Court Opinion

ID: 9915912
Source: CourtListenerOpinion
Date Created: 2024-01-08 23:01:22.89007+00
Date Added: 2024-06-11T13:21:37.743827
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                   ____________________
Nos. 22-2683 & 22-2688
ARTISAN AND TRUCKERS CASUALTY COMPANY,
                         Plaintiff-Appellant/Cross-Appellee,
                              v.

THE BURLINGTON INSURANCE COMPANY,
                       Defendant-Appellee/Cross-Appellant

                             and

SOUTHERN TRUSS, INC., DOUGLAS FORREST, GAYLON CRUSE, in-
dividually and doing business as CRUSE CONSTRUCTION
COMPANY, and MARK DUCKWORTH,
                                         Defendants-Appellees,
___________________________________________________
THE BURLINGTON INSURANCE COMPANY,
    Defendant/Counter/Cross-Plaintiff-Appellee/Cross-Appellant,

                              v.

ARTISAN AND TRUCKERS CASUALTY COMPANY,
         Plaintiff/Counter-Defendant-Appellant, Cross-Appellee,

                              v.

SOUTHERN TRUSS, INC., DOUGLAS FORREST, GAYLON CRUISE,
individually and doing business as Cruse Construction
Company, and MARK DUCKWORTH,
                                       Defendants-Appellees,
2                                           Nos. 22-2683 & 22-2688

                     ____________________

         Appeals from the United States District Court for the
                    Southern District of Illinois.
             No. 3:21-cv-00497 — J. Phil Gilbert, Judge.
                     ____________________

    ARGUED OCTOBER 26, 2023 — DECIDED JANUARY 8, 2024
                ____________________

    Before FLAUM, BRENNAN, and KIRSCH, Circuit Judges.
    KIRSCH, Circuit Judge. Gaylon Cruse and Mark Duckworth
were involved in an accident at a construction site while in-
stalling roof trusses. To lift the roof trusses into place, Douglas
Forrest operated a power crane that was permanently at-
tached to a 2007 International 760 truck owned by Southern
Truss. As Cruse and Duckworth stood on ladders to secure
the trusses, Forrest prematurely released tension on a truss,
causing it to fall and collapse onto other trusses. The trusses
then struck Cruse and Duckworth and knocked them to the
ground. After the accident, Cruse and Duckworth sued in Il-
linois state court, seeking damages for bodily injury from
Southern Truss and Forrest.
    Southern Truss had a commercial auto policy issued by
Artisan and Truckers Casualty Company and a commercial
general liability policy issued by The Burlington Insurance
Company. Artisan’s auto policy states that it will pay dam-
ages for bodily injury arising out of the use of an insured auto.
The policy contains an operations exclusion (and related def-
initions) providing, in relevant part, that Artisan has no duty
to defend against a lawsuit for bodily injury when (1) the in-
jury arises out of the operation of equipment attached to a
land vehicle, and (2) the land vehicle is used primarily to
Nos. 22-2683 & 22-2688                                        3

provide mobility to a permanently attached power crane. Bur-
lington’s general liability policy states that it will pay dam-
ages for bodily injury. In some instances, Burlington will not
have a duty to defend under its policy. As applicable to the
facts of this appeal, if Artisan has no duty to defend under its
auto policy, then Burlington has a duty to defend under its
general liability policy.
    Both Artisan and Burlington denied a duty to defend in
the underlying lawsuit. To sort out the duty to defend, Arti-
san sued in federal court, seeking a declaration that under its
auto policy, it owed no duty to defend. It also sought a decla-
ration that Burlington owed a duty to defend. Both Artisan
and Burlington moved for judgment on the pleadings, and the
district court denied both motions. It concluded that the dec-
larations page of Artisan’s policy conflicted with the policy’s
operations exclusion, creating an ambiguity that should be
construed in favor of the insured. The court also held that Bur-
lington had a duty to defend in addition to Artisan because
Burlington’s duty to defend extended to some claims in the
underlying lawsuit that Artisan’s duty to defend did not. Ar-
tisan appealed, and Burlington cross-appealed. On appeal,
both Artisan and Burlington argue that they have no duty to
defend under their respective policies. Artisan argues that its
policy is unambiguous and that its operations exclusion ap-
plies, while Burlington argues that it has no duty to defend,
in part because Artisan does have a duty to defend.
    We review de novo a district court’s judgment on the
pleadings, Hanover Ins. v. R.W. Dunteman Co., 51 F.4th 779, 785
(7th Cir. 2022), and its construction of an insurance policy,
Lexington Ins. v. RLI Ins., 949 F.3d 1015, 1021 (7th Cir. 2020).
Judgment on the pleadings is proper when there is no dis-
puted issue of material fact, and the moving party is entitled
4                                       Nos. 22-2683 & 22-2688

