Preview
FILED
Hearing Date: 10/27/2023 9:30 AM 6/29/2023 1:11 PM
Location: Court Room 2502 IRIS Y. MARTINEZ
Judge: Demacopoulos, Anna Helen CIRCUIT CLERK
COOK COUNTY, IL
2023CH06109
IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS Calendar, 13
23350364
COUNTY DEPARTMENT, CHANCERY DIVISION
FILED DATE: 6/29/2023 1:11 PM 2023CH06109
COLUMBIA MUTUAL INSURANCE COMPANY, )
)
Plaintiff, )
)
v. )
) 2023CH06109
PRO MC CONSTRUCTION, INC., 1302 WINONA )
CONDOMINIUM ASSOCIATION’S BOARD OF )
MANAGERS, and O’NEILL DEVELOPMENT )
GROUP, INC., )
Defendants. )
COMPLAINT FOR DECLARATORY JUDGMENT
NOW COMES the Plaintiff, COLUMBIA MUTUAL INSURANCE COMPANY
(“Columbia”), by and through its attorneys, Lindsay, Pickett & Postel, LLC, and for its Complaint
for Declaratory Judgment against the Defendants, PRO MC CONSTRUCTION, INC. (“Pro MC”),
1302 WINONA CONDOMINIUM ASSOCIATON’S BOARD OF MANAGERS (the “Board”)
and O’NEILL DEVELOPMENT GROUP, INC. (“O’Neill”), alleges as follows:
INTRODUCTION
1. In this declaratory judgment action, Columbia seeks a declaration that it does not
owe a duty to defend or indemnify Pro MC with respect to a fourth-party complaint filed by
O’Neill in the construction defect lawsuit brought by the Board in the Circuit Court of Cook
County, case no. 22 L 001563 consolidated with 22 L 005679 (“the underlying suit”).
THE PARTIES
2. Columbia is an insurance company incorporated under the laws of the State of
Missouri with its principal place of business located in Columbia, Missouri.
3. Pro MC is a corporation organized under the laws of the State of Illinois and was a
subcontractor involved in the construction of a six-unit, multi-residential building, located at 1302
W. Winona St., Chicago, IL 60640 (the “Building”).
4. The Board is the governing body of 1302 Winona Condominium Association, and
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acts on behalf of the unit owners in the Building. The Board is named herein only in that it may
be deemed a necessary party with an interest in the subject matter of this action. Columbia seeks
no relief from the Board, other than to the extent, if any, that it is interested in the subject matter
of this action, that it be bound by the judgment sought herein. If the Board will sign a stipulation
to that effect, then Columbia will voluntarily dismiss it as a Defendant.
5. O’Neill is a corporation organized under the laws of the State of Illinois and was
the general contractor for the construction of the Building. Columbia seeks no relief from O’Neill,
other than to the extent, if any, that it is interested in the subject matter of this action, that it be
bound by the judgment sought herein. If O’Neill will sign a stipulation to that effect, then
Columbia will voluntarily dismiss it as a Defendant.
THE UNDERLYING SUIT
The Board’s Complaint
6. On or about February 16, 2022, the Board filed the underlying suit in Cook
County’s Law Division.
7. On or about March 22, 2023, the Board filed a second amended complaint (the
“underlying complaint”) in the underlying suit, naming as direct defendants Winona 1302 LLC
(“Winona”) and Bak Home Development Partners (“Bak”). The underlying complaint is the
currently operative pleading on file. A true and correct copy of the underlying complaint is
attached as Exhibit A.
8. Neither Pro MC nor O’Neill are named defendants in the underlying complaint.
Winona and Bak’s Third-Party Complaint
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9. On or about March 22, 2023, Winona and Bak filed an amended third-party
complaint within the underlying suit (the “third-party complaint”) naming O’Neill, Castle
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Masonry, Inc. and Craft Architecture, LLC as third-party defendants.. A true and correct copy of
the third-party complaint is attached as Exhibit B.
10. Pro MC is not named as a third-party defendant in the third-party complaint.
O’Neill’s Fourth Party Complaint
11. On May 5, 2023, O’Neill filed a fourth-party complaint naming Pro MC and several
other subcontractors as fourth party defendants (the “fourth party complaint”). A true and correct
copy of the fourth-party complaint is attached as Exhibit C.
12. Counts 7 and 8 of the fourth party complaint are directed to Pro MC and allege
theories of contribution and breach of contract against Pro MC respectively. Ex. C, Counts 7 and
8.
