Declaratory Judgment Is Premature where Subcontractor’s Insurance Procurement Obligation Is Pending Issue in Underlying Case

Navigators Specialty Insurance Co. v. Power Construction Co., LLC (Ill. App. Ct., September 30, 2016)

The Appellate Court of Illinois reversed an insurer’s summary judgment win in a declaratory judgment action due to a pending cross-claim for breach of contract in the underlying action. The insurer sought a declaration that it owed no duty to defend or indemnify a first-tier subcontractor as an additional insured in a wrongful death action filed against the general contractor, the first-tier subcontractor, and the policyholder, a second-tier subcontractor. The insurer argued that the first tier subcontractor was never named as an additional insured under its policy, despite a certificate of insurance suggesting it had. In addition, no party could produce a signed copy of the contract between the two subcontractors, the blank form of which contained a promise to add the first tier contractor as an additional insured. The court held that because the first tier subcontractor filed a cross-claim against the second tier subcontractor for breach of contract on that issue in the underlying wrongful death action, it was improper for the trial court to make a finding on that same issue in ruling on the insurer’s declaratory judgment action.