IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

WESTFIELD INSURANCE COMPANY,

Plaintiff,

v.

ROSE PAVING COMPANY, ALAN ROSE,

MICHAEL ROSE, CARL QUANSTROM,

SCOT VANDENBERG, and PATRICIA

VANDENBERG,

Defendants.

Case No. 12 C 40

Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

Several Motions are pending before the Court. For the reasons

discussed herein, the Motions are resolved as follows: Plaintiff’s

Motion for Judgment on the Pleadings is granted; Defendants’ Motion

to File a Combined Brief is granted; Plaintiff’s Motion to Strike

is denied; Defendants’ Motion for Summary Judgment is denied. 

I. BACKGROUND

This insurance coverage dispute arises from an accident that

occurred on a 75-foot yacht. The following background information,

drawn from the pleadings in this case, is uncontested unless noted

otherwise.

Defendants Rose Paving and Alan Rose (“the Rose Defendants”),

along with several others who are not parties here, owned the yacht

and operated it for cruises on Lake Michigan. It appears that

those parties used the trade name “RQM” for their yacht business. 
On September 1, 2009, Scot Vandenberg attended a five-hour cruise

on the chartered yacht. During the event, Mr. Vandenberg was

sitting on a bench on the yacht’s upper deck. The deck lacked an

upper railing, and the bench was not secured. Mr. Vandenberg

sustained severe injuries when the bench tipped over and he fell to

the bottom deck. 

Plaintiff Westfield Insurance Company had issued a policy of

commercial general liability (“CGL”) insurance, as well as an

umbrella policy (collectively, the “Westfield policies”), to Rose

Paving. The insuring agreement provided that Plaintiff “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.” ECF No. 56-1 at 75.

In the insuring agreement, Rose Paving’s business is described

as “concrete construction.” ECF No. 56-1 at 54. The “Schedule of

Hazards” lists the risks associated with Rose Paving’s business:

“concrete construction,” “contractors executive supervisors,” and

“subcontractors.” ECF No. 56-2 at 49. According to the contract,

Rose Paving did not own, hire, or lease any watercraft, docks, or

floats. ECF No. 56-2 at 50. The document includes a section

entitled “representations,” in which the parties agreed that (1)

the policy was based on statements and representations made to

Plaintiff, (2) those statements were accurate and complete, and (3)

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Plaintiff issued the policy in reliance upon those representations. 

ECF No. 56-1 at 86. 

Two underlying lawsuits preceded this case. The Vandenbergs

– Scot and his wife, Patricia – filed suit in Illinois state court

against Rose Paving Company, Alan Rose, and other defendants not

parties to this action (“the Vandenberg suit”). Westfield denied

any coverage for the claim and did not retain counsel to defend

Rose Paving and Alan Rose. In the second case, In re RQM, LLC

(“the RQM suit”), No. 10-CV-5520, RQM filed suit in this District

in admiralty seeking exoneration from liability for the accident. 

Plaintiff brought this action to determine the rights and

duties of the parties under the Westfield policies. Later, the

Vandenberg and RQM suits were resolved when all parties (other than

Westfield, which was not party to those cases) settled. In their

settlement agreement, the Rose Defendants assigned to the

Vandenbergs the right to collect under the Westfield policies. The

Rose Defendants were dismissed from this case, and the only

remaining dispute is between Plaintiff and the Vandenbergs over

whether Plaintiff must pay the Vandenbergs under the policy. 

Plaintiff has moved for judgment on the pleadings. Defendants

have responded by moving for summary judgment. Also pending are

Defendants’ Motion for Leave to File a Combined Brief and

Plaintiff’s Motion to Strike. 

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II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(c) allows a party to move

for judgment on the pleadings, which include the complaint, the

answer, and any written instruments, including contracts, that are

attached as exhibits. N. Ind. Gun & Outdoor Shows, Inc. v. City of

S. Bend, 163 F.3d 449, 452-53 (7th Cir. 1998). When ruling on a

Rule 12(c) motion, the Court views the facts in the pleadings in

the light most favorable to the nonmoving party and will grant the

motion only if it appears beyond doubt that there are no material

issues of fact to be resolved. Buchanan-Moore v. County of

Milwaukee, 570 F.3d 824, 827 (7th Cir. 2009). 

Defendants dispute that this case can be resolved on the basis

of the pleadings alone, and respond to the motion with a motion for

summary judgment that asks the Court to consider evidence outside

the pleadings. If the Court considers evidence outside the

pleadings, a motion for judgment on the pleadings is treated as one

for summary judgment. FED. R. CIV. P. 12(d). 

III. MOTION FOR JUDGMENT ON THE PLEADINGS

The crux of this litigation is whether the Westfield policies

provide coverage to the Vandenbergs. Plaintiff argues that the

Vandenbergs have no right to recover under the Westfield policies

because they never had a duty to defend their insured in the

underlying lawsuit. Defendants insist that Plaintiff owes a duty

to indemnify the Vandenbergs under the policy because the claim is

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covered and the insured party settled the claim against it in

reasonable anticipation of liability. Because the Court concludes

that the claim is not covered, the Court need not discuss whether

Plaintiff owed a duty to defend.

