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                                     Appellate Court                         Date: 2017.10.17
                                                                             09:31:06 -05'00'




           Pekin Insurance Co. v. Lexington Station, LLC, 2017 IL App (1st) 163284



Appellate Court         PEKIN INSURANCE COMPANY, Plaintiff-Appellant, v.
Caption                 LEXINGTON STATION, LLC, an Illinois Limited Liability
                        Company; and MARCOS BOTELLO, Defendants-Appellees.



District & No.          First District, First Division
                        Docket No. 1-16-3284



Filed                   August 14, 2017



Decision Under          Appeal from the Circuit Court of Cook County, No. 15-CH-1660; the
Review                  Hon. David B. Atkins, Judge, presiding.



Judgment                Affirmed.


Counsel on              Robert Marc Chemers, Heather E. Plunkett, and Paula K. Villela, of
Appeal                  Pretzel & Stouffer, Chtrd., of Chicago, for appellant.

                        Christopher J. Pickett and Amy E. Johnson, of Rappaport & Postel,
                        LLC, of Chicago, for appellees.



Panel                   JUSTICE MIKVA delivered the judgment of the court, with opinion.
                        Presiding Justice Connors and Justice Harris concurred in the
                        judgment and opinion.
                                              OPINION

¶1       This is a declaratory judgment action filed by plaintiff Pekin Insurance Company (Pekin),
     seeking a declaration that it owes defendant Lexington Station, LLC (Lexington), no duty to
     defend in a personal injury lawsuit filed by Marcos Botello against Lexington. Pekin issued a
     commercial general liability (CGL) policy to ACC, Inc. (ACC). Defendant Marcos Botello
     was injured during the effective policy period, while working as an employee of ACC, on a
     development project owned by Lexington. Mr. Botello filed a personal injury lawsuit against
     Lexington. Lexington tendered defense of that action to Pekin. Pekin refused the tender, then
     filed this action, arguing it had no duty to defend Lexington as an additional insured under the
     policy issued to ACC.
¶2       Westfield Insurance Company (Westfield), as Lexington’s own CGL insurer, intervened in
     the declaratory action and argued, along with Lexington, that Pekin did owe a duty to defend.
     The circuit court denied Pekin’s motion for summary judgment and granted Lexington and
     Westfield’s cross-motion for judgment on the pleadings, finding that Pekin had a duty to
     defend Lexington.
¶3       On appeal, Pekin argues that the court’s entry of judgment in favor of Lexington and
     Westfield was in error because (1) Mr. Botello’s complaint did not contain allegations that
     created a potential for a claim of vicarious liability against Lexington and (2) the circuit court
     improperly considered a third-party complaint in coming to its conclusion. For the following
     reasons, we affirm the judgment of the circuit court.

¶4                                        BACKGROUND
¶5                              A. The ACC Construction Agreement
¶6       In September 2014, Lexington, as the “Owner,” entered into a contract with ACC, as the
     “Contractor” (ACC construction agreement), for carpentry services in connection with the
     development of a property in Morton Grove, Illinois. The ACC construction agreement, which
     was attached to the complaint for declaratory judgment, provided that ACC was an
     independent contractor and required ACC to “perform and pay for all” of the contract work.
     The ACC construction agreement defined that contract work to include a broad scope of
     carpentry work on the Morton Grove development. The ACC construction agreement included
     the requirement that ACC supply and install a broad range of equipment to do that work,
     specifically including “[h]oisting and erection equipment.” The ACC construction agreement
     also provided:
                 “A. Contractor shall initiate, maintain and supervise all safety and hazard
             communication precautions and programs (collectively, the ‘Programs’). *** The
             programs shall cover specifically and Contractor and each subcontractor shall take all
             reasonable precautions for the safety of and shall provide all reasonable protection to
             prevent damage, injury or loss to the following:
                     (1) All employees performing all or any portion of the Work and all other
                 persons who may be affected thereby;
                                                 ***




                                                 -2-
                   B. Contractor shall erect and maintain, as required by existing conditions and
               progress of the Work, all reasonable, necessary or appropriate safeguards for safety and
               protection ***.
                                                   ***
                   H. Notwithstanding anything in the Contract Documents to the contrary, Owner
               shall have no responsibility or obligation in connection with safety or the construction
               means, methods, techniques or procedures in connection with the Work or the acts or
               omissions of Contractor ***.”
       The construction agreement further provided that all “material and workmanship *** shall be
       subject to inspection, examination and testing by Owner at any and all times.”

