                           ILLINOIS OFFICIAL REPORTS
                                         Appellate Court




         Pekin Insurance Co. v. Equilon Enterprises LLC, 2012 IL App (1st) 111529




Appellate Court            PEKIN INSURANCE COMPANY, Plaintiff-Appellant, v. EQUILON
Caption                    ENTERPRISES LLC, d/b/a Shell Oil Products US; SHELL OIL
                           COMPANY; and WALDEMAR ZABLOCKI, Defendants-Appellees.



District & No.             First District, Sixth Division
                           Docket No. 1-11-1529


Filed                      November 9, 2012


Held                       Plaintiff insurer had a duty to defend defendant oil company as an
(Note: This syllabus       additional insured in an underlying personal injury action for the injuries
constitutes no part of     suffered when the underlying plaintiff lit a cigarette while gasoline was
the opinion of the court   being delivered at the insured station, notwithstanding the insurer’s
but has been prepared      contention that coverage for the oil company was limited by
by the Reporter of         endorsements to negligence in granting the franchise or vicarious liability,
Decisions for the          since the endorsements were ambiguous and had to be construed against
convenience of the         the insurer.
reader.)


Decision Under             Appeal from the Circuit Court of Cook County, No. 10-CH-2619; the
Review                     Hon. Michael B. Hyman, Judge, presiding.


Judgment                   Affirmed.
Counsel on                 Robert Marc Chemers and Richard M. Burgland, both of Pretzel &
Appeal                     Stouffer, Chtrd., of Chicago, for appellant.

                           Kevin B. Duckworth, Russell K. Scott, and Samuel Henderson, all of
                           Greensfelder, Hemker & Gale, P.C., of St. Louis, Missouri, for appellees.


Panel                      JUSTICE GARCIA delivered the judgment of the court, with opinion.
                           Justice Hall concurred in the judgment and opinion.
                           Justice Gordon specially concurred, with opinion.



                                              OPINION

¶1          In this declaratory action arising out of a personal injury suit, the circuit court denied
        plaintiff Pekin Insurance Co.’s motion for summary judgment on the question of duty to
        defend and, instead, granted judgment as a matter of law to defendants Equilon Enterprises,
        d/b/a Shell Oil Products US, and Shell Oil Company (collectively Shell), as additional
        insureds under the policy. Waldemar Zablocki filed suit for injuries he sustained while
        lighting a cigarette behind a gas station operated by Summit Shell (Summit), d/b/a Mary’s
        Station II, Inc. The complaint alleged that Shell and Summit were directly liable for
        Zablocki’s injuries after an explosion occurred while fuel was being delivered to the station.
        Shell tendered the Zablocki action to Pekin for defense. In its motion for summary judgment,
        Pekin argued that an endorsement to the policy limited coverage to Shell for “negligence in
        the granting of a franchise” and a second endorsement limited coverage “to liability arising
        out of [Summit’s] operations *** [or its] premises.” According to Pekin, the Zablocki action
        did not allege negligence in the granting of the franchise or vicarious liability against Shell,
        which foreclosed a finding that Pekin owed a duty to defend. On de novo review, we
        conclude the two endorsements to the Pekin policy when read together are ambiguous. Based
        on the unclear endorsements, in particular the endorsement that purported to limit coverage
        to vicarious liability, Pekin has not demonstrated that the allegations of the underlying
        complaint do not bring the case potentially within the policy’s coverage. We affirm the
        circuit court’s judgment that Pekin has a duty to defend Shell.

¶2                                        BACKGROUND
¶3          Waldemar Zablocki was injured in an explosion at the gas station operated by Summit.
        In his personal injury lawsuit, Zablocki alleged the explosion occurred when he lit a cigarette
        behind the gas station while a truck delivered gasoline to the underground tanks of the
        station. In addition to Summit and Shell, Zablocki sued A.D. Connor, Inc., the party
        delivering the gasoline at the time of the explosion, which has no role in this appeal. The
        Shell defendants, Equilon Enterprises and Shell Oil Company, are subsidiaries of the Royal

