First Division June 18, 2007
No. 1-06-2121
CLARENDON AMERI CA INSURANCE COMPANY, a New Jersey Corpora

tion, Plaintiff-Appellee,

v. AARGUS SECU

RITY SYSTEMS, I

NC., an I llinois Corporation, Defendant-Appellant
(Scottsdale Insurance Company , Intervenor-Appe llee; B.G.K. Security

Services, Inc., an I

llinois Corporation, 69 West Washington Management LL C, an Illinois Limited Liab ility Corpora tion, and C ounty

of Cook, a

Body Politic and Corporation, Defendants). ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Appeal from the Circuit Court of Cook County

04 CH 10575

Honorable Julia Nowicki, Judge Presi ding.
PRESID ING

JUSTICE

McBRI DE delive

red the o pinion of t

he court : Plaintiff Clarendon America Insur ance Co. (Clarendon) filed a declara tory judgment action seeking a determination that it owed no duty to defend or indemnify

defendant Aargus Security Sy

stems, Inc. (Aarg

us), in several underly

ing lawsuits arising out of the October 17, 2003, fire that occurred at a building owne d by defenda nt County of Cook (Cook) and manag ed by defenda

nt 69 West Washington Management, LL C (69 West), located at 69 West Washington Street in Chicago. Clarendon issued a commercial g eneral liability (CGL ) policy to defe

ndant B.G.K. Security

Services, Inc. (B GK), from which Aargus soug ht coverage as an “a

dditional insured.” Intervenor

Scottsdale Insurance Company (Scottsdale) issued an excess insurance1-06-2121

1 In the same wri tten orde r, the tri al court

grante d summary

judgmen t in favor of 69 West and Cook and against Clarendon. Clarendon appea led that order in case No. 1-06-1864. 2 policy to BGK a

nd interv ened in th

is action a

lso seeki ng a de clarati on that it ha d no duty to defend A argus. Clarendon filed a motion for

summary judgmen t in the tri al court . Scottsda le filed a brief in support of Clarendon’s summary judgment motion. The court granted Clarendo n’s summar

y ju dgment motion ag ainst Aar gus. 1 Aargu s appeal s, argu

ing that : (1) the t

rial cou rt erre d in holding

that the r elevant contrac t, insurance provisions, and certificates of insurance were insufficient to demonstrate a potential for additiona l insured covera ge for Aargu s; and (2)

in the alte

rnative , the tria

l court inc orrect

ly granted summary

judgment in favor of Clarendon and Scottsdale beca use a genuine issue of material fact existed. On April 1, 2002, Aargus entered into a contra ct, entitled “Agreement with Service Contractor” (hereafter, 69 West/Aarg us Contract), with 69 West, acting as the manager a nd agent of Cook, to provide security g uard service to the commercial high-r ise building located at 69 West Washington Street in Chicago. On June 17, 2002, Aargus and BGK entered into a c ontract entitled “Joint Venture Agreement, 69 West Washington Manage ment Company, L .L.C., 69 West Washington, Chicago,
IL 60602” (hereafter, Aarg

us/BGK Agreement) in which the pa rties agreed to jointly

provide security g uard service at the 69 West Washington building. The Aarg us/BGK Agreement stated that “B.G.K. Security

Services, Inc. shall serve as Aargus’ exclusive subcontractor under the Contract.” Paragraph 16 of the Aa rgus/BGK Agree

ment provided: “All insurance that may from1-06-2121

3

time to time be required shall be obtained in such manner as the parties he reto agree.” BGK obtained a CGL policy from Clarendon, effective January 21, 2003, to January 21, 2004. The Clarendon policy pr ovided $1 million of liability coverag e per occurrence with a $5 million general aggre gate limit. The Clarendon policy contains a “Blanket Additional I nsured Endorse ment” (a dditional i

nsured e ndorseme nt), whic h states, in relev ant part : “WHO I S AN I

NSURED (Se ction II) pr

ovision of the Policy

is amended to include as an insured any person or organization (called ‘addition al insure d’) to whom yo

u are obl igated

by v alid written c ontract

to provide

such cov erage , but only

with resp ect to liability for ‘bodily

injury’ or ‘prope

rty damag e’ arising solely out of ‘your wor

k’ on behalf of said additional insured for which coverage is provided by

this policy.” Scottsdale issued an excess liability policy to BGK, effective August 1, 2003, to January 21, 2004. The Scottsdale policy “is excess of a nd follows form to the Clarendon policy.” In March and May

