2017 IL App (1st) 160200 

 

 

 FIFTH DIVISION

May 19, 2017 

 

 

No. 1-16-0200 

PEKIN INSURANCE COMPANY, ) Appeal from the 

 ) Circuit Court of 

 ) Cook County. 

 Plaintiff-Appellant, ) 

 ) 

v. ) 

 ) 

AAA-1 MASONRY & TUCKPOINTING, INC., ) 

and EMIL PIEKUTOWSKI, ) No. 14 CH 1303 

 ) 

 ) 

 Defendants ) 

 ) 

(Scottsdale Insurance Company, ) 

 ) 

 Intervenor-Appellee). ) Honorable 

 ) Moshe Jacobius, 

 ) Judge Presiding. 

 

 

JUSTICE HALL delivered the judgment of the court with opinion. 

 Presiding Justice Gordon and Justice Lampkin concurred in the judgment and opinion. 

 

OPINION

 

¶ 1 This appeal arises out of an insurance coverage dispute involving a personal injury action 

(Underlying Suit) filed on September 16, 2013, by Emil Piekutowski against defendants AAA-1 

Masonry & Tuckpointing, Inc. (AAA), Chicago Scaffolding, Inc. (CSI), Lakeshore Land 

Ventures LLC, Hilco Management, Inc., and Hilco Realty Management, Inc. Piekutowski v. 

AAA-1Masonry & Tuckpointing, No. 13-L-10341 (Cir. Ct. Cook Co.). Plaintiff, Pekin Insurance 
No. 1-16-0200 

2 

Company (Pekin) filed its initial declaratory action against AAA seeking a declaration that it

owed no duty to defend AAA in the Underlying Suit. Subsequently, defendant-intervener,

Scottsdale Insurance Company (Scottsdale) intervened in the declaratory action and filed a 

counterclaim seeking a declaration from the circuit court that (1) Pekin has a duty to defend 

AAA in the Underlying Suit pursuant to the policy entered into between Pekin and its named 

insured Alpha 1 Construction Inc. (Alpha), whereby AAA was named an additional insured and

(2) that Pekin owed Scottsdale reimbursement for costs incurred defending AAA. The parties 

submitted cross-motions for summary judgment, and the circuit court entered judgment in favor 

of Scottsdale on both counts on December 22, 2015. On January 21, 2016, the circuit court 

granted Pekin’s motion for a finding pursuant to Rule 304(a) of the Illinois Supreme Court Rules 

(Ill. S. Ct. R. 304(a) (eff. Feb. 26, 2010)). As a result, Pekin filed its timely notice of appeal on 

January 21, 2016. 

¶ 2 BACKGROUND

¶ 3 A. The Pekin Policy 

¶ 4 AAA and Alpha entered into an agreement for construction services and labor on August 

6, 2007 (Subcontract). In the Subcontract, Alpha agreed to name AAA as an additional insured 

on its commercial general liability insurance policy. The Subcontract stated that Alpha was an

independent contractor of AAA and that Alpha was to maintain full control over its respective 

crews, employees, assistants, helpers and workers. The Subcontract further provided that the 

work was to be performed solely by Alpha and not by AAA. 

¶ 5 Pekin issued a policy of insurance to Alpha as named insured for the effective policy 

period of June 1, 2012, to June 1, 2013. The policy contained an “additional insured” 

endorsement, which provided that an additional insured was “any person or organization for 
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3 

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 further 

provided that additional insureds were covered “only with respect to vicarious liability for 

‘bodily injury’ or ‘property damage’ imputed from [the named insured] to the Additional Insured 

as a proximate result of your ongoing operations performed for that Additional Insured during 

the Policy Period.” The endorsement specifically excluded liability “arising out of or in any way 

attributable to the claimed negligence or statutory violation 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.” 