13. Count 7 of the fourth-party complaint (the “contribution count”), alleges that Pro
MC provided concrete and lay out for its concrete on the project. Ex. C, ¶ 96.
14. The contribution count alleges that Pro MC had a duty to perform its concrete
layout and installation according to the standard of care to which ordinary concrete installers are
held. Ex. C, ¶ 99.
15. The contribution count alleges that Pro MC breached the standard of care in one or
more of the following ways:
a. Pro MC made lay out errors in setting down the footings for the garage;
b. Pro MC failed to prepare the soil below the footings for the garage prior to installing
foundational concrete footings;
c. Pro MC failed to inspect the soil below the footings for the garage prior to installing
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foundational concrete footings.
d. Pro MC installed concrete footings without adequate measurements; and
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e. Pro MC installed concrete footings in violation of the specifications and design. Ex.
C, ¶ 100.
16. The contribution count alleges that Pro MC, by its breaches of its duty of care,
proximately and in fact caused or contributed to the alleged defects Plaintiffs and Third-Party
Plaintiff claim and damage to other property. Ex. C, ¶ 101.
17. The contribution count alleges that Pro MC’s breaches of its duty of care were
accidental and not intended, the consequences of the breach were not intended or the foreseeable
result of the errors made. Ex. C, ¶ 102.
18. The contribution count alleges that as a direct and proximate result of the errors by
Pro MC in the layout, setting digging and installation of the concrete footings at the garage, the
garage was made unusable, and moved, causing structural damage to wood framing, drywall,
garage door tracking, the garage door, ceiling tiles on the garage roof deck, and structural steel
elements. Ex. C, ¶ 103.
19. The contribution count alleges that the property damage was an accident in that Pro
MC did not intend to cause the collateral damage to the surrounding building elements, and the
resulting damage was neither expected nor intended from their standpoint. Ex. C, ¶ 104.
20. The contribution count seeks damages from Pro MC in the form of contribution in
an amount commensurate with the percentage of fault attributable to Pro MC pursuant to the Joint
Tortfeasor Contribution Act, 740 ILCS 100/.01, et. seq. Ex. C, ¶¶ 106-107.
21. Count 8 of the fourth-party complaint (the “breach of contract count”) alleges that
O’Neill and Pro MC formed a contract pursuant to which Pro MC agreed to furnish and install
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concrete including footings and foundation for the Project as enumerated in its proposal. Ex. C, ¶
109.
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22. The breach of contract count alleges that Pro MC’s contract with O’Neill was its
promise to perform all its work or services skillfully, carefully, diligently and in a good and
workmanlike manner. Ex. C, ¶ 110.
23. The breach of contract count alleges that Pro MC breached its promise to perform
all its work or services skillfully, carefully, diligently and in a good and workmanlike manner in
that, among other things:
a. Pro MC made lay out errors in setting down the footings for the garage;
b. Pro MC failed to prepare the soil below the footings for the garage prior to installing
foundational concrete footings;
c. Pro MC failed to inspect the soil below the footings for the garage prior to installing
foundational concrete footings.
d. Pro MC installed concrete footings without adequate measurements; and
e. Pro MC installed concrete footings in violation of the specifications and design. Ex.
C, ¶ 100.
24. The breach of contract count alleges that by the aforementioned breaches of the
contract between Pro MC and O’Neill, Pro MC caused O’Neill damages, including but not limited
to O’Neill’s costs and expenses related to correcting Pro MC’s work and damages O’Neill may be
required to pay to the unit owners and/or condominium association for damage to other property
damaged by Pro MC’s work. Ex. C ¶ 112.
PRO MC’S TENDER OF DEFENSE AND INDEMNITY
25. On June 2, 2023, Pro MC first notified Columbia of the underlying suit and the
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claim from which it arose and has tendered its defense and indemnity with respect to the fourth-
party complaint to Columbia.
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26. On June 20, 2023, Columbia responded to Pro MC’s tender by agreeing to defend
Pro MC under reservation of rights. A true and correct copy of the June 20, 2023 letter reserving
rights is attached as Exhibit D.
THE COLUMBIA POLICY
27. Columbia issued a commercial multiple peril policy to Pro MC, policy no. CMPIL
23448, effective June 26, 2019 through June 26, 2020, containing Commercial General Liability
(“CGL”) coverage (“the Columbia policy”). A true and correct copy of the Columbia policy is
attached hereto as Exhibit E.
28. Columbia subsequently renewed the Columbia policy annually through June 26,
2022.
