In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 19-3315

SCOTTSDALE INSURANCE COMPANY,

Plaintiff-Appellee,

v.

COLUMBIA INSURANCE GROUP, INC.,

Defendant-Appellant.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 1:18-CV-03657 — John Z. Lee, Judge.

____________________

ARGUED MAY 28, 2020 — DECIDED AUGUST 26, 2020

____________________

Before MANION, KANNE, and WOOD Circuit Judges.

MANION, Circuit Judge. While performing HVAC work at a 

construction site in Chicago, Eduardo Guzman fell approximately 22 feet through an unguarded opening in the second 

floor, sustaining serious injuries. Guzman sued Rockwell 

Properties (the owner), Prairie Management & Development 

(the manager), and others in state court.
2 No. 19-3315

The issue before us is whether Columbia Insurance Group 

(Guzman’s employers’ insurer) owes a duty to defend Rockwell and Prairie. Scottsdale Insurance Company (Rockwell’s 

insurer) wants Columbia to take over the defense. The district 

court granted Scottsdale judgment on the pleadings, declaring Columbia has a duty to defend Rockwell and Prairie, and 

ordering Columbia to reimburse prior defense costs. We affirm.

I. Background

We review a ruling on a Rule 12(c) motion for judgment 

on the pleadings de novo and we construe the facts in the light 

most favorable to the nonmovant. Buchanan-Moore v. Cty. of 

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

A. Columbia insures TDH

TDH Mechanical provides heating, ventilation, and air 

conditioning services. It employed Eduardo Guzman.

TDH bought an insurance policy from Columbia Insurance Group to cover the period from April 12, 2016, to April 

12, 2017. The policy contains this “insuring agreement”:

We will pay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury” ... to which this insurance applies. We will have the right and duty to 

defend the insured against any “suit” seeking 

those damages ... .

The policy also includes an endorsement adding additional insureds under particular circumstances:
No. 19-3315 3

The following amends SECTION II—Liability, 

C. Who Is An Insured:

Who Is An Insured is amended to include as an 

insured any person or organization for whom 

you are performing operations when you and 

such person or organization have agreed in 

writing in a contract or agreement that such person or organization be added as an additional 

insured on your policy. Such person or organization is an additional insured only with respect 

to liability arising out of your ongoing operations performed for that insured. Liability for 

“bodily injury” or “property damage” caused, 

in whole, or in part, by “your work” arising out 

of your ongoing operations performed for that 

additional insured and included in the “products-completed operations hazard”.

B. TDH contracts with Prairie and Rockwell

Rockwell Properties owned a piece of property under construction in Chicago. Prairie Management & Development 

was the construction manager at this property. In February 

2017, Prairie and Rockwell contracted with TDH to provide 

HVAC services at this property. That contract contains two 

particularly relevant paragraphs:

14. Contractor [TDH] hereby assumes responsibility and liability in and for any and all damages or injury of any kind or nature whatever to 

all persons and to all property growing out of or 

resulting from the act or omission of the Subcontractor in the performance of the Work provided for in this Contract. ... Contractor [TDH], 
4 No. 19-3315

to the extent permitted by law, agrees to indemnify, defend, save and hold harmless the Owner 

[Rockwell] against any and all claims, damages, 

loss or expenses (including court costs and attorney’s fees) by reason of the liability imposed 

by law upon the Contractor, and/or Owner for 

damages because of bodily injuries, including 

death at any time there from [sic], sustained by 

any person or persons; or on account of damage 

to property arising out of or on account of or in 

consequence of the performance of this Contract 

where such injuries to persons or damage to 

property are due or claimed to be due to any 

negligence of Contractor’s employees, agents or 

servants. Contractor shall protect and indemnify Owner against any loss or damage suffered 

by anyone arising through Contractor’s negligence, or those employed by Contractor may 

have by reason thereof, or on account of being 

charged therewith ... .

15. Prior to commencing any work, the Contractor shall submit a certification of insurance acceptable to the Owner naming the Owner 

(Rockwell Properties, LLC) and Prairie Management & Development, Inc. as Additional Insureds for the duration of the job.

