Court Opinion

ID: 4104276
Source: CourtListenerOpinion
Date Created: 2016-12-03 00:06:30.472557+00
Date Added: 2024-06-11T14:09:05.570233
License: Public Domain

2016 IL App (1st) 151166 and 151184
                               Nos. 1-15-1166 and 1-15-1184 cons.
                                Opinion filed November 16, 2016

                                             IN THE

                              APPELLATE COURT OF ILLINOIS

                                       FIRST DISTRICT

EMPRESS CASINO JOLIET CORPORATION,                             )
Plaintiff-Appellant,                                           ) Appeal from the Circuit Court
                                                               ) of Cook County, Illinois,
v.                                                             ) Cook County, Illinois,
                                                               ) County Department,
W. E. O’NEIL CONSTRUCTION CO., an Illinois corporation, ) Law Division.
LINDEN GROUP, INC., an Illinois corporation, R.L.              )
MILLIES & ASSOCIATES, INC., an Indiana corporation,            ) Nos. 2012 L 012077 and
GLOBAL FIRE PROTECTION COMPANY, an Illinois                    ) 2014 L 003223
corporation, JAMESON SHEET METAL, INC., an Illinois            )
corporation, and AVERUS, INC., f/k/a FACILITEC                 ) The Honorable
CENTRAL, INC., a Wisconsin corporation,                        ) John P. Callahan, Jr.,
 Defendants-Appellees.                                         ) Judge Presiding.
___________________________________________________ )
                                                               )
NATIONAL FIRE AND MARINE INSURANCE                             )
COMPANY, a Nebraska corporation, LLOYD’S                       )
SYNDICATE 1414 (Ascot), a British underwriting syndicate,      )
and AXIS INSURANCE COMPANY, an Illinois corporation,           )
as subrogees of Empress Casino Joliet Corporation, an Illinois )
corporation,                                                   )
 Plaintiffs-Appellants,                                        )
                                                               )
v.                                                             )
                                                               )
W. E. O’NEIL CONSTRUCTION CO., an Illinois corporation, )
LINDEN GROUP, INC., an Illinois corporation, R.L.              )
MILLIES & ASSOCIATES, INC., an Indiana corporation,            )
GLOBAL FIRE PROTECTION COMPANY, an Illinois                    )
corporation, JAMESON SHEET METAL, INC., an Illinois            )
corporation, and AVERUS, INC., f/k/a FACILITEC                 )
CENTRAL, INC., a Wisconsin corporation,                        )
 Defendants-Appellees.                                         )

______________________________________________________________________________
     Nos. 1-15-1166 & 1-15-1184 cons.

                    PRESIDING JUSTICE FITZGERALD SMITH delivered the judgment of the
     court, with opinion. 

                    Justices Lavin and Cobbs concurred in the judgment and opinion. 

                                                  OPINION

¶1       This cause of action arises from a fire that occurred during an extensive renovation project, at

     Empress Casino Joliet (hereinafter the casino) on March 20, 2009. As a result of the fire, the

     casino, which is owned by the insured plaintiff, Empress Casino Joliet Corporation (hereinafter

     Empress), sustained extensive damages. Empress received $81,150,000 in insurance payments

     from three separate insurers—Axis Insurance Company (hereinafter Axis), National Fire and

     Marine Insurance Company (hereinafter National Fire), and Lloyd’s Syndicate 1414 (Ascot)

     (hereinafter Lloyd’s)—under three separate insurance policies. The Axis policy was a “builder’s

     risk” policy specific to the renovation project, while the National Fire and Lloyd’s policies

     provided general property coverage for the casino. At issue in this appeal are the subrogation

     rights of the three insurers.

¶2       Specifically, in this appeal Empress and the three insurers appeal the trial court’s grant of

     summary judgment against them in two underlying consolidated actions against numerous

     defendants that they claim were responsible for the fire. The first cause of action (case No. 2012

     L 012077) was filed by Empress against W.E. O’Neil Construction Co. (hereinafter W.E.

     O’Neil), Global Fire Protection Company (hereinafter Global), Jameson Sheet Metal Inc.

     (hereinafter Jameson), the Linden Group, Inc. (hereinafter Linden), R. L. Millies & Associates,

     Inc. (hereinafter Millies) and Averus, Inc. (hereinafter Averus) and asserted claims for

     $83,700,00 in damages to cover: (1) the $2,550,000 deductibles that Empress incurred as a result

     of the fire; and (2) the $81,150,000 in payments that the three insurers made for Empress’s

     covered losses and for which they should have been subrogated. The second action (case No.

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     Nos. 1-15-1166 & 1-15-1184 cons.

     2014 L 003223) was filed by the three insurers (Axis, National Fire and Lloyd’s) against the

     same defendants and asserted their subrogation claims. Both actions alleged claims of negligence

     and willful and wanton misconduct against all of the defendants, and claims for breach of

     contract against all of the defendants, except for Averus.

¶3       After the two cases were consolidated, the circuit court granted summary judgment in favor

     of all the defendants, on all claims, holding that a waiver of subrogation clause contained in the

     construction contract for the casino renovation project prevented all the plaintiffs from asserting

     their respective subrogation claims. The plaintiffs now appeal.

¶4       On appeal, all of the plaintiffs (Empress, Axis, National Fire and Lloyd’s) argue that the trial

     court erred when it found that the waiver of subrogation clause in the renovation construction

     contract applied to the defendant, Averus, since Averus operated under a separate pre-existing

     oral contract and was not involved in the renovation project. All of the plaintiffs also assert that

     the trial court erred when it found that the waiver of subrogation clause prevented them from

     proceeding with their willful and wanton misconduct claims because public policy should bar

     enforcement of such exculpatory clauses where heighted misconduct is alleged.

¶5       In addition, Empress, National Fire, and Lloyd’s argue that the waiver of subrogation

     clause is limited to Axis’s builders risk policy and does not apply to Empress’s general property

     insurance policies with National Fire and Lloyd’s. In the alternative, Empress, National Fire, and

     Lloyd’s argue that to the extent that waiver of subrogation might apply, it is limited to those

     losses related to the work (i.e., the renovation project), as it is defined in the construction

     contract. In addition, Empress, National Fire and Lloyd’s argue that the defendants’ material

     breaches of the construction contract should bar enforcement of the waiver of subrogation clause.

     Finally, Empress asserts that it never waived its right to recover its deductibles under its general

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       Nos. 1-15-1166 & 1-15-1184 cons.

       property insurance policies with National Fire and Lloyd’s. For the reasons that follow, we

       affirm in part and reverse in part.

¶6                                            I. BACKGROUND

¶7        The record below us is voluminous. For purposes of clarity, we will set forth only those facts

       and procedural history relevant for this appeal.

¶8                                               A. The Parties

¶9        In 2008, Empress, which owned and operated the casino complex located in Joliet, Illinois,

       began performing extensive renovations to its property. For this purpose, Empress entered into a

       construction contract with O’Neil as the general contractor. O’Neil then hired, inter alia,

       subcontractors Jameson (for HVAC and sheet metal work) and Global (for sprinkler installment).

       Linden was the architect and Millies the mechanical, electrical, and plumbing engineer

       (responsible for inter alia, the fire sprinkler and mechanical systems) for the renovation project.

       The parties do not dispute that prior to the renovation project, Empress had entered into a

       separate contract with Averus, for Averus periodically to perform cleaning and maintenance

       services at the casino, including the cleaning and removal of cooking grease and other

       combustible residue from ductwork in and above the kitchen. Averus continued to perform these

       services for Empress during the renovation project.

¶ 10                           B. The Renovation Project Construction Contract

¶ 11      The parties agree that on September 15, 2008, Empress entered into a construction contract

       with O’Neil for the renovation project. That contract was comprised of, inter alia: (1) the

       American Institute of Architects (AIA) Standard Form of Agreement Between Owner and

       Contractor (AIA Document A111-1997), and (2) the General Conditions of the Contract for

       Construction (AIA A21-1997) (hereinafter the construction contract). Relevant to the issues in

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        this appeal, as to insurance coverage, the construction contract required Empress as the “Owner”

        to maintain both liability (section 11.2) and property (section 11.4) insurance. With respect to

        property insurance section 11.4 provides in pertinent part:

               “§ 11.4.1 Unless otherwise provided, the Owner shall purchase and maintain, in a

               company or companies lawfully authorized to do business in the jurisdiction in which the

               Project is located, property insurance written on a builder’s risk “all-risk” or equivalent

               policy form in the amount of the initial GMP, plus value of subsequent Contract

               modifications and cost of material supplied or installed by others, comprising total value

               for the entire Project at the site on a replacement cost basis without optional deductibles.

               Such property insurance shall be maintained, unless otherwise provided in the Contract

               Documents or otherwise agreed in writing by all persons and entities who are

               beneficiaries of such insurance, until final payment has been made as provided in Section

               9.10 or until no person or entity other than the Owner has an insurable interest in the

               property required by this Section 11.4 to be covered, whichever is later. This insurance

               shall include interest of the Owner, the Contractor, Subcontractors, and Sub-

               subcontractors in the Project.”

¶ 12	      Section 11.4.1.1 further provides that the property insurance shall be on “an ‘all risk’ or

        equivalent policy form, and must include, “without limitation, insurance against the perils of fire

        (with extended coverage) and physical loss or damage, including *** [inter alia], theft,

        vandalism, malicious mischief, collapse, earthquake, flood, windstorm, falsework, testing and

        startup.” The property insurance also must cover “reasonable compensation” for services and

        expenses incurred by the architect and contractor “as a result of such insured loss.”