29. The Columbia policy is intended to be interpreted as a whole, but for the
convenience of the Court and counsel, Columbia sets forth certain pertinent provisions from the
policy’s CGL coverage, which are materially identical in each policy iteration, as follows:
SECTION I – COVERAGES
COVERAGE A -- BODILY INJURY AND PROPERTY DAMAGE
LIABILITY
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally obligated to pay
as damages because of "bodily injury" or "property damage" to which this
insurance applies. We will have the right and duty to defend the insured
against any "suit" seeking those damages. However, we will have no duty
to defend the insured against any "suit" seeking damages for "bodily injury"
or "property damage" to which this insurance does not apply. We may, at
our discretion, investigate any "occurrence" and settle any claim or "suit"
that may result. But:
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(1) The amount we will pay for damages is limited as described in Section
III - Limits Of Insurance; and
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(2) Our right and duty to defend ends when we have used up the applicable
limit of insurance in the payment of judgments or settlements under
Coverages A or B or medical expenses under Coverage C.
No other obligation or liability to pay sums or perform acts or services is
covered unless explicitly provided for under Supplementary Payments –
Coverages A and B.
b. This insurance applies to "bodily injury" and "property damage" only if:
(1) The "bodily injury" or "property damage" is caused by an
"occurrence" that takes place in the "coverage territory":
(2) The "bodily injury" or "property damage" occurs during the policy
period; and
(3) Prior to the policy period, no insured listed under Paragraph 1. of
Section II - Who Is An Insured and no "employee" authorized by
you to give or receive notice of an "occurrence" or claim, knew that
the "bodily injury" or "property damage" had occurred, in whole or
in part. If such a listed insured or authorized "employee" knew, prior
to the policy period, that the "bodily injury" or "property damage"
occurred, then any continuation, change or resumption of such
"bodily injury" or "property damage" during or after the policy
period will be deemed to have been known prior to the policy period.
* * *
The policy’s coverage is subject to the following exclusions:
2. EXCLUSIONS
This insurance does not apply to:
a. Expected Or Intended Injury
"Bodily injury" or "property damage" expected or intended from the standpoint of
the insured. This exclusion does not apply to "bodily injury" resulting from the use
of reasonable force to protect persons or property.
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***
b. Contractual Liability
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"Bodily injury" or "property damage" for which the insured is obligated to pay
damages by reason of the assumption of liability in a contract or agreement. ***
***
j. Damage To Property
"Property damage" to:
***
(5) That particular part of real property on which you or any contractors or
subcontractors working directly or indirectly on your behalf are performing
operations, if the "property damage" arises out of those operations; or
(6) That particular part of any property that must be restored, repaired or replaced
because "your work" was incorrectly performed on it.
***
Paragraphs (3), (4), (5) and (6) of this exclusion do not apply to liability assumed
under a sidetrack agreement.
Paragraph (6) of this exclusion does not apply to "property damage" included in the
"products-completed operations hazard".
***
k. Damage To Your Product
"Property damage" to "your product" arising out of it or any part of it.
***
l. Damage To Your Work
"Property damage" to "your work" arising out of it or any part of it and included in
the "products-completed operations hazard".
This exclusion does not apply if the damaged work or the work out of which the
damage arises was performed on your behalf by a subcontractor.
***
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m. Damage To Impaired Property Or Property Not Physically Injured
FILED DATE: 6/29/2023 1:11 PM 2023CH06109
"Property damage" to "impaired property" or property that has not been physically
injured, arising out of:
(1) A defect, deficiency, inadequacy or dangerous condition in "your product" or
"your work" or
(2) A delay or failure by you or anyone acting on your behalf to perform a contract
or agreement in accordance with its terms.
This exclusion does not apply to the loss of use of other property arising out of
sudden and accidental physical injury to "your product" or "your work" after it has
been put to its intended use.
* * *
SECTION V – DEFINITIONS
8. "Impaired property" means tangible property, other than "your product" or "your
work", that cannot be used or is less useful because:
a. It incorporates "your product" or "your work" that is known or thought
to be defective, deficient, inadequate or dangerous; or
b. You have failed to fulfill the terms of a contract or agreement;
if such property can be restored to use by the repair, replacement,
adjustment or removal of "your product" or "your work" or your
fulfilling the terms of the contract or agreement.
***
13. "Occurrence" means an accident, including continuous or repeated exposure to
substantially the same general harmful conditions.