¶ 6 B. Piekutowski Complaint 

¶ 7 In the Underlying Suit, Alpha is not named as a defendant; however, Piekutowski alleges 

that on September 20, 2011, prior to and at the time of his injury, the defendants “individually 

and by and through agents, servants and employees,” owned and/or were in charge of the 

construction of a building located at 2930 North Commonwealth Avenue in Chicago. On that 

date, Alpha and AAA were operating under the Subcontract regarding the construction, and 

Piekutowski was employed by Alpha and performing work at the construction site when he fell 

from a scaffold and sustained permanent injuries. 

¶ 8 Piekutowski alleged that defendants, individually and through agents, servants and 

employees, “participated in coordinating 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,” and were responsible for complying with standards promulgated by the 

Occupational Safety and Health Administration (OSHA). The complaint further alleges that 
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defendants 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. Piekutowski goes on to allege numerous “careless and negligent acts and/or omissions” 

on the part of the named defendants, of which he claims one or more was a proximate cause of 

his injuries. 

¶ 9 C. CSI Third-Party Complaint 

¶ 10 On September 18, 2014, CSI filed a third-party complaint against Alpha seeking 

contribution. CSI alleged that AAA “rented equipment, including a swing stage and supporting 

equipment from [CSI],” and that Piekutowski was using the swing stage and supporting 

equipment in furtherance of his work when he was injured. The CSI complaint goes on to allege 

a number of negligent acts or omissions on the part of Alpha, that Alpha had a duty to 

Piekutowski to supervise and provide a safe work environment, that Alpha was responsible for 

the work being performed pursuant to OSHA standards and that “the alleged damages suffered 

by [Piekutowski] were directly and proximately caused by the negligent and careless acts of 

[Alpha].” 

¶ 11 D. Pekin Declaratory Judgment Action 

¶ 12 On August 17, 2012, Scottsdale, AAA’s general liability insurance provider, tendered 

AAA’s defense of the Underlying Suit to Pekin pursuant to the terms of the Pekin policy; that 

same day, Scottsdale also tendered CSI’s defense to Pekin on behalf of CSI. XL Insurance 

Company is CSI’s general liability insurance provider and it tendered CSI’s defense to 

Scottsdale. Scottsdale maintained the position that it had no duty to defend CSI in the Underlying 

Suit.1

 

 

1 The matter of Scottsdale’s duty to defend CSI was the subject of a separate declaratory action in federal court 

where the district court held that Scottsdale did in fact have a duty to defend CSI in the Underlying Suit. Scottsdale 
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¶ 13 On November 7, 2012, Pekin rejected Scottsdale’s tender of AAA’s defense on the 

grounds that it did not believe its duty to defend AAA was triggered where AAA was not sued 

for damages stemming from Alpha’s acts or omissions. On January 23, 2014, Pekin filed its 

complaint for declaratory judgment against AAA and Piekutowski, seeking a declaration that 

Pekin had no duty to defend AAA in the Underlying Suit. Pekin alleged, inter alia, that it had no 

duty to defend AAA as an additional insured because Piekutowski sued AAA for its own 

negligence and the additional insured endorsement specifically excludes coverage for the 

negligence of the additional insured. 

¶ 14 On May 23, 2014, AAA filed its answer and cross-complaint for declaratory judgment, 

seeking a declaration that Pekin had a duty to defend AAA in the Underlying Suit. On July 11, 

2014, Scottsdale moved to intervene, and on August 5, 2014, the circuit court granted 

Scottsdale’s motion and ordered Scottsdale to file instanter its answer and counterclaim for 

declaratory judgment.

¶ 15 In its counterclaim, Scottsdale alleged that it had undertaken AAA’s defense in the 

Underlying Suit and sought declarations (1) that Pekin had a duty to defend AAA, (2) that Pekin 

has a duty to indemnify AAA, (3) that the Pekin policy is primary and noncontributory, and (4) 

that Scottsdale was entitled to reimbursement of defense costs and expenses in connection with 

providing AAA a defense in the Underlying Suit. 