¶7                                          B. The Pekin Policy
¶8         The ACC construction agreement provided that ACC, “at its own expense, shall carry at all
       times prior to completion of the work and acceptance by the Owner of the work, the Insurance
       as set forth in the Schedule of Insurance attached hereto and make a part thereof as Exhibit
       ‘D.’ ” Exhibit D provided that ACC’s insurance policy “must include” an “additional insured”
       endorsement, naming Lexington as its additional insured.
¶9         Pekin issued a CGL policy to ACC effective July 1, 2014, to July 1, 2015. The policy
       contained an “additional insured” endorsement that defined an additional insured as “any
       person or organization for whom you are performing operations, when you and such person or
       organization have agreed in a written contract effective during the policy period *** that you
       must add that person or organization as an additional insured on a policy of liability
       insurance.” The endorsement stated that the additional insured was covered by the policy “only
       with respect to vicarious liability for ‘bodily injury’ *** imputed from [the named insured] to
       the Additional Insured.” The endorsement specifically excluded coverage for liability “arising
       out of or in any way attributable to the claimed negligence *** of the Additional Insured, other
       than vicarious liability which is imputed to the Additional Insured solely by virtue of the acts
       or omissions of the Named Insured.”

¶ 10                                   C. The Underlying Complaint
¶ 11       Mr. Botello filed his first amended complaint against Lexington (underlying complaint or
       Botello complaint) in August 2015, alleging claims of construction negligence, premises
       liability, and direct negligence. ACC, Mr. Botello’s employer, was not named as a defendant in
       the action. In his complaint, Mr. Botello alleged that in March 2015, Lexington owned the
       Morton Grove property; was in charge of the property’s “erection, construction, repairs, and
       maintenance”; and controlled the property “both directly and indirectly, individually and
       through its agents, servants and employees.” Mr. Botello alleged that Lexington had entered
       into an agreement with ACC for carpentry work to be performed on a construction project at
       the property. The complaint alleged that Mr. Botello was employed as a carpenter by ACC and
       that Lexington, “individually and by and through its agents, servants and employees” was
       guilty of a variety of careless and negligent acts, including a failure to “provide proper
       equipment” and “to erect, construct place or operate” or cause to be erected, constructed, or
       operated “a safe, suitable and proper hoist, lift, ladder, stand, scaffold or tie off to facilitate and
       be used in the said erection, construction repair, alteration, removal and/or painting.”


                                                      -3-
¶ 12       Mr. Botello alleged:
                   “[Lexington] participated in coordinating the work being done and designated
               various work methods, maintained and checked work progress and participated in
               scheduling of the work and inspection of the work. In addition, at the time and place,
               [Lexington] had the authority to stop the work, refuse the work and materials and order
               changes in the work, in the event the work was being performed in a dangerous manner
               or for any other reason.”
       Mr. Botello also alleged that Lexington, “through its agents,” “[i]mproperly operated,
       managed, maintained and controlled the premises,” and “[f]ailed to supervise the work being
       done.”
¶ 13       Mr. Botello alleged that, on March 24, 2015, he was standing on a ladder, working “at
       heights in excess of 20 feet” “without tie-off, without a proper lift, hoist, ladder, scaffold, or
       stand, when he fell a significant distance to the ground below” from the ladder, causing his
       injury. According to Mr. Botello, “as a direct and proximate result of one or more of the
       aforesaid careless and negligent acts [or] omissions of [Lexington], [Mr. Botello] sustained
       severe and permanent injuries, both externally and internally.”