***
16. "Products-completed operations hazard":
a. Includes all "bodily injury" and "property damage" occurring away from
premises you own or rent and arising out of "your product" or "your
work" except:
(1) Products that are still in your physical possession; or
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(2) Work that has not yet been completed or abandoned. However,
"your work" will be deemed completed at the earliest of the
following times:
FILED DATE: 6/29/2023 1:11 PM 2023CH06109
(a) When all of the work called for in your contract has been
completed.
(b) When all of the work to be done at the job site has been
completed if your contract calls for work at more than one job
site.
(c) When that part of the work done at a job site has been put to its
intended use by any person or organization other than another
contractor or subcontractor working on the same project.
Work that may need service, maintenance, correction, repair or
replacement, but which is otherwise complete, will be treated as
completed.
b. Does not include "bodily injury" or "property damage" arising out of:
(1) The transportation of property, unless the injury or damage arises
out of a condition in or on a vehicle not owned or operated by you,
and that condition was created by the "loading or unloading" of that
vehicle by any insured;
(2) The existence of tools, uninstalled equipment or abandoned or
unused materials; or
(3) Products or operations for which the classification, listed in the
Declarations or in a policy Schedule, states that products-completed
operations are subject to the General Aggregate Limit.
***
17. "Property damage" means:
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
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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.
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For the purposes of this insurance, electronic data is not tangible property.
As used in this definition, electronic data means information, facts or
programs stored as or on, created or used on, or transmitted to or from
computer software, including systems and applications software, hard or
floppy disks, CD-ROMs, tapes, drives, cells, data processing devices or any
other media which are used with electronically controlled equipment.
18. "Suit" means a civil proceeding in which damages because of "bodily injury",
"property damage" or "personal and advertising injury" to which this insurance
applies are alleged. "Suit" includes:
a. An arbitration proceeding in which such damages are claimed and to
which the insured must submit or does submit with our consent; or
b. Any other alternative dispute resolution proceeding in which such
damages are claimed and to which the insured submits with our consent.
***
22. "Your work":
a. Means:
(1) Work or operations performed by you or on your behalf; and
(2) Materials, parts or equipment furnished in connection with such
work or operations.
b. Includes:
(1) Warranties or representations made at any time with respect to the
fitness, quality, durability, performance or use of "your work"; and
(2) The providing of or failure to provide warnings or instructions.
* * *
30. There may be other relevant policy provisions upon which Columbia can assert that
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it does not owe a duty to defend or indemnify Pro MC with respect to the fourth-party complaint,
and Columbia reserves the right to plead them in the future.
FILED DATE: 6/29/2023 1:11 PM 2023CH06109
COUNT I
NO DUTY TO DEFEND OR INDEMNIFY PRO MC IN THE UNDERLYING LAWSUIT AGAINST THE
FOURTH PARTY COMPLAINT
31. Columbia restates and incorporates the allegations of paragraphs 1 through 30,
above, as if set forth fully herein.
32. Columbia has no duty to defend or indemnify Pro MC for one or more of the
following reasons, pleading hypothetically or in the alternative:
a. The fourth-party complaint does not allege an “occurrence.”
b. The fourth-party complaint does not allege any “property damage.”
c. The fourth-party complaint does not allege any “property damage” caused by an
“occurrence” occurring during the Columbia policy periods.
d. The Columbia policy’s exclusion for expected or intended injury a., negates any
“property damage” coverage that might otherwise exist.
e. The Columbia policy’s exclusion for contractual liability, exclusion b., negates any
“property damage” coverage that might otherwise exist.
f. The Columbia policy’s exclusion for damage to property, exclusion j.(5) and j.(6),
negates any “property damage” coverage that might otherwise exist.
g. The Columbia policy’s exclusion for damage to your product, exclusion k., negates
any “property damage” coverage that might otherwise exist.
h. The Columbia policy’s exclusion for damage to your work, exclusion l., negates
any “property damage” coverage that might otherwise exist.
i. The Columbia policy’s exclusion for damage to impaired property or property not
physically injured, exclusion m., negates any “property damage” coverage that
might otherwise exist.
j. There may be other bases on which Columbia can properly deny coverage to Pro
MC, and Columbia reserves the right to plead them in the future.
33. For one or more of the foregoing reasons, Columbia has no duty to defend or
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indemnify Pro MC with respect to the fourth-party complaint filed within the underlying lawsuit.
WHEREFORE, the Plaintiff, Columbia Mutual Insurance Company, prays that this
FILED DATE: 6/29/2023 1:11 PM 2023CH06109
Honorable Court enter an Order finding and declaring that it does not owe a duty to defend or
indemnify the Defendant Pro MC Construction, Inc., with respect to the underlying litigation, and
for such other and further relief as this Court deems appropriate and just under the circumstances.
