ILLINOIS OFFICIAL REPORTS

Appellate Court

Owners Insurance Co. v. Seamless Gutter Corp., 2011 IL App (1st) 082924-B

Appellate Court

Caption

OWNERS INSURANCE COMPANY and AUTO-OWNERS

INSURANCE COMPANY, Plaintiffs-Appellants, v. SEAMLESS

GUTTER CORPORATION, an Illinois Corporation, D.R. HORTON,

INC., an Illinois Corporation, Doing Business as Cambridge Homes,

ERIC GULBRANDSEN and AMY GULBRANDSEN, Defendants

(Westfield Homes of Illinois, Inc., a Dissolved Illinois Corporation, and

DRH Cambridge Homes, Inc., an IllinoisCorporation, DoingBusiness as

Cambridge Homes, Defendants-Appellees).

 District & No. First District, First Division

Docket No. 1-08-2924

Rule 23 Order filed

Rule 23 Order

withdrawn

Opinion filed

September 6, 2011

November 3, 2011

November 14, 2011

Held

(Note: This syllabus

constitutes no part of

the opinion of the court

but has been prepared

by the Reporter of

Decisions for the

convenience of the

reader.)

In plaintiff insurers’ action seeking a declaratoryjudgment that theywere

not obligated to provide coverage for defendant general contractor and its

successor under the comprehensive general liability policy and the

umbrella policy issued to defendant subcontractor naming the general

contractor as an additional insured in an underlying action for the injuries

suffered by an employee of the general contractor, the order granting

summary judgment for defendants and denying plaintiffs’ motion for

summary judgment was reversed and summary judgment was entered for

plaintiffs, since the construction contract did not require the subcontractor

to provide umbrella coverage, the employee exclusion in the

comprehensive general liabilitypolicyapplied to exclude coverage for the

injured plaintiff in the underlying action, the estoppel doctrine did not
apply where plaintiffs did not breach a duty to defend, and plaintiffs

did not waive any coverage defenses not set forth in their letters

denying coverage.

Decision Under 

Review

Appeal from the Circuit Court of Cook County, No. 07-CH-01603; the

Hon. Martin S. Agran, Judge, presiding.

Judgment Reversed.

Counsel on

Appeal

Robert Marc Chemers, David S. Osborne, and Sara J. Brundage, all of

Pretzel & Stouffer, Chtrd., of Chicago, for appellants.

John D. Hackett, Benjamin B. Belcher, and Julie A. Teuscher, all of

Cassidy Schade LLP, of Chicago, for appellees.

Panel PRESIDING JUSTICE HALL delivered the judgment of the court, with

opinion.

Justices Lampkin and Rochford concurred in the judgment and opinion.

OPINION

¶ 1 The plaintiffs, Owners Insurance Company (Owners) and Auto-Owners Insurance

Company (Auto-Owners), filed a complaint for declaratory judgment against Seamless

Gutter Corporation (Seamless), Westfield Homes of Illinois, Inc. (Westfield), DRH

Cambridge Homes, Inc. (Cambridge), D.R. Horton, Inc., and Eric and Amy Gulbrandsen,

seeking a declaration that defendants Westfield and Cambridge were not entitled to coverage

under the policies of insurance issued to Seamless by the plaintiffs. The circuit court denied

the plaintiffs’ motion for summary judgment and entered summary judgment in favor of the

defendants. The plaintiffs appealed. 1

¶ 2 On November 15, 2010, this court entered an order pursuant to Illinois Supreme Court

Rule 23 (eff. Jan. 13, 2011) affirming in part and reversing in part the grant of summary

judgment to the defendants finding that there were genuine issues of material fact. Owners

Insurance Co. v. Seamless Gutter Corp., No. 1-08-2924 (2010) (unpublished order under

Supreme Court Rule 23). The plaintiffs filed a petition for leave to appeal.

Seamless, D.H. Horton, Inc., and the Gulbrandsens are not parties to this appeal.

1

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¶ 3 On March 30, 2011, our supreme court denied leave to appeal but issued a supervisory

order directing this court to vacate our order and reconsider our determination that Owners

owed a duty to Cambridge, in light of Pekin Insurance Co. v. Wilson, 237 Ill. 2d 446 (2010).

Owners Insurance Co. v. Seamless Gutter Corp., No. 111754 (Ill. Mar. 30, 2011) (table). 

