                                                          NO. 5-06-0307
                       N O T IC E

 D e ci si o n fil e d 05/02/08. The text of
                                                             IN THE
 this d e cisi on m ay be changed or

 co rre cte d prio r to th e filin g of a
                                                  APPELLATE COURT OF ILLINOIS
 P e t it io n   for    Re he aring   or   th e

 d i sp o sitio n o f th e same.
                             FIFTH DISTRICT
_________________________________________________________________________
UNITED FIRE & CASUALTY COMPANY,    )                                  Appeal from the
a Corporation,                     )                                  Circuit Court of
                                   )                                  St. Clair County.
   Plaintiff-Appellant,            )
                                   )
v.                                 )                                  No. 05-MR-181
                                   )
KEELEY & SONS, INC., TERRY MARTIN, )
ARDITH WYNN, RICKEY VANOVER,       )
EGYPTIAN CONCRETE COMPANY, and     )
ALLEN HENDERSON & ASSOCIATES,      )
INC.,                              )     Honorable
                                       ) Patrick M. Young,
   Defendants-Appellees.               ) Judge, presiding.
_________________________________________________________________________

                 JUSTICE SPOMER delivered the opinion of the court:

                 United Fire & Casualty Company (United) appeals the circuit court's order granting

a summary judgment in favor of Keeley & Sons, Inc. (Keeley), and denying United's motion

for a summary judgment on its complaint for a declaratory judgment. For the following

reasons, we reverse and remand with directions to enter a summary judgment in favor of

United.

                 On June 20, 2005, United filed a two-count complaint for a declaratory judgment in

the circuit court of St. Clair County. The complaint alleged that United issued a commercial

general liability policy (the policy) to Keeley, which included a commercial umbrella liability

policy, with coverage effective from December 31, 2000, to December 31, 2001.

                 Previously, on May 29, 2001, Terry Martin, Ardith Wynn, and Rickey Vanover (the

employees), all of whom were employed by Keeley, fell from an I-beam and were injured.

The employees filed suit (the underlying lawsuit) against Egyptian Concrete Company and

                                                               1
others (the underlying defendants). Counts alleging spoliation of evidence were added

against Keeley on behalf of the employees, due to Keeley's alleged destruction or disposal

of the I-beam. United in turn sent a letter to Keeley, denying coverage for the spoliation

counts.

       The underlying defendants filed counterclaims against Keeley, seeking contribution

and damages for spoliation of evidence. Upon receipt of notice of the counterclaims, United

sent a letter to Keeley, reaffirming its denial of coverage for all spoliation claims and further

denying coverage for the counterclaims for contribution.

       In count I of the complaint for a declaratory judgment, United sought, inter alia, a

declaration that the policy afforded no coverage to Keeley for the defense of or

indemnification for the claims alleging spoliation of evidence. Count II of the complaint

sought, inter alia, a declaration that the policy afforded no coverage to Keeley for the

underlying defendants' counterclaims for spoliation and contribution and that United was

under no duty to defend or indemnify Keeley for those counterclaims or any other

counterclaims for contribution to be filed concerning injuries to the employees.

       On January 17, 2006, United filed a motion for a summary judgment on counts I and

II of its complaint for a declaratory judgment. On February 21, 2006, Keeley filed a response

and cross-motion for a summary judgment. On May 22, 2006, the circuit court granted

Keeley's cross-motion for a summary judgment and denied United's motion for a summary

judgment. United filed a timely notice of appeal on June 20, 2006.

       United brings the following sole issue on appeal, which we have restated as follows:

whether the policy issued by United to Keeley provides coverage for claims of spoliation of

evidence. Rulings on motions for a summary judgment are reviewed de novo. Dardeen v.

Kuehling, 213 Ill. 2d 329, 335 (2004).

       "An insurance policy is a contract, and the general rules governing the interpretation


                                               2
of other types of contracts also govern the interpretation of insurance policies." Hobbs v.