2003, Mack & Parker, I

nc., an agent of BGK, issued two c ertificates of insurance to Aargus. The first ce rtificate identified Aargus as “a n Additional Insured as respects work performed” by BGK, and the second said that Aarg us “is an Additional Insured as regards General L

iability for operations per formed” by

BGK. On October 17, 2003, a fire occurre d at the 69 West Washington building. As a result of the deaths and injuries that occurred in the fire, 22 lawsuits wer e filed in the circuit court of Cook County and were

consolidated under case No. 03 L 12520 (underlying

lawsuits). Aargus, 691-06-2121

4

West, Cook, and BGK were named as defenda nts, third-party defe

ndants, and/or counterdefendants in the underly ing lawsuits. Aargu s, 69 West, Co ok, and B GK tende red the d efense in the unde

rly ing law suits to Clare ndon. In July 200 4, Cl arendo n file d thi s decl arator y judgment actio n seek ing a determination that the Clarendon policy issued to BGK did not provide coverage to Aa rgus as an additional insured. Scottsdale was granted leave to interve ne in the circuit court and filed its own complaint for declaratory judgment. In January

2006, Clarendon filed a motion for summary judgment. Scottsdale filed a brief in support of Clarendon’s motion. I n April 2006, the trial court g ranted Cl arendon ’s motion. I n June 2006, the trial

court fo und that pu

rsuant to Supreme Court Rule 304(a) (155 Ill. 2d R. 304(a)), ther e was no just reason to delay enforcement or appeal of the April 2006 order. This appeal followed. On appeal, Aargus contends that the trial c ourt erred in finding that the Aarg us/BGK Agreement, the Clarendon policy and the certificates of insurance we re insufficient to provide coverage to Aarg

us as an additional insured. In the alter native, Aargus asserts that a question of material fact exists regarding insuranc e coverage beca use of the Aargus/BGK Ag reement and the certifi cates of

insuranc es. “The construction of an insurance policy and a determination of the rights and obligations thereunder are questions of law for the c ourt which are appropriate subjects for disposition by way of summary

judgment.” Crum & Forster Managers Corp. v. Resolution Trust Corp. , 156 I ll. 2d 384, 391 (1993). Summary judg ment is appropriate where the pleadings, de positions, and admissions

on file, to gether

with any affida vits and exhibits, whe

n viewed in the lig ht most1-06-2121

5

favorable to the nonmoving party, indicate that there is no genuine issue of material fa ct and the movin g pa rty is ent itled to jud gment as a

matte r of l aw. 7 35 ILCS 5/2-1 005( c) (W est 20 04). We review c ases invo lving sum mary judgmen t de novo

. Ragan v. Columbia Mutual Insuranc e Co. , 183 Ill. 2d 342, 349 (1998). “When con struing

the lang uage o f an insur

ance po licy , a court's prima ry objectiv e is to ascertain and give effe ct to the intentions of the parties as expressed by the words of the policy.” Central Illinois Lig

ht Co. v. Home Insurance Co. , 213 Ill. 2d 141, 153 (2004). “An insurance

contract *** is to be

construe d as a who le, givi ng eff ect to ev ery

provision

*** beca use it must be assumed that every

provision was intended to serve a purpose.” Central Illinois Lig ht Co. , 213 Ill. 2d at 153. “I f the words used in the policy are clear and unambiguous, they must be given their plain, ordinary , and popular meaning.” Central Illinois Lig ht Co. , 213 Ill. 2d at 153. Aargus raises two theories for it to qualify as an additional insured under BGK’s policies with Clarendon and Scottsdale. First, Aargus contends that the a dditional insured endorsement only requires a