to judgment as a matter of law. United Here Loc. 1 v. Hyatt
Corp., 862 F.3d 588, 595 (7th Cir. 2017). Under Illinois law,
“[a]n insurance policy is a contract, and the general rules gov-
erning the interpretation of other types of contracts also gov-
ern the interpretation of insurance policies.” Crescent Plaza
Hotel Owner, L.P. v. Zurich Am. Ins., 20 F.4th 303, 308 (7th Cir.
2021) (quotation omitted).
    We must give effect to the parties’ intentions, “‘as ex-
pressed in the policy language,’” and apply the terms as writ-
ten if the policy is unambiguous. Id. (quoting Thounsavath v.
State Farm Mut. Auto. Ins., 104 N.E.3d 1239, 1244 (Ill. 2018)).
The policy is ambiguous if its language is “subject to more
than one reasonable interpretation, as applied to the dispute
before the court,” id. (citation omitted), but we “‘will not
strain to find an ambiguity where none exists,’” id. (quoting
Founders Ins. v. Munoz, 930 N.E.2d 999, 1004 (Ill. 2010)). And
ambiguous policy language is construed against the insurer
but only if it is ambiguous “after application of other princi-
ples or canons of interpretation and only if the ambiguity can-
not otherwise be resolved.” Schuchman v. State Auto Prop. &
Cas. Ins., 733 F.3d 231, 238 (7th Cir. 2013) (cleaned up).
     Artisan notes that the underlying lawsuit alleged negli-
gent operation of a crane attached to a truck and that the truck
is listed on the Artisan policy as an insured auto, but it main-
tains that it has no duty to defend because the operations ex-
clusion applies. Burlington disagrees, stating that an ambigu-
ity in the application of Artisan’s policy trumps the opera-
tions exclusion. It observes that the policy’s definition of “in-
sured auto” includes “[a]ny auto specifically described on the
declarations page” and that the declarations page lists the
2007 International 760 truck with permanently attached
equipment. Thus, in Burlington’s view, the declarations page
Nos. 22-2683 & 22-2688                                        5

indicates that the policy covers the crane, conflicting with the
operations exclusion and creating an ambiguity that should
be resolved in favor of the insured.
    But the declarations page does not conflict with the oper-
ations exclusion. The declarations page lists the 2007 Interna-
tional 760 including permanently attached equipment only in
the truck’s “Stated Amount” of $70,000, which indicates its
current retail value. The declarations page notes that “[i]n the
event of a total loss, the maximum amount payable is the
lesser of the Stated Amount or Actual Cash Value, less de-
ductible” (see the following excerpt of the declarations page).

In other words, the declarations page simply provides that if
the truck (including the permanently attached crane) is to-
taled, the most that Artisan will pay for the truck plus the
crane is $70,000. Nowhere does it suggest that Artisan will
cover bodily injury arising out of the operation of the crane.
The declarations page thus does not conflict with the opera-
tions exclusion, and there is no ambiguity in the application
of Artisan’s policy.
    The operations exclusion applies when the bodily injury
arises out of the operation of equipment attached to a land
vehicle that is used primarily to provide mobility to a perma-
nently attached power crane. Cruse and Duckworth’s bodily
injuries arose out of the use of a power crane permanently at-
tached to a truck, and Burlington does not argue that the
6                                     Nos. 22-2683 & 22-2688

truck’s primary purpose was something other than providing
mobility to the crane. The operations exclusion therefore ap-
plies, and Artisan has no duty to defend. Because Artisan has
no duty to defend, Burlington does have a duty to defend un-
der its policy. We thus reverse the district court’s denial of
Artisan’s motion for judgment on the pleadings but affirm its
denial of Burlington’s motion.
                     AFFIRMED IN PART AND REVERSED IN PART