Hartford Insurance Co. of the Midwest, 214 Ill. 2d 11, 17 (2005). "The court's primary

objective in construing an insurance policy is to ascertain and give effect to the intentions of

the parties as expressed in the policy language." Illinois Farmers Insurance Co. v. Hall, 363

Ill. App. 3d 989, 993 (2006) (citing Gillen v. State Farm Mutual Automobile Insurance Co.,

215 Ill. 2d 381, 393 (2005)). "If the policy language is unambiguous, the policy will be

applied as written, unless it contravenes public policy." Hobbs, 214 Ill. 2d at 17. "Whether

an ambiguity exists turns on whether the policy language is subject to more than one

reasonable interpretation." Hobbs, 214 Ill. 2d at 17. "If the policy language is susceptible

to more than one reasonable meaning, it will be considered ambiguous and will be construed

against the insurer." Illinois Farmers Insurance Co., 363 Ill. App. 3d at 993 (citing Gillen,

215 Ill. 2d at 393). "Although 'creative possibilities' may be suggested, only reasonable

interpretations will be considered." Hobbs, 214 Ill. 2d at 17 (quoting Bruder v. Country

Mutual Insurance Co., 156 Ill. 2d 179, 193 (1993)). "Thus, we will not strain to find an

ambiguity where none exists." Hobbs, 214 Ill. 2d at 17. "Although policy terms that limit

an insurer's liability will be liberally construed in favor of coverage, this rule of construction

only comes into play when the policy is ambiguous." Hobbs, 214 Ill. 2d at 17.

       As a threshold matter, we note that United addressed the issue of coverage for the

spoliation claims, as well as the counterclaims for contribution, in both its complaint for a

declaratory judgment and its motion for a summary judgment. Keeley, on the other hand,

referenced coverage for the spoliation claims in its cross-motion for a summary judgment,

but it did not address the coverage issue with regard to the counterclaims for contribution.

Likewise, in its order the circuit court addressed the issue of coverage only for the spoliation

claims and omitted any reference to the counterclaims for contribution. Nevertheless, the

circuit court granted Keeley's cross-motion for a summary judgment and denied United's


                                                3
motion for a summary judgment. Although on appeal neither party briefed the issue of

coverage for the counterclaims for contribution or brought it up at oral argument, it was

nonetheless a substantive part of United's motion for a summary judgment, which was denied

in its entirety by the circuit court.

       The issue of coverage for the counterclaims seeking contribution could be deemed

waived (forfeited) on appeal because it was not briefed. See A.J. Maggio Co. v. Willis, 316

Ill. App. 3d 1043, 1048 (2000). However, "the waiver doctrine is an admonition to the

parties and not a limitation upon the power of a reviewing court to address issues of law as

the case may require." Mayfield v. ACME Barrel Co., 258 Ill. App. 3d 32, 37 (1994) (citing

Schutzenhofer v. Granite City Steel Co., 93 Ill. 2d 208, 211 (1982)). However, the lack of

briefing in the circuit court and on appeal seems to suggest that the parties treated the

coverage for the contribution counterclaims as a "nonissue." This may be because coverage

for the contribution counterclaims is clearly excluded by the following language in the

commercial general liability policy:

               "2. Exclusions

               This insurance does not apply to:

                                               ***

                       e. Employer's Liability

                       'Bodily injury' to:

                              (1) An 'employee' of the insured arising out of and in the course

                       of:

                                        (a) Employment by the insured; or

                                        (b) Performing duties related to the conduct of the

                              insured's business ***."

In addition, the commercial umbrella liability policy contains language identical to the above


                                                 4
exclusion in all relevant aspects. Accordingly, we reverse the circuit court's order denying

United's motion for a summary judgment to the extent that it might be construed to find

coverage for the contribution counterclaims.

       We turn now to the issue of whether the policy issued by United to Keeley provides

coverage for claims of spoliation of evidence. The commercial general liability policy

contains the following language regarding coverage and exclusions:

              "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. ***

                                            ***

              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. ***

                                            ***


                                               5
                     j. Damage to Property

                     'Property damage' to:

                            (1) Property you own, rent, or occupy;

                                             ***

                            (4) Personal property in the care, custody[,] or control of the

                     insured ***."

       The policy defines "property damage" as follows:

              "SECTION V–DEFINITIONS

                                             ***

              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

                     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."

The commercial umbrella liability policy contains language regarding coverage and

exclusions identical to the above language in all relevant aspects.

       Keeley asserts that it is entitled to coverage because it is being sued for damages

"because of" property damage under the insuring agreement. It is possible to characterize

the property damage for which Keeley seeks coverage in two ways. First, it could be said

that Keeley is being sued because of the damage to and loss of the use of the I-beam itself.