In accordance with the supervisory order, we vacate our judgment in Owners InsuranceCo.,

and upon reconsideration, we now determine that the insurers did not have a duty to defend

Cambridge.

¶ 4 As our prior judgment was vacated, we revisited the issue of whether the plaintiffs had

a duty to defend Westfield. See Flavell v. Ripley, 247 Ill. App. 3d 842, 847 (1993) (“[w]here

a judgment order is vacated, the effect is to leave the pleadings as if no judgment were ever

entered”); but see People v. Coulter, 345 Ill. App. 3d 81 (2003) (where supreme court

vacated appellate court’s prior opinion and remanded for reconsideration in light of a recent

decision of the court, the appellate court would not consider portions of that decision not

related to the case before the appellate court).

¶ 5 We now determine that Westfield was not an insured under either of the plaintiffs’

policies, and therefore, they had no duty to defend Westfield. The pertinent facts are taken

from the pleadings and are set forth below.

¶ 6 I. BACKGROUND

¶ 7 A. The Construction Contract

¶ 8 Westfield was the general contractor and Seamless was a subcontractor on a construction

project site in Algonquin, Illinois (the Algonquin site). The contract between Seamless and

Westfield contained the following provisions relating to insurance:

“Subcontractor shall *** pay for and maintain insurance for all coverages and

amounts of coverage not less than those set forth below *** and shall provide directly

from Subcontractor’s insurance carrier to Contractor at Contractor’s office certificates

issued by insurance companies satisfactory to Contractor to evidence such coverage ***.

*** In the event of any failure by Subcontractor to comply with the provisions of this

Paragraph 27.1. Contractor may*** purchase such insurance at Subcontractor’s expense,

provided that Contractor shall have no obligation to do so and if Contractor shall do so,

Subcontractor shall not be relieved of or excused from the obligation to obtain and

maintain such insurance amounts and coverages. Subcontractor shall provide to

Contractor a certified copy of any and all applicable insurance policies and/or

endorsements within fifteen (15) days of any request of Contractor.

The non-procurement of such insurance by the Subcontractor, or the non-delivery of

such certificates or policies to Contractor, whether inadvertently or otherwise, shall not

constitute waiver of subcontractor’s obligations hereunder.

* * *

27.2 SCHEDULE OF INSURANCE COVERAGES

* * *

27.2.3Commercial Liability Insurance $2,000,000 general aggregate, and $2,000,000

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completed operations aggregate, and $2,000,000 each occurrence for bodily injuries,

death and property damage resulting from any one occurrence, including the following

coverages and conditions:

1. Shall name Contractor, Owner and Lender, if any, and any other parties

designated by the Contractor as Additional Insureds as their interests may appear

pursuant to ISO Additional Insured Endorsement CG 2010 (or the most recent form

of said endorsement, if applicable), including but not limited to the following

entities:

Westfield Homes of Illinois, Inc. (Sample Certificate Attached)

Westfield Development Corporation of Illinois

Westfield Homes USA

A copy of such Additional Insured endorsement shall be attached to the

Certificate of Insurance, and the endorsement number or designation shall be entered

on the Certificate.”

¶ 9 On September 4, 2001, a certificate of insurance was issued by Seamless’s insurance

agent, listing Seamless as the insured and Westfield as the certificate holder. There was no

reference to Westfield as an additional insured on the certificate. The certificate provided as

follows:

“THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY

AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS

CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE

AFFORDED BY THE POLICIES BELOW.” 

¶ 10 In 2001, Westfield was dissolved, and Cambridge acquired Westfield’s assets, including

the Algonquin site. Cambridge was added as an additional insured pursuant to an

endorsement to the Owners policy.

¶ 11 B. The Insurance Policies

¶ 12 1. Owners Policy

¶ 13 Owners issued a commercial general liability (CGL) policy of insurance to Seamless as

the named insured for the effective policy period of July 1, 2001, to July 1, 2002. The CGL

policy provided in pertinent part as follows:

“1. Insuring Agreement

a. We 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.

We will have the right and duty to defend any ‘suit’ seeking those damages.”

The Owners policy contained the following exclusion to the above coverage:

“This insurance does not apply to:

* * *

e. ‘Bodily injury’ to:

(1) An employee of the insured arising out of and in the course of employment

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by the insured; or

(2) The spouse, child, parent, brother or sister of that employee as a consequence

of (1) above.