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     Dutch Shell Company. Summit signed certain franchise agreements with Shell, which
     imposed a duty on Summit to name Shell as an additional insured under Summit’s liability
     policy.
¶4        Zablocki’s complaint, filed September 1, 2009, alleged the following. On September 4,
     2007, Zablocki stopped at Summit to purchase grocery items. Simultaneously, an employee
     of A.D. Connor was transferring fuel from its transport truck to underground fuel tanks at the
     station. This filling process released flammable gasoline vapors into the air. Immediately
     upon exiting the store, Zablocki walked into a public alley behind the station to smoke a
     cigarette. When he attempted to light the cigarette, the small flame ignited the vapors,
     causing an explosion that injured Zablocki.
¶5        Zablocki alleged in his complaint that Summit and Shell “alternatively or simultaneously
     owned and/or operated” the filling station. Count I alleged negligence against Summit.
     Counts II and III alleged negligence against the Shell companies separately, each of which
     he claimed “owned, operated and controlled the premises.” The alleged acts of negligence
     against each defendant were identical. We set them out in full.
               “Notwithstanding said duty as aforesaid, the defendant was guilty of one or more of
          the following negligent and careless acts:
                   A) Failed to ventilate the accumulated fumes through the use of [a] system to
               disperse the fumes into the air to a level which would not provide a risk of explosion
               to those on or about the premise grounds.
                   B) Continued to use appliances, conduit fixtures, pipes or vents for the dispersion
               of gas fumes, although it knew or, in the exercise of reasonable care should have
               known that they were in disrepair and not effective in dispersing said fumes.
                   C) Failed to post warning signs that there was a risk that said fumes could
               accumulate in the areas in which plaintiff was on or about the premises.
                   D) Failed to inspect and test the area where plaintiff was on or about the premises
               to determine the existence of the fumes that accumulated to explosive or combustive
               levels.”
¶6        In its complaint for declaratory judgment, filed on January 21, 2010, Pekin claimed its
     insurance policy extended coverage to Shell for negligence in the granting of a franchise and
     to claims of vicarious liability. The Zablocki complaint did not allege that the Shell
     defendants were vicariously liable for Zablocki’s injuries; nor did the complaint allege any
     fault by Shell in granting a franchise to Summit.
¶7        On June 14, 2007, Summit procured the Pekin policy as the named insured with an
     effective date of July 1, 2007. In accordance with certain franchise agreements, Summit
     listed Shell as “additional insured” to the Pekin policy. Under the “Optional Coverage” of
     the policy’s “Businessowners Supplemental Declarations,” there are two entries for the
     additional insured, each of which modifies the “Who is an Insured” clause of the policy. The
     first is listed as “Additional Ins - Grantors of Fran,” with the premium listed for the coverage.
     The second is listed as “Additional Insured - Flat Charge,” which lists a separate premium
     for the coverage. The first endorsement provides, “The person or organization shown in the
     schedule [is an insured], but only with respect to their liability as grantor of a franchise to

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       you.” The second endorsement amends the policy to reflect the following.
           “WHO IS AN INSURED (Section C) is amended to include as an insured the person or
           organization shown in the Schedule as an insured but only with respect to liability arising
           out of your operations and premises owned by or rented by you.”
¶8         After hearing argument on Pekin’s motion for summary judgment in its declaratory
       action, with a written response by Shell, with certain franchise agreements between Summit
       and Shell attached, the circuit court denied summary judgment to Pekin. Instead, on oral
       motion from Shell, the court granted judgment as a matter of law to Shell, holding that Pekin
       had a duty to defend. The court reasoned that “the allegations of simultaneous ownership,
       being incorporated into all applicable counts, triggered Pekin’s duty to defend [the Shell
       defendants] as additional insureds.” Pekin timely appealed.

¶9                                          ANALYSIS
¶ 10       Pekin asserts the circuit court erred as a matter of law in granting judgment to Shell
       because its duty to Shell as an additional insured under the policy was not triggered by the
       Zablocki action. Pekin claims the policy covers actions that allege negligence in the granting
       of the franchise by Shell under the first endorsement. Additionally, Pekin argues the second
       endorsement of July 1, 2007, affords coverage only for vicarious liability based on the
       “arising out of” language, which the Zablocki action did not allege as the basis for his claims
       against Shell. As an evidentiary issue, Pekin argues that the agreements Summit and Shell
       signed, which Shell attached to its response to Pekin’s motion for summary judgment, are
       impermissible parole evidence, which renders them inadmissible on the issue of duty to
       defend as the insurance contract is not ambiguous. Pekin asserts that our review of whether
       a duty to defend has been triggered should be limited to the comparison of the allegations in
       Zablocki’s complaint to the provisions of the Pekin policy.