Respectfully submitted,
COLUMBIA MUTUAL INSURANCE
COMPANY
By: /s/Christopher J. Pickett
Christopher J. Pickett
cpickett@lpplawfirm.com
312-596-7779
Todd W. Hunnewell
thunnewell@lpplawfirm.com
312-766-9868
LINDSAY, PICKETT & POSTEL, LLC
200 W. Madison St., Suite 3850
Chicago, Illinois 60606
Firm No. 62461
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Preview
FILED Hearing Date: 10/27/2023 9:30 AM 6/29/2023 1:11 PM Location: Court Room 2502 IRIS Y. MARTINEZ Judge: Demacopoulos, Anna Helen CIRCUIT CLERK COOK COUNTY, IL 2023CH06109 IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS Calendar, 13 23350364 COUNTY DEPARTMENT, CHANCERY DIVISION FILED DATE: 6/29/2023 1:11 PM 2023CH06109 COLUMBIA MUTUAL INSURANCE COMPANY, ) ) Plaintiff, ) ) v. ) ) 2023CH06109 PRO MC CONSTRUCTION, INC., 1302 WINONA ) CONDOMINIUM ASSOCIATION’S BOARD OF ) MANAGERS, and O’NEILL DEVELOPMENT ) GROUP, INC., ) Defendants. ) COMPLAINT FOR DECLARATORY JUDGMENT NOW COMES the Plaintiff, COLUMBIA MUTUAL INSURANCE COMPANY (“Columbia”), by and through its attorneys, Lindsay, Pickett & Postel, LLC, and for its Complaint for Declaratory Judgment against the Defendants, PRO MC CONSTRUCTION, INC. (“Pro MC”), 1302 WINONA CONDOMINIUM ASSOCIATON’S BOARD OF MANAGERS (the “Board”) and O’NEILL DEVELOPMENT GROUP, INC. (“O’Neill”), alleges as follows: INTRODUCTION 1. In this declaratory judgment action, Columbia seeks a declaration that it does not owe a duty to defend or indemnify Pro MC with respect to a fourth-party complaint filed by O’Neill in the construction defect lawsuit brought by the Board in the Circuit Court of Cook County, case no. 22 L 001563 consolidated with 22 L 005679 (“the underlying suit”). THE PARTIES 2. Columbia is an insurance company incorporated under the laws of the State of Missouri with its principal place of business located in Columbia, Missouri. 3. Pro MC is a corporation organized under the laws of the State of Illinois and was a subcontractor involved in the construction of a six-unit, multi-residential building, located at 1302 W. Winona St., Chicago, IL 60640 (the “Building”). 4. The Board is the governing body of 1302 Winona Condominium Association, and FILED DATE: 6/29/2023 1:11 PM 2023CH06109 acts on behalf of the unit owners in the Building. The Board is named herein only in that it may be deemed a necessary party with an interest in the subject matter of this action. Columbia seeks no relief from the Board, other than to the extent, if any, that it is interested in the subject matter of this action, that it be bound by the judgment sought herein. If the Board will sign a stipulation to that effect, then Columbia will voluntarily dismiss it as a Defendant. 5. O’Neill is a corporation organized under the laws of the State of Illinois and was the general contractor for the construction of the Building. Columbia seeks no relief from O’Neill, other than to the extent, if any, that it is interested in the subject matter of this action, that it be bound by the judgment sought herein. If O’Neill will sign a stipulation to that effect, then Columbia will voluntarily dismiss it as a Defendant. THE UNDERLYING SUIT The Board’s Complaint 6. On or about February 16, 2022, the Board filed the underlying suit in Cook County’s Law Division. 7. On or about March 22, 2023, the Board filed a second amended complaint (the “underlying complaint”) in the underlying suit, naming as direct defendants Winona 1302 LLC (“Winona”) and Bak Home Development Partners (“Bak”). The underlying complaint is the currently operative pleading on file. A true and correct copy of the underlying complaint is attached as Exhibit A. 8. Neither Pro MC nor O’Neill are named defendants in the underlying complaint. Winona and Bak’s Third-Party Complaint 2 9. On or about March 22, 2023, Winona and Bak filed an amended third-party complaint within the underlying suit (the “third-party complaint”) naming O’Neill, Castle FILED DATE: 6/29/2023 1:11 PM 2023CH06109 Masonry, Inc. and Craft Architecture, LLC as third-party defendants.. A true and correct copy of the third-party complaint is attached as Exhibit B. 10. Pro MC is not named as a third-party defendant in the third-party complaint. O’Neill’s Fourth Party Complaint 11. On May 5, 2023, O’Neill filed a fourth-party complaint naming Pro MC and several other subcontractors as fourth party defendants (the “fourth party complaint”). A true and correct copy of the fourth-party complaint is attached as Exhibit C. 12. Counts 7 and 8 of the fourth party complaint are directed to Pro MC and allege theories of contribution and breach of contract against Pro MC respectively. Ex. C, Counts 7 and 8. 13. Count 7 of the fourth-party complaint (the “contribution count”), alleges that Pro MC provided concrete and lay out for its concrete on the project. Ex. C, ¶ 96. 