This exclusion applies:

(1) Whether the insured may be liable as an employer or in any other capacity;

and

(2) To any obligation to share damages with or repay someone else who must pay

damages because of the injury.

This exclusion does not apply to liability assumed by the insured under an ‘insured

contract.’ ”

¶ 14 2. Auto-Owners Policy

¶ 15 Auto-Owners issued a commercial umbrella insurance policy to Seamless. In addition

to Seamless, the named insured, the following were also insureds under the policy:

“Any person, organization, trustee or estate with respect to which you are obligated

by virtue of a written contract to provide insurance such as is afforded by this policy, but

only with respect to operations by or on behalf of, or to facilities of or used by you.”

The Auto-Owners policy contained the following exclusion:

“This policy does not apply to:

C. 1. Bodily Injury or personal injury of an employee of the insured arising out

of and in the course of employment by the insured; or

2. A loss or claim by the spouse, child, parent, brother or sister of the employee

of the insured as a consequence of C.1.

This exclusion applies:

1. whether the insured may be liable as an employer or in any other capacity; and

2. to any obligation to share damages with or repay someone else who must pay

damages because of the injury.

This exclusion does not apply to:

1. liability assumed by the insured under an insured contract; or

2. bodily injury with respect to which insurance is provided such insured by

scheduled underlying insurance.”

¶ 16 C. The Underlying Complaints

¶ 17 On November 5, 2004, Eric and Amy Gulbrandsen filed a personal injury suit against

Westfield and Seamless. The complaint alleged that, on January 21, 2002, Mr. Gulbrandsen

was injured when he fell at the Algonquin site. The complaint contained no allegation that

Mr. Gulbrandsen was an employee of either Seamless or Westfield. However, in an

affirmative defense, Seamless alleged that Mr. Gulbrandsen was the job

superintendent/foreman for Westfield and was in the course of his employment on January

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21, 2002.

¶ 18 Seamless filed a third-party complaint against Cambridge, seeking contribution in the

event it was found liable to the Gulbrandsens. Seamless alleged that Cambridge had

purchased the assets and liabilities of Westfield, including the Algonquin site, and was in

charge of the site at the time of Mr. Gulbrandsen’s fall.

¶ 19 Westfield and Cambridge tendered their defenses to Owners, whichOwners declined. On

January 24, 2007, the Gulbrandsen suit was settled.

¶ 20 D. Summary Judgment

¶ 21 On January 17, 2007, the plaintiffs filed their declaratory judgment complaint. In their

amended complaint, the insurers sought a declaration that Westfield’s rights, if any, were

determined bythe terms and conditions of the Owners policy, not the certificate of insurance.

The plaintiffs also sought a declaration that they had no duty to defend Cambridge under the

policy exclusion for bodily injuries suffered by an employee.

¶ 22 The plaintiffs filed a motion for summary judgment, alleging that the certificate of

insurance did not establish that Westfield was an additional insured on the Owners policy.

They further alleged that the Owners policy exclusions operated to deny coverage to

Cambridge.

¶ 23 In response to the motion for summary judgment, the defendants maintained that the

plaintiffs were estopped from denying coverage because their declaratory judgment

complaint was not filed timely. The defendants further maintained that the plaintiffs had

waived the right to contest Westfield’s status as an additional insured because, prior to the

filing of the complaint, Owners had never asserted that Westfield was not an additional

insured, pointing out that Owners had denied coverage to Westfield based on an exclusion,

applicable to additional insureds. In the alternative, the defendants maintained that therewere

questions of fact as to whetherthe certificate of insurance conveyed additional-insured status

on Westfield.

¶ 24 The defendants also maintained that Westfield was an insured under Auto-Owners’

umbrella policyunder the “written contract” provision. Because the umbrella policyrequired

Auto-Owners to provide an insured with a defense in the event there was no primary

coverage for an incident covered under the policy, the defendants argued that Auto-Owners

was required to defend Westfield in the Gulbrandsen suit.

¶ 25 In response, the plaintiffs disputed the untimeliness of their complaint and maintained

that they were not required to raise all of their policy defenses in their denial of coverage

letters to the defendants. They denied that a question of fact existed as to whether the

certificate of insurance conveyed additional-insured status on Westfield. The plaintiffs

pointed out that the contract between Seamless and Westfield required Seamless to provide

primary, noncontributory insurance coverage, not umbrella coverage.

