Intra-American Foundation v. Evanston Ins.
An insurance policy issued by defendant Evanston Insurance Company to plaintiff Intra-American Foundation & Drilling Company, Inc., a construction company specializing in deep foundations, obligated defendant to defend and indemnify plaintiff against property damage claims. When a general contractor sued plaintiff, plaintiff sought defense and indemnification from defendant under the insurance policy. Defendant denied any duty to defend. Plaintiff defended itself and settled with the general contractor.
Plaintiff subsequently brought this action against defendant for breach of contract and bad faith. In a general verdict, the jury awarded plaintiff damages of $462,000. We reverse. The insurance policy contained an endorsement excluding coverage for breach of contract claims. The underlying lawsuit brought by the general contractor created not even a potential for covered claims under the insurance policy. Any property damage allegations raised in or suggested by the lawsuit involved harm to the property of third parties (not the general contractor) for which plaintiff was contractually obliged to indemnify the general contractor, coverage for which was expressly excluded by the endorsement to the insurance policy.
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