¶ 13       Section 11.4.1.2 further explicitly provides that if the owner chooses not to purchase property

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       Nos. 1-15-1166 & 1-15-1184 cons.

       insurance, the owner must inform the contractor in writing of such a decision before the work

       begins, so that the contractor may obtain such insurance and protect its interest (as well as the

       interests of the subcontractors and sub-subcontractors) in the work, as well as increase the price

       tag on the renovation project, to cover the cost of having to obtaining such insurance itself.

¶ 14      The contract also allocates who will be responsible for payment of deductibles after the

       property insurance is obtained. Section 11.4.1.3 explicitly states that “If the property insurance

       requires deductibles, the Owner shall pay costs not covered because of such deductibles.”

¶ 15      In addition, the contract contains an explicit waiver of subrogation clause. Specifically,

       sections 11.4.5 and 11.4.7 state in pertinent part:

              “§ 11.4.5 If during the Project construction period the Owner insures properties, real or

              personal or both, at or adjacent to the site by property insurance under policies separate

              from those insuring the Project, or if after final payment property insurance is to be

              provided on the completed Project through a policy or policies other than those insuring

              the Project during the construction period, Owner shall waive all rights in accordance

              with the terms of Section 11.4.7 for damages caused by fire or other causes of loss

              covered by this separate property insurance. All separate policies shall provide this

              waiver of subrogation by endorsement or otherwise.

                                                        ***

              § 11.4.7 Waiver of Subrogation. The Owner and Contractor waive all rights against (1)

              each other and any of their subcontractors, sub-subcontractors, agents and employees,

              each of the other, and (2) the Architect, Architect’s consultants, separate contractors

              described in Article 6, if any and any of their subcontractors, sub-subcontractors, agents

              and employees, for damages caused by fire or other causes of loss to the extent covered

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       Nos. 1-15-1166 & 1-15-1184 cons.

               by property insurance obtained pursuant to this Section 11.4 or other property insurance

               applicable to the Work, except such rights as they have to proceeds of such insurance

               held by the Owner as fiduciary. The Owner or Contractor, as appropriate, shall require of

               the Architect, Architect’s consultants, separate contractors described in Article 6, if any,

               and the subcontractors, sub-contractors, agents and employees of any of them, by

               appropriate agreements, written where legally required for validity, similar waivers each

               in favor of other parties enumerated herein. The policies shall provide such waivers of

               subrogation by endorsement or otherwise. A waiver of subrogation shall be effective as to

               a person or entity even though that person or entity would otherwise have a duty of

               indemnification, contractual or otherwise, did not pay the insurance premium directly or

               indirectly, and whether or not the person or entity had an insurable interest in the property

               damage.”

¶ 16       Article 6 referenced above is titled “Construction By Owner or by Separate Contractors.”

       Section 6.1 of that article, states in pertinent part:

               “[T]he Owner reserves the right to perform construction or operations related to the

               Project with the Owner’s own forces, and award separate contracts in connection with

               other portions of the Project or other construction or operations on the site under

               Conditions of the Contract identical or substantially similar to these including those

               portions related to insurance and waiver of subrogation.”

       In addition, section 6.1.2 of that article provides that “[w]hen separate contracts are awarded for

       different portions of the Project or other construction or operations on the site, the term ‘

       Contractor’ in the Contract Documents in each case shall mean the Contractor who executes each

       separate Owner-Contractor Agreement.” Finally, section 6.1.4 states that:

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       Nos. 1-15-1166 & 1-15-1184 cons.

              “when the Owner performs *** operations related to the Project with the Owner’s own

              forces, the Owner shall be deemed to be subject to the same obligations and to have the

              same rights which apply to the Contractor under the Conditions of the Contract, including

              without excluding others, those stated in [inter alia] Article[ ] *** 11 ***.”

¶ 17                                    C. Empress’s Insurance Policies

¶ 18      At the time of the fire, Empress had in place three insurance policies. Specifically, for

       purposes of the renovation project, Empress purchased a “builder’s risk policy” from Axis. This

       policy was in effect from December 22, 2008, to December 22, 2009. The Axis policy provided

       coverage for “direct physical ‘loss’ to Covered Property caused by or resulting from any of the

       Covered Causes of Loss.” Under the policy “Covered Property” was defined as, inter alia,

       “[b]uildings or structures (including foundations, underground flues, pipes or drains) while under

       construction, erection or fabrication at the project site shown in the Coverage Form

       Declarations.” The Axis policy contained explicit language indicating that Axis (as the insurer)

       “may waive [its] rights against another party in writing” prior to a loss to covered property.

¶ 19      In addition, to the Axis policy, at the time of the incident, Empress also had in place two

       general “all-risk” property insurance policies for the casino with National Fire and Lloyd’s. Both

       policies were in effect for the period between August 8, 2007 and December 31, 2010. National

       Fire was responsible for 90% of the property coverage, and Lloyd’s for 10%. The parties do not

       dispute that Lloyd’s policy incorporates by reference the wording of the National Fire policy, so

       that the language of the two policies is essentially the same. Specifically, the policies “insure[ ]

       against all risk of direct physical loss or damage to property insured by this policy occurring

       during the policy period except as hereinafter excluded.” The policies define “property” as “real

       or personal property,” including,” inter alia, “improvements and betterments”; “property in the

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       Nos. 1-15-1166 & 1-15-1184 cons.

       care, custody or control of the Insured or for which the Insured is legally liable to insure”;

       “property of the Insured in the care, custody or control of others”; “property while in the

       incidental course of construction, installation, erection or assembly”; “demolition and increased

       cost of construction”; and “debris removal.”

¶ 20         The policies further provided that “[u]nder no circumstances shall insurer be liable for

       cover, nor drop down in the event of erosion of aggregate for the following,” inter alia,

       “Property in the Course of Construction (except for incidental Course of Construction) being

       property in due course of construction, renovation, erection, installation, or assembly.”

       “Incidental Course of Constriction” is separately defined in National Fire’s policy as “total

       contracted works costs of $10,000,000 or lower.”

¶ 21         In addition, both National Fire and Lloyd’s policies contain a “Subrogation” provision, which

       states in relevant part that they as “[t]he Insurer[s] will not acquire any rights of recovery that the

       Insured has expressly waived prior to loss, nor will such waiver affect the Insured’s rights under

       the Policy.”

¶ 22                                      D. The Fire and the Complaints

¶ 23         On March 20, 2009, during the first phase of the renovation project, large portions of the

       casino were destroyed by a fire. After Empress received $81,150,000 in insurance proceeds from

       Axis, National Fire and Lloyd’s,1 on October 23, 2012, it filed a complaint against the

       defendants to recoup damages for itself and for its insurers, resulting from the fire (case No.

       2012 L 012077).

       1
           According to the insurers’ complaint, National Fire paid $64,215,000, Lloyd’s paid $7,135,000,

       and Axis paid $9,800,000 to Empress for the fire damage.

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       Nos. 1-15-1166 & 1-15-1184 cons.

¶ 24      According to Empress’s complaint, the fire was started when a Jameson employee, Mike

       Haberzetle (hereinafter Haberzetle), was welding ductwork in the kitchen area. Haberzetle was

       attaching new duct to the existing duct for the kitchen hood exhaust, and started welding the

       existing ductwork even though the duct was coated with grease and other residue from cooking.

       During the welding the existing duct ignited on the inside, causing extensive damage to the

       casino complex. In a written statement, which is part of the record on appeal, Haberzetle

       described the incident as follows:

              “I was welding in the new kitchen area attaching new duct to the existing [duct] for the

              kitchen hood exhaust. The existing duct started on fire on the inside. I took the lift down

              to the ground, went for the fire extinguisher, [but] it was not on the pole for it. So I went

              to get another and tell Lance [the foreman] about it. When I got back to put it out, it was

              out of control and we called the fire department.”

¶ 25      In its complaint, Empress further alleged that during the welding operations, O’Neil and

       Jameson both failed to provide the necessary fire watch required as protection during hot work.

       Specifically, Empress complained that O’Neil and Jameson did not have a fire extinguisher near

       Haberzetle, and permitted or participated in the decision to allow the welding to occur when fire

       sprinklers in other areas of the casino were out of operation. In addition, Empress alleged that

       O’Neil and Jameson failed to maintain the required clearance between the welding operations

       and combustibles.

¶ 26      Empress also alleged that the architect Linden and the mechanical engineer Millies failed to

       provide for sprinklers in the concealed attic/truss spaces above the kitchen as required by the

       building code. Similarly, Empress alleged that the sprinkler subcontractor, Global, had installed

       the non-complaint sprinkler system.

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       Nos. 1-15-1166 & 1-15-1184 cons.

¶ 27       As to Averus, Empress alleged that four months prior to the incident, Averus purportedly

       spent five hours performing cleaning services at the casino and submitted a written report to

       Empress stating that it had spent this time cleaning the “kitchen hot line” and certifying that the

       “ductwork [was] clean.” Nonetheless, according to the complaint, the ductwork in the kitchen

       was coated with grease.

¶ 28      Accordingly, Empress alleged that as a result of the defendants’ negligence, and willful and

       wanton misconduct, the fire resulted in $83,695,000 in damages. Accordingly, Empress sought

       $81,150,000 for the insurers, and the remainder to cover Empress’s deductibles.