¶ 14                               D. The Declaratory Judgment Action
¶ 15       Pekin filed this complaint for declaratory judgment on November 12, 2015, against both
       Lexington and Mr. Botello, seeking a declaration that it had no duty to defend Lexington in the
       Botello action. Pekin alleged that it owed Lexington no such duty because Lexington was
       being sued for its own negligence, and direct negligence of the additional insured was
       specifically excluded by the policy.
¶ 16       On May 10, 2016, Lexington and Westfield filed a motion for judgment on the pleadings
       pursuant to section 2-615(e) of the Code of Civil Procedure (735 ILCS 5/2-615(e) (West
       2016)). Lexington and Westfield argued that Pekin owed a duty to defend Lexington in the
       Botello action because, “under the controlling law set forth in Pekin Insurance Co. v. CSR
       Roofing Contractors, Inc., 2015 IL App (1st) 142473, [the Botello] complaint does create a
       potential that [Lexington] will be held vicariously liable for ACC’s conduct.” (Emphasis in
       original.) Lexington and Westfield also attached a third-party complaint filed by Lexington in
       the Botello action, alleging that ACC’s negligent acts and omissions were the cause of Mr.
       Botello’s injuries and seeking contribution from ACC on that basis. Lexington and Westfield
       argued that the circuit court could consider the third-party complaint as “further evidence” that
       Mr. Botello’s allegations—referring to Lexington acting “by and through its agents”—were
       actually referring to acts or omissions of ACC and that, therefore, there was a potential to find
       Lexington vicariously liable for ACC’s negligence, bringing Lexington within the Pekin
       policy’s coverage.
¶ 17       On June 8, 2016, Pekin filed a cross-motion for summary judgment against Lexington and
       Westfield pursuant to section 2-1005(a) of the Code of Civil Procedure (735 ILCS 5/2-1005(a)
       (2016)). Pekin argued that there was “no possibility based on the underlying allegations that
       Lexington w[ould] be vicariously liable for ACC’s conduct.” Pekin also argued that the
       third-party complaint could not be considered because it was “the only pleading [that]
       contain[ed] any allegations of negligence by ACC, rather than Lexington itself,” and it was
       therefore “entirely self-serving” and was only filed as an improper attempt to bring the
       underlying complaint within coverage.

                                                   -4-
¶ 18       On November 17, 2016, after full briefing on both motions, the circuit court granted
       Lexington and Westfield’s motion on the pleadings and denied Pekin’s motion for summary
       judgment. The court found that Pekin did have a duty to defend Lexington as an additional
       insured and that the case before it was very similar to the facts in CSR Roofing, which the court
       found was “particularly instructive.” As to whether it could consider Lexington’s third-party
       complaint against ACC, the court rejected Pekin’s argument that it was required to ignore the
       third-party complaint because it was merely “self-serving,” but also concluded that, even if it
       did not consider the third-party complaint, it would find a duty to defend. The court ordered
       Pekin to defend Lexington in the Botello action, to reimburse Lexington and Westfield “for
       any reasonable costs and fees incurred in defense of the Botello Case as of the date of this
       Order,” and to “pay for their future defense costs on a continuing basis.”

¶ 19                                        JURISDICTION
¶ 20       Pekin timely filed its notice of appeal on December 14, 2016. This court thus has
       jurisdiction pursuant to Illinois Supreme Court Rules 301 and 303 governing appeals from
       final judgments entered by the circuit court in civil cases. Ill. S. Ct. R. 301 (eff. Feb. 1, 1994);
       R. 303 (eff. Jan. 1, 2015).

¶ 21                                           ANALYSIS
¶ 22      On appeal, Pekin argues that the circuit court erred (1) by finding that Pekin owed
       Lexington a duty to defend and (2) by considering Lexington’s third-party complaint in
       making its ruling. A circuit court’s rulings on a motion on the pleadings and on a motion for
       summary judgment are reviewed de novo. Pekin Insurance Co. v. Wilson, 237 Ill. 2d 446,
       454-55 (2010); Valley Forge Insurance Co. v. Swiderski Electronics, Inc., 223 Ill. 2d 352, 360
       (2006). We consider each of Pekin’s arguments on appeal in turn.