¶ 11                              Summary Judgment Review
¶ 12       “The same standard for the grant of summary judgment applies in a case involving a duty
       to defend claim: ‘Summary judgment is appropriate when there is no genuine issue of
       material fact and the moving party is entitled to judgment as a matter of law.’ ” American
       Family Mutual Insurance Co. v. Fisher Development, Inc., 391 Ill. App. 3d 521, 525 (2009)
       (quoting Virginia Surety Co. v. Northern Insurance Co. of New York, 224 Ill. 2d 550, 556
       (2007)). Our review is de novo. Id.

¶ 13                                       Duty to Defend
¶ 14        To determine whether an insurer has a duty to defend an action against an insured,
       generally, we compare the allegations of the underlying complaint to the relevant portions
       of the insurance policy. Fisher Development, 391 Ill. App. 3d at 525. “If the complaint
       alleges facts that fall within or potentially within the coverage of the policy, ‘the insurer is
       obligated to defend its insured even if the allegations are groundless, false, or fraudulent.’ ”
       Id. (quoting United States Fidelity & Guaranty Co. v. Wilkin Insulation Co., 144 Ill. 2d 64,


                                                 -4-
       73 (1991)). Where the insurer rejects a tender of defense based on a provision that it contends
       excludes coverage, we review the applicability of that provision to ensure it is “ ‘clear and
       free from doubt’ that the policy’s exclusion prevents coverage.” Id. (quoting Atlantic Mutual
       Insurance Co. v. American Academy of Orthopaedic Surgeons, 315 Ill. App. 3d 552, 560
       (2000)).

¶ 15                             “Grantor of a Franchise” Provision
¶ 16        We first address Pekin’s argument that coverage under the policy for Shell as the
       “additional insured” is limited to actions alleging “the Shell companies were negligent in
       granting a franchise,” as Pekin asserts in its main brief. Pekin cites Tennessen v. Commercial
       Union Insurance Co., No. 95-3411, 1997 WL 91270 (Wis. Ct. App. Mar. 5, 1997) (per
       curiam), as its only authority for its position that coverage is limited by the first endorsement.
       Pekin explains the absence of authority in our state interpreting this provision is simply one
       of opportunity: “Illinois has yet to address the ‘Grantor of Franchise’ endorsement.”
¶ 17        In Tennessen, a passenger in a vehicle was injured in a collision. Id. at *1. The passenger
       claimed that a convenience store, operating as an “Open Pantry” store, unlawfully sold
       alcohol to the underage driver, which caused her to become intoxicated. Id. The Open Pantry
       corporate entity granted the franchise to Goldmine Corporation, which operated the actual
       store. Id. The passenger sued both Open Pantry and Goldmine to recover damages for her
       injuries. Id.
¶ 18        Threshermens Mutual Insurance Company insured Goldmine, with Open Pantry listed
       as an additional insured. Id. The policy covered Open Pantry but “ ‘only with respect to their
       liability as grantor of a franchise’ to Goldmine.” Id. The Wisconsin court held that no
       coverage was provided by the Threshermens policy because the complaint did not implicate
       Open Pantry’s role as grantor of a franchise. Id. at *2. We quote the court’s reasoning in its
       entirety: “Open Pantry was only an additional insured on the Threshermens policy. Open
       Pantry was not insured by Threshermens for all liability but only for liability as a ‘grantor of
       a franchise.’ There was no allegation in the amended complaint regarding negligence in the
       granting of the franchise.” Id.
¶ 19        Illinois courts construe an insurance policy by considering “the policy as a whole, the risk
       undertaken, the subject matter and the purpose of the contract.” American Family Mutual
       Insurance Co., 391 Ill. App. 3d at 525. “If the words in the policy are unambiguous, a court
       must afford them their plain, ordinary, and popular meaning. [Citation.] However, if the
       words in the policy are susceptible to more than one reasonable interpretation, they are
       ambiguous [citations] and will be construed in favor of the insured and against the insurer
       who drafted the policy [citations].” (Emphasis in original.) Outboard Marine Corp. v. Liberty
       Mutual Insurance Co., 154 Ill. 2d 90, 108-09 (1992). “This is so because there is little or no
       bargaining involved in the insurance contracting process [citation], the insurer has control
       in the drafting process, and the policy’s overall purpose is to provide coverage to the insured
       [citation].” Id. at 119. “Only where the complaint allegations clearly exceed policy coverage
       may an insurer justifiably refuse to defend.” U.S. Fidelity & Guaranty Co. v. Specialty
       Coatings Co., 180 Ill. App. 3d 378, 384 (1989).