¶ 26 On September 23, 2008, the circuit court entered the following order:

“(1) Plaintiff’s [sic] motion for Summary Judgment is denied; (2) the Court finds, on

its own ruling, that Plaintiffs Owners and Auto-Owners have a duty to defend and

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indemnifyDefendants Westfield and Cambridge; and that Plaintiff insurers are estopped

from raising coverage defenses; (3) that this is a final judgment for purposes of Supreme

Court Rule 304(a) and the case is hereby terminated.”

This appeal followed.

¶ 27 II. ANALYSIS

¶ 28 A. Standard of Review

¶ 29 The de novo standard of review applies to our review of a circuit court’s grant of

summary judgment. Luise, Inc. v. Village of Skokie, 335 Ill. App. 3d 672, 678 (2002). The

construction of the provisions of an insurance policy presents a question of law to which the

de novo standard of review is also applicable. See Hobbs v. Hartford Insurance Co. of the

Midwest, 214 Ill. 2d 11, 17 (2005).

¶ 30 The principles guiding our review of the grant of summary judgment are well settled.

“Summary judgment is proper if, and only if, the pleadings, depositions, admissions,

affidavits and other relevant matters on file show that there is no genuine issue of material

fact and that the movant is entitled to judgment as a matter of law.” Illinois Farmers

Insurance Co. v. Hall, 363 Ill. App. 3d 989, 993 (2006). The court will uphold the grant of

summary judgment only when the right of the moving party is free from doubt. Hall, 363 Ill.

App. 3d at 993.

¶ 31 B. Discussion

¶ 32 1. Duty to Defend Westfield

¶ 33 Two requirements must be satisfied before the duty to defend arises: (1) the action must

be brought against an insured, and (2) the allegations of the complaint must disclose the

potential for policy coverage. Federal Insurance Co. v. Economy Fire & Casualty Co., 189

Ill. App. 3d 732, 735 (1989). Where the allegations of the complaint reveal that the action

was not brought against an insured and there was no potential coverage under the policy,

there is no duty to defend the underlying action. Federal Insurance Co., 189 Ill. App. 3d at

735. Thus, the threshold inquiry is whether Westfield was an insured under the plaintiffs’

policies.

¶ 34 Our court has recognized two lines of cases addressing the issue of coverage where there

is a certificate of insurance separate from the policy itself. Where the certificate did not refer

to the policy and the terms of the certificate conflicted with the terms of the policy, the

certificate language governed the extent and terms of the coverage. Where the certificate

referred to the policy and expressly disclaimed any coverage other than that contained in the

policy itself, the policy governed the extent and terms of the coverage. United Stationers

Supply Co. v. Zurich American Insurance Co., 386 Ill. App. 3d 88, 102 (2008) (cases cited

therein).

¶ 35 In United Stationers Supply Co., the plaintiff was issued a certificate of insurance

containing a disclaimer that the coverage was governed by the policy itself. The construction

contract required that the plaintiff be named as an additional insured on different types of

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insurance, but not on CGL insurance. The indemnification provision of the contract did not

require the purchase of insurance for the plaintiff. United Stationers Supply Co., 386 Ill. App.

3d at 104. The court analyzed the decisions in West American Insurance Co. v. J.R.

Construction Co., 334 Ill. App. 3d 75 (2002), American Country Insurance Co. v. Kraemer

Brothers, Inc., 298 Ill. App. 3d 805 (1998), and Pekin Insurance Co. v American Country

Insurance Co., 213 Ill. App. 3d 543 (1991).

¶ 36 In Pekin Insurance Co., the contractor was denied additional-insured status where the

certificate contained the disclaimer, requiring the contractor to look to the terms of the policy

to determine coverage. As there was no coverage under the policy, there was no duty to

defend. Pekin Insurance Co., 213 Ill. App. 3d at 547-48. In Kraemer Brothers, Inc., the

certificate of insurance contained a disclaimer and, therefore, the contractor was bound by

the exclusions and conditions in the policy. Kraemer Brothers, Inc., 298 Ill. App. 3d at 811.

¶ 37 In J.R. Construction Co., even though the certificate of insurance contained the

disclaimer, the reviewing court found that, when considered together, the policy and the

certificate provided coverage to the contractor. The certificate listed the contractor as an

additional insured; the subcontractor never denied that there was an oral agreement to add

J.R. Construction as an additional insured; and a number of documents prepared by the

insurer confirmed that J.R. Construction was an additional insured under the policy. J.R.