¶ 29      The three insurers—Axis, National Fire, and Lloyd’s—subsequently filed a direct

       subrogation suit against the defendants, seeking to recover the same damages as those in the

       Empress lawsuit (case No. 2014 L 003223). The allegations in the insurers’ complaint were

       identical to those in Empress’s complaint. These two cases were later consolidated. Empress

       subsequently amended its complaint and added breach of contract claims against all the

       defendants, except for Averus.

¶ 30                                             E. Discovery

¶ 31      The parties proceeded with discovery, during which the following relevant deposition

       testimony was obtained.

¶ 32      Norman Nelms (hereinafter Nelms), Empress’s vice president for design and construction,

       testified, inter alia, that the casino renovation project was budgeted at $50 million and involved

       both the renovation of the land and vessel portion of the casino. Nelms stated that Empress hired

       Linden as project architect to develop the renovation design, and that Linden in turn hired Millies

       as mechanical engineer.

¶ 33      In his deposition, Nelms acknowledged that after the design was discussed but before the

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        Nos. 1-15-1166 & 1-15-1184 cons.

        project began, he was aware of certain problems with the fire safety of the casino. Specifically,

        Nelms knew that the dry pipe system in the casino’s pavilion was unable to hold pressure

        effectively and was therefore compromised. Nelms did not know if the area above the kitchen

        duct in the pavilion was sprinklered. He stated, however, that he was aware that the pavilion area

        had a functional wet system (sprinklers) in case of fire. He explained that the wet system covered

        all of the “below ceiling” spaces in the pavilion and the dry system covered all of the spaces in

        the pavilion above the ceiling (i.e., the attic space). Nelms also testified that the casino engaged

        in fire watches, but did not know details as to how these were conducted.

¶ 34       Nelms next explained that, during the renovation project, the responsibility for the safety of

        the job site fell to the general contractor, O’Neil, who had control of the job site. Nelms

        explained that this responsibility was accorded to O’Neil by way of: (1) the construction project;

        (2) O’Neil’s own safety program; and (3) industry custom and practice. Nelms averred that since

        renovation always involved some aspects of demolition, there would necessarily be times when

        the sprinkler system would have to be out of commission. Therefore, there were special safety

        considerations for the project for which O’Neil was responsible, including anything related to

        protecting customers, the building, and the workers during the renovation. Nelms explained that

        Empress’s role in terms of safety would have been to collaborate with O’Neil.

¶ 35	      During his deposition, Nelms was shown a Site Assessment Report for February 11, 2009

        (about a month before the fire), which states that if any element of the fire protection system has

        to come down due to renovation activities, Empress’s casino security guards would perform fire

        watch walks in those areas. Nelms averred that this report evidenced the “collaboration” that was

        required between O’Neil and Empress during the renovation. He admitted, however, that he did

        not know if the Empress security guards ever actually performed those walks.

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       Nos. 1-15-1166 & 1-15-1184 cons.

¶ 36      Nelms acknowledged that the responsibility for the presence of fire extinguishers on site was

       shared by Empress and O’Neil, with O’Neil being responsible for the fire extinguishers within

       the construction zone, and Empress for those in the remainder of the facilities.

¶ 37      Nelms had no personal knowledge as to how the fire occurred, but testified that it was his

       opinion that the “unfortunate accident” occurred by “a lapse of judgment or supervision” by

       either Jameson or O’Neil. He explained that the welder should have had better instruction, a fire

       extinguisher should have been present, or hot work permits should have been properly obtained.

¶ 38      Nelms was next questioned about the content of the construction contract Empress entered

       into with O’Neil. He acknowledged that the contract contained a liquidated damages provision

       and that section 4.3.10 contained a waiver of consequential damages (namely that the contractor

       and owner waive claims against each other for consequential damages arising out of or relating

       to the contract). Nelms also acknowledged that contracts of this nature usually involve a concept

       known as “flow down,” which means that whatever is contained in the contract is “flowed down”

       to the lower tier to the subcontractors, so that whatever burdens are placed on a general

       contractor and whatever benefits are given to the general contractor flow down to the

       subcontractors without creating privity of contract between the subcontractors and the owner.

¶ 39      With respect to the waiver of subrogation provision in the contract, Nelms admitted that it

       was his understanding that Empress provided builders risk insurance coverage for the renovation,

       but he did not understand what this type of insurance entailed or what type of subrogation rights

       were obtained or triggered thereunder. He also admitted that the casino had property insurance

       but could not speak as to what that insurance covered.

¶ 40      In his deposition, Jacques Arragon (hereinafter Arragon), Empress’s director of risk

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       Nos. 1-15-1166 & 1-15-1184 cons.

       management, next testified, inter alia, that he was responsible for negotiating and drafting all of

       the insurance portions of the construction contract between Empress and O’Neil. Arragon

       acknowledged that for purposes of the renovation project, Empress ensured that it had a builder’s

       all-risk insurance policy (with Axis), which had a miscellaneous property under construction

       supplement with a threshold sublimited to $10 million.

¶ 41      Arragon stated that the waiver of subrogation clause in the construction contract was a

       modification from the original AIA form. According to Arragon, the purpose of that provision

       was to have Empress protect the interests of the owner, contractor, subcontractors and sub-

       subcontractors of the project by way of builder’s risk insurance. Arragon testified that it was his

       understanding that section 11.4.7 of the construction contract applied only to the builder’s risk

       policy because it covered only insurance relating to work—i.e., the renovation project.

       According to Arragon, the work was supposed to be covered by the builder’s risk insurance,

       while the remainder of the adjacent buildings where the renovation was not taking place were to

       be covered by Empress’s general property insurance policies. Arragon conceded, however, that

       section 11.4.5 of the construction contract applied to the two property insurance policies issued

       by Lloyd’s and National Fire, and that it includes a requirement that Empress waive any

       subrogation claims as to these two policies. Arragon, however, could not remember whether any

       special endorsements for such mandatory waivers under section 11.4.5 were ever completed.

¶ 42      Arragon admitted that, since the fire, Empress has changed its insurance coverage template to

       have higher builder’s risk insurance and not have multiple insurers on the same loss covering

       different things. Rather, now, Empress obtains property insurance and builder’s risk under just

       one program.

¶ 43      With respect to his knowledge of any problems at the casino prior to the fire, Arragon

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       Nos. 1-15-1166 & 1-15-1184 cons.

       testified he could not recall if he was aware of any fire safety issues. When presented with the

       February 23, 2009, site assessment report, Arragon acknowledged that he ordered that report be

       prepared, but testified that, because the report was overall satisfactory, he relied on the fact that

       Empress’s security guards would perform some of the fire watches and accordingly did nothing

       further about it.

¶ 44       Arragon also explained in his deposition that a hot works permit is a document used

       during the renovation that states when there will be any type of hot works, including welding,

       and whether the area where such welding will occur is secured (i.e., if there are any combustibles

       within a specific distance, whether fire extinguishers are available etc.). The hot works permits

       must be signed by an individual responsible for the safety of the hot works site. Arragon

       admitted that after the fire, upon his order, Empress has strengthened its hots works permit

       process.

¶ 45       In his deposition, Donald Stewart (hereinafter Stewart), vice president of the fire protection

       division of Averus, testified that Averus was responsible for cleaning the hoods at the casino

       since 2008. According to Stewart, there was no written contract between Averus and Empress for

       services. Instead, Averus submitted a signed proposal, and received a verbal approval from

       Empress to perform the services. A copy of Averus’s proposal is included in the record below us

       and is a two-page document, which is neither in AIA format, nor includes any reference to a

       waiver of subrogation. What is more, Stewart explicitly admitted in his deposition that in coming

       to their verbal agreement, there was never any discussions between Averus and Empress about

       any waiver of subrogation. In addition, no one ever asked Stewart to sign a waiver of subrogation

       form. Stewart also acknowledged that when Averus entered into the agreement with Empress,

       Averus was operating under the National Fire Protection Association (NFPA) 96 standard as to

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       the frequency of the cleanings it recommended in its proposals, and that under those rules it was

       required to clean any contaminated portions of the exhaust system or provide Empress with a

       written report specifying all areas that were inaccessible or not cleaned.

¶ 46      In his deposition, Stewart further admitted that at the time of the fire, Averus was working

       directly for the casino, and that it was not a subcontractor to anyone relative to the ongoing

       renovation project.

¶ 47      Stewart stated that, prior to the fire, the last time Averus cleaned the buffet kitchen exhaust

       hood was on October 19, 2008. On the advice of his attorney, Stewart refused to answer

       counsels’ questions about when Averus last cleaned the horizontal main line in the pavilion area.

¶ 48      In his deposition John Russell (hereinafter Russell), president of O’Neil, next testified, inter

       alia, that he was principally responsible for negotiating the construction contract between O’Neil

       and Empress, with some help from Nelms and Arragon. Russell testified that it was his

       understanding, both from the language of the contract and the negotiations he had with

       Empress’s principals, that during the renovation project O’Neil would have access to all of

       Empress’s insurance policies (including builder’s risk, property, use, etc.). Specifically, Russell

       averred that when read as a whole section 11.4 of the construction contract clearly required

       Empress to purchase builder’s risk insurance, and make available to O’Neil insurance for any

       adjacent property, as well as insurance for any loss of use. According to Russell, section 11.4.1

       required Empress to provide the builder’s risk insurance. Section 11.4.1.3 confirmed that

       Empress was responsible for all deductibles associated with its policies, and required Empress to

       purchase insurance for loss of use and make it available to O’Neil. This section also included a

       waiver of subrogation. According to Russell, section 11.4.5 further required Empress to provide

       O’Neil with insurance for adjacent properties, and included a waiver of subrogation. Under

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       Nos. 1-15-1166 & 1-15-1184 cons.

       section 11.4.7, Empress waived subrogation for any damage caused by fire. Finally, section

       11.4.1.2 provided that if Empress did not provide any of those coverages, it would have an

       obligation to notify O’Neil so that it could purchase the insurance and change the order to

       increase the price of the renovation project.