¶ 23                                        A. Duty to Defend
¶ 24       Pekin first contends that the circuit court erroneously found that Pekin owes Lexington a
       duty to defend. An insurer’s duty to defend is broader than its duty to indemnify. General
       Agents Insurance Co. of America, Inc. v. Midwest Sporting Goods Co., 215 Ill. 2d 146, 154
       (2005). To determine whether an insurer has a duty to defend, the court “must compare the
       allegations in the underlying complaint to the policy language.” Id. at 154-55. “An insurer may
       not justifiably refuse to defend an action against its insured unless it is clear from the face of
       the underlying complaint that the allegations set forth in that complaint fail to state facts that
       bring the case within or potentially within the insured’s policy coverage.” Id. at 154. In
       considering the underlying complaint, the allegations “must be liberally construed in favor of
       the insured.” Id. at 155. “Moreover, *** it is the alleged conduct, and not the labeling of the
       claim in the [underlying] complaint, that is controlling.” Steadfast Insurance Co. v. Caremark
       Rx, Inc., 359 Ill. App. 3d 749, 755-56 (2005).
¶ 25       According to Pekin, the circuit court erred in finding a duty to defend existed here because
       the Botello complaint did not contain allegations that created the potential for Lexington to be
       found vicariously liable for ACC’s negligence. In response, Lexington and Westfield argue
       that “the underlying complaint alleges at least a threshold potential that ACC could be
       negligent and that Lexington could be vicariously liable for ACC’s negligence” (emphasis in
       original) and that a duty to defend is therefore owed.

                                                    -5-
¶ 26       We considered this issue extensively, just recently, in Pekin Insurance Co. v. Centex
       Homes, 2017 IL App (1st) 153601, ¶ 57. Centex Homes drew heavily on CSR Roofing (see id.
       ¶¶ 38-41), which was the case relied on by the trial court here. In Centex Homes, we observed
       that because the Workers’ Compensation Act (820 ILCS 305/5(a) (West 2000)) provides tort
       immunity to the direct employer of an injured worker, “thereby barring the injured worker
       from bringing a personal injury complaint against his or her employer,” the direct employer
       will generally not be named as a defendant in the underlying lawsuit. Centex Homes, 2017 IL
       App (1st) 153601, ¶ 36. As such, we stated that “the allegations of the underlying complaint
       must be read with the understanding that the employer may be the negligent actor even where
       the complaint does not include allegations against that employer.” Id.
¶ 27       In Centex Homes, we recognized two aspects to the determination of whether the insurer
       owes an “additional insured” a duty to defend in these cases. “First, there must be a potential
       for finding that the named insured was negligent, and second, there must be a potential for
       holding the additional insured vicariously liable for that negligence.” Id. ¶ 37. Contrary to
       Pekin’s argument now on appeal, this is not a new version of the duty to defend test; it is
       simply a clarification of what the duty to defend means in the specific context of an additional
       insured that is only covered if found to be vicariously liable for the negligence of the named
       insured on a construction project.
¶ 28       We start with an examination of the first of these components. In Centex Homes, the first
       component—allegations that could support a claim that the named insured was
       negligent—was met because the underlying complaint alleged that the named insured was
       responsible for erection of the balloon wall and that the plaintiff, working for named insured,
       was injured when that wall fell and struck him. Id. ¶ 43. Based on these allegations, we found
       that the facts alleged in the underlying complaint sufficiently raised the potential of a claim
       based on the negligence of the named insured.
¶ 29       In this case, according to the allegations of the underlying complaint, Mr. Botello was
       injured when he fell from a ladder, and he was working on the ladder without “tie-off, without
       a proper lift, hoist, ladder, scaffold, or stand, when he fell a significant distance to the ground
       below.” Although the underlying compliant does not expressly state who was supposed to have
       provided the “tie-off, lift, hoist, ladder, scaffold and stand” or who was responsible for
       ensuring that Mr. Botello was protected from injury when he was doing carpentry work on the
       Morton Grove project, the construction agreement between Lexington and ACC specifically
       provided that ACC was required to supply and install “[h]oisting and erection equipment”; to
       “initiate, maintain and supervise all safety *** precautions and programs”; and to “prevent
       damage, injury or loss” to all “employees performing all or any” of the work covered by the
       ACC construction agreement. Thus, it is clear that, when the underlying complaint is read
       together with the construction agreement, the Botello complaint alleges an injury that was
       potentially caused by ACC’s negligence. Moreover, the construction agreement expressly
       stated that Lexington had “no responsibility or obligation in connection with safety.”
¶ 30       Although, generally, a court compares only the allegations of the underlying complaint and
       the insurance policy to determine whether an insurer has a duty to defend, our supreme court
       has recognized that a court may consider documents beyond the underlying complaint in
       certain circumstances, as long as the court “does not determine an issue critical to the
       underlying action” in doing so. (Internal quotation marks omitted.) Wilson, 237 Ill. 2d at
       460-62. In Wilson, our supreme court considered whether Pekin had a duty to defend its