The record also includes a Certificate of Liability Insurance dated February 9, 2017, identifying Columbia as the

commercial general liability insurer, TDH as the insured, and 

Rockwell and Prairie as additional insureds.
No. 19-3315 5

C. Guzman falls and is injured

On March 13, 2017, Guzman was performing HVAC work 

at the Chicago building when he fell “through an unguarded 

opening” in the second floor. He fell 22 feet. He suffered serious injuries, but survived.

Guzman sued Prairie, Rockwell, and others for negligence 

(“underlying suit”).1 He claims, among other things, that

Prairie and Rockwell “carelessly and negligently failed to supervise, inspect, monitor, and coordinate the work of the subcontractors on the construction site in order to prevent and 

protect Plaintiff from falling through the unprotected opening 

in the floor ... .” He also claims that Prairie and Rockwell 

“carelessly and negligently failed to properly supervise the 

construction site and monitor work of [their] subcontractors, 

and thereby allowed [their] subcontractors to engage in the 

unsafe practice of not covering or guarding the unmarked 

opening in the floor with appropriate protection which exposed Plaintiff to the risk of falling through the opening.” 

Guzman did not sue TDH, and his suit does not specifically 

mention it.

Several defendants in the underlying suit (besides Prairie 

and Rockwell) filed third-party complaints against TDH for 

contribution, alleging TDH negligently failed to train its employees on multiple issues, failed to maintain a safe workplace, failed to provide proper safety equipment, allowed the 

opening to remain open and unprotected, failed to supervise 

1 The underlying suit’s most-recent amended complaint that is part of 

the record before us is Guzman’s second amended complaint. Columbia 

has advanced no arguments that any subsequent amended complaint 

changes the allegations in any relevant way.
6 No. 19-3315

or inspect the construction site, failed to supervise or inspect 

the work of subcontractors, failed to warn Guzman of the 

opening, failed to provide adequate illumination, failed to supervise the HVAC work of its employees including Guzman, 

failed to enforce its own safety rules, and failed to provide 

adequate safeguards to prevent the injury.

Scottsdale insured Rockwell. Scottsdale has defended 

Rockwell and Prairie in the underlying suit. Columbia refuses 

to defend them. Scottsdale wants Columbia to take over their

defense, and to reimburse Scottsdale for the defense costs 

thus incurred. Scottsdale filed this suit, seeking a declaration 

that Columbia has a duty to defend and indemnify Rockwell 

and Prairie. Scottsdale moved for judgment on the pleadings.

The district court granted this motion in part, declaring Columbia owes a duty to defend Prairie and Rockwell, ordering 

Columbia to pay Scottsdale over $50,000 for defense costs 

through August 2019, and leaving the issue of indemnity for 

another day. Columbia appeals.

II. Discussion

A. Law

Procedurally, we review a judgment on the pleadings de 

novo. When a plaintiff moves for judgment on the pleadings, 

the motion should not be granted unless it appears beyond 

doubt that the nonmovant cannot prove facts sufficient to 

support its position, and that the plaintiff is entitled to relief.

See Housing Auth. Risk Retention Grp. v. Chicago Housing Auth., 

378 F.3d 596, 600 (7th Cir. 2004).

Substantively, the parties agree Illinois law applies. Insurance policies are contracts. Under Illinois law, “the general 

rules governing the interpretation of other types of contracts 
No. 19-3315 7

also govern the interpretation of insurance policies.” Hobbs v. 

Hartford Ins. Co. of the Midwest, 823 N.E.2d 561, 564 (Ill. 2005). 

The goal in interpreting an insurance policy “is to ascertain 

and give effect to the intention of the parties, as expressed in 

the policy language.” Id.