Construction Co., 334 Ill. App. 3d at 84-85.

¶ 38 The court in United Stationers Supply Co. chose to follow the line of cases holding that,

where the certificate refers to the policy and expressly disclaims any coverage other than that

contained in the policy, the policy governs the extent and the terms of the coverage. Finding

J.R. Construction Co. distinguishable, the court concluded as a matter of law that United

Stationers was not an additional insured under the CGL policy based on the following:

“(1) United Stationers is not specifically listed as an additional insured in the policy; (2)

the construction contract requiringD.C. Taylor to purchase insurance on behalf of United

Stationers did not specifically require the purchase of a commercial general liability

policy; (3) there is no evidence of intent by the parties that United Stationers was to be

added as an additional insured; and (4) the disclaimer language in the certificate of

insurance put United Stationers on notice that the CGL policy language governed

coverage of additional insureds.” United Stationers Supply Co., 386 Ill. App. 3d at 105.

¶ 39 We have reconsidered the determination in our prior order that a genuine material

question of fact existed as to Westfield’s status as an additional insured under the Owners

policy and conclude that our reliance on J.R. Construction Co. was misplaced. Like J.R.

Construction Co., there was an agreement to name the contractor as an additional insured.

In both cases, the certificate contained the disclaimer, but, whereas in J.R. Construction Co.,

the contractor was listed as an additional insured, in this case, Westfield was not listed as an

additional insured in the certificate. A prior certificate issued to Westfield for a prior policy

period did list it as an additional insured. The fact that the certificate at issue in this case did

not refer to Westfield as an additional insured should have alerted Westfield that there was

some question as to its additional-insured status, requiring it to review the policy and bring

the discrepancy to Seamless’ or Owners’ attention. There was no evidence that Westfield

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ever requested to view the CGL policy to verify its status as an additional insured. In light

of all the evidence, the fact that Owners did not question Westfield’s status as an insured in

refusing the tender of its defense of the Gulbrandsen suit did not raise a genuine issue of

material fact so as to bar summary judgment.

¶ 40 We conclude that, as a matter of law, Westfield was not an additional insured under the

Owners policy. Therefore, Owners had no duty to defend Westfield.

¶ 41 The defendants maintain that Westfield was an insured under the written contract

provision of Auto-Owners policyand thereforeAuto-Owners had a dutyto defend Westfield.

We disagree. According to the written contract provision, Westfield would be an insured

under the Auto-Owners policy if the construction contract required umbrella coverage. The

construction contract did not require Seamless to provide umbrella coverage. As Westfield

was not an insured under the written contract provision of the policy, Auto-Owners did not

have a duty to defend Westfield.

¶ 42 2. Duty to Defend Cambridge

¶ 43 The plaintiffs contend that there was no duty to defend Cambridge in the third-party suit

brought against it by Seamless because the policies excluded coverage for bodily injury

suffered by an insured’s employee. As Mr. Gulbrandsen was Cambridge’s employee, the

plaintiffs maintain that there was no coverage for Cambridge under the policies.

¶ 44 To determine whether an insurer has a duty to defend its insured from a lawsuit, a court

compares the facts alleged in the underlying complaint to the relevant portions of the

insurance policy. Valley Forge Insurance Co. v. Swiderski Electronics, Inc., 223 Ill. 2d 352,

363 (2006). The insurer is obligated to defend the insured if the complaint alleges facts

within or potentially within the policy’s coverage. Valley Forge Insurance Co., 223 Ill. 2d

at 363. The insurer must defend the insured even if the allegations are false or groundless and

even if only one theory of recovery is covered under the policy. Valley Forge Insurance Co.,

223 Ill. 2d at 363. Therefore, we must determine whetherthe allegations of Seamless’s thirdparty complaint disclose the potential of policy coverage. Federal Insurance Co., 189 Ill.

App. 3d at 735.