                                                    -6-
       insured, who was sued for assault, battery, and intentional infliction of emotional distress by
       the underlying plaintiff where the policy excluded intentional acts, unless they were taken in
       self-defense. Id. at 449-51. Our supreme court held that, because there was “no possible reason
       for [the underlying plaintiff], suing in tort for the intentional conduct of [the insured], to allege
       that [the insured’s] actions were excused by, as the policy states: bodily injury resulting from
       the use of reasonable force to protect persons or property,” it was proper for the court to
       consider the insured’s counterclaim against the underlying plaintiff, which raised self-defense.
       (Internal quotation marks omitted.) Id. at 465-67. Similarly here, there was no reason for Mr.
       Botello to allege negligence against his direct employer in his complaint because, as we noted
       in Centex Homes, the Workers’ Compensation Act gives a direct employer immunity from
       personal injury actions brought by an injured employee. As in Wilson, these are circumstances
       that allow a court to look beyond the allegations of the underlying complaint. See also CSR
       Roofing, 2015 IL App (1st) 142473, ¶ 48 (considering a construction contract in addition to the
       allegations of the underlying complaint to determine whether Pekin had a duty to defend an
       additional insured). In contrast to the third-party complaint filed by Lexington against ACC,
       which Pekin objects to us considering because it was filed after Pekin had refused coverage,
       the ACC construction agreement predates any dispute about coverage and thus there is no
       concern that it was a self-serving document created to supply the missing allegations necessary
       to trigger coverage. Cf. Pekin Insurance Co. v. Illinois Cement Co., 2016 IL App (3d) 140469,
       ¶ 10 n.1 (refusing to consider what it dismissed as a “self-serving” third-party complaint filed
       four months after Pekin sent a letter denying coverage to an additional insured).
¶ 31        When the responsibilities of ACC and Lexington, as provided in the construction
       agreement, are considered together with the allegations of the underlying complaint, there is a
       basis for a potential finding that negligence by the named insured—ACC—was the cause of
       Mr. Botello’s injuries.
¶ 32        We must now determine whether the underlying complaint also contains allegations that
       support a potential claim that Lexington was vicariously liable for ACC’s negligence. As we
       discussed at some length in Centex Homes, whether an additional insured can potentially be
       found vicariously liable for the negligence of the named insured has depended, in our case law,
       on the degree of control the underlying complaint alleges that the additional insured had over
       the named insured. In reviewing a number of cases that were decided on this issue, we
       observed in Centex Homes that those courts looked to the allegations of the underlying
       complaints and decided that “a certain amount of control over the work of the named insured
       will result in direct liability, greater control over ‘operative detail’ could properly result in
       vicarious liability, and a lesser amount of control could give rise to no liability at all.” Centex
       Homes, 2017 IL App (1st) 153601, ¶ 54. As we also observed in Centex Homes, when deciding
       whether there was a duty to defend an additional insured for vicarious liability, many Illinois
       courts have analyzed this issue under section 414 of the Restatement (Second) of Torts (1965).
       See Centex Homes, 2017 IL App (1st) 153601, ¶ 45 (see cases cited therein). However, our
       supreme court recently clarified that section 414 deals with direct rather than vicarious
       liability. Id. ¶ 48 (citing Carney v. Union Pacific R.R. Co., 2016 IL 118984, ¶¶ 36-38). And, as
       we stated in Centex Homes, “[o]ur precedent on this issue, in addition to resting at least in part
       on what our supreme court has indicated is a misunderstanding of section 414, has often been
       inconsistent.” Id. ¶ 49. In Centex Homes, we chose to follow the approach taken by this court
       in CSR Roofing, 2015 IL App (1st) 142473, and Illinois Emcasco Insurance Co. v. Waukegan