¶ 49       Russell also testified in his deposition that it was his understanding that Empress would

       waive any rights to subrogation under the contract. He testified that his objective in negotiating is

       to make sure, if at all possible, that his company transfers all of the risk that is available to the

       owner’s policies. Otherwise, O’Neil needs to purchase additional polices and burden the project

       with additional costs. Accordingly, Russell expected that the standard text of the AIA would be

       in play.

¶ 50       Russell further testified that the renovation project was not limited to any particular area of

       the casino complex, and that O’Neil’s work encompassed the whole property.

¶ 51       In his deposition Joseph Cassacio (hereinafter Cassacio), an officer of National Fire,

       testified, inter alia, that the sublimit of $10 million contained in National Fire’s property

       insurance policy for Empress was intended to delineate between minor and large construction

       projects. Specifically, if a construction project involved costs of up to $10 million, then those

       costs would be covered under the National Fire policy. Cassacio admitted, however, that

       National Fire paid Empress insurance proceeds after the fire for the “loss of the property that was

       next door,” and caused by that fire.

¶ 52       In addition, Cassacio testified that it was his opinion that National Fire had not waived any

       subrogation rights under the construction contract. While Cassacio acknowledged that the

       National Fire policy states that if the insured (Empress) has waived its rights to recover prior to a

       loss then the insured cannot pursue subrogation, he testified that such a waiver must be express

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       Nos. 1-15-1166 & 1-15-1184 cons.

       (by naming the additional insured, and by way of endorsement of the existing insurance policy).

       According to Cassacio any waiver of subrogation in the construction contract applies only to the

       builder’s risk policy. Specifically, Cassacio asserted that section 11.4.5 of the construction

       contract does not pertain to National Fire because National Fire’s policy was not obtained during

       the renovation project and there was no endorsement of any such waiver by National Fire.

¶ 53                                          F. Summary Judgment

¶ 54         After discovery, the defendants moved for summary judgment, arguing that the plaintiffs’

       claims were barred by the waivers of subrogation in the construction contract.2 In support of their

       motion for summary judgment the defendants attached the following exhibits: (1) their two

       complaints; (2) the construction contract; (3) Empress’s three insurance policies; (4) Empress’s

       discovery responses (admitting to having received the insurance proceeds from the insurers); and

       (5) the depositions of Nelms, Arragon, and Cassacio.

¶ 55         The plaintiffs filed their response to the motion for summary judgment, arguing inter alia,

       that under the plain language of the construction contract: (1) the waiver of subrogation clause

       did not apply to the two property insurers (National Fire and Lloyd’s) or to Averus; and (2)

       Empress did not waive its right to recover its deductibles. In support they attached, inter alia: (1)

       the depositions of Stewart and Russell; (2) a subcontract with Jameson; (3) the AIA official

       guide; and (4) Haberzetle’s statement.

       2
           Although the defendants initially filed their motion for summary judgment only against

       Empress in case No. 12 L 12077, all the parties agreed and the trial court subsequently ordered,

       that the defendants’ motion for summary judgment (as well as the parties’ briefs with respect to

       that motion) be considered as a motion for summary judgment brought by all defendants against

       all plaintiffs in both cases (Nos. 12 L 12077 and 14 L 3223).

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       Nos. 1-15-1166 & 1-15-1184 cons.

¶ 56      After reviewing the extensive briefs filed by the parties, and having heard oral arguments on

       the issues raised, on March 30, 2010, the trial court granted summary judgment in favor of the

       defendants. In doing so, the court held that the plain language of the construction contract reveals

       the parties’ intent that Empress assume the risk of loss for any fire loss and look to its different

       insurance policies as the single source of recovery. Accordingly, the court concluded that

       Empress had agreed to waive all rights to subrogation against all possible at-fault parties. In

       addition, the court found that pursuant to the plain language of the construction contract Empress

       was responsible for its own insurance deductibles. The plaintiffs now appeal.

¶ 57                                             II. ANALYSIS

¶ 58      Before addressing the merits, we begin by noting the well-established principles regarding

       grants of summary judgment. “Summary judgment is a drastic measure of disposing of

       litigation” (Bruns v. City of Centralia, 2014 IL 116998, ¶ 12) and should only be granted “if the

       movant’s right to judgment is clear and free from doubt” (Outboard Marine Corp. v. Liberty

       Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992)). See also Schade v. Clausius, 2016 IL App

       (1st) 143162, ¶ 18. Summary judgment is proper where “the pleadings, depositions, and

       admissions on file, together with the affidavits, if any, show that there is no genuine issue as to

       any material fact and that the moving party is entitled to a judgment as a matter of law.” 735

       ILCS 5/2-1005(c) (West 2012); see also Carlson v. Chicago Transit Authority, 2014 IL App (1st)
122463, ¶ 21; Fidelity National Title Insurance Co. of New York v. West Haven Properties

       Partnership, 386 Ill. App. 3d 201, 212 (2007) (citing Home Insurance Co. v. Cincinnati

       Insurance Co., 213 Ill. 2d 307, 315 (2004)); Virginia Surety Co. v. Northern Insurance Co. of

       New York, 224 Ill. 2d 550, 556 (2007). In determining whether the moving party is entitled to

       summary judgment, the court must construe the pleadings and evidentiary material in the record,

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       Nos. 1-15-1166 & 1-15-1184 cons.

       in the light most favorable to the nonmoving party and strictly against the moving party. Schade,

       2016 IL App (1st) 143162, ¶ 17; see also Happel v. Wal-Mart Stores, Inc., 199 Ill. 2d 179, 186

       (2002). “Although the burden is on the moving party to establish that summary judgment is

       appropriate, the nonmoving party must present a bona fide factual issue and not merely general

       conclusions of law.” Morissey v. Arlington Park Racecourse, LLC, 404 Ill. App. 3d 711, 724

       (2010). “A genuine issue of material fact exists where the facts are in dispute or where

       reasonable minds could draw different inferences from the undisputed facts.” Morrissey, 404 Ill.

       App. 3d at 724; see also Espinoza v. Elgin, Joliet & Eastern Ry. Co., 165 Ill. 2d 107, 114 (1995)

       (“[W]here reasonable persons could draw divergent inferences from the undisputed material

       facts or where there is a dispute as to [the] material fact, summary judgment should be denied

       and the issue decided by the trier of fact.”). Our review of the trial court’s entry of summary

       judgment is de novo. See Village of Palatine v. Palatine Associates, L.L.C, 2012 IL App (1st)
102707, ¶ 43; see also Ragan v. Columbia Mutual Insurance Co., 183 Ill. 2d 342, 349 (1998);

       Outboard Marine, 154 Ill. 2d at 102.

¶ 59      On appeal, the plaintiffs make numerous contentions of error, in some instances pertaining to

       all of them and in others only to some. For purposes of clarity, we begin by addressing those

       arguments raised by all of the plaintiffs.

¶ 60                                                A. Averus

¶ 61      First, all of the plaintiffs (Empress, Axis, National Fire, and Lloyd’s) argue that the trial court

       erred when it granted summary judgment in favor of Averus, on the basis of the waiver of

       subrogation clause in section 11.4.7 of the construction contract, where that clause could not

       have applied to Averus, since Averus operated under a separate pre-existing oral agreement with

       Empress and its work in the casino was not related to the renovation project. The defendants, on

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       Nos. 1-15-1166 & 1-15-1184 cons.

       the other hand, assert that pursuant to Article 6 of the construction contract, Averus, who was

       hired by Empress to perform “other operations on site,” became a “contractor” for purposes of

       the waiver of subrogation in section 11.4.7. For the reasons that follow, we disagree with the

       defendants.

¶ 62      In interpreting a contract, our primary objective is to effectuate the intent of the parties.

       Thompson v. Gordon, 241 Ill. 2d 428, 441 (2011); see also Gallagher v. Lenart, 226 Ill. 2d 208,

       232 (2007). In doing so, we first look to the plain language of the contract to determine the

       parties’ intent. Thompson, 241 Ill. 2d at 441; see also Gallagher, 226 Ill. 2d at 233. If the words

       in the contract are clear and unambiguous, we must give them their plain, ordinary and popular

       meaning. Thompson, 241 Ill. 2d at 441 (citing Central Illinois Light Co. v. Home Insurance Co.,

       213 Ill. 2d 141, 153 (2004)). However, if the language of the contract is ambiguous, we may look

       to extrinsic evidence to determine the parties’ intent. Thompson, 241 Ill. 2d at 441; Gallagher,
226 Ill. 2d at 233. Language in a contract is ambiguous if it is “susceptible to more than one

       meaning.” Thompson, 241 Ill. 2d at 441. However, mere disagreement between the parties

       concerning a provision’s meaning will not automatically render such language ambiguous.