14. The contribution count alleges that Pro MC had a duty to perform its concrete layout and installation according to the standard of care to which ordinary concrete installers are held. Ex. C, ¶ 99. 15. The contribution count alleges that Pro MC breached the standard of care in one or more of the following ways: a. Pro MC made lay out errors in setting down the footings for the garage; b. Pro MC failed to prepare the soil below the footings for the garage prior to installing foundational concrete footings; c. Pro MC failed to inspect the soil below the footings for the garage prior to installing 3 foundational concrete footings. d. Pro MC installed concrete footings without adequate measurements; and FILED DATE: 6/29/2023 1:11 PM 2023CH06109 e. Pro MC installed concrete footings in violation of the specifications and design. Ex. C, ¶ 100. 16. The contribution count alleges that Pro MC, by its breaches of its duty of care, proximately and in fact caused or contributed to the alleged defects Plaintiffs and Third-Party Plaintiff claim and damage to other property. Ex. C, ¶ 101. 17. The contribution count alleges that Pro MC’s breaches of its duty of care were accidental and not intended, the consequences of the breach were not intended or the foreseeable result of the errors made. Ex. C, ¶ 102. 18. The contribution count alleges that as a direct and proximate result of the errors by Pro MC in the layout, setting digging and installation of the concrete footings at the garage, the garage was made unusable, and moved, causing structural damage to wood framing, drywall, garage door tracking, the garage door, ceiling tiles on the garage roof deck, and structural steel elements. Ex. C, ¶ 103. 19. The contribution count alleges that the property damage was an accident in that Pro MC did not intend to cause the collateral damage to the surrounding building elements, and the resulting damage was neither expected nor intended from their standpoint. Ex. C, ¶ 104. 20. The contribution count seeks damages from Pro MC in the form of contribution in an amount commensurate with the percentage of fault attributable to Pro MC pursuant to the Joint Tortfeasor Contribution Act, 740 ILCS 100/.01, et. seq. Ex. C, ¶¶ 106-107. 21. Count 8 of the fourth-party complaint (the “breach of contract count”) alleges that O’Neill and Pro MC formed a contract pursuant to which Pro MC agreed to furnish and install 4 concrete including footings and foundation for the Project as enumerated in its proposal. Ex. C, ¶ 109. FILED DATE: 6/29/2023 1:11 PM 2023CH06109 22. The breach of contract count alleges that Pro MC’s contract with O’Neill was its promise to perform all its work or services skillfully, carefully, diligently and in a good and workmanlike manner. Ex. C, ¶ 110. 23. The breach of contract count alleges that Pro MC breached its promise to perform all its work or services skillfully, carefully, diligently and in a good and workmanlike manner in that, among other things: a. Pro MC made lay out errors in setting down the footings for the garage; b. Pro MC failed to prepare the soil below the footings for the garage prior to installing foundational concrete footings; c. Pro MC failed to inspect the soil below the footings for the garage prior to installing foundational concrete footings. d. Pro MC installed concrete footings without adequate measurements; and e. Pro MC installed concrete footings in violation of the specifications and design. Ex. C, ¶ 100. 24. The breach of contract count alleges that by the aforementioned breaches of the contract between Pro MC and O’Neill, Pro MC caused O’Neill damages, including but not limited to O’Neill’s costs and expenses related to correcting Pro MC’s work and damages O’Neill may be required to pay to the unit owners and/or condominium association for damage to other property damaged by Pro MC’s work. Ex. C ¶ 112. PRO MC’S TENDER OF DEFENSE AND INDEMNITY 25. On June 2, 2023, Pro MC first notified Columbia of the underlying suit and the 5 claim from which it arose and has tendered its defense and indemnity with respect to the fourth- party complaint to Columbia. FILED DATE: 6/29/2023 1:11 PM 2023CH06109 26. On June 20, 2023, Columbia responded to Pro MC’s tender by agreeing to defend Pro MC under reservation of rights. A true and correct copy of the June 20, 2023 letter reserving rights is attached as Exhibit D. THE COLUMBIA POLICY 27. Columbia issued a commercial multiple peril policy to Pro MC, policy no. CMPIL 23448, effective June 26, 2019 through June 26, 2020, containing Commercial General Liability (“CGL”) coverage (“the Columbia policy”). A true and correct copy of the Columbia policy is attached hereto as Exhibit E. 28. Columbia subsequently renewed the Columbia policy annually through June 26, 2022. 