¶ 16 On July 26, 2015, Scottsdale filed its motion for summary judgment which included the 

following attached to it: CSI’s third party complaint for contribution, CSI’s answers to 

interrogatories from the Underlying Suit, the Subcontract, and a note from the Pekin claim file 

dated September 11, 2012. The note stated that: 

 

Insurance Co. v. Chicago Scaffolding, Inc., No. 14 C 4268, 2015 WL 4751136 (N.D. Ill. Aug. 11, 2015), appeal 

dismissed, No. 15-2975 (7th Cir. Apr. 26, 2016).
No. 1-16-0200 

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“Alpha loaded masonry bricks mortar and an I beam on the swing stage 

scaffolding and began raising it from ground level to the 6th floor. While the scaffolding 

was in transit to the top level of the building the scaffolding allegedly shifted and 

apparently caused an I beam support rail to come loose and fall forward striking the 

lefthand/foratm [sic.]” 

¶ 17 On July 28, 2015, Pekin filed a cross-motion for summary judgment. On December 22, 

2015, after hearing oral argument, the circuit court granted Scottsdale’s motion for summary 

judgment and denied Pekin’s cross-motion. The circuit court found that AAA was entitled to a 

defense from Pekin because the facts pleaded in Piekutowski’s complaint, taken together with 

the facts in CSI’s third-party complaint, created the potential that AAA could be found liable 

based on Alpha’s negligent acts or omissions. In response, Pekin timely appealed that judgment. 

¶ 18 ANALYSIS

¶ 19 The dispositive issue on appeal is whether Pekin’s duty to defend AAA as an additional 

insured was triggered. Pekin maintains that the circuit court erred when it determined that it had 

a duty to defend AAA on the grounds that the allegations contained in CSI’s third-party 

complaint and Piekutowski’s complaint raised the potential that liability could be imputed to 

AAA solely from negligent acts or omissions by Alpha. Even assuming arguendo that CSI’s 

third-party complaint was considered in error, we find that other true but unpleaded facts are 

sufficiently present in the instant case to affirm the circuit court’s judgment.

¶ 20 A. Standard of Review 

¶ 21 On appeal, a reviewing court may affirm the trial court’s ruling for any reason supported 

by the record regardless of the basis relied upon by the trial court. In re Marriage of Loomis, 348 

Ill. App. 3d 972, 974 (2004) (citing Scassifero v. Glaser, 333 Ill. App. 3d 846, 860 (2002)). The 
No. 1-16-0200 

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instant case involves the circuit court’s ruling on cross-motions for summary judgment.

Summary judgment is appropriate where the pleadings, depositions, and admissions on file, 

together with any affidavits and exhibits, when viewed in the light most favorable to the 

nonmoving party, indicate there is no genuine issue of material fact and the moving party is 

entitled to judgment as a matter of law. Pekin Insurance Co. v. United Contractors Midwest, 

Inc., 2013 IL App (3d) 120803, ¶ 22. We review cases involving summary judgment de novo. Id. 

¶ 22 B. Discussion 

¶ 23 It is well established that, in a declaratory judgment action such as the case at bar, where 

the issue is whether the insurer has a contractual duty to defend pursuant to an insurance policy, 

a court ordinarily looks first to the allegations in the underlying complaint and compares those 

allegations to the relevant provisions of the insurance policy. Id. ¶ 21. 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 fail to state facts which bring the case within, or 

potentially within, the policy’s coverage. Id. Therefore, if the facts alleged in the underlying 

complaint fall within, or potentially within, the policy’s coverage, the insurer’s duty to defend 

arises. Id. “ ‘The insurer’s duty to defend is much broader than its duty to indemnify its 

insured.’ ” American Economy Insurance Co. v. DePaul University, 383 Ill. App. 3d 172, 178 

(2008) (quoting Crum & Forster Managers Corp., 156 Ill. 2d 384, 393-94 (1993)). The threshold 

for pleading a duty to defend is low, and any doubt with regard to such duty is to be resolved in 

favor of the insured. United Services Automobile Ass’n v. Dare, 357 Ill. App. 3d 955, 963 

(2005). “[I]nsurance policies are to be liberally construed in favor of coverage, and where an 

ambiguity exists in the insurance contract, it will be resolved in favor of the insured and against 
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the insurer.” Id. at 963-64. “Provisions in an insurance policy that limit or exclude coverage are 

also construed liberally in favor of the insured and against the insurer.” Id. at 964. 