An insurer’s duty to defend is broader than its duty to indemnify. Outboard Marine Corp. v. Liberty Mut. Ins. Co., 607 

N.E.2d 1204, 1220 (Ill. 1992). To determine whether an insurer 

has a duty to defend, a court compares the underlying complaint’s allegations (liberally construed in the insured’s favor)

to the policy’s language. Id. If the underlying complaint “alleges facts within or potentially within policy coverage, an insurer is obligated to defend its insured even if the allegations 

are groundless, false or fraudulent.” General Agents Ins. Co. of 

Am. v. Midwest Sporting Goods Co., 828 N.E.2d 1092, 1098 (Ill. 

2005).

“An insurer can only refuse to defend if the allegations of 

the underlying complaint preclude any possibility of coverage.” Illinois Tool Works, Inc. v. Travelers Cas. & Sur. Co., 26 

N.E.3d 421, 428 (Ill. App. Ct. 2015). An insurer must defend

when “the underlying allegations do not foreclose coverage.” 

Id. When an insurer relies on a provision that it contends excludes coverage, courts “review the applicability of the provision to ensure it is clear and free from doubt that the policy’s 

exclusion prevents coverage.” National Fire Ins. of Hartford v. 

Walsh Const. Co., 909 N.E.2d 285, 288 (Ill. App. Ct. 2009) (internal quotation marks omitted).

A court may look beyond the underlying complaint to 

third-party complaints when determining whether there is a 

duty to defend, so long as the third-party complaints are not 

“self-serving” or filed by the additional insured seeking 
8 No. 19-3315

coverage. See Farmers Auto. Ins. Ass’n v. Neumann, 28 N.E.3d 

830, 834 (Ill. App. Ct. 2015); Illinois Embacaso Ins. Co. v. 

Waukegan Steel Sales Inc., 996 N.E.2d 247, 254 (Ill. App. Ct. 

2013); Pekin Ins. Co. v. Wilson, 930 N.E.2d 1011, 1018–20 (Ill. 

2010). Any doubts about the duty to defend are resolved in 

favor of the insured. Hilco Trading, LLC v. Liberty Surplus Ins. 

Corp., 8 N.E.3d 166, 174 (Ill. App. Ct. 2014).

B. Analysis

1. Columbia’s policy language, and comparison to underlying 

complaint

Columbia insured TDH. The Columbia policy said it 

would include another organization as an additional insured 

if TDH and that organization agreed in writing that that organization would be added as an additional insured.

Well, TDH agreed in writing that it would have Prairie 

and Rockwell named as additional insureds on TDH’s policy.

Indeed, though it is superfluous to our analysis, a Certificate 

of Liability Insurance was issued certifying Rockwell and 

Prairie were additional insureds on the Columbia commercial 

general liability policy. And as the district court observed, the 

parties do not dispute that the TDH HVAC contract provided 

that Prairie and Rockwell would be named additional insureds to TDH’s policy. So Prairie and Rockwell are additional insureds on the Columbia policy, at least for some 

claims. So far so good for Scottsdale.

But the Columbia policy had a limitation. It said the other 

organization would only be an additional insured with respect to liability arising out of TDH’s ongoing operations performed for this other organization.
No. 19-3315 9

We agree with the district court that this “arising out of” 

limitation in the Columbia policy does not eliminate Columbia’s duty to defend in the underlying suit. This limitation 

does not keep Columbia off the hook to defend because Prairie’s and Rockwell’s liability for the fall potentially (and that 

is enough) arises in part (and that is enough) out of TDH’s

then-ongoing operations performed for Prairie and Rockwell, 

TDH’s work on the project. For the duty to defend, it does not 

matter if TDH itself is actually ultimately liable, and it does 

not matter that the underlying suit does not name TDH as a 

defendant, or mention it. We agree with the district court that 

the mere fact that Guzman did not bring a negligence claim 

against TDH does not mean Prairie and Rockwell cannot be 

liable to Guzman based on and arising out of TDH’s then-ongoing operations performed for them.