n obligation to provide insurance from a valid written contrac t and that paragraph 16 satisfies that obligation. Second, if the certificates of insuranc e are considered alongside the Aargus/BGK Agr

eement, then an unambiguous intent for covera ge is shown. Clarendon and Scottsdal e maintai

n that par agrap h 16 of the

Aargu s/BGK Ag

reemen t did not obl igate B GK to provide insurance coverag e for Aargus. Clarendon and Scottsdale f urther respond that the certificates of insurance do not satisfy the requirement of a valid written contract bec ause the certificates plainly

state that they do not confe r any rig hts under the policy without an endorsement from the insurer.1-06-2121

6

Aargus relies on Yoder v. Rock Island Ba nk , 47 Ill. App. 3d 486 (1977), for its position that the decision by the par ties “to leave open for future completion the details of additional insured coverage for Aa

rgus does not invalidate the contractual obliga tion to do so that was assumed by BG

K.” We find Aargus’ reliance on Yoder to be misplaced. Yoder

involved whether a letter from an attorney in a foreclosure case was an of fer subject to acceptance by specific performance by

the other side. Yoder , 47 Ill. App. 3d at 490. Here, no one is ar guing that the Aargus/BGK Agr eement is not a valid contract. Rather, the issue is whether the Aargus/BGK Agr

eement contained an obligation undertaken by BGK to provide insurance coverage for Aar

gus. We find the decision in Liberty Mutual Fire Insuranc e Co. v. St Paul Fire and Marine
Insurance Co. , 363 I ll. App. 3d 335 (2005 ), to be in structive . In that case , the Centr al Il linois Public Service Company (CI PS) and Dover Elevator Company (Dover) entered into two service contracts for Dover’s work to modernize and upg rade two elevators in a CI PS facility. Dover obtained a CGL insurance policy through Liberty

Mutual Fire Insuranc e Company (L iberty). An elevator accident occurred a t the CIPS facility

and a personal injury

lawsuit followed. Libe

rty filed a d eclara tory judgmen t action se eking a

determination tha

t it did not ha

ve to def end CI PS under Dover’s policies, and CI PS’ insurer, St. Paul Fire and Marine Insur ance Co. (St. Paul), filed a counterclaim requesting the trial cour t to find that Liberty

had a duty to defe

nd CIPS. On summary judgme

nt, the trial court ruled in favor of L iberty. Liberty Mutual Fire Insuranc e Co. , 363 Ill. App. 3d at 337-38. On appeal, St. Paul argued that CI PS was made an additional insured under Dover’s CGL1-06-2121

7

policy with Liberty. The a dditional insured endorsement in Liberty ’s policy amende d an insured to include “any pe

rson, organization, state or other political subdivision, trustee or estate for whom you have a

greed in writing to provide liability insurance.” Liberty

Mutual Fire Insuranc e Co. , 363 Ill. App. 3d at 341. St. Paul contended that the two service c ontracts between CIPS and Dover constituted a written agreeme nt, as defined in the additional insured endorsement. The insuranc e provisi on in both se rvice c ontract s stated, in relev ant part : “ ‘It is expressly

understood and agreed by and between the parties hereto that no Work of any kind is authorized nor shall any Work be begun under this Contract until the Contractor shall have provided and deliv ered to t

he Owne r satisfa ctory and acc eptable evidence of insurance which is in full compliance with the Insurance Specif

ications attached hereto and incorporated by reference herein.’ ” Liberty Mutual Fire Insuranc e Co. , 363 I ll. App. 3d at 341. The insurance specifications provided that “contra ctors such as Dover ‘will secure, maintain and provide evidence’ of ‘Comprehensive Ge neral Liability

insurance for all claims for personal injury, bodily

injury, including dea

th, and property da

mage which may

arise from the operations under this contract.’ ” Liberty Mutual Fire Insuranc e Co. , 363 I ll. App. 3d at 341. St. Paul asserted that this language shows that Dover obtained the CGL policy for CIPS’ benefit. The reviewing

court dis agree d and fou

nd that the

insuranc e provisi on only require d Dover t

o secure insurance to cover its own negligence. Liberty Mutual Fire Insuranc e Co. , 363 Ill. App.1-06-2121