¶ 45 In order for the employee exclusion under the Owners policy to apply, Mr. Gulbrandsen

must have been both an employee of Cambridge and in the course of his employment with

Cambridge at the time of his accident. In its third-party complaint for contribution against

Cambridge, Seamless alleged that in October 2001, Westfield and its assets, including the

Algonquin site, had been purchased by Cambridge. At the time of Mr. Gulbrandsen’s

accident, Cambridge was the owner and the general contractor for the Algonquin

construction site and was Mr. Gulbrandsen’s employer. The third-party complaint repeated

the allegations from the Gulbrandsen complaint that Mr. Gulbrandsenwasleaving a dwelling

on the Algonquin construction site when he slipped and fell on an unnatural accumulation

of ice. It further alleged that Cambridge breached its duty to maintain and supervise its

property and to exercise due care and caution for the safety of Mr. Gulbrandsen, setting forth

various acts alleged to constitute negligence on the part of Cambridge toward Mr.

Gulbrandsen.

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¶ 46 In our prior order, we determined that, in the absence of an allegation that Mr.

Gulbrandsen was in the course of his employment at the time of his accident, there was a

potential for coverage for Cambridge under the Owners policy. Therefore, Owners owed a

duty to defend Cambridge in the Seamless third-party suit. Owners Insurance Co., slip order

at 18. It is this finding that the supreme court ordered us to reconsider in light of Wilson.

¶ 47 In Wilson, the court pointed out that the rule that courts look solely to the allegations of

the complaint in determining whether there is a duty to defend is a “general rule.” Wilson,

237 Ill. 2d at 458. The court noted that in American Economy Insurance Co. v. Holabird &

Root, 382 Ill. App. 3d 1017 (2008), the appellate court considered the allegations of the

complaint, the third-party complaint and the relevant language of the insurance policy in

determining that the insurer owed a duty to defend. Wilson, 237 Ill. 2d at 460. The supreme

court quoted the following language from Holabird & Root:

“ ‘[C]onsideration of a third-partycomplaint in determining a duty to defend is in line

with the general rule that a trial court may consider evidence beyond the underlying

complaint if in doing so the trial court does not determine an issue critical to the

underlying action [citation]. *** The trial court should be able to consider all the

relevant facts contained in the pleadings, including a third-party complaint, to determine

whether there is a duty to defend. After all, the trial court need not wear judicial blinders

and may look beyond the complaint at other evidence appropriate to a motion for

summaryjudgment. [Citations.]’ (Emphasis added.)” (Internal quotation marks omitted.)

Wilson, 237 Ill. 2d at 460-61 (quoting Holabird & Root, 382 Ill. App. 3d at 1024, 1031-

32).

See Fidelity &Casualty Co. of New York v. EnvirodyneEngineers, Inc., 122 Ill. App. 3d 301

(1983); in accord Pekin Insurance Co. v. Pulte Home Corp., 404 Ill. App. 3d 336 (2010). In

a summary judgment proceeding, when determining whether a duty to defend exists, the

court is not limited to considering the allegations of the complaint but may consider evidence

usually considered in ruling on a motion for summary judgment, so long as such evidence

does not tend to determine an issue critical to the determination of the underlying law suit.

See Wilson, 237 Ill. 2d at 462 (relying on the considerations set forth in Holabird &Root and

Envirodyne Engineers, Inc.).

¶ 48 In our prior order, we noted that “[w]hile the Seamless third-party complaint alleged that

Mr. Gulbrandsen was Cambridge’s employee at the time he fell, there was no allegation that

Mr. Gulbrandsen was in the course of his employment at that time.” Owners Insurance Co.,

slip order at 18. Cambridge’s complaint against Seamless did allege that Mr. Gulbrandsen

was injured while he was employed by Cambridge and performing work at the Algonquin

site. We declined to consider those allegations because that complaint was not a part of the

record on appeal. Owners Insurance Co., slip order at 18 (citing Carroll v. Faust, 311 Ill.

App. 3d 679, 725 N.E.2d 764 (2000)). In reaching our determination that there was potential

for coverage for Cambridge under the Owners policy, we noted, but did not consider, that

“[i]n its answer and affirmative defenses, Seamless alleged that Mr. Gulbrandsen was in the

course of his employment with Cambridge.” Owners Insurance Co., slip order at 18 n. 5.

¶ 49 In ruling on a summaryjudgment motion, the court considers “the pleadings, depositions,

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admissions, affidavits and other relevant matters on file.” Hall, 363 Ill. App. 3d at 993; 735

ILCS 5/2-1005(c) (West 2006). In its first affirmative defense to the Gulbrandsens’

complaint, Seamless alleged that “[o]n January 21, 2002, the plaintiff, Eric Gulbrandsen was

in the course of his employment with the Co-defendant, Westfield Homes, and was

supervising the construction of the multi-family being erected in Algonquin, Illinois.”