29. The Columbia policy is intended to be interpreted as a whole, but for the convenience of the Court and counsel, Columbia sets forth certain pertinent provisions from the policy’s CGL coverage, which are materially identical in each policy iteration, as follows: SECTION I – COVERAGES COVERAGE A -- BODILY INJURY AND PROPERTY DAMAGE LIABILITY 1. Insuring Agreement a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply. We may, at our discretion, investigate any "occurrence" and settle any claim or "suit" that may result. But: 6 (1) The amount we will pay for damages is limited as described in Section III - Limits Of Insurance; and FILED DATE: 6/29/2023 1:11 PM 2023CH06109 (2) Our right and duty to defend ends when we have used up the applicable limit of insurance in the payment of judgments or settlements under Coverages A or B or medical expenses under Coverage C. No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supplementary Payments – Coverages A and B. b. This insurance applies to "bodily injury" and "property damage" only if: (1) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory": (2) The "bodily injury" or "property damage" occurs during the policy period; and (3) Prior to the policy period, no insured listed under Paragraph 1. of Section II - Who Is An Insured and no "employee" authorized by you to give or receive notice of an "occurrence" or claim, knew that the "bodily injury" or "property damage" had occurred, in whole or in part. If such a listed insured or authorized "employee" knew, prior to the policy period, that the "bodily injury" or "property damage" occurred, then any continuation, change or resumption of such "bodily injury" or "property damage" during or after the policy period will be deemed to have been known prior to the policy period. * * * The policy’s coverage is subject to the following exclusions: 2. EXCLUSIONS This insurance does not apply to: a. Expected Or Intended Injury "Bodily injury" or "property damage" expected or intended from the standpoint of the insured. This exclusion does not apply to "bodily injury" resulting from the use of reasonable force to protect persons or property. 7 *** b. Contractual Liability FILED DATE: 6/29/2023 1:11 PM 2023CH06109 "Bodily injury" or "property damage" for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. *** *** j. Damage To Property "Property damage" to: *** (5) That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the "property damage" arises out of those operations; or (6) That particular part of any property that must be restored, repaired or replaced because "your work" was incorrectly performed on it. *** Paragraphs (3), (4), (5) and (6) of this exclusion do not apply to liability assumed under a sidetrack agreement. Paragraph (6) of this exclusion does not apply to "property damage" included in the "products-completed operations hazard". *** k. Damage To Your Product "Property damage" to "your product" arising out of it or any part of it. *** l. Damage To Your Work "Property damage" to "your work" arising out of it or any part of it and included in the "products-completed operations hazard". This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor. *** 8 m. Damage To Impaired Property Or Property Not Physically Injured FILED DATE: 6/29/2023 1:11 PM 2023CH06109 "Property damage" to "impaired property" or property that has not been physically injured, arising out of: (1) A defect, deficiency, inadequacy or dangerous condition in "your product" or "your work" or (2) A delay or failure by you or anyone acting on your behalf to perform a contract or agreement in accordance with its terms. This exclusion does not apply to the loss of use of other property arising out of sudden and accidental physical injury to "your product" or "your work" after it has been put to its intended use. * * * SECTION V – DEFINITIONS 8. "Impaired property" means tangible property, other than "your product" or "your work", that cannot be used or is less useful because: a. It incorporates "your product" or "your work" that is known or thought to be defective, deficient, inadequate or dangerous; or b. You have failed to fulfill the terms of a contract or agreement; if such property can be restored to use by the repair, replacement, adjustment or removal of "your product" or "your work" or your fulfilling the terms of the contract or agreement. *** 13. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions. *** 16. "Products-completed operations hazard": a. Includes all "bodily injury" and "property damage" occurring away from premises you own or rent and arising out of "your product" or "your work" except: (1) Products that are still in your physical possession; or 9 (2) Work that has not yet been completed or abandoned. However, "your work" will be deemed completed at the earliest of the following times: FILED DATE: 6/29/2023 1:11 PM 2023CH06109 (a) When all of the work called for in your contract has been completed. (b) When all of the work to be done at the job site has been completed if your contract calls for work at more than one job site. (c) When that part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project. Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed. b. Does not include "bodily injury" or "property damage" arising out of: (1) The transportation of property, unless the injury or damage arises out of a condition in or on a vehicle not owned or operated by you, and that condition was created by the "loading or unloading" of that vehicle by any insured; (2) The existence of tools, uninstalled equipment or abandoned or unused materials; or (3) Products or operations for which the classification, listed in the Declarations or in a policy Schedule, states that products-completed operations are subject to the General Aggregate Limit. *** 17. "Property damage" means: 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 10 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. FILED DATE: 6/29/2023 1:11 PM 2023CH06109 For the purposes of this insurance, electronic data is not tangible property. As used in this definition, electronic data means information, facts or programs stored as or on, created or used on, or transmitted to or from computer software, including systems and applications software, hard or floppy disks, CD-ROMs, tapes, drives, cells, data processing devices or any other media which are used with electronically controlled equipment. 18. "Suit" means a civil proceeding in which damages because of "bodily injury", "property damage" or "personal and advertising injury" to which this insurance applies are alleged. "Suit" includes: a. An arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with our consent; or b. Any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent. *** 22. "Your work": a. Means: (1) Work or operations performed by you or on your behalf; and (2) Materials, parts or equipment furnished in connection with such work or operations. b. Includes: (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your work"; and (2) The providing of or failure to provide warnings or instructions. * * * 30. There may be other relevant policy provisions upon which Columbia can assert that 11 it does not owe a duty to defend or indemnify Pro MC with respect to the fourth-party complaint, and Columbia reserves the right to plead them in the future. FILED DATE: 6/29/2023 1:11 PM 2023CH06109 COUNT I NO DUTY TO DEFEND OR INDEMNIFY PRO MC IN THE UNDERLYING LAWSUIT AGAINST THE FOURTH PARTY COMPLAINT 31. Columbia restates and incorporates the allegations of paragraphs 1 through 30, above, as if set forth fully herein. 32. Columbia has no duty to defend or indemnify Pro MC for one or more of the following reasons, pleading hypothetically or in the alternative: a. The fourth-party complaint does not allege an “occurrence.” b. The fourth-party complaint does not allege any “property damage.” c. The fourth-party complaint does not allege any “property damage” caused by an “occurrence” occurring during the Columbia policy periods. d. The Columbia policy’s exclusion for expected or intended injury a., negates any “property damage” coverage that might otherwise exist. e. The Columbia policy’s exclusion for contractual liability, exclusion b., negates any “property damage” coverage that might otherwise exist. f. The Columbia policy’s exclusion for damage to property, exclusion j.(5) and j.(6), negates any “property damage” coverage that might otherwise exist. g. The Columbia policy’s exclusion for damage to your product, exclusion k., negates any “property damage” coverage that might otherwise exist. h. The Columbia policy’s exclusion for damage to your work, exclusion l., negates any “property damage” coverage that might otherwise exist. i. The Columbia policy’s exclusion for damage to impaired property or property not physically injured, exclusion m., negates any “property damage” coverage that might otherwise exist. j. There may be other bases on which Columbia can properly deny coverage to Pro MC, and Columbia reserves the right to plead them in the future. 33. For one or more of the foregoing reasons, Columbia has no duty to defend or 12 indemnify Pro MC with respect to the fourth-party complaint filed within the underlying lawsuit. WHEREFORE, the Plaintiff, Columbia Mutual Insurance Company, prays that this FILED DATE: 6/29/2023 1:11 PM 2023CH06109 Honorable Court enter an Order finding and declaring that it does not owe a duty to defend or indemnify the Defendant Pro MC Construction, Inc., with respect to the underlying litigation, and for such other and further relief as this Court deems appropriate and just under the circumstances. Respectfully submitted, COLUMBIA MUTUAL INSURANCE COMPANY By: /s/Christopher J. Pickett Christopher J. Pickett cpickett@lpplawfirm.com 312-596-7779 Todd W. Hunnewell thunnewell@lpplawfirm.com 312-766-9868 LINDSAY, PICKETT & POSTEL, LLC 200 W. Madison St., Suite 3850 Chicago, Illinois 60606 Firm No. 62461 13