                                                  -5-
¶ 20        As we stated, there are two endorsements for optional coverage, which purport to provide
       coverage to the additional insured under the Pekin policy. The existence of these two
       endorsements for additional-insured coverage necessarily means that the “Grantors of Fran”
       endorsement does not provide the only coverage to Shell, as the additional insured. While
       the “Grantors of Fran” endorsement appears to limit coverage as Pekin claims to negligence
       arising from the awarding of a franchise, Pekin does not, and cannot, argue that either
       coverage exists for Shell under that endorsement or it does not exist at all. Plainly, Shell is
       also listed as additional insured under the second endorsement. Thus, it cannot be that the
       first endorsement limits coverage under the entire policy as Pekin contends to “negligence
       in granting a franchise” in light of the second endorsement. If the first endorsement limited
       coverage to only instances of negligence in granting a franchise, it would render meaningless
       the coverage provided by the second endorsement. “[A]ny ambiguities arising when several
       provisions of the policy are read together will be construed in favor of the insured.”
       Maryland Casualty Co. v. Chicago & North Western Transportation Co., 126 Ill. App. 3d
       150, 153 (1984).
¶ 21        In light of the second endorsement providing for coverage to Shell as additional insured,
       the “grantor of franchise” endorsement does not limit coverage under the Pekin policy to
       Shell in its “capacity as franchisor *** to Summit,” as Pekin contends. As a consequence,
       this case does not call upon us to address the scope of the coverage provided under the
       “grantor of franchise” endorsement. At the very least, the existence of the second
       endorsement renders Tennessen inapposite.

¶ 22                            “Liability Arising Out of” Provision
¶ 23       Pekin contends the second endorsement, which provides that Shell is an insured “only
       with respect to liability arising out of [Summit’s] operations and [its] premises,” limits
       coverage to allegations of vicarious liability of Shell for the negligence of Summit. Pekin
       argues that counts II and III, which alleged that the Shell defendants separately “owned,
       operated and controlled the premises,” allege “direct liability against the Shell Defendants
       arising out of their own negligent operation, ownership or control of the filling station,” as
       Pekin claims in its main brief. Premised on this, Pekin contends no duty to defend under the
       policy’s “vicarious liability” coverage was triggered.
¶ 24       As affirmative authority, Pekin cites three cases in which this court determined that the
       Pekin policies under consideration covered only vicarious liability: Pekin Insurance Co. v.
       Beu, 376 Ill. App. 3d 294, 297 (2007) (the homeowner did not qualify as an additional
       insured to trigger a duty to defend because the allegations of the underlying complaint were
       not limited to “acts or omissions of the named insured, but also were predicated on the
       additional insured’s alleged independent acts of negligence”); Pekin Insurance Co. v. United
       Parcel Service, Inc., 381 Ill. App. 3d 98, 104 (2008) (“Since negligence has been directly
       alleged against UPS, UPS is not covered by the additional insured provision in the Pekin
       policy.”); and Pekin Insurance Co. v. Roszak/ADC, LLC, 402 Ill. App. 3d 1055, 1064 (2010)
       (“the facts alleged in this complaint [fail to] allege an agency relationship between [the
       additional insured] and [the named insured]”). The “Who is an Insured” clause at issue in