       Thompson, 241 Ill. 2d at 443. Rather, instead of focusing on one clause or provision in isolation,

       we, as the reviewing court, must read the entire contract in context and construe it as a whole,

       viewing each provision in light of the other ones. See Gallagher, 226 Ill. 2d at 233; see also

       Thompson, 241 Ill. 2d at 441. In doing so, we will not add language or matters to a contract

       about which the instrument is silent, nor add words or terms to the agreement to change the plain

       meaning, as expressed by the parties. Sheehy v. Sheehy, 299 Ill. App. 3d 996, 1001 (1998).

¶ 63      In the present case, section 11.4.7 of the construction contract provides in pertinent part:

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       Nos. 1-15-1166 & 1-15-1184 cons.

              “Waivers of Subrogation. The Owner and Contractor waive all rights against (1) each

              other and any of their subcontractors, sub-subcontractors, agents, and employees, each of

              the other *** and separate contractors described in Article 6 *** for damages caused by

              fire or other causes of loss to the extent covered by property insurance obtained pursuant

              to this Section 11.4 or other property insurance applicable to the Work ***.”

¶ 64      Further, Article 6, which is titled “Construction by Owner or by Separate Contractors,” states

       in relevant part:

              “§ 6.1.1 The Owner reserves the right to perform construction or operations related to the

              Project with the Owner’s own forces, and to award separate contracts in connection with

              other portions of the Project or other construction or operations on the site under

              Conditions of the Contract identical or substantially similar to these including those

              portions related to insurance and waiver of subrogation.”

¶ 65      In addition, section 6.1.2 provides that “[w]hen separate contracts are awarded for different

       portions of the Project or other construction or operations on the site, the term ‘Contractor’ in the

       Contract Documents in each case shall mean the Contractor who executes each separate Owner-

       Contractor Agreement.” Finally, section 6.1.4 states that “when the Owner performs ***

       operations related to the Project with the Owner’s own forces, the Owner shall be deemed to be

       subject to the same obligations and to have the same rights which apply to the Contractor under

       the Conditions of the Contract, including without excluding others, those stated in [inter alia]

       Article[ ] *** 11 ***.”

¶ 66      Construing these sections of the contract as a whole, we find that under the plain language of

       the construction contract, Averus does not fall into the category of entities to which the waiver of

       subrogation applies. The plain language of section 11.4.7 makes clear that the waiver is limited

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       Nos. 1-15-1166 & 1-15-1184 cons.

       to a class of defined participants, including (1) the owner; (2) the contractor; (3) the

       subcontractor; (4) the sub-subcontractors; and (5) their respective agents and employees, as well

       as “separate contractors described in Article 6.” The construction contract clearly identifies

       Empress as the owner and O’Neil as the contractor. In addition, the contract defines a

       “subcontractor” as an “entity who has a direct contract with the Contractor to perform a portion

       of the Work at the site” and a “sub-subcontractor” as an “entity who has a direct or indirect

       contract with the Contractor to perform a portion of the Work at the site.” As such, since Averus

       admittedly had no direct contract with either O’Neil or any of O’Neil’s subcontractors, Averus

       does not fall into the category of either subcontractor or a sub-subcontractor. Similarly, because

       Averus admitted that it had a separate and preexisting contract with Empress to periodically

       clean ductwork in the casino, it was neither Empress’s employee, nor agent. Accordingly, aside

       from the class defined by Article 6, Averus does not fall into any of the defined categories to

       which the waiver would apply.

¶ 67      The defendants nonetheless argue that because section 6.1.1 of the contract permits Empress

       to “award separate contracts” in connection with “other *** operations on the site,” Averus is a

       “separate contractor” within the meaning of Article 6, so as to fall within the purview of the

       waiver of subrogation clause. The defendants, however, conveniently forget to mention that

       section 6.1.1 conditions Empress’s award of separate contracts for the performance of “other

       construction or operations on the site” to those operations “under Conditions of the Contract

       identical or substantially similar to these including those portions related to insurance and waiver

       of subrogation.” “Conditions of the Contract” are explicitly defined in the construction contract,

       and include General, Supplementary and Other Conditions. The “General Conditions” are

       defined as the AIA Document A201-1997, as modified, and the “Supplementary and Other

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       Nos. 1-15-1166 & 1-15-1184 cons.

       Conditions” are defined as those issued and incorporated via Change Orders. Accordingly, it is

       clear from the plain language of section 6.1.1 that separate contracts for “other operations on

       site” do not include just any operations conducted at the casino but, rather, must be made under a

       contract identical or similar to AIA Document A201-1997, i.e., they must be related to

       construction. This is further evidenced by the very title of Article 6, which indicates that it

       applies to “Construction By Owner or By Separate Contractors.” For that same reason, section

       6.1.4 confers on Empress obligations to its separate contractors “under the Conditions of the

       Contract,” and including waiver of subrogation, only where Empress “performs *** operations

       related to the Project with [its] own forces.” Since, in the present case, Averus’s vice president

       Stewart admitted that it operated under a completely separate, pre-existing, oral, non-AIA

       contract with Empress, to clean the casino ductwork, Averus cannot now avail itself of the

       waiver of subrogation provision in section 11.4.7. In addition, Stewart admitted in his deposition

       that in negotiating Averus’s contract with Empress, the parties never discussed or contemplated

       any waiver of subrogation.

¶ 68      Accordingly, under these circumstances, the trial court erred when it granted summary

       judgment in favor of the defendant Averus.

¶ 69                    B. Waiver of Subrogation for Willful and Wanton Misconduct

¶ 70      With respect to the remaining defendants, the plaintiffs (Empress, Axis, National Fire, and

       Lloyd’s) all collectively assert that the trial court erred in granting summary judgment pursuant

       to the waiver of subrogation clause, because public policy in Illinois bars the enforcement of

       exculpatory clauses where heighted misconduct is alleged. The plaintiffs assert that because they

       proceeded with claims for willful and wanton misconduct, the court should have found the

       waiver of subrogation provision unenforceable. For the reasons that follow, we disagree.

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¶ 71      The general purpose of a waiver of subrogation provision is to permit parties to a

       construction contract to exculpate each other from personal liability in the event of property loss

       or damage to the work occurring during construction, relying instead on the insurance purchased

       by one of the parties to provide recovery for that loss. Intergovernmental Risk Management v.

       O’Donnell, Wicklund, Pigozzi & Peterson Architects, Inc., 295 Ill. App. 3d 784, 791 (1998); see

       also Village of Rosemont v. Lentin Lumber Co., 144 Ill. App. 3d 651 (1986). Such provisions

       shift the risk of loss to the insurance company to facilitate timely completion of the project and

       avoid the prospect of time-consuming and expensive litigation, regardless of which party is at

       fault. See Intergovernmental Risk, 295 Ill. App. 3d at 793; see also Village of Rosemont, 144 Ill.

       App. 3d at 660 (“ ‘The insurance clause shifts the risk of loss to the insurance company

       regardless of which party is at fault.’ [Citation.]” ); Ralph Korte Construction Co. v. Springfield

       Mechanical Co., 54 Ill. App. 3d 445 (1977).

¶ 72      In Intergovernmental Risk, this court had an opportunity to address an argument similar to

       the one raised here by the plaintiffs. In that case, the plaintiffs argued that an AIA construction

       contract, with a waiver of subrogation clause identical to the one here, could not apply to

       damages caused by either “negligent” or “wrongful acts” of the defendant. Intergovernmental

       Risk, 295 Ill. App. 3d at 792. This court disagreed, finding that the waiver of subrogation

       provision was contingent upon the types of perils that could result in property damage and loss,

       and not on what caused those perils (i.e., the manner by which the perils were caused).

       Intergovernmental Risk, 295 Ill. App. 3d at 795-96. As the court explained:

              “[The waiver of subrogation clause] identifies the types of perils that could cause

              property damage and loss. It identifies fire as a distinct peril. It does not differentiate

              between the manner in which that peril arises, that is, whether by acts of God or by the

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       Nos. 1-15-1166 & 1-15-1184 cons.

              intentional or unintentional, negligent or reckless acts of human beings. In point of fact,

              fire loss could result from any of these acts, although as noted in one case it ‘nearly

              always [is] caused by negligence. [Citation.] To the extent that this provision does

              purport to enumerate different types of human conduct that could cause losses of

              property, it does so with respect to nonfire-related physical loss or damage; and, even

              there, it purports only to be inclusive, not preclusive. Moreover, strong argument can be

              made that even with respect to those property losses the focus is not upon the differing

              human motivations behind the conduct causing the damage but upon the different type of

              hazards resulting from categories of human conduct conventionally treated as separate

              underwriting coverages.” Intergovernmental Risk, 295 Ill. App. 3d at 795-96.

       Accordingly, the court in that case concluded that under the express language of the contract, the

       owner was required to obtain “property insurance that insured against damage to property

       caused by fire regardless of the fire’s origin or cause” (emphasis added) and as such, the waiver

       of subrogation extended to the fire loss, regardless of how the fire had been started.

       Intergovernmental Risk, 295 Ill. App. 3d at 796.