Columbia argues the underlying complaint does not allege any facts that bring the case even potentially within coverage by Columbia. We disagree. The underlying complaint 

specifically alleges Prairie and Rockwell “negligently failed to 

supervise, inspect, monitor, and coordinate the work of the 

subcontractors on the construction site in order to prevent 

and protect Plaintiff from falling through the unprotected 

opening in the floor” and that Prairie and Rockwell “negligently failed to properly supervise the construction site and 

monitor work of [their] subcontractors, and thereby allowed 

[their] subcontractors to engage in the unsafe practice of not 

covering or guarding the unmarked opening in the floor with 

appropriate protection which exposed Plaintiff to the risk of 

falling through the opening.” TDH is potentially one of those 

subcontractors. The underlying suit suggests, and does not 

foreclose the possibility, that some fault lies with TDH. The 

underlying suit suggests, and does not foreclose the 
10 No. 19-3315

possibility, that any liability of Prairie or Rockwell arises out 

of TDH’s then-ongoing operations performed for Prairie and 

Rockwell. It is not clear from the face of the underlying complaint that the allegations fail to state facts bringing the case 

within (or potentially within) the policy’s coverage, so Columbia cannot refuse to defend. Lagestee-Mulder, Inc. v. Consol.

Ins. Co., 682 F.3d 1054, 1056 (7th Cir. 2012).2

2. Third-party complaints

Moreover, several defendants in the underlying suit (besides Prairie and Rockwell) filed third-party complaints 

against TDH for contribution. We can consider these thirdparty complaints. They make it even clearer that TDH might

have been at fault. They allege TDH negligently failed to train 

its employees on multiple issues, failed to maintain a safe 

workplace, failed to provide proper safety equipment, allowed the opening to remain open and unprotected, failed to 

2 The Columbia endorsement includes this incomplete sentence: “Liability for ‘bodily injury’ or ‘property damage’ caused, in whole, or in part, 

by ‘your work’ arising out of your ongoing operations performed for that 

additional insured and included in the ‘products-complete operations 

hazard.’” Based on this, Columbia argues its policy explicitly provides 

coverage for additional insureds only when the liability was caused, in 

part or in whole, by TDH’s work. Scottsdale seems to accept this interpretation of the incomplete sentence. But even if Columbia’s argument were 

based on a proper interpretation of this incomplete sentence, and even if 

we did not apply the canon of construing the policy in favor of the insured, 

we would still conclude it is possible that the liability of Prairie and Rockwell was ultimately caused, in part or in whole, by “your work,” which 

according to the Columbia policy means TDH’s work or operations performed by TDH or on its behalf, and materials, parts, and equipment in 

connection with such work or operations, and includes the failure to provide warnings or instructions.
No. 19-3315 11

supervise or inspect the construction site, failed to supervise 

or inspect the work of subcontractors, failed to warn Guzman 

of the opening, failed to provide adequate illumination, failed 

to supervise the HVAC work of its employees including Guzman, failed to enforce its own safety rules, and failed to provide adequate safeguards to prevent the injury. The district 

court observed that the third-party complaints “certainly 

raise the possibility that TDH will be held liable for Guzman’s 

injuries based on its own negligence—a possibility also contemplated by the underlying complaint itself.”3

Columbia asks us to ignore the third-party complaints, arguing a court “may consider evidence beyond the underlying 

complaint only if such evidence does not tend to determine 

an issue critical to the underlying lawsuit.” (Appellant’s Br. at 

13.) Columbia only cites one case for this proposition—Pekin 

Ins. Co. v. Centex Homes, 72 N.E.3d 831 (Ill. App. Ct. 2017)—

and does not provide a pinpoint, probably because Centex

Homes does not support that proposition.

Centex Homes merely recognized that the Illinois Appellate 

Court in CSR Roofing Contractors expressly declined to determine the applicability of Section 414 of the Restatement (Second) of Torts because it “may tend to determine an issue crucial to the determination of the underlying lawsuit.” Centex 

Homes, 72 N.E.3d at 844 (quoting Pekin Ins. Co. v. CSR Roofing 

Contractors, 41 N.E.3d 559, 573 (Ill. App. Ct. 2015)). And Centex

Homes merely agreed that “the coverage determination must 

3 The district court referenced three third-party complaints filed by 

different defendants in the underlying suit, not including Prairie or Rockwell. We reviewed these third-party complaints. Columbia advanced no 

argument in its initial appellate brief that any party amended any of these 

third-party complaints in any relevant way.
12 No. 19-3315

be made without deciding any significant issues in the underlying case.” Centex Homes, 72 N.E.3d at 845. Deciding a significant issue in the underlying case is not necessarily the same 

as considering a third-party complaint to determine whether 

there is a duty to defend.