                                                -6-
       each of the three cases was identical; each policy provided coverage to “an additional insured
       only with respect to liability incurred solely as a result of some act or omission of the named
       insured and not for its own independent negligence or statutory violation.” (Emphasis added.)
       (Internal quotation marks omitted.) Beu, 376 Ill. App. 3d at 294-95; United Parcel Service,
       381 Ill. App. 3d at 100; Roszak, 402 Ill. App. 3d at 1058.
¶ 25        The “Who is an Insured” clause in the instant case is not identical to the language in the
       same clause at issue in the three cases Pekin relies upon. To paraphrase this court from
       United Parcel Service, Pekin nevertheless argues that the “Who is an Insured” clause under
       the policy at issue should be construed identically to the “solely as a result of” clause at issue
       in the three cases, but “without explaining how the language in Pekin’s additional insured
       endorsement [in the instant case] is amenable to that conclusion.” United Parcel Service, 381
       Ill. App. 3d at 108. To paraphrase further, “The key difference *** is that the additional
       insured endorsement in [the instant case] is much broader than the one at issue [in United
       Parcel Service].” Id. It follows from the distinct clause in the Pekin policy before us that the
       question of law we address in this case, as to coverage provided to Shell, is not answered by
       the three Pekin cases referenced above, which turned on coverage extended to an additional
       insured “with respect to liability incurred solely as a result of” the negligence of the named
       insured. See Pekin Insurance Co. v. Pulte Home Corp., 404 Ill. App. 3d 336, 348 (2010)
       (“because each of those cases [including Beu and United Parcel Service] is distinguishable
       from the instant case, we decline to follow them in this case”).
¶ 26        The cited case that did not go Pekin’s way on the duty to defend issue, Pekin contends,
       is helpful here but only by distinction: “Unlike in Pulte [Home], Summit has not made
       admissions which make it possible or even likely that Summit will be found solely liable to
       Zablocki. Summit has not admitted it was in the business of selling gasoline, grocery and
       convenience products to members of the public, that it entered into a contract with Shell
       Defendants to operate or own the filling station, that its liabilities and duties arose in part
       from that contract, or that it owned or operated the station when the explosion occurred.” In
       fact, the franchise agreements attached to Shell’s response to Pekin’s summary judgment
       motion address many of the questions that Pekin contends distinguish this case from Pulte
       Home, agreements which Pekin nevertheless contends should not be considered by this court.
¶ 27        In Pulte Home, this court called into question the limitation expressed in the Roszak
       opinion to restrict review of the duty-to-defend issue to the comparison of the underlying
       complaint with the terms of the policy. “[The Roszak court’s] analysis runs counter to our
       supreme court’s decision in [Pekin Insurance Co. v.] Wilson, 237 Ill. 2d 446 [(2010)], which
       held that ‘a circuit court may, under certain circumstances, look beyond the underlying
       complaint in order to determine an insurer’s duty to defend.’ ” Pulte Home, 404 Ill. App. 3d
       at 341 (quoting Wilson, 237 Ill. 2d at 459).
¶ 28        In construing an insurance policy, Illinois courts look to “the risk undertaken, the subject
       matter and the purpose of the contract.” American Family Mutual Insurance Co., 391 Ill.
       App. 3d at 525. It follows that a circuit court ought not ignore the agreements that serve to
       drive the named insured to purchase the liability policy naming the other party as an
       additional insured, in assessing the risk undertaken and the subject matter and purpose of the
       insurance contract. See American Economy Insurance Co. v. Holabird & Root, 382 Ill. App.