¶ 73      We agree with the rationale in Intergovernmental Risk, and find it directly applicable to the

       cause at bar. Just as in Intergovernmental Risk, the parties here negotiated the construction

       contract using the AIA form. In doing so, they obligated Empress, as the owner, to purchase

       insurance covering “without limitation, insurance against the perils of fire (with extended

       coverage) and physical loss or damage, including *** [inter alia], theft, vandalism, malicious

       mischief, collapse, earthquake, flood, windstorm, falsework, testing and startup.” In addition, the

       parties explicitly negotiated a waiver of subrogation for damages caused by fire. Specifically,

       pursuant to section 11.4.5 they agreed that, “if during the Project construction period” Empress

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       Nos. 1-15-1166 & 1-15-1184 cons.

       insured its properties, it would “waive all rights in accordance with the terms of Section 11.4.7

       for damages caused by fire or other causes of loss.” Section 11.4.7 further explicitly provided

       that Empress and O’Neil would waive all rights against “(1) each other and any of their

       subcontractors, sub-subcontractors, agents and employees, each of the other, and (2) the

       Architect, Architect’s consultants, separate contractors described in Article 6, if any and any of

       their subcontractors, sub-subcontractors, agents and employees, for damages caused by fire or

       other causes of loss to the extent covered by property insurance obtained pursuant to this Section

       11.4.” In addition, the parties agreed that the waiver of subrogation would “be effective as to a

       person or entity even though that person or entity would otherwise have a duty of

       indemnification, contractual or otherwise, did not pay the insurance premium directly or

       indirectly, and whether or not the person or entity had an insurable interest in the property

       damage.”

¶ 74      Just as in Intergovernmental Risk, we hold that the parties here expressly foresaw the

       potential of property loss occurring due to fire and chose to impose on Empress the duty to

       insure against any such loss (regardless of fault), expressly waiving all rights against each other

       for damages caused by such perils. See Intergovernmental Risk, 295 Ill. App. 3d at 796; see also

       Village of Rosemont, 144 Ill. App. 3d at 661 (construing similar waiver of subrogation provision

       to hold that “the parties expressly waived all rights against each other for damages caused by

       perils covered under the policy” and “intended to allocate property loss to an insurer and to limit

       the recourse of the plaintiff, the party acquiring the policy, solely to the insurance proceeds”);

       Ralph Korte, 54 Ill. App. 3d at 447 (interpreting waiver of subrogation provision to mean that

       “the parties had agreed, in effect, to assume the risk of loss as between themselves due to fire or

       other perils, to the extent each party was covered by insurance”). Nothing in the language of the

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        Nos. 1-15-1166 & 1-15-1184 cons.

        waiver of subrogation clause indicates that the parties intended there to be an exception for fires

        caused by willful and wanton conduct. Since “[t]he law and the public policy of Illinois permit

        and require that competent parties be free to contract with one another,” we conclude that the

        trial court properly applied the waiver of subrogation clause to bar the plaintiffs’ claims

        attempting to recoup losses they incurred as a result of the fire. Liccardi v. Stotl Terminals, Inc.,

        178 Ill. 2d 540, 549 (1997); see also Saba Software, Inc. v. Deere & Co., 2014 IL App (1st)
132381, ¶ 60 (“Illinois’s public policy strongly favors freedom to contract [citation] and broadly

        allows parties to determine their contractual obligations. [Citation.] Hussein v. L.A. Fitness

        International, L.L.C., 2013 IL App (1st) 121426, ¶ 11. As a result, we exercise sparingly the

        power to declare a private contract void as against public policy.” (Internal quotation marks

        omitted.))

¶ 75       In coming to this conclusion, we further find that in making their public policy argument, the

        plaintiffs confuse waivers of subrogation with exculpatory clauses. The law in Illinois is well

        settled that a waiver of subrogation is not an exculpatory clause. See, e.g., Allstate Indemnity Co.

        v. ADT LLC, 110 F. Supp. 3d 856, 862 (N.D. Ill. 2015) (“[S]ubrogation waivers are not true

        exculpatory provisions. They merely allocate risk of loss; they do not immunize the wrongdoer

        from all liability, nor do they require the injured parties to give up all their claims or leave them

        uncompensated.”); see also Hartford v. Burns International Security Services, Inc., 172 Ill. App.
3d 184 (1988); see also Bastian v. Wasau Homes Inc., 635 F. Supp. 201 (N.D. Ill. 1986).

¶ 76	      Similar to the present case, in Hartford, 172 Ill. App. 3d 184, the plaintiff insurer

        argued that a waiver of subrogation in a contract for security services for the Board of Trade

        Building was an exculpatory clause that should be deemed void (as against public policy) both

        under New York and Illinois law. This appellate court disagreed, holding:

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       Nos. 1-15-1166 & 1-15-1184 cons.

              “Here, we are dealing with two corporations which voluntarily entered into a contract at

              arm’s length, with full freedom to do so. The waiver provision in question here is not a

              true exculpatory clause. It is merely an agreement between the parties to shift most of the

              risk of loss to a third party, namely: the [insured Building’s] insurance company, i.e., [the

              plaintiff insurer]. The clause did not immunize [the Building] from all liability nor did it

              require [the insured Building] to give up all claims against [the defendant.] The [insured

              Building] gave up only its rights against the [defendant] to the extent that it was insured.

              Thus, the waiver provision *** does not violate Illinois public policy ***.” Hartford, 172
Ill. App. 3d at 190.

¶ 77      In coming to this decision, the court in Hartford relied in part on the decision in Bastian,

       635 F. Supp. 201. In that case the plaintiff home purchasers alleged that a waiver of subrogation

       clause in a sales contact was an unenforceable exculpatory clause because it was unconscionable

       and violated Illinois public policy. See Bastian, 635 F. Supp. at 202. Applying Illinois law, the

       federal court in that case disagreed, explaining the distinction between a waiver of subrogation

       and an exculpatory clause:

                  “The clause in question here is not even a true exculpatory clause. With it the parties

              agree to shift most of the risk of property loss to a third party, namely the Bastians’s

              insurance company; or, worded another way, by the clause Wausau became an additional

              beneficiary of the Bastians’s insurance policy. [Citations.] Such a clause does not leave

              the injured party uncompensated. Indeed, the Bastians have already been largely

              compensated for their loss, albeit from their own insurance rather than by Wausau.”

              Bastian, 635 F. Supp. at 203.

¶ 78      In making their argument, the plaintiffs here fail to cite to any Illinois decision in which the

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       Nos. 1-15-1166 & 1-15-1184 cons.

       court refused to enforce an insurance subrogation waiver on the basis that willful and wanton

       misconduct was alleged. Rather, the majority of the decisions they cite discuss contractual

       exculpatory provisions. See, e.g., Oelze v. Score Sports Venture, LLC, 401 Ill. App. 3d 110

       (2010) (exculpatory clause in membership agreement signed by a member who tripped on a rope

       ladder during a tennis match); Garrison v. Combined Fitness Centre, Ltd., 201 Ill. App. 3d 581

       (1990) (exculpatory clause in a health club membership agreement signed by a member who was

       injured while lifting weights); Downing v. United Auto Racing Ass’n, 211 Ill. App. 3d 877

       (1991) (release signed by a pit crew member who was struck by a car during a race); Falkner v.

       Hinckley Parachute Center, Inc., 178 Ill. App. 3d 597 (1989) (exculpatory clause within a

       release signed by a parachutist who died when his parachute became entangled).

¶ 79      The only Illinois case the plaintiffs offer in support of their argument is Third Swansea

       Properties, Inc. v. Ockerlund Construction Co., 41 Ill. App. 3d 894 (1976). Although at first

       blush that decision appears factually similar, a thorough reading reveals that it is not a waiver of

       subrogation case. In Third Swansea, the plaintiffs, owners (and lessor-occupants) of a property

       on which a bakery addition was being erected and that was damaged by fire during the

       construction, sued, inter alia, a subcontractor involved in the project. Third Swansea, 41 Ill. App.
3d at 895. While the contract at issue contained a waiver of liability clause, it also obligated the

       plaintiffs to obtain insurance, which they apparently failed to do so, leaving them uncompensated

       for their loss. See Third Swansea, 41 Ill. App. 3d at 896-97. Although the court in Third Swansea

       concluded that the plaintiffs could proceed against the subcontractor with their willful and

       wanton claims, it found that it was unable to determine from the record presented whether the

       insurance, if it had been obtained by the plaintiffs, would have been so comprehensive so as to

       bar the plaintiffs’ subrogation action or whether it would have covered only the subcontractor’s

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       Nos. 1-15-1166 & 1-15-1184 cons.

       interest in the project and thus allowed the action for damages directly against the subcontractor.

       Since the parties here do not dispute that Empress had three insurance policies in place at the

       time of the renovation project, and that the three insurers collectively reimbursed Empress for its

       fire losses, Third Swansea is inapplicable.

¶ 80      Therefore, we conclude that nothing in our State’s law or public policy prevents competent

       parties to a construction contract to negotiate a full waiver of subrogation rights (regardless of

       fault) among themselves, so as to require one of them to obtain insurance and have the insurer

       provide the sole recovery for the identified loss. Accordingly, we conclude that the waiver of

       subrogation clause in the construction contract was applicable to bar the plaintiffs’ willful and

       wanton claims and permit the trial court to enter summary judgment. As such, we must next

       determine whether that clause applies to all three insurers, and if so to what extent.

¶ 81                   C. Application of Waiver to the Two Property Insurance Policies

¶ 82      Axis concedes that under the plain language of the construction contract, the waiver of

       subrogation provision applies to it as the builder’s risk insurer. Empress, National Fire, and

       Lloyd’s agree and further contend that the waiver provision is limited to Axis’ builder’s risk

       insurance policy and therefore does not apply to either of Empress’s property insurance policies

       with National Fire and Lloyd’s. We disagree.

¶ 83       The plain language of the construction contract is clear and contemplates that the waiver of

       subrogation applies both to the specific renovation builder’s risk insurance and the general

       property insurers.