                                                     -7-
       Steel Sales, Inc., 2013 IL App (1st) 120735, of declining to parse the underlying complaint for
       allegations of a specific amount or level or type of control by the additional insured over the
       named insured. Centex Homes, 2017 IL App (1st) 153601, ¶ 51.
¶ 33       As we recognized in Centex Homes, “the underlying complaint will offer little real
       guidance on the issue of vicarious liability” because the underlying plaintiff “will likely have
       no knowledge as to what relationship or degree of control exists between the additional insured
       and the named insured.” Id. ¶ 56. We continued:
                “As a result, the underlying complaint will likely contain boilerplate language similar
                to the language in this case, and indeed in most of the cases cited by the parties, about
                participation ‘in coordinating the work being done,’ designating ‘various work
                methods,’ maintaining and checking ‘work progress,’ and participating ‘in scheduling
                of the work and the inspection of the work.’ Is this control over the operative detail? Is
                it supervisory control? Or is it not legally significant control at all? As our supreme
                court made clear, an insurer owes a duty to defend if the claim is ‘potentially within
                policy coverage.’ [Citation.] Accordingly, where the complaint alleges that the
                additional insured had control of operations and was liable for the actions of its agents,
                there is a ‘potential’ basis for vicarious liability.” Id.
¶ 34       We see no reason to depart from the approach we outlined in Centex Homes. The
       allegations of the underlying complaint before us are sufficient to support a potential finding
       that Lexington was vicariously liable for the negligence of ACC. As in Centex Homes, the
       underlying complaint contains what we acknowledge are “boilerplate” allegations that
       Lexington was liable because of conduct of its agents and that Lexington had control over the
       work being done by those agents because it “participated in coordinating the work being done
       and designated various work methods, maintained and checked work progress and participated
       in the scheduling of the work and the inspection of the work”; “had the authority to stop the
       work, refuse the work and materials and order changes in the work, in the event the work was
       being performed in a dangerous manner or for any other reason”; “[i]mproperly operated,
       managed, maintained and controlled the premises”; and negligently “[f]ailed to supervise the
       work being done.” From these allegations, the potential exists that a jury could find that
       Lexington retained sufficient operative control over the carpentry work on the project such that
       ACC was its agent, and that Lexington was thus vicariously liable for the negligence of ACC.
¶ 35       As is almost always the case in these additional insured construction cases, the ACC
       construction agreement provided that ACC was an “independent contractor.” It is well-settled
       that a “principal is vicariously liable for the conduct of its agent but not for the conduct of an
       independent contractor.” Sperl v. C.H. Robinson Worldwide, Inc., 408 Ill. App. 3d 1051, 1057
       (2011). Pekin relies on this fact, but it does not alter our conclusion. If the independent
       contractor status in the construction agreement was the end of the inquiry, there would seldom,
       if ever, be coverage for an additional insured in these cases and the requirement that the named
       insured provide coverage would likely be meaningless. However, the designation of a named
       insured as an independent contractor is not the end of the inquiry. It is also well-settled that a
       contract “is not conclusive of the nature of the relationship between the parties. Despite an
       agreement labeling the relationship as that of an independent contractor, the facts of the case
       can demonstrate an agency status.” Bruntjen v. Bethalto Pizza, LLC, 2014 IL App (5th)
       120245, ¶ 80. “Specific conduct can demonstrate by inference the existence of an agency
       relationship, despite contractual evidence that the parties intended an independent contractor