                                                  -7-
       3d 1017, 1032 (2008) (“the trial court need not wear judicial blinders and may look beyond
       the complaint at other evidence appropriate to a motion for summary judgment” (internal
       quotation marks omitted)). Here as well, we conclude that it was appropriate for the circuit
       court “to examine evidence beyond that contained in the underlying complaint in determining
       the duty to defend.” Wilson, 237 Ill. 2d at 462.
¶ 29        In Wilson, our supreme court expressly rejected the assertion by appellant Pekin
       Insurance Co. that precedent of the court established a rule “that a trial court must look solely
       to the underlying complaint and the applicable policy provisions to determine whether there
       is a duty to defend.” Id. at 456. The court made clear “that such a limited interpretation was
       not intended” by its earlier decision. Id. In addition to Holabird & Root, the court quoted
       with approval the appellate court’s decision in Fidelity & Casualty Co. of New York v.
       Envirodyne Engineers, Inc., 122 Ill. App. 3d 301, 304-05 (1983):
            “ ‘To require the trial court to look solely to the complaint in the underlying action to
            determine coverage would make the declaratory proceeding little more than a useless
            exercise possessing no attendant benefit and would greatly diminish a declaratory
            action’s purpose of settling and fixing the rights of the parties.’ ” (Emphasis omitted.)
            Wilson, 237 Ill. 2d at 461 (quoting Envirodyne Engineers, Inc., 122 Ill. App. 3d at 305).
       It seems likely that the contract that compels a named insured to add other parties to its
       liability policy will inform the circuit court’s decision on the nature of the coverage the
       purchased policy was meant to provide to the additional insured. “ ‘An insurance policy is
       not intended to be interpreted in a factual vacuum and without regard to the purpose for
       which the insurance policy was written.’ ” Pulte Home, 404 Ill. App. 3d at 343 (quoting
       Massachusetts Bay Insurance Co. v. Unique Presort Services, Inc., 287 Ill. App. 3d 741, 744
       (1997)).
¶ 30        We are also unpersuaded by the reason offered by Pekin to bar consideration of other
       evidence in this case. Pekin argues that consideration of the franchise agreements Shell relied
       on to challenge Pekin’s motion for summary judgment may “tend to determine an issue
       critical to the underlying litigation” involving Zablocki as to whether the named insured or
       the additional insureds “owned, operated or controlled the filling station.” The circuit court
       made no such determination; nor has this court. See Canal Insurance v. A&R Transportation
       & Warehouse, LLC, 357 Ill. App. 3d 305, 312 (2005) (the court rejected the appellant’s
       contention that the proposed finding “in the context of this declaratory judgment action is
       inappropriate as it will be binding upon him in the underlying action”). The franchise
       agreements attached to the filed responses by Shell to Pekin’s motion for summary judgment,
       to which Pekin did not object or successfully move to strike, were properly considered only
       to determine coverage under the endorsement “and for no other purpose.” Id. In fact, were
       we to preclude the circuit court from considering the agreements that compelled the
       additional-insured coverage, it may well spur litigation between the additional insured and
       the named insured over whether the contracted-for insurance was procured. See Patrick
       Engineering, Inc. v. Old Republic General Insurance Co., 2012 IL App (2d) 111111, ¶ 6 n.1
       (“third-party complaint [filed] against Patrick in the underlying litigation, alleging, among
       other claims, that Patrick[, as the named insured,] breached its agreement with ComEd[, as
       the purported additional insured,] by failing to procure the appropriate insurance”).