¶ 84      Under section 11.4.1 of the contract, Empress was obligated to purchase and maintain until

       final payment (i.e., the completion of the project) “property insurance written on a builder’s risk

       ‘all-risk’ or equivalent policy form.” Section 11.4.1.1 enumerated the types of coverage that

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       must be included “without limitation” in such a builder’s risk policy, and included perils like

       fire. Section 11.4.7 further set forth the waiver of subrogation, obligating the parties to waive all

       rights against each other for “damages caused by fire or other causes of loss to the extent covered

       by property insurance obtained pursuant to this Section 11.4 of other property insurance

       applicable to the Work ***.” Section 11.4.5 contains an additional waiver of subrogation

       provision and further obligates Empress to waive all rights in accordance with the terms of

       section 11.4.7 “for damages caused by fire or other causes of loss covered by” any “separate

       property insurance,” if “during the Project construction period [it] insures properties, *** at or

       adjacent to the site by property insurance under policies separate from those insuring the Project,

       or if after final payment property insurance is to be provided on the completed project through a

       policy or policies other than those insuring the Project during the construction period.”

¶ 85      Reading the aforementioned language of the construction contract as a whole, for the reasons

       that shall be more fully articulated below, we hold that pursuant to both section 11.4.7 and

       11.4.5, Empress unambiguously agreed to waive any and all of National Fire’s and Lloyd’s

       subrogation rights.

¶ 86      With respect to the waiver contained in section 11.4.7, the contract here is identical to the

       one at issue in Intergovernmental Risk. In that case, just as here, the plaintiffs argued that the

       section 11.4.7 waiver of subrogation did not apply to the all-risk insurance policies because they

       were not “builder’s all-risk policies” purchased specifically for the construction project, but

       rather were policies that had been purchased by the Village more than 10 years before the

       renovation construction project began. Intergovernmental Risk, 295 Ill. App. 3d at 796. In

       rejecting the plaintiffs’ argument, the court in Intergovernmental Risk, first noted that the

       plaintiffs’ interpretation of the waiver of subrogation would have the effect of rendering the

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       phrase in section 11.4.7 “or other property insurance applicable to the Work” redundant and

       meaningless, since it would not allow for any alternative form of insurance implied by the word

       “or.” Intergovernmental Risk, 295 Ill. App. 3d at 796-97.

¶ 87        The court then relied on the interpretation of similar provisions by courts of other

       Jurisdictions, which also found that general all-risk policies obtained prior to execution of the

       construction contract constituted “other property insurance applicable to the Work” (internal

       quotation marks omitted) triggering the waiver of subrogation contained in section 11.4.7. See

       Intergovernmental Risk, 295 Ill. App. 3d at 797 (quoting Lloyd’s Underwriters v. Craig & Rush,

       Inc., 32 Cal. Rptr. 2d 144, 146 (Ct. App 1994), and citing E.C. Long, Inc v. Brennan’s of Atlanta,

       Inc., 252 S.E.2d 642 (Ga. Ct. App. 1979), and Haemonetics Corp. v. Brophy & Phillips Co., 501
N.E.2d 524 (Mass. Ct. App. 1986)).

¶ 88        The court in Intergovernmental Risk further recognized that the issue was not “whether the

       policies [we]re called ‘all-risk’ or ‘general liability’ ” but rather “whether those policies

       cover[ed] the risk and losses delineated in the construction agreement between the [parties].”

       Intergovernmental Risk, 295 Ill. App. 3d at 797-98.

¶ 89       We agree with the rationale of Intergovernmental Risk and see no reason to depart from it in

       this case.

¶ 90       Empress, National Fire, and Lloyd's nonetheless argue that Intergovernmental Risk is

       inapplicable to the cause at bar because, unlike in that case, National Fire and Lloyd’s policy

       explicitly contained language excluding coverage for construction projects in excess of $10

       million. We disagree.

¶ 91       While it is true that the two policies contain language limiting insurance coverage for

       property in the course of construction to incidental course of construction (defined as projects of

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       $10,000 million or less), the term “property” in those policies is very broadly defined and also

       includes, without limitation, “property in the care, custody or control of the Insured or for which

       the Insured is legally liable to insure” and “property of the Insured in the care, custody or control

       of others.” Since Empress’s vice president for design and construction Nelms admitted that

       during the construction Empress placed the casino in the care and control of O’Neil and under

       the construction contract was legally liable to insure its property during the renovation, we are

       unpersuaded by National Fire and Lloyd’s argument attempting to limit the policy’s coverage.

       What is more, National Fire and Lloyd's ignore the fact that the language of their policies’ own

       subrogation clause explicitly provides that they “will not acquire any rights of recovery that the

       Insured has expressly waived prior to a loss.” Since Empress agreed to waive any subrogation

       rights against the defendants prior to the fire, by way of the construction contract and by the

       express terms of their own policies, National Fire and Lloyd’s are also bound by that waiver.

¶ 92      Accordingly, applying the rationale of Intergovernmental Risk to the facts of this case, we

       conclude that the waiver of subrogation clause in section 11.4.7 applied equally to National

       Fire’s and Lloyd’s policies. See Intergovernmental Risk, 295 Ill. App. 3d at 798; see also

       Haemonetics Corp., 501 N.E.2d at 525-26.

¶ 93      However, even if we were to ignore the holding in Intergovernmental Risk and were to

       construe “other property insurance applicable to the Work,” in section 11.4.7 as excluding

       National Fire and Lloyd’s policies, the two property insurers would nonetheless be bound by the

       waiver of subrogation prescribed in section 11.4.5. That section provides that a section 11.4.7

       waiver of subrogation is triggered “if during the Project construction period [Empress, as] the

       Owner insures properties, real or personal or both, at or adjacent to the site by property

       insurance under policies separate from those insuring the Project.”

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       Nos. 1-15-1166 & 1-15-1184 cons.

¶ 94      Contrary to National Fire and Lloyd’s position, this provision has no temporal requirement.

       The owner is not required to purchase the separate insurance policy after the project has already

       begun. The key word of this section is “insures.” The plain language of section 11.4.5 does not

       state that the waiver applies if the owner procures policies during the construction period.

       Rather, the paragraph’s present tense use of “insures” suggests only that the separate policy is in

       existence during the project, not that it was procured during the project. See Hunt Construction

       Group, Inc. v. Hun School of Princeton, No. 08-3550, 2010 WL 3724279, at *13 (D.N.J. Apr.

       29, 2010).

¶ 95      In the present case, there is no dispute that Empress had in existence separate property “all­

       risk” insurance policies with National Fire and Lloyd during the renovation project. What is

       more, National Fire’s designated representative, Cassacio, admitted in his deposition that

       National Fire “paid for the loss to [Empress’s] property that was next door [to the casino]” (i.e.,

       adjacent to the site). Accordingly given this concession, Empress and National Fire cannot

       contest that the plain language of section 11.4.5 contemplated their policies and triggered the

       waiver of subrogation clause in section 11.4.7.

¶ 96      Empress, National Fire, and Lloyd’s nevertheless contend that we should not focus on the

       language of the subrogation waivers, but rather begin our analysis with the language of section

       11.4, requiring Empress to obtain insurance. They contend that because both the waiver of

       subrogation (section 11.4.7) and the separate property insurance (section 11.4.5) clauses are

       included in section 11.4, and that section requires Empress to procure “builder’s risk all-risk”

       only for the work, and not Empress’s entire property (i.e., buildings adjacent to the casino), the

       scope of the waiver should be just as narrow and apply (1) only to the work; and (2) only to the

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       Nos. 1-15-1166 & 1-15-1184 cons.

       damages related to the work (i.e., the value of the materials, tools and labor incorporated into the

       renovation project, and not the extra expenses, such as business interruption). We disagree.

¶ 97      In that respect, we note that the majority of jurisdictions that have had the opportunity to

       address this issue have rejected the “work or non-work” distinction proposed here by the

       plaintiffs. See Board of Commissioners v. Teton Corp., 30 N.E.3d 711, 716 (Ind. 2015);

       Lexington Insurance Co. v. Entrex Communication Services, Inc., 749 N.W.2d 124, 135 (Neb.

       2008); Federal Insurance Co. v. Woodruff Construction, No. 12-0821, 2012 WL 5954588 (Iowa

       Ct. App. Nov. 29, 2012); ASIC II Ltd. v. Stonhard, Inc., 63 F. Supp. 2d 85 (D. Me. 1999);

       Lloyd’s Underwriters, 32 Cal. Rptr. 2d 144; Housing Investment Corp. v. Carris, 389 So. 2d 689

       (Fla. Ct. App. 1980); E.C. Long, Inc. v. Brennan’s of Atlanta, Inc., 252 S.E.2d 642 (Ga. Ct. App.

       1979); Willis Realty Associates v. Cimino Construction Co., 623 A.2d 1287 (Me. 1993);

       Haemonetics, 501 N.E.2d 524; Employers Mutual Casualty Co. v. A.C.C.T., Inc., 580 N.W.2d
490 (Minn. 1998); Chadwick v. CSI, Ltd., 629 A.2d 820 (N.H. 1993); Westfield Insurance Group

       v. Affinia Development, LLC., 2012-Ohio-5348, 982 N.E.2d 132; Trinity Universal Insurance

       Co. v. Bill Cox Construction, Inc., 75 S.W.3d 6 (Tex. App. 2001). The rationale has been that if

       the waiver extended only to damages to the work, there would be no need to include the waiver

       in section 11.4.5 for damages to property adjacent to the site covered by policies separate from

       those described in section 11.4.7. See Federal Insurance, 2012 WL 5954588, at *,4 (holding that

       “[s]ection 11.4.5 clearly provides for waiver of all rights for damages covered by any property

       insurance policies ‘separate from those insuring the project’ that cover the ‘properties, real or

       personal or both, at or adjacent to the site,’ ” and rejecting any work-non-work distinction, noting

       that it would “render section 11.4.5 of no effect to the construction project because the policies

       described in section 11.4.5 are ‘separate from those insuring the project’ and include ‘property

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        Nos. 1-15-1166 & 1-15-1184 cons.

