transmittal letters to be considered as part of the subcontract. Mid-Am Builders, 194 F. Supp. 2d at 827-28; C.f. West American, 334 Ill. App. 3d at 83. (holding that although there was no one single document requiring the subcontractor to name the general contractor as an additional insured, the totality of the record, including an oral agreement between the general contractor and subcontractor to add the contractor as an additional insured, the issuance of a certificate of insurance naming the general contractor as an additional insured, the general contractor's reliance on that certificate as proof of insurance, and the insurers confirmation that the general contractor was listed as an additional insured in later correspondence and memoranda established that the general contractor had in fact been insured).