                                                 -8-
¶ 31        The franchise agreements, as the driving force behind Summit’s procurement of the
       Pekin policy, reinforce our decision that Pekin had a duty to defend Shell. Resolution of the
       duty to defend issue, as the Pulte Home court intimated, should not turn on the absence of
       allegations of vicarious liability when the allegations in the complaint do not “preclude the
       possibility that [the additional insured] could be found liable solely as a result of the acts or
       omissions of *** the named insured.” Pulte Home, 404 Ill. App. 3d at 342. There are of
       course duty-to-defend cases where the allegations in the underlying complaint sufficiently
       demonstrate sole negligence by the additional insured to exclude coverage. See, e.g.,
       National Fire Insurance of Hartford v. Walsh Construction Co., 392 Ill. App. 3d 312, 319-20
       (2009) (the underlying complaint alleged that an employee of the general contractor
       “ ‘moved a section of the roof’s support causing the roof deck on which the Plaintiff was
       working to fall,’ ” which demonstrated the accident was due to the sole negligence of the
       general contractor and precluded a duty to defend from arising on the part of the
       subcontractor’s insurer). The instant case is not such a case.
¶ 32        Moreover, we are aware of no authority that converts the insurer’s burden to demonstrate
       that the allegations in the underlying complaint do not potentially fall within the coverage
       of the policy (Roszak, 402 Ill. App. 3d at 1059) to one where the additional insured must
       demonstrate that the allegations in the underlying complaint fall within the coverage of the
       policy. In Pulte Home, we rejected Pekin’s contention that no duty to defend arose unless the
       additional insured could point to allegations in the underlying complaint that the “sole basis”
       for the additional insured’s liability was the named insured’s negligence. Pulte Home, 404
       Ill. App. 3d at 342.
¶ 33        Accordingly, we reject Pekin’s implicit contention that in the context of this case, only
       if the allegations of the underlying complaint support a claim of vicarious liability can we
       find a duty to defend owed by Pekin. As we stated above, the burden is on Pekin to
       demonstrate that the allegations in the underlying complaint do not potentially fall within the
       coverage of the policy. Roszak, 402 Ill. App. 3d at 1059. See Pulte Home, 404 Ill. App. 3d
       at 344 (“A finding as to whether Pulte was solely liable will not be made until after a trial has
       been held and a determination of liability has been made.”). The three cases on which Pekin
       relies are clearly distinguishable based on the far more specific and narrower language in the
       “Who is an Insured” clause than in the same clause in the policy at issue here. The required
       showing to foreclose a duty to defend has not been made here by Pekin. “An insurer may not
       justifiably refuse to defend an action against its insured unless it is clear from the face of the
       underlying complaints that the allegations fail to state facts which bring the case within, or
       potentially within, the policy’s coverage.” (Emphasis omitted.) United States Fidelity &
       Guaranty Co. v. Wilkin Insulation Co., 144 Ill. 2d 64, 73 (1991).
¶ 34        Finally, we agree with Shell that there is an inherent contradiction between Pekin’s claim
       that Shell was provided insurance coverage for “negligence in granting a franchise” to
       Summit, as provided in the first endorsement, and the second endorsement, which, in the
       words of Pekin’s main brief, covered “liability arising out of Summit’s operations or
       premises owned or rented by Summit, not for Shell’s own negligence.” Pekin fails to explain
       how the coverage provided by second endorsement is reconciled with the coverage provided
       by the first endorsement. The two endorsements when read together are ambiguous and will

                                                  -9-
       be construed in favor of Shell. Maryland Casualty Co., 126 Ill. App. 3d at 153 (“any
       ambiguities arising when several provisions of the policy are read together will be construed
       in favor of the insured”). Neither endorsement foreclosed Pekin’s duty to defend Shell as an
       additional insured.

¶ 35                                      CONCLUSION
¶ 36       The two endorsements in the Pekin policy extending coverage to the Shell defendants as
       additional insured “with respect to their liability as grantor of a franchise” and for “liability
       arising out of [the named insured’s] operations” are ambiguous when read together and are
       construed against Pekin as the issuer of the policy. Pekin has failed to demonstrate that the
       allegations of the Zablocki action do not fall potentially within the Pekin policy’s coverage.
       Absent such a showing, Pekin has a duty to defend the Shell defendants.

¶ 37       Affirmed.

¶ 38       JUSTICE R. GORDON, specially concurring.
¶ 39       I concur in the majority’s holding that plaintiff Pekin Insurance Company has a duty to
       defend. However, I must write separately because I believe, with all due respect, that the
       majority strays too far from the allegations of the complaint and too far down the road of
       deciding the ultimate question of coverage. Thus, I must specially concur.
¶ 40       In Illinois, the duty to defend and the duty to indemnify are not coextensive. International
       Minerals & Chemical Corp. v. Liberty Mutual Insurance Co., 168 Ill. App. 3d 361, 366
       (1988). The obligation to defend is much broader than the obligation to pay. International
       Minerals, 168 Ill. App. 3d at 366.
¶ 41       To determine whether an insurer has a duty to defend, a court must look to the allegations
       in the underlying complaint and then compare them to the relevant provisions of the
       insurance policy. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90,
       107-08 (1992). If the facts alleged in the underlying complaint fall potentially within the
       policy’s coverage, then the insurer has a duty to defend. Outboard Marine, 154 Ill. 2d at 108.
¶ 42       Only if it is clear from the face of the complaint that the allegations fail to state facts that
       could bring the case potentially within the policy’s coverage, then the insurer may properly
       refuse to defend. State Farm Fire & Casualty Co. v. Hatherley, 250 Ill. App. 3d 333, 336
       (1993) (quoting United States Fidelity & Guaranty Co. v. Wilkin Insulation Co., 144 Ill. 2d
       64, 73 (1991)).
¶ 43       Where the language of an insurance policy is clear and unambiguous, we will apply it as
       written. Hatherley, 250 Ill. App. 3d at 337. However, where an insurer relies on an
       exclusionary clause to deny coverage, “its applicability must be clear and free from doubt”
       and “any doubts as to coverage will be resolved in favor of the insured.” International
       Minerals, 168 Ill. App. 3d at 367. The construction of an insurance policy presents a question
       of law that we review de novo. Outboard Marine, 154 Ill. 2d at 108.
¶ 44       In the case at bar, defendant Pekin argues that an endorsement to the policy limits the

