THIRD DIVISION
Date Filed: March 24, 2004

No. 1-02-3686

JUSTICE HALL delivered the opinion of the court:

The plaintiff, Chubb Insurance Co. (Chubb), as subrogee ofOpus North Corp. (Opus), filed suit against the defendants, BrianDeChambre and Prairie Material Sales, Inc. (Prairie), seekingdamages resulting from Mr. DeChambre's negligence. The circuitcourt of Cook County granted the defendants' motion for summaryjudgment. Chubb appeals.

On appeal, Chubb raises the following issues: (1) whetherthe granting of summary judgment based on the anti-subrogationrule was proper; (2) whether public policy considerations supportChubb's subrogation claim; and (3) whether the exculpatorylanguage on the delivery tickets waived Chubb's right tosubrogation.

In its complaint, Chubb alleged that, on October 27, 1998,Mr. DeChambre was operating a cement truck, owned by Prairie, andwas making a delivery to the Willow Creek Center, a constructionsite for which Opus was the general contractor, as well as theowner of one of the buildings at the site. In operating thetruck, Mr. DeChambre backed into a support column, causing thecollapse of the completed roof of the building Opus owned. Opussustained property damage in the amount of $105,021.90.

Chubb further alleged that it was entitled to proceedagainst the defendants because it made payments to or on behalfof its insured, Opus, pursuant to a policy of insurance issued byChubb to Opus (the policy) and therefore, owned the claimsagainst the defendants.

The defendants filed a request to admit facts. Chubb wasrequested to admit or deny the existence of endorsement No. 9 tothe policy and whether it was in effect on October 28, 1998. Endorsement No. 9 provided in pertinent part as follows:

"ADDITIONAL NAMED INSURED

Contractors and subcontractors of any [sic] all tiers, andany owner of a specific builders risk project where Opus Northcorporation is contractually responsible for purchasing buildersrisk insurance as covered under this policy, and not morespecivicspecificallyd [sic] elsewhere."

Subsequently, Chubb filed its answer to the request to admitfacts, admitting that endorsement No. 9 was part of the policyissued by Chubb to Opus and that it was in effect on October 27,1998.

On March 21, 2002, the defendants filed a motion for summaryjudgment. In their motion, the defendants argued that, pursuantto endorsement No. 9, which Chubb admitted was part of the policyand in effect on the day of the accident, the defendants wereadditional insureds on Opus's policy. Since an insurance carriercannot subrogate against its own insured, the defendants wereentitled to judgment as a matter of law.

On July 12, 2002, Chubb filed its response to the motion forsummary judgment. While acknowledging that the defendants werenamed as additional insureds on Opus's policy, Chubb argued thatthe anti-subrogation rule did not apply in this case based on theno-coverage exception to the rule. Chubb maintained that thepolicy was intended to apply only to claims made by third partiesand that the claim in this case involved damage to Opus'sproperty.

On November 18, 2002, the circuit court issued itsmemorandum opinion and order. The court observed that Chubb hadconceded that the defendants were additional insureds on thepolicy. The court found that the damage to the building wascovered by policy. Since the defendants were additional insuredsunder the policy and Chubb was not permitted to subrogate againstits own insured, the circuit court granted the defendants' motionfor summary judgment.

This timely appeal followed.

This court reviews motions for summary judgment de novo. Travelers Insurance Co. v. Eljer Manufacturing, Inc., 197 Ill. 2d278, 757 N.E.2d 481, 491 (2001).

Summary judgment is proper if, and only if, the pleadings,depositions, admissions, affidavits and other relevant matters onfile show that there is no genuine issue of material fact andthat the movant is entitled to judgment as a matter of law. Prowell v. Loretto Hospital, 339 Ill. App. 3d 817, 822, 791N.E.2d 1261, 1265 (2003). The purpose of summary judgment is notto try a question of fact but to determine if one exists. Prowell, 339 Ill. App. 3d at 822, 791 N.E.2d at 1265. Indetermining whether a genuine issue of material fact exists, acourt must construe the pleadings, admissions and affidavitsstrictly against the movant and liberally in favor of theopponent. Prowell, 339 Ill. App. 3d at 822, 791 N.E.2d at 1265. A triable issue of material fact exists where the material factsare disputed or where reasonable persons might draw differentconclusions from undisputed facts. Prowell, 339 Ill. App. 3d at822, 791 N.E.2d at 1265.

At the outset, we are confronted with the defendants'assertion that Chubb has waived certain of its arguments onappeal because it failed to raise them in the circuit court. SeeLajato v. AT&T, Inc., 283 Ill. App. 3d 126, 136, 669 N.E.2d 645,652 (1996) (contentions not raised in the trial court are waivedon appeal, even in a summary judgment case).

Nevertheless, this court is not bound by the principle ofwaiver and, in the interest of a just result, we may elect toaddress an argument. See American Federation of State, County &Municipal Employees, Council 31 v. County of Cook, 145 Ill. 2d475, 584 N.E.2d 116 (1991). We elect to address Chubb'sarguments on the merits.