Centex Homes did not forbid consideration of third-party 

complaints or other documents in determining whether there 

is a duty to defend. Quite the contrary, Centex Homes expressly noted that “[i]n certain circumstances, the court may 

look beyond the underlying complaint in order to determine 

whether an insurer has a duty to defend.” Id. at 839.

Indeed, Scottsdale’s appellate response claims Columbia 

recognizes a court may consider evidence beyond the underlying complaint to determine whether an insurer has a duty 

to defend, and Scottsdale cites Centex Homes, 72 N.E.3d at 839.

Scottsdale then cites numerous other Illinois cases endorsing 

consideration of third-party complaints in this context. Scottsdale notes that Columbia fails to articulate a reason why the 

rule that a coverage determination must be made without deciding any issue crucial to the underlying case would preclude consideration of the third-party complaints here.

In reply, Columbia abandons any argument that we are 

forbidden from considering the third-party complaints by the 

rule against determining an issue critical to the underlying 

lawsuit, and instead advances other arguments for why we 

should ignore the third-party complaints. Columbia did not 

raise these arguments in its initial brief, so they are forfeited. 

Webster v. CDI Indiana, LLC, 917 F.3d 574, 578 (7th Cir. 2019); 
No. 19-3315 13

Scheidler v. Indiana, 914 F.3d 535, 540 (7th Cir. 2019). But these 

new arguments would not have prevailed anyway.4

Consideration here of the third-party complaints is not 

tantamount to determining any issue crucial to the determination of the underlying suit. We find no error in considering 

the third-party complaints.

They show TDH might have been at fault. But even without considering them, we would still conclude that the underlying suit suggests and does not foreclose satisfaction of the 

“arising out of” condition, and therefore the possibility of 

coverage, so Columbia owes a duty to defend Prairie and 

Rockwell.

As Centex Homes explicitly recognized, in this type of case, 

workers’ compensation exclusivity is often at play, and that is 

4 First, Columbia attempts to discount the various third-party claims 

against TDH as “kitchen sink” claims, mere attempts to spread liability 

against any available party. But that argument does not undermine the 

potential merits of the third-party claims against TDH. And besides, we 

are not deciding whether these claims are meritorious but merely whether 

they indicate a potential that TDH might be partially at fault. They do, 

regardless of whether other parties also might be potentially liable. Second, Columbia argues that one of the third-party claimants against TDH 

has been dismissed from the underlying case so its third-party claim is 

moot. But this mootness does not affect our analysis, and does nothing to 

undermine the other third-party complaints against TDH. Third, Columbia argues that the particular allegations of another third-party claimant 

against TDH do not implicate the Columbia policy. We simply disagree. 

Fourth, Columbia argues that yet another third-party claimant shares an 

owner with Prairie and Rockwell, so its third-party complaint against 

TDH should be considered “self-serving,” and ignored. But even if we ignore this third-party complaint, we still have the other third-party claims 

to consider. Besides, even if we ignored all the third-party complaints, we 

would still reach the same conclusion based on the underlying complaint.
14 No. 19-3315

why the injured employee does not sue his employer. But that 

does not preclude coverage of additional insureds on the employer’s insurance policy.

3. National Fire

Columbia argues National Fire sheds light on this case. 

There, the Illinois Appellate Court affirmed the lower court’s 

declaratory judgment that National Fire had no duty to defend proposed insureds. National Fire, 909 N.E.2d at 293. The 

owner hired a general contractor to renovate property in Chicago. The general contractor subcontracted with a roofing 

company for a portion of the project. As part of this agreement, the owner and general contractor were named additional insureds on the subcontractor’s commercial general liability policy with National Fire, subject to this limitation:

“That person or organization is an additional insured solely for liability due to [subcontractor’s] 

negligence and specifically resulting from ‘your 

work’ for the additional insured which is the 

subject of the written contract or written agreement. No coverage applies to liability resulting 

from the sole negligence of the additional insured.”

