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Stickovich v. City of Cleveland8/2/2001
JUDGMENT: Affirmed.
This appeal involves an insurance coverage dispute. Two employees of an independent contractor working on a public works bridge project were injured when the contractor directed its unlicensed crane operator who had been drinking alcohol to violate safety regulations and the crane touched a stationary, municipally-owned electric power line. Although the contractor named the municipality as an additional insured on its liability insurance contract, the insurer argued that its own liability insurance coverage violated public policy. We affirm the trial court's judgment, made by two successive judges, that the compulsory public liability insurance coverage does not violate public policy in the case at bar.
Background and Facts
In 1990, Cleveland City Council passed ordinance No. 993-90 authorizing and directing Cleveland to accept public bids and enter into the challenged public works contracts. The work, declared by Cleveland City Council to be an emergency, was to demolish and reconstruct the Washington Avenue Bridge (the Project ). Among the requirements for the Project was compulsory liability insurance, which requirement is on public works projects throughout the state. C.C.O. 185.26.
At the time of the bidding, various utility lines were located near the existing bridge: Cleveland Public Power ( CPP ) maintained electric power lines beneath the bridge, and other utilities maintained power, telephone, and other utility lines on the north and south sides. The Notice to Bidders provided by Cleveland specifically informed them that the Project was required to comply with certain safety regulations, including O.A.C. Section 4121:1-3-07, which governs the operation of cranes in close proximity to power lines. (Id. at Para. 6.)
In June 1991, after reviewing the site and the work to be performed, Industrial Construction Co., Inc. ( ICC ), an independent contractor, submitted a bid to perform the Project. Cleveland accepted ICC's bid and agreed to pay $519,247.40 to obtain a finished product: namely, the replacement of the bridge, as well as liability insurance coverage for the Project. Cleveland retained no control over the independent contractor's conduct of the work, and there has never been any allegation that it did.
On August 23, 1991, the parties entered into an extensive Contract and Specifications for the Project, which incorporated, inter alia, the above ordinances and Notice to Bidders. In addition to other specific terms governing the work, the Contract and Specifications advised ICC of its responsibility for Project safety, its responsibility to safeguard adjacent property in general and utilities in particular, and its responsibility to comply with Workers' Compensation Laws and to be fully insured.
To satisfy its insurance obligations, ICC obtained Commercial General Liability ( CGL ) policy No. ASR124769 from the Commercial Union Insurance Companies, issued by American Employers' Insurance Company ( Commercial Union ). The CGL policy contained several endorsements to expand coverage, including an endorsement to name Cleveland as an additional insured as well as an employers liability stop-gap endorsement to extend coverage for claims by ICC's employees.
The central issue in the case at bar is whether Cleveland qualified as an insured within the scope of this coverage. The policy introduction provides: The word `insured' means any person or organization qualifying as such under WHO IS AN INSURED (SECTION II). SECTION II of the CGL policy defines who qualifies as an insured for purposes of coverage. ICC was the organization listed in the Declarations as the named insured un
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