        *** adjacent to the site’ ”); see also Teton, 30 N.E.3d at 717 (holding that “the AIA contract

        provides that even when the Owner has both builders-risk coverage for the work and separate

        property insurance for ‘adjoining or adjacent’ property, its subrogation waiver *** extends to

        ‘fire or other perils covered by this separate property insurance policy,’ ” because the separate

        provision would be “an anomaly within the AIA contractual scheme” if the parties already

        expected the liability insurance to cover “non-work damages”); see also Lexington, 749 N.W.2d

        at 134-35 (“We understand *** [section 11.4.5] to mean that if the owner acquires a separate

        property insurance policy to cover non-Project property—a policy that did not cover the Project

        or Work property—and the non-Project property is damaged, the owner waives subrogation

        rights for the insurer as to those damages. So even though the damage occurred to non-Work

        property, the owner waived subrogation rights because the damages were insured.”).

¶ 98          We agree with the rationale of these decisions and see no reason to depart from it here.

        Accordingly, we conclude that the waiver of subrogation clause in section 11.4.5 applied to

        National Fire’s and Lloyd’s policies.

¶ 99                                            E. Breach of Contract

¶ 100         Empress, National Fire, and Lloyd’s next contend that the defendants’3 multiple

        breaches of the construction contract should bar enforcement of the waiver of subrogation clause.

        Specifically, citing to the “time is of the essence clause,” the three plaintiffs first argue that

        because completion of the renovation project on “time” was a material provision of the

        construction contract, and was never fulfilled as a result of the fire, the plaintiffs should not be

        3
            The allegations in Empress’s complaint for breach of contract were made against all the

        defendants, except for Averus. The breach of contract issues raised on appeal accordingly also

        exclude Averus.

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        Nos. 1-15-1166 & 1-15-1184 cons.

        forced to fulfill their waiver of subrogation obligations under the agreement. Furthermore, the

        three plaintiffs assert that because the construction contract required the contractor to obtain

        liability insurance and to indemnify the owner for claims arising out of the performance of the

        work, it conflicted with the waiver of subrogation clause, and therefore the waiver is not

        enforceable. For the reasons that follow, we disagree.

¶ 101      At the outset, we note that contrary to the plaintiffs’ assertion, the waiver of subrogation

        provision is not limited to negligence actions, but can apply with equal force to contract claims.

        See Village of Rosemont, 144 Ill. App. 3d 665-66 (holding that a waiver of subrogation provision

        applied to bar breach of contract, implied warranty and strict liability claims). As already

        explained above in more detail, the parties here agreed that any casualty loss resulting from a fire

        would be borne solely by Empress’s property insurance and that accordingly Empress expressly

        waived all claims against the defendants arising from such a loss covered by such insurance. The

        fire was related to performance on the contract and therefore the loss and damage from the fire

        were all covered under the property insurance policies Empress was required to maintain. As

        such, the waiver of subrogation bars the breach of contract claims as well. See Village of

        Rosemont, 144 Ill. App. 3d 665-66.

¶ 102      Turning specifically to the plaintiffs’ arguments, with respect to the “time is of the essence”

        clause, we find that the plaintiffs have failed to present any facts establishing that this provision

        was material to the contract, or for that matter, any rationale to support the position that the

        defendants’ failure to complete the project within the contemplated time-frame would or should

        somehow negate the waiver of subrogation provision. It is well-settled that the mere fact that the

        parties include a “time is of the essence” provision in a contract does not automatically make the

        provision material. See Asset Recovery Contracting, LLC v. Walsh Construction Co. of Illinois,

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        Nos. 1-15-1166 & 1-15-1184 cons.

        2012 IL App (1st) 101226, ¶ 73 (holding that “even where the contract contains an express

        clause stipulating that ‘time is of the essence,’ Illinois courts will inquire into the situation of the

        parties and the underlying circumstances to determine whether a delay in performance resulted in

        a ‘material breach’ ” (internal quotation marks omitted)).

¶ 103       We similarly reject the plaintiffs’ contention that the provisions of the construction contract

        requiring the contractor to obtain liability insurance and to indemnify Empress for claims arising

        out of the performance of the work conflicted with the waiver of subrogation clause, so as to

        render those provisions an exception to the waiver. This same argument was raised and rejected

        by the plaintiffs in Village of Rosemont, 144 Ill. App. 3d at 663. In that case, the appellate court

        held that the waiver of subrogation clause was part of the owner’s property insurance obligations

        while the insurance and indemnity provision were tied to the contractors’ liability insurance

        obligations. Village of Rosemont, 144 Ill. App. 3d at 663. The court explained that it was

        apparent that the liability insurance and the indemnification provisions were “entirely consistent

        with the explicit waiver of claims” in the waiver of subrogation clause, since they were intended

        to provide a different type of coverage (i.e., contractor’s liability insurance versus property

        insurance due to fire loss). Village of Rosemont, 144 Ill. App. 3d at 663. The same is true here,

        where the type of insurance the defendant contractor was required to obtain under the

        construction contract, and to which the three plaintiffs cite, included liability insurance (such as

        workers’ compensation and employers’ liability, commercial auto, umbrella and contractor’s

        equipment), while the property insurance and waivers of subrogation required Empress to

        maintain coverage for property loss in the event of, inter alia, fire damage to the renovation

        project and to waive its subrogation rights. Moreover, the express language of the waiver of

        subrogation makes clear that the waiver will trump any indemnification obligations. See supra

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        Nos. 1-15-1166 & 1-15-1184 cons.

        ¶ 15 (“ ‘A waiver of subrogation shall be effective as to a person or entity even though that

        person or entity would otherwise have a duty of indemnification, contractual or otherwise, ***

        and whether or not the person or entity had an insurable interest in the property damage.’ ”). To

        accept the plaintiffs’ interpretation, in contravention of the already established rule in Village of

        Rosemont, so as to create an exception to the waiver of subrogation for contractor’s liability

        insurance, would render the waiver of subrogation, which was intended to shift the risk of loss to

        the owner’s insurance company, meaningless.

¶ 104      The plaintiffs do not cite to any Illinois authority to the contrary. Instead they rely on Liberty

        Mutual Insurance Co. v. Perfect Knowledge, Inc., 752 N.Y.S.2d 677 (App. Div. 2002), a case

        decided by the New York appellate court. In light of already existing Illinois precedent to the

        contrary discussed above, we need not, however, consider that decision, as it is not binding upon

        this court. See, e.g., In re M.H., 2011 IL App (1st) 110196, ¶ 58 (“this court is not bound by

        decisions from other jurisdictions”).

¶ 105                                        F. Empress’s Deductibles

¶ 106      Lastly, on appeal, Empress alone asserts that it never waived its right to recover its

        deductibles under its general property insurance policies with National Fire and Lloyd’s.

        Specifically, Empress asserts that the language of the construction contract requiring it to pay

        deductibles only applies to its builder’s risk policy with Axis. In that respect, Empress concedes

        that the language of section 11.4.1.3 states that “if the property insurance requires deductibles,”

        Empress will pay “costs not covered because of such deductibles.” Nonetheless, Empress

        contends that because section 11.4.1.3 is part and parcel of section 11.4, requiring Empress to

        obtain the builder’s risk insurance, this section does not apply to Empress’s policies with

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        Nos. 1-15-1166 & 1-15-1184 cons.

        National Fire and Lloyd’s, which were obtained long before the parties entered into the

        construction contract. We disagree.

¶ 107      While it is true that section 11.4.1.3 is part of section 11.4 of the construction

        contract, the plain language of that section does not limit the deductible requirement to the

        builder’s insurance, but rather speaks of “property insurance” in general. Contrary to Empress’s

        interpretation, the term “property insurance” is used interchangeably in the entirety of section

        11.4, obligating Empress to maintain “property insurance,” and at different times connotes both

        builder’s risk and general property insurance. See supra ¶ 15. At those instances where the

        parties intended to differentiate between the types of property insurance used, they clearly do so.

        As already discussed above, section 11.4.5 of the construction contract explicitly permits

        Empress to use its general “property insurance” to insure its property (at or adjacent to the

        construction site) for losses resulting from a fire, and obligates Empress to waive its subrogation

        rights with respect to those policies. Under such a requirement, it makes no sense to permit

        Empress to avoid its deductibles on such property insurance. Accordingly, since nothing in the

        plain language of section 11.4.1.3 indicates a limitation of the deductible requirement to the

        builder’s risk policy, we conclude that Empress is responsible for its deductibles to National Fire

        and Lloyd’s.

¶ 108                                          III. CONCLUSION

¶ 109      For the reasons that follow, we affirm in part the judgment of the circuit court granting

        summary judgment to all of the defendants on all claims, except for those involving the

        defendant, Averus. We reverse in part that portion of the trial court order with respect to Averus

        and remand for further proceedings against that defendant.

¶ 110      Affirmed in part; reversed and remanded in part.

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Nos. 1-15-1166 & 1-15-1184 cons.

                                   42