                                                    -8-
       relationship.” Sperl, 408 Ill. App. 3d at 1057. The “independent contractor” label does not
       preclude the possibility that ACC could be found to be an agent of Lexington and that
       Lexington could therefore be liable for ACC’s negligence.
¶ 36       The thrust of Pekin’s argument here is that we are not bound by and should not follow the
       approach that we employed in CSR Roofing and in Centex Homes because it is “problematic.”
       We recognized in Centex Homes that our approach was not necessarily consistent with all prior
       cases in this court, just as those cases were not consistent with each other. Centex Homes, 2017
       IL App (1st) 153601, ¶¶ 42, 49. For the reasons we explained at length in Centex Homes (id.
       ¶¶ 42, 52), the analysis of CSR Roofing and Centex Homes is, however, completely consistent
       with that of our supreme court. See Midwest Sporting Goods, 215 Ill. 2d at 154-55 (noting that
       an insurer has a duty to defend if the allegations of an underlying complaint fall potentially
       within coverage “even if the allegations are groundless, false or fraudulent” and the allegations
       “must be liberally construed in favor of the insured”). “Because at the duty to defend stage our
       courts only consider whether the allegations of control could potentially give rise to vicarious
       liability, more general allegations should be sufficient so long as they do not eliminate any
       possibility of vicarious liability.” (Emphasis in original.) Centex Homes, 2017 IL App (1st)
       153601, ¶ 52.
¶ 37       We also note that this analysis is consistent with the approach taken recently by another
       panel of this court in Pekin Insurance Co. v. AAA-1 Masonry & Tuckpointing, Inc., 2017 IL
       App (1st) 160200, ¶ 26, in which, as here, the allegations of the underlying complaint were
       “solely against” the additional insured. But the court found that reading those allegations in
       conjunction with a claim note of Pekin’s—that stated the subcontractor was doing the work
       that caused the injury—and the construction agreement between the named insured and the
       additional insured “create[d] the possibility that [the additional insured] could be found liable
       for [the underlying plaintiff’s] injuries based on [the named insured’s] careless or negligent
       operation of the swing stage scaffolding.” Id. As in this case, the named insured in AAA-1
       Masonry was not a defendant in the underlying suit, yet the court recognized that the named
       insured could still be the negligent actor. Id. ¶¶ 7, 26. And while Pekin is correct that the
       question of whether the additional insured exercised sufficient control such that the named
       insured could be its agent did not appear to be at “issue” in AAA-1 Masonry, the facts and
       allegations that the AAA-1 Masonry court relied on to determine that the additional insured
       could potentially be found liable for the negligence of the named insured appear to be the same
       “boilerplate” facts and allegations that are present here. The construction agreement in AAA-1
       Masonry defined the named insured as an independent contractor. Id. ¶ 4. The underlying
       complaint alleged that the additional insured had acted “individually and through agents,
       servants and employees” and “had the authority to stop the work, refuse the work and materials
       and order changes in the work, in the event the work was being performed in a dangerous
       manner, or for any other reason.” Id. ¶ 8.
¶ 38       Here, for all the reasons discussed above, we find that the possibility of Lexington’s
       vicarious liability for ACC’s negligence brings this action within the broad duty to defend. It
       does not matter if a finding of vicarious liability is unlikely; “it is a potentiality.” Centex
       Homes, 2017 IL App (1st) 153601, ¶ 57. Accordingly, Pekin has a duty to defend Lexington in
       the underlying lawsuit.




                                                   -9-
¶ 39                   B. Consideration of the Lexington Third-Party Complaint
¶ 40       Pekin contends that, in entering judgment in favor of Lexington and Westfield, the circuit
       court improperly considered the third-party complaint filed by Lexington in the underlying
       action. But Pekin’s entire argument is based on the incorrect presumption that this third-party
       complaint was a necessary predicate for finding a duty to defend. Because we have found that
       Pekin owes Lexington a duty to defend without any consideration of the third-party complaint,
       and we may affirm the circuit court on any basis supported by the record (Guinn v. Hoskins
       Chevrolet, 361 Ill. App. 3d 575, 586 (2005)), we need not consider this argument.

¶ 41                                       CONCLUSION
¶ 42      For the foregoing reasons, we affirm the judgment of the circuit court.

¶ 43      Affirmed.




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