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       policy’s coverage to: (1) negligence in Shell’s granting of the franchise; and (2) Shell’s
       vicarious liability for the franchisor. Pekin claims that, since the underlying action did not
       allege either (1) negligence in the granting of the franchise or (2) vicarious liability against
       Shell, Pekin, therefore, had no duty to defend.
¶ 45        In the underlying action, the complaint alleged that Waldemar Zablocki was injured in
       an explosion at a gas station that was “alternatively or simultaneously owned and/or
       operated” by Summit and Shell. Specifically, the complaint alleged that an employee of A.D.
       Connor was transferring fuel from its transport truck to an underground fuel tank at the
       station and that this process released flammable vapors into the air. After Zablocki exited the
       station’s store, he walked into a public alley behind the station and started to light a cigarette.
       The spark ignited the vapors, which caused the explosion that injured Zablocki. Count I of
       the Zablocki complaint alleged negligence against Summit, while counts II and III alleged
       negligence against Shell which, Zablocki claimed, “owned, operated and controlled the
       premises.”
¶ 46        I find that the complaint’s allegations of control against Shell are sufficient to trigger a
       potential for vicarious liability by Shell and, thus, are sufficient to trigger Pekin’s duty to
       defend.
¶ 47        Control is the key element of vicarious liability. Lawlor v. North American Corp. of
       Illinois, 2012 IL 112530, ¶ 44 (control is the “cardinal consideration” (internal quotation
       marks omitted)). Recently, our supreme court set forth a comprehensive discussion of
       vicarious liability in Lawlor v. North American Corp. of Illinois, 2012 IL 112530, ¶¶ 42-44.
       In Lawlor, our supreme court explained that, generally, a person injured by the tortious action
       of another must seek a remedy from the person who actually caused the injury. Lawlor, 2012
       IL 112530, ¶ 42. However, if vicarious liability exists, a principal may be held liable for the
       toritous actions of an agent, even if the principal itself did not engage in the conduct. Lawlor,
       2012 IL 112530, ¶ 42. As a general rule, no vicarious liability exists for the actions of
       independent contractors. Lawlor, 2012 IL 112530, ¶ 42. An independent contractor is one
       who agrees to produce a certain result but who, during the actual execution of the work, is
       not under the control of the person for whom the work is done. Lawlor, 2012 IL 112530,
       ¶ 43. An independent contractor may use his or her own discretion in matters that were not
       specified or in the details of the work. Lawlor, 2012 IL 112530, ¶ 43. However, just because
       someone is an independent contractor will not bar vicarious liability, if he or she is also an
       agent of the principal. Lawlor, 2012 IL 112530, ¶ 43. There is no precise formula for
       determining when a person’s status as an independent contractor is negated by his or her
       status as an agent. Lawlor, 2012 IL 112530, ¶ 44.
¶ 48        The determination of whether a person is an agent or an independent contractor rests
       upon the facts and circumstances of each case. Lawlor, 2012 IL 112530, ¶ 44. However, the
       “cardinal consideration is whether that person retains the right to control the manner of doing
       the work.” Lawlor, 2012 IL 112530, ¶ 43.
¶ 49        In the case at bar, the complaint alleged that Shell had “control.” Since “control” is the
       key element of vicarious liability, I would find that the factual allegations of the complaint
       triggered Pekin’s duty to defend, even though the complaint does not allege vicarious


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liability. For these reasons, I must specially concur.




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