In Illinois, the construction of an insurance policy is a

question of law, and the Court’s “paramount objective . . . is to

give effect to the intent of the parties as expressed by the terms

of the agreement.” Oakley Transp., Inc. v. Zurich Ins. Co., 648

N.E.2d 1099, 1106 (Ill. App. Ct. 1995). An insurance policy “is

not to be interpreted in a factual vacuum and without regard to the

purpose for which the insurance was written.” Id. Rather, the

Court construes the policy as a whole, “taking into account the

type of insurance for which the parties have contracted, the risks

undertaken and purchased, the subject matter that is insured and

the purposes of the entire contract.” Crum & Foster Managers Corp.

v. Resolution Trust Corp., 620 N.E.2d 1073, 1078 (Ill. 1993). 

In this case, the underlying incident for which coverage is

sought is a fall suffered on a yacht operated in part by the

insured. Rose Paving, the insured, obtained insurance from

Plaintiff for its work related to paving and construction. In the

insuring agreement, Rose Paving’s business is described as

“concrete construction.” ECF No. 56-1 at 54. The agreement’s

“Schedule of Hazards” lists the risks associated with Rose Paving’s

business as “concrete construction,” “contractors executive

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supervisors,” and “subcontractors.” ECF No. 56-2 at 49. According

to the contract, Rose paving did not own, hire, or lease any

watercraft, docks, or floats. ECF No. 56-2 at 50. The document

includes a section entitled “representations,” in which the parties

agreed that (1) the policy was based on statements and

representations made to Plaintiff, (2) those statements were

accurate and complete, and (3) Plaintiff issued the policy in

reliance upon those representations. ECF No. 56-1 at 86. 

A similar situation arose in Cooper v. RLI Ins. Co., No. CV

9403617028, 1996 WL 367721 (Conn. Super. Ct. June 3, 1996). In

that case, the plaintiff fell on a gangway leading to a dock at a

yacht club. Id. at *5. The insurer provided a general liability

policy to “Thimble Island Café,” a restaurant that operated on the

same premises and leased the land for the gangway. Id. at *4. The

insured had represented to the insurer that there were no

additional exposures, beyond those involved in the restaurant

business, for which coverage was sought. Id. at *6. The policy

included a section in which the insured agreed that the statements

made to procure coverage were accurate and complete and the policy

was issued in reliance upon those representations. Id. at *5. 

Even though the policy did not limit coverage expressly to the

restaurant business, the court denied coverage, explaining that the

only reasonable interpretation of the policy recognized that

coverage did not extend to “accidents associated with business

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activity different from the business activity for which coverage

was initially sought.” Id. at *8. 

The court considered an analogous situation in Gemini Ins. Co.

v. S&J Diving, Inc., 464 F.Supp.2d 641 (S.D. Tex. 2006). In that

case, the insured was described as a diving contractor that

repaired docks and vessels. Id. at 649. In obtaining coverage for

that business, the insured stipulated that the statements made to

procure the policy were accurate and complete and the policy was

issued in reliance upon those representations. Id. When the

insured was sued for damages arising out of an outdoor rock concert

and motorcycle rally, the court found it unreasonable “to conclude

that the policy covers any and all activity, not specifically

excluded, when the insured negotiated as, and described itself to

be, a marine operation.” Id. at 650. The Court interpreted the

contract as a whole to limit the policy’s coverage to “a marine

operation’s typical undertakings.” Id. 

Just as in Cooper and Gemini, the insured in this case

obtained coverage for one business and represented that the

description of the business and its hazards was accurate and

complete. In this case, the policy also indicates that Rose Paving

did not own, hire, or lease watercraft, docks, or floats. ECF

No. 56-2 at 50. This Court need not decide whether coverage

extends to only those activities that fall squarely within the

hazards listed in the policy. This contract, when interpreted as

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a whole, does not provide coverage for injuries arising out of the

operation of a yacht. This much is clear from the business

description, the description of hazards, the fact that Rose Paving

represented that it did not operate any watercraft, and the fact

that Rose Paving acknowledged that the policy was issued in

reliance upon its complete and accurate representations. See also,

Steadfast Ins. Co. v. Dobbas, No. CIV. S-05-0632, 2008 WL 324023

(E.D. Cal. Feb. 5, 2008) (insured’s description as “railroad

contractor” limited coverage for injuries arising out of farming

activities). 