This would seem to conform with the definition of property damage in the policy, because

the loss of the use of the I-beam as evidence w as a result of physical injury to tangible

property. However, if we characterize property damage to include damage to the I-beam,


                                              6
coverage is clearly excluded because the I-beam was under the care, custody, and control of

Keeley at all relevant times.

       In order to characterize the property damage so that it falls outside of the "care,

custody[,] or control" exclusion, Keeley attempts to characterize the property damage at issue

by asserting that it is being sued for damage to the lawsuit of the employees and the

codefendants in the underlying action. However, if we characterize property damage to

include damage to a lawsuit, coverage does not apply because only injury to tangible

property is included under the insuring agreement.        Illinois law provides as follows:

"Property damag[e] is limited to damage to tangible property. The damage to [a] cause of

action is not damage to tangible property." Essex Insurance Co. v. Wright, 371 Ill. App. 3d

437, 440 (2007).

       Keeley attempts to characterize the property damage for which it is seeking coverage

as (a) damage to the I-beam when analyzing the insuring agreement and (b) damage to the

employees' product liability claim when analyzing the "care, custody[,] or control" exclusion.

However, the insuring agreement clearly states that United "will pay those sums that

[Keeley] becomes legally obligated to pay as damages because of *** 'property damage' to

which this insurance applies." (Emphasis added.) This language requires that the property

analyzed under the insuring agreement must be the same as the property analyzed under the

exclusions. As explained above, neither of the characterizations of the property damage that

has been advanced by Keeley can be so analyzed in favor of coverage. Accordingly, the

circuit court erred when it granted Keeley's cross-motion for a summary judgment and denied

United's motion for a summary judgment.

       For the reasons set forth above, we reverse and remand with directions to enter a

summary judgment in favor of United.




                                              7
Reversed; cause remanded with directions.



STEWART, P.J., and WEXSTTEN, J., concur.




                                   8
                                         NO. 5-06-0307

                                             IN THE

                               APPELLATE COURT OF ILLINOIS

                                  FIFTH DISTRICT
___________________________________________________________________________________

      UNITED FIRE & CASUALTY COMPANY,    )            Appeal from the
      a Corporation,                     )            Circuit Court of
                                         )            St. Clair County.
         Plaintiff-Appellant,            )
                                         )
      v.                                 )            No. 05-MR-181
                                         )
      KEELEY & SONS, INC., TERRY MARTIN, )
      ARDITH WYNN, RICKEY VANOVER,       )
      EGYPTIAN CONCRETE COMPANY, and     )
      ALLEN HENDERSON & ASSOCIATES,      )
      INC.,                              )            Honorable
                                         )            Patrick M. Young,
         Defendants-Appellees.           )            Judge, presiding.
___________________________________________________________________________________

Opinion Filed:        May 2, 2008
___________________________________________________________________________________

Justices:          Honorable Stephen L. Spomer, J.,

                 Honorable Bruce D. Stewart, P.J., and
                 Honorable James M. Wexstten, J.,
                 Concur
___________________________________________________________________________________

Attorneys        Richard E. Boyle, Curtis R. Picou, Gundlach, Lee, Eggmann, Boyle & Roessler,
for              LLC, 5000 West Main Street, Box 23560, Belleville, IL 62223
Appellant
___________________________________________________________________________________

Attorneys        Russell K. Scott, Dayna L. Johnson, Greensfelder, Hemker & Gale, P.C., 12 Wolf
for              Creek Drive, Suite 100, Swansea, IL 62226 (for Keeley & Sons, Inc.); Bruce R.
Appellees        Cook, Cook, Ysursa, Bartholomew, Brauer & Shevlin, Ltd., 12 W est Lincoln Street,
                 Belleville, IL 62220 (for Terry M artin, Ardith W ynn, & Rickey Vanover); Dennis
                 E. Rose, Kenneth M . Nussbaumer, Donovan, Rose, Nester & Joley, P.C., 8 East
                 Washington Street, Belleville, IL 62220 (for Egyptian Concrete Co.); John L.
                 McMullin, Esq., Brown & James, P.C., 1010 Market Street, 20th Floor, St. Louis,
                 MO 63101 (for Allen Henderson & Associates, Inc.)
___________________________________________________________________________________
