Insurance Coverage: The Importance of the Pleadings

In Nationwide Prop. & Cas. Ins. Co. v. State Farm Fire & Casualty Co., 2022 IL App (1st) 210267, the appellate court ruled that State Farm had a duty to defend and indemnify the insured defendant in a wrongful death action, in a case that reiterates the importance of the pleadings.

Crowley-Sheppard Asphalt, Inc. was the general contractor of a street rehabilitation project in Burbank, but subcontracted excavation and concrete work to Davis Concrete, which subcontracted work to RJ&R Trucking and Excavating, Inc. An RJ&R employee driving a truck hit a bicyclist while returning to the construction site, and the bicyclist died. Insured by Nationwide Property and Casualty Insurance Co., and State Farm, Nationwide contributed to a $3.5 million settlement; State Farm contributed to the settlement on behalf of RJ&R under an automobile policy, but nothing on behalf of Davis. Following the settlement, Nationwide sued State Farm, claiming that it should have defended Davis Concrete under its commercial general liability policy and owed it indemnity for the settlement it made on behalf of Davis Concrete.

State Farm argued that coverage was prohibited by the automotive exclusion in its CGL policy and that it owed neither a defense nor indemnity, but the plaintiff’s pleadings negated this argument. The plaintiff had pleaded that Davis Concrete was negligent not just in the operation of the truck, but also because it failed to use a flagman at the intersection where the collision occurred, entirely separate from the negligent driving allegation. Thus, State Farm owed coverage for Davis because some of the pleadings fell outside of the automotive exclusion in the policy.

The court was also critical of State Farm’s delay in seeking a declaratory judgment that it owed no coverage for Davis Concrete.  

The case is a reminder, if one is needed, that care should be taken by plaintiff lawyers in drafting the complaint to consider ways to ensure that sufficient coverage exists to cover the damages claimed. In this case, that care benefitted one insurer at the expense of another insurer, ironic perhaps, but the analysis is the same as it would have been if plaintiff needed the extra coverage.

For information on insurance coverage actions, get in touch with Thomas Patterson at

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