Seamless’s amended answer and affirmative defenses to the Gulbrandsen’s complaint were

included in an exhibit to the plaintiffs’ amended complaint for declaratory judgment, and

therefore, properly considered by a court in ruling on summary judgment. The evidence that

Mr. Gulbrandsen was in the course of his employment when the accident occurred did not

determine the outcome of the underlying case. See Holabird &Root, 382 Ill. App. 3d at 1032

(allegation that subcontractor installed the lights did not determine an issue critical to the

underlying lawsuit or the ultimate finding of negligence).

¶ 50 As we previously observed, our review of the grant of summary judgment is de novo. We

consider the entire record in determining whethersummary judgment was properly granted.

Makowski v. City of Naperville, 249 Ill. App. 3d 110, 115 (1993). We are aware that any

doubt as to the duty to defend must be resolved in favor of the insured. Pulte Home Corp.,

404 Ill. App. 3d at 340. Considering all of the evidence in the record pertinent to ruling on

a motion for summary judgment, we find no evidence raising a genuine question of fact as

to whetherMr. Gulbrandsen was in the course of his employment with Cambridge at the time

of his accident. As the employee exclusion in the Owners policy applied, there was no

potential for coverage for Cambridge under the Owners policy. Therefore, the plaintiffs had

no duty to defend Cambridge in the Seamless third-party suit.

¶ 51 3. Estoppel

¶ 52 The defendants maintain that the declaratory judgment suit was not timely filed.

Therefore, the plaintiffs were estopped from raising any policy defenses.

¶ 53 In order to avoid the application of the estoppel doctrine, an insurer that takes the

position that the policy does not provide coverage may not simply refuse to defend the

insured but must either (1) defend the suit under a reservation of rights, or (2) seek a

declaratory judgment that there is no coverage. Employers Insurance of Wausau v. Ehlco

Liquidating Trust, 186 Ill. 2d 127, 150 (1999). However, the “estoppel doctrine applies only

where [the] insurer has breached its duty to defend.” Employers Insurance of Wausau, 186

Ill. 2d at 151.

¶ 54 In view of our determination that the plaintiffs had no duty to defend, the estoppel

doctrine does not apply to bar the policy defenses.

¶ 55 4. Waiver

¶ 56 Finally, the defendants maintain that the plaintiffs waived their right to raise any policy

defenses that were not raised in their denial of coverage.

¶ 57 This court disagreed with the suggestion in Coulter v. American Employers’ Insurance

Co., 333 Ill. App. 631 (1948), that in any case an insurer refused coverage on one ground,

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it waived the right, or was estopped, to deny coverage on another ground. Jones v. Universal

Casualty Co., 257 Ill. App. 3d 842, 852 (1994). Instead, we found the better rule to be “that

insureds must show that they relied to their detriment upon the insurer’s failure to assert a

particular defense.” Jones, 257 Ill. App. 3d at 852. For example, an insurer should not be

allowed to assert a blanket denial of coverage and then assert the insured’s failure to provide

proof of loss, since the law does not require the insured to perform what appeared to be a

useless act. Jones, 257 Ill. App. 3d at 852.

¶ 58 The evidence does not establish that the defendants were prejudiced bythe failure to raise

the policy defenses not raised in their denial of coverage letters. The defendants suggest that,

because they were unaware that Westfield’s status as an additional insured would be

challenged, they had no opportunity to obtain evidence to establish that Westfield was an

additional insured. However, the defendants do not indicate what evidence beside the

Owners policy, the certificate of insurance and the construction contract, all of which they

had access to, they could have presented. Moreover, the defendants were not prevented from

producing evidence in this proceeding to establish that Westfield was an additional insured.

¶ 59 We conclude that the plaintiffs did not waive any coverage defenses not set forth in their

denial of coverage letters.

¶ 60 III. CONCLUSION

¶ 61 For all of the foregoing reasons, we reverse the order granting summary judgment to the

defendants and denying the plaintiffs’ motion for summary judgment. Pursuant to Illinois

Supreme Court Rule 366(a)(5) (eff. Feb. 1, 1994), we enter summary judgment for the

plaintiffs on their complaint for declaratory judgment. Deciding this case as we do, we need

not address whether the circuit court erred in granting summary judgment to the defendants

in the absence of their request for such relief.

¶ 62 Reversed.

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