¶ 24 Although a court ordinarily begins its analysis by examining the underlying complaint, a 

court is not limited to the allegations in the complaint in determining whether an insurer has a 

duty to defend. Pekin Insurance Co. v. Pulte Home Corp., 404 Ill. App. 3d 336, 340 (2010). The 

Illinois Supreme Court declined to “limit the source of an insurer’s duty to defend ‘solely’ to the 

content of the underlying complaint in all cases.” Pekin Insurance Co. v. Wilson, 237 Ill. 2d 446, 

458 (2010). Under certain circumstances, it is proper for the court to examine evidence beyond 

that contained in the underlying complaint to determine the insurer’s duty to defend. Id. at 462. 

One such circumstance is where the insurer possesses knowledge of true but unpleaded facts 

that, when taken together with the allegations in the complaint, indicate that the claim is within 

or potentially within the policy coverage. Shriver Insurance Agency v. Utica Mutual Insurance 

Co., 323 Ill. App. 3d 243, 247 (2001) (citing Indiana Insurance Co. v. Hydra Corp., 245 Ill. App. 

3d 926, 929 (1993)). The only time such evidence should not be permitted is when it tends to 

determine an issue crucial to the determination of the underlying lawsuit. Fidelity & Casualty 

Co. of New York v. Envirodyne Engineers, Inc., 122 Ill. App. 3d 301, 305 (1983). 

¶ 25 In the present case, Scottsdale contends that the true but unpleaded facts doctrine allows 

full consideration of Pekin’s claim note and that when taken together with the allegations in the 

underlying complaint, they trigger Pekin’s duty to defend AAA. Pekin contends that the claim 

note does not trigger its duty to defend because the note does not state or suggest that Alpha was 

negligent. We find Pekin’s argument unpersuasive. The question this Court must answer is not 

whether the note taken by itself states or suggests that Alpha was negligent, but rather whether 
No. 1-16-0200 

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the note when taken together with the allegations in the underlying complaint indicate that the 

claim is within or potentially within the policy coverage. See Shriver, 323 Ill. App. 3d at 247. 

¶ 26 Alpha’s insurance policy names AAA as an additional insured and covers circumstances 

where vicarious liability for bodily injury or property damage is imputed from Alpha to AAA 

solely by virtue of Alpha’s acts or omissions. The Subcontract between Alpha and AAA states 

that Alpha, rather than AAA, was solely responsible for performing the work at the construction 

site, and the parties agreed Alpha was to maintain full control over its respective crews, 

employees, assistants, helpers, and workers. The parties do not dispute that Piekutowski was 

employed by Alpha at the time of his injury. According to Pekin, it was informed that “(1) Alpha 

loaded bricks, mortar and an I-beam onto a swing stage scaffolding; (2) Alpha raised the swing 

stage scaffolding from ground level; (3) and that during transit, the scaffolding shifted , causing 

an I-beam to come loose and fall forward, striking the left hand/forearm of Piekutowski.” 

Piekutowski’s complaint alleged that his injuries were proximately caused by careless or 

negligent acts, which included in pertinent part: failing to safely place or operate scaffolding,

failing to adequately secure the scaffolding, and allowing the scaffolding to be inadequately 

secured. Piekutowski raised his allegations solely against the named defendants; however, when 

read in conjunction with Pekin’s claim note and the terms of the Subcontract, they create the 

possibility that AAA could be found liable for Piekutowski’s injuries based on Alpha’s careless 

or negligent operation of the swing stage scaffolding. 