The doctrine of subrogation is a creature of chancery and isa method whereby one who has involuntarily paid a debt or claimof another succeeds to the rights of the other with respect tothe claim or debt paid. Dix Mutual Insurance Co. v. LaFramboise,149 Ill. 2d 314, 319, 597 N.E.2d 622, 624 (1992). The right ofsubrogation is an equitable right and remedy which rests on theprinciple that substantial justice should be attained by placingultimate responsibility for the loss upon the one against whom ingood conscience it ought to fall. Dix Mutual, 149 Ill. 2d at319, 597 N.E.2d at 624. Subrogation is allowed to preventinjustice and unjust enrichment but will not be allowed where itwould be inequitable to do so. Dix Mutual, 149 Ill. 2d at 319,597 N.E.2d at 624. There is no general rule that can be laiddown to determine whether a right of subrogation exists sincethis right depends upon the equities of each particular case. Dix Mutual, 149 Ill. 2d at 319, 597 N.E.2d at 624.

However, it is well settled that an insurer may notsubrogate against its own insured or any person or entity who hasthe status of a co-insured under the insurance policy. DixMutual, 149 Ill. 2d at 323, 597 N.E.2d at 626. In Dix Mutual,the court held that a tenant, by the payment of rent, hadcontributed to the payment of the insurance premium, therebygaining the status of a co-insured. Since the landlord and thetenant intended for the insurance policy to cover any fire damageto the premises, regardless of who caused it, the insurancecompany could not maintain an action against the tenant. DixMutual, 149 Ill. 2d at 323, 597 N.E.2d at 626.

Chubb contends that the anti-subrogation rule does not applyin this case because the defendants did not attain the status ofadditional insureds. Chubb maintains that in order for the anti-subrogation rule to bar its claim in this case, all of thefollowing must be true: (1) premiums must have been paid toinclude the defendants as additional insureds; (2) there musthave been a contract between Opus and the defendants; (3) theinsurance policy must entitle the defendants to coverage fordamage to their truck or for damage done by the defendants to theprimary insured's property; and (4) the extent of the damagesmust exceed the defendants' coverage under their primaryinsurance.

Chubb argues that there is no evidence that any premiumswere paid by Opus to provide additional coverage to thedefendants. See American Country Insurance Co. v. Cline, 309Ill. App. 3d 501, 722 N.E.2d 755 (1999) (it would be inequitableto allow an additional insured to avoid responsibility for itsown conduct and seek full coverage where the insurer has not beenfully compensated); see also Benge v. State Farm MutualAutomobile Insurance Co., 297 Ill. App. 3d 1062, 697 N.E,2d 914(1998) (courts have applied the anti-subrogation rule to preventan insurance carrier from transferring a loss back to the partywho has paid for protection from the same loss). Chubb furtherargues that there is no evidence of any contract or agreementbetween Opus and the defendants to include the defendants asadditional insureds.

The builder's risk coverage form of the policy issued toOpus provides in pertinent part as follows:

"12. SUB-CONTRACTORS

With respect to construction or installation workperformed for the Insured by sub-contractors, such sub-contractors may, at the request of the Insured, beincluded as an Additional Insured but only with respectto such work performed by the aforesaid sub-contractors, the value of which shall have beenincluded in the contract price (in accordance withValuation, Clause 7, of this policy) reported to theCompany and on which premium has been paid. In theevent the value of the said work is not included in thecontract price reported to the Company, coverage underthis clause with respect to sub-contractor's work shallnot apply."

However, the language of paragraph 12 limits it to constructionand installation subcontractors. At the time of the accident inthis case, Mr. DeChambre was making a delivery to theconstruction site. There is no allegation or evidence thatPrairie was a construction or installation subcontractor. Therefore paragraph 12 is not controlling.

Pursuant to endorsement No. 9, the defendants, assubcontractors, were additional named insureds under Opus'spolicy. In its answer to the request to admit facts, Chubbadmitted that endorsement No. 9 provided that contractors "andsubcontractors of every tier" were additional named insureds. Further, on appeal Chubb concedes that, in its response to themotion for summary judgment, it acknowledged that Prairie wasnamed as an additional insured under Opus's builder's riskpolicy. However, Chubb argues that it never intended to admitthat the defendants had satisfied the requisite conditions toactually be additional insureds.

Regardless of its intentions, by its answer to the requestto admit facts and its response to the motion for summaryjudgment, Chubb has admitted that the defendants were additionalinsureds.

Chubb's reliance on United States Fire Insurance Co. v.Hartford Insurance Co., 312 Ill. App. 3d 153, 726 N.E.2d 126(2000), is misplaced. In that case, this court held that sincethe policy of insurance required a written agreement in order fora party to be named as an additional insured, an oral agreementto be named as an additional insured would not be enforceable. In the present case, endorsement No. 9 was part of the contractand by its terms included Prairie as an additional insured. Seealso West American Insurance Co. v. J.R. Construction Co., 334Ill. App. 3d 75, 777 N.E.2d 610 (2002) (the reviewing courtdistinguished United States Fire on the basis that, unlike thatcase where the only written evidence conferring additionalinsured status was issued after the accident, corporate practiceand written documents in the record confirmed the defendant'sstatus as an additional insured).

We conclude that the defendants were additional insuredunder the terms of the policy.

Next, Chubb maintains that, even if the defendants wereadditional insureds, the anti-subrogation rule does not applywhere the policy does not provide coverage to the defendants forthe harm at issue.

The anti-subrogation rule is intended to prevent an insurerfrom recovering back from its insured that loss or damage therisk of which the insured had passed along to the insurer underthe policy. LaSalle National Bank v. Massachusetts Bay InsuranceCo, 958 F. Supp. 384, 388 (N.D. Ill. 1997); 16 Couch on Insurance3d