Defendants argue that the business description does not limit

coverage unless the contract says so expressly. This argument is

supported by the unobjectionable proposition that ambiguous terms

in an insurance contract are construed liberally in favor of the

insured. But that rule of construction is of little help here,

because this contract is not ambiguous. Hobbs v. Hartford Ins. Co.

of the Midwest, 823 N.E.2d 561, 564 (Ill. 2005) (“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.”). Rather, taking the policy as

a whole, and considering the reasons for which coverage was sought,

as Illinois law requires, the only reasonable conclusion is that

this policy does not cover damages arising out of a fall on a yacht

during a chartered cruise. 

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Defendants also argue that Cooper and Steadfast were rejected

in a case from this District applying Illinois law. In

Philadelphia Indem. Ins. Co. v. 1801 W. Irving Park, LLC, No. 11 C

1710, 2012 WL 3482260 (N.D. Ill. Aug. 13, 2012), the insured was

listed as a condominium association. The court held that the

insured’s business description, standing alone, did not limit

coverage for actions taken by the insured when acting as a real

estate developer. Id. at *3-5. The Court relied on the fact that

the insured “did not own and operate multiple separate businesses,

only one of which was insured.” Id. at *5. Rather, the insured

“was a single entity that performed multiple services as part of

its condominium development business—which was a named insured

under the policy.” Id. In addition, the insurer could not point

to evidence sufficient to show that the insured agreed that its

actions as a developer would be excluded from coverage. Id. at *4. 

Defendants’ reliance on Philadelphia Indemnity is misplaced

for three reasons. First, this Court is relying not on the

business description or schedule of hazards standing alone, but

rather on the policy as a whole, including the purpose for which

the policy was written. Second, unlike the insurer in Philadelphia

Indemnity, Plaintiff has directed the Court to evidence that the

parties did not intend for their insurance contract to cover yachtrelated injuries: the insured indicated that it did not own or

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operate any watercraft and accepted that the policy was given in

reliance upon the representations made in the application process. 

Finally, the Philadelphia Indemnity court distinguished Cooper

and Steadfast on the ground that the insured was a single entity

that performed multiple services, while Cooper and Steadfast both

involved “an insured entity that operated multiple independent

businesses, purchased insurance for only one of those businesses,

and later sought coverage for a different business.” Philadelphia

Indemnity, 2102 WL 3482260 at *5. Rose Paving bears little

resemblance to the insured in Philadelphia Indemnity that acted as

a developer and also operated a condominium association. Rather,

Rose Paving is comparable to the entities distinguished by the

Philadelphia Indemnity court: it operated multiple independent

businesses (paving and yacht charters), purchased insurance for

only one of those businesses (paving), and later sought coverage

for a different business (yacht charters). The factors that were

present in Philadelphia Indemnity and critical to that court’s

holding are all absent here. 

The Court recognizes and abides by the rule in interpreting

insurance contracts that ambiguity is resolved in the insured’s

favor. But this insurance policy is not ambiguous just because it

does not limit coverage expressly to those actions related to

paving and construction. This Court’s task is to construe the

policy as a whole, and it is clear from the entire document that

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the contracting parties never intended that coverage extend to

damages arising out of a yachting operation, a completely separate

subject matter. Crum and Foster Managers Corp. v. Resolution Trust

Corp., 620 N.E.2d 1073, 1078 (Ill. 1993) (explaining that the Court

construes the insurance policy as a whole, “taking into account the

type of insurance for which the parties have contracted, the risks

undertaken and purchased, the subject matter that is insured and

the purposes of the entire contract”). The Vandenberg’s injuries,

while tragic, are not covered by the Westfield policies, and thus

Plaintiff is entitled to judgment as a matter of law. 

IV. REMAINING MOTIONS

Defendant’s Motion for Leave to File a Combined Brief is

granted. The Court was able to resolve the coverage issues in this

case without reference to factual disputes that relate only to

issues that did not arise in the foregoing coverage analysis. Had

further analysis been necessary, the Court could have considered

factual issues outside the pleadings. Pekin Ins. Co. v. Wilson,

930 N.E.2d 1011, 1019-20 (Ill. 2010) (explaining that the question

of coverage “should not hinge on the draftsmanship skills or whims

of the plaintiff in the underlying action,” so Courts may consider

materials outside the complaint in the underlying action unless the

evidence “tends to determine an issue crucial to the determination

of the underlying lawsuit”). 

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Defendant’s Motion for Summary Judgment is denied because the

claim is not covered. 

Plaintiff’s Motion to Strike is denied because it is moot. 

The issues discussed therein do not affect the coverage analysis

undertaken above.

V. CONCLUSION

For the reasons stated, the Court rules as follows:

1. Defendant’s Motion for Leave to File a Combined Brief

[ECF No. 66] is granted.

2. Plaintiff’s Motion for Judgment on the Pleadings [ECF

No. 56] is granted. 

3. Defendant’s Motion for Summary Judgment [ECF No. 63] is

denied. 

4. Plaintiff’s Motion to Strike [ECF No. 78] is denied as

moot. 

IT IS SO ORDERED.

Harry D. Leinenweber, Judge

United States District Court

Date:3/5/2014

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