¶ 27 On appeal, Pekin attempts to distinguish the reviewing court’s decision in American 

Economy Insurance Co. v. DePaul University, 383 Ill. App. 3d 172 (2008) from the instant case; 

however we find the rationale utilized in that case to be instructive. In American Economy, 

Caroline Cogtella filed a lawsuit against defendants DePaul University (DePaul), L & L 
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Engineers, and Holabird & Root (H&R), alleging that she suffered bodily injury due to her 

exposure to the fluorescent lighting selected and installed in DePaul’s Goldblatt building. Id. at 

173. Subsequently, DePaul tendered its defense of Cogtella’s complaint to plaintiff American 

Economy Insurance Company (American Economy) because American Economy was the 

insurer of Metrick Electric Company (Metrick). Id. Metrick was the electrical subcontractor that 

was hired to install the lighting at the Goldblatt building and DePaul was a named additional 

insured on Metrick’s insurance policy. Id. American Economy denied coverage and filed a 

declaratory judgment action as to its duty to defend in the Cogtella litigation. The circuit court, in 

considering cross-motions for summary judgment, held that American Economy had an 

obligation to defend DePaul in the Cogtella litigation. Id. On appeal, the reviewing court applied 

the same rationale utilized in the related declaratory judgment action American Economy had 

against H&R by reiterating “‘that in addition to the third-party complaint, true but unpleaded 

facts should have alerted American Economy to the possibility that the Cogtella complaint 

against H&R was potentially within the coverage of Metrick’s policy.’ ” Id. at 181 (quoting 

American Economy Insurance Co. v. Holabird & Root, 382 Ill. App. 3d 1017, 1034 (2008)). The 

reviewing court came to this conclusion after reviewing Cogtella’s complaint together with the 

terms of Metrick’s subcontract. Id. at 182. The subcontract provided that Metrick was 

responsible for the construction of the complete operating electrical system. Id. The Cogtella 

complaint against DePaul alleged that she was injured because of the selection and installation of 

the fluorescent lighting without UV diffusers. Id. The reviewing court found that American 

Economy knew Metrick installed the fluorescent lighting because American Economy 

represented Metrick in the underlying litigation. Id. Consequently, the reviewing court affirmed 

the circuit court and found the allegations in the complaint, taken together with the true but 
No. 1-16-0200 

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unpleaded facts contained in the record, were sufficient to trigger American Economy’s duty to 

defend. Id.

¶ 28 In the present case, the Subcontract states that Alpha, rather than AAA, is solely 

responsible for the work at the construction site. Piekutowski’s complaint alleges, inter alia, that 

he was injured by careless or negligent acts relating to the operation of the swing stage 

scaffolding. Furthermore, the claim note, taken from Pekin’s claim file and dated September 11, 

2012, states that Piekutowski was injured during Alpha’s operation of the swing stage 

scaffolding. Therefore, prior to November 7, 2012, when Pekin rejected Scottsdale’s tender of 

AAA’s defense, Pekin should have been alerted that Piekutowski’s complaint against AAA was 

potentially within the coverage of Alpha’s policy. See La Rotunda v. Royal Globe Insurance Co., 

87 Ill. App. 3d 446, 452 (1980) (finding the results of the insurance company’s own investigation 

may be considered as unpleaded facts known to the insurer which indicate that the claim was 

potentially within the policy’s coverage). “ ‘To hold otherwise would allow the insurer to 

construct a formal fortress of the third party’s pleadings and to retreat behind its walls, thereby 

successfully ignoring true but unpleaded facts within its knowledge that require it, under the 

insurance policy, to conduct the putative insured’s defense.’ ” Id. (quoting Associated Indemnity 

Co. v. Insurance Co. of North America, 68 Ill. App. 3d 807, 816-17 (1979)). 

¶ 29 Based on the forgoing facts, we find that the allegations in Piekutowski’s complaint when 

taken with the facts in Pekin’s claim note and the terms of the Subcontract raise the possibility 

that liability could be imputed to AAA as a result of Alpha’s operation of the scaffolding swing 

stage; therefore, Pekin’s duty to defend AAA under the additional insured endorsement was 

triggered. We also note that consideration of these true but unpleaded facts does not determine 
No. 1-16-0200 

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any issue crucial to the Underlying Suit. Accordingly, we find the circuit court properly held that 

Pekin has a duty to defend AAA, and we affirm the decision of the circuit court of Cook County. 

¶ 30 Affirmed.