8

3d at 342. The court went on to state that “there was no lang uage in the insurance provision or insurance specifications section that obligated Dove r to add CIPS as an additional insured on the CGL policy .” Liberty

Mutual Fire Insuranc e Co. , 363 Ill. App. 3d at 342. Similarly , under the additio nal insur ed endorsement in t

he instan t case, “ an insure d” is amended to include

those tha t the name d insured

is “oblig ated by

valid wri tten cont ract to provide such coverage.” T he only valid written contra ct between BGK and Aarg us is the Aargu s/BGK Ag

reemen t from June 2 002. Howe

ver, the langua ge of p aragr

aph 16 (“ All insurance that may

from time to time be required shall be obtained in such manner as the par ties hereto agree”) doe s not discuss any obligation under taken by either

BGK or Aargus to provide insurance. When interpreting the provisions of a contrac t, the court must ascertain and give effect to the intent of the parties; and the langua ge of the contract is the best indication of the parties' intent. Liberty

Mutual Fire Insuranc e Co. , 363 I ll. App. 3d at 341. “A

contract term is ambiguous if it can reasonably be interpreted in more than one way due to the indefiniteness of the language or due to it having a double or multiple meaning.” William Blair & Co., LLC v. FI Liquidation Corp. , 358 Ill. App. 3d 324, 334 (2005). “A contra ct is not ambiguous, however, if a court can ascertain its meaning fr om the general contract lang uage.” William Bla

ir , 358 Ill. App. 3d at 334. “[T]he mere fact that the parties disagree as to the meaning of a term does not make that term ambiguous.” William Bla ir , 358 Ill. App. 3d at 334. We disagree with Aargus’ a ssertion that paragraph 16 crea tes an obligation for insurance coverage to satisfy

the requirements under the additional insured endorsement. Rather , we conclude that paragraph 16 lea ves the insurance obligations of both contracting parties1-06-2121

9

undecided. As in Liberty Mutual , paragraph 16 does not indicate what insura nce is required by either party

and we decline to read parag raph 16 to create any

coverage obligations. Ba sed on the language of para

graph 16, we find that Aarg us was not an additional insured under BGK’s policies with Clarendon and Scottsdale. Aargus also contends that the certifica tes of insurance along with the Aarg us/BGK Agree ment show B GK’s inte

nt to provi de additi onal insur ed cove rage t o Aarg us. According to Aargus, “when the certific ates are considered, it is clear that BG K unambiguously intende d by the Aargus/BGK Contract to assume an oblig ation to provide additional insured coverage for Aargus.” Clarendon and Scottsdale respond that the c ertificates of insurance do not satisfy the additional insured endorsement because a cer tificate of insurance does not constitute a contract between the parties. See Lezak & L evy Wholesale Mea ts, Inc. v. I llinois Employers I nsurance Co. of Wausau , 121 I ll. App. 3d 954, 957 ( 1984). I

n reply, Aarg

us resta tes its posi

tion, in tha

t, it is not claiming that the certificates of insurance qua lify as a valid written c ontract under the additional insured endorsement, but instead, the certificates serve as “documentary

confirmation that BGK agreed to provide c overage for Aarg us.” Aargu s cites William Blair & Co., LL C v. FI L iquidation Corp. , 358 Ill. App. 3d 324, 339 (2005), as a basis for this court to consider the certifica tes “as extrinsic evidence *** on a provisional basis for the limited purpose of testing whether [the] contract is ambiguous.” Aa rgus does not assert that the Aargus/BGK Ag reement is ambiguous or that the certificates va ry the contract terms, but instead the certificates confirm that B GK agreed to provide cover age for Aargu s.1-06-2121