Id. at 286.

An employee of the subcontractor suffered injuries while 

working on the roof. He sued the general contractor and the 

owner. He alleged an employee of the general contractor 

moved part of the roof’s support, causing him to fall. The underlying complaint included no allegations expressly against 

the subcontractor/employer. The owner and general contractor argued, however, that because the underlying complaint 
No. 19-3315 15

alleged the victim was not provided with a safe place to work, 

any breach of this duty would belong to the subcontractor 

also, so the “sole negligence” exclusion did not apply. The appellate court rejected this argument, exposing it as a claim that 

any injury of a subcontractor’s employee on the jobsite triggers the subcontractor’s insurer’s duty to defend other parties 

because it necessarily follows that the subcontractor must 

have failed to provide a safe workplace for its employee. This, 

according to the court, would render the additional-insured 

limitation meaningless. The court concluded that “[m]ore 

than some unspecified breach of the subcontractor’s duty to 

provide a safe work place is required to support a claim that 

the negligence complaint implicates negligence on the part of 

the subcontractor, too.” Id. at 291. The court determined no 

allegation in the underlying complaint suggested potential liability on the part of the subcontractor sufficient to trigger 

National Fire’s duty to defend.

But could the third-party complaint in the underlying action show some potential for negligence by the subcontractor 

such that the “sole negligence of the additional insured” limitation did not bar coverage? The appellate court affirmed the 

lower court’s decision not to consider the third-party complaint. The appellate court recognized a “long line of cases” 

allowing extrinsic evidence to inform the duty-to-defend determination. Id. at 292. But the court rejected consideration of 

the particular third-party complaint at issue because it was 

filed by the general contractor, one of the very parties seeking 

coverage. That is, after National Fire brought its declaratory 

judgment action, the general contractor—seeking coverage 

from National Fire—filed a third-party complaint in the underlying action. The subcontractor essentially sought to 
16 No. 19-3315

bolster its claim of coverage by referencing its own thirdparty complaint. The court rejected this.

We agree with the district court that National Fire is distinguishable. First, the two insurance policies have different relevant language.

Second, the two underlying complaints have different factual allegations. The underlying complaint here does not 

merely suggest TDH might have breached a duty to provide 

a safe work place in the manner of res ipsa loquitur. Rather, the 

underlying complaint suggests Prairie and Rockwell are liable because they failed to supervise, inspect, monitor, and coordinate the work of the subcontractors to prevent the fall 

through the unprotected opening, and because they allowed 

their subcontractors to engage in the unsafe practice of not 

covering or guarding the unmarked opening.

Third, at least two of the three third-party complaints the 

district court considered here were not filed by proposed additional insureds or related entities. We “need not wear judicial blinders,” American Economy Insurance Co. v. Holabird & 

Root, 886 N.E.2d 1166, 1179 (Ill. App. Ct. 2008), and we can

consider them. They make it even clearer that TDH might 

have been at fault.

So National Fire does not help Columbia.

III. Conclusion

This case turns on whether Prairie’s and Rockwell’s liability in the underlying suit might partially arise out of TDH’s 

operations performed for Prairie and Rockwell, because the 

Columbia policy says: “Such person or organization is an additional insured only with respect to liability arising out of 

your ongoing operations performed for that insured.” The 
No. 19-3315 17

answer, based on the underlying complaint and the thirdparty complaints, is yes.

An insurer must defend its proposed insureds in an action 

that is potentially within coverage. The underlying allegations do not preclude the possibility of coverage. It is not clear 

or free from doubt that the policy’s exclusion prevents coverage. Therefore, Columbia owes a duty to defend Prairie and 

Rockwell. As the district court correctly concluded, the issue 

of indemnity can wait.

We affirm.