10

However, the problem with Aargus’ a rgument is that the plain language of paragraph 16 does not require BGK to add Aarg us as an additional insured under its policies. In the a bsence of ambiguity, a c ourt must construe a contract according to its own language, not according to the parties' subjective constructions. William Bla ir , 358 Ill. App. 3d at 335. The existence of the certificates does not change the fact that the Aargus/BGK Ag reement does not discuss insurance requirements for either party . Paragraph 16 left insurance r equirements open for future agreements and we will not look to documents outside of the contrac t to create an obligation. As previously pointed out, Aarg us does not qualify as an a dditional insured under the Clarendon policy and the ce

rtificates do not change that holding. Additionally , since the certificates of insurance are not contracts (see Lezak & L evy Wholesale Mea ts, Inc. , 121 Ill. App. 3d at 957), they are not s ufficie nt to prove

that BGK

had an ob ligation

under a v alid writt

en contr act to provide c overag e for Aa

rgus. Aargus further contends that the trial cour t’s reasoning in its ruling against Clarendon a nd in favor of 69 West and Cook, which is the subject of a separate appe al in case No. 1-06-1864, should be extended to Aargus. In tha t portion of the order, the trial court read the Aar gus/BGK Agreement and the 69 West/Aargus Contra ct together to “satisfy

the written contract requirement of the Cla rendon a nd Scottsda

le policie s.” Aar

gus’ re liance on the tria

l court’s order a s to those defendants is not persuasive. “Under Illinois law, the decisions of circuit courts have no precedential value.” Delgad o v. Bo ard of E lecti on Co mmis sion ers of t he Cit y of Chica go , 224 Ill. 2d 481, 488 (2007). As an alternative argument, Aar gus asserts that a genuine issue of mate rial fact exists that1-06-2121

11

makes summary judg

ment inappropriate. Aargus contends that “the c ertificates, if viewed in the light most favorable to the non-movant, evince an ag reement between Aarg

us and BGK that Aargus should be added as an additional insured unde r Clarendon’s policy.” “The pur pose of su

mmary judgmen t is not to tr

y a question o f fact, but rathe r to determine whether a genuine issue of material fact exists.” Adams v. Northern Illinois Gas Co. , 211 Ill. 2d 32, 42-43 (2004). “A triable issue pr ecluding summary

judgment exists where the material facts are disputed, or where, the material facts being undisputed, reasonable persons might draw different inferenc es from the undisputed facts.” Adams , 211 Ill. 2d at 43. “Summary judgment should not be granted unless the right of the moving party is c lear and free from doubt.” Michigan Avenue National Bank v. County of Cook , 191 Ill. 2d 493, 517 (2000). “However, although the nonmoving par ty in a summary

judgment motion is not required to prove his or her case, th e nonmova

nt must none

theless present a

factua l basis whi ch would a

rguab ly entitle that party to a judg ment.” Michigan Avenue National Bank , 191 Ill. 2d at 517-18. Aargus tries to avoid summary judgment by a

rguing that summary

judgment was premature. In its view, there is a question of material fact as to whether Aarg us and BGK executed in writing an agreeme nt about insurance. Aargus asserts that it should have had the opportunity to determine whethe r such agreement exists. We are not persuaded. It seems clear that Aa

rgus itself should know if it entered into a subsequent written agreement with BGK. The f act that no such agreement was pr oduced should not preclude summary judgme

nt. Here, the additional insured endorsement confers c overage on those that the named insured is obligated by valid written contract to provide such coverag e. The Aargus/BGK1-06-2121

12

Agreement is the only

written contract between the parties and doe s not obligate BGK to provide additional insured coverage for Aa rgus. The Aargus/BG

K Agreement left the insurance requirements open to a future agr eement. This provision is unambiguous. There is no indication that a subsequent written agreement about insura nce exists. Aargus’ reliance on the ce rtificates of insurance to create a question of mater ial fact is misplaced because the certifica tes are not
contracts and ca

nnot alte r the fa ct that the written c ontract

does not c ontain an

obligat ion to provide for additional insured coverage . There is no question of material fact and summary judgmen t in favor of Clare ndon and Sc ottsdale was corr ect. Based on the foregoing

reasons, we affirm the decision of the circ uit court of Cook
Co un ty. Affirmed.
CAHIL L and R. GORDON, JJ., concur.