GREAT WEST CASUALTY COMPANY v. ROSS WILSON TRUCKING IL LLC (2021)

ORDER

On March 29, 2021, this court entered an Order (#85) granting in part Plaintiff's Motion for Summary Judgment (#76) and denying Defendants’ Motion for Partial Judgment on the Pleadings (#78). The court reserved ruling on the issue of whether Plaintiff has a duty to indemnify as an excess insurer only, and the court granted Defendants additional time to file a motion regarding that remaining issue.

On April 7, 2021, Plaintiff filed a Motion to Modify or to Partially Reconsider Order Regarding Summary Judgment (#86), to which Defendants filed a Response (#89) on April 28, 2021.

On April 26, 2021, Defendants filed a Motion for Reconsideration and Motion to Provide Policies (#88), to which Plaintiff filed a Memorandum in Opposition (#90) on May 19, 2021. Defendants also filed a Motion for Leave to File a Reply Brief (#91) on June 2, 2021, which the court GRANTS. The court will consider the proposed Reply Brief (#91-1) filed by Defendants when ruling on the pending motions.

For the following reasons, Plaintiff's Motion to Modify or to Partially Reconsider (#86) is DENIED and Defendants’ Motion for Reconsideration and Motion to Provide Policies (#88) is GRANTED in part and DENIED in part.

Pursuant to the instant order and the court's prior Order (#85), Plaintiff's Motion for Summary Judgment (#76) is now fully resolved. The Motion (#76) is GRANTED in part and DENIED in part.

I. THE MARCH 29, 2021 ORDER

The court assumes familiarity with its prior Order (#85) entered March 29, 2021, including the facts summarized therein, but will briefly review the scope of that Order before addressing the parties’ motions for reconsideration and their positions on the single issue for which judgment was reserved.

First, in the prior Order, the court held that the Other Insurance provision in Great West Policy ICP00923B ¹ (“the Policy”) is ambiguous and should therefore be construed against Plaintiff, as the insurer who drafted the policy. Given this ambiguity, and according to the court's interpretation, the Great West Policy provides primary coverage when a covered auto: “(1) Is not used to carry property in any business; and (2) Is not used in the business of anyone to whom the ‘auto’ is rented, leased or loaned[,]” while the Policy provides excess coverage when a covered auto is used to carry property in any business and/or is used in the business of anyone to whom it is rented, leased or loaned.

Second, the court determined that at the time of the accident the covered auto was being used in the business of someone to whom it was leased. Specifically, the truck owned by Defendant Ross Wilson Trucking (“RWT”) was being used in the business of Defendant Transport Services of Sullivan IL, LLC (“Transport Services”). Therefore, coverage was not primary under the Policy's Other Insurance provision.² However, Plaintiff could still have a duty to provide excess coverage if the underlying settlement exceeded the limits of any other collectible insurance policies.

The court therefore granted the parties additional time to supplement the record as to whether there was other collectible insurance that provided coverage in the underlying lawsuit, and whether the underlying settlement exceeded the limits of the other collectible insurance policies such that Plaintiff has a duty to provide excess coverage.

II. MOTIONS FOR RECONSIDERATION

A. Plaintiff's Motion for Reconsideration

In short, in Plaintiff's Motion to Modify or Partially Reconsider, Plaintiff argues that the court should reconsider its interpretation of the Policy as ambiguous due to the Other Insurance provision. Plaintiff argues that the court should not have held that the Policy could ever provide coverage (even excess coverage) for an auto used to carry property in any business and/or used in the business of anyone to whom it is rented, leased or loaned.³

First, Plaintiff indicates that this issue is moot because Defendants had insurance coverage for these “trucking uses” under a policy with a $6,000,000 limit, while the underlying settlement was $1,750,000. Plaintiff indicates that because the underlying settlement did not exceed the limits of Defendants’ other collectible insurance, Plaintiff does not have any obligation to provide coverage in excess of other collectible insurance even under the court's interpretation in the prior Order, and Plaintiff therefore asks the court to strike all analysis of the Great West Policy's ambiguity from its prior Order.

The court will consider the submitted proof of other collectible insurance and resolve the reserved issue of whether Plaintiff has any duty to provide excess coverage in the following section. The court will not reconsider or strike its analysis of the Policy's ambiguity simply because Plaintiff argues that the reserved issue should now ultimately be resolved in its favor.

Second, Plaintiff argues that the court's interpretation of the Policy as providing excess coverage for trucking uses due to ambiguity in the Policy's Other Insurance provision is “unreasonable and inconsistent with Illinois law.” Plaintiff argues that the Other Insurance provision can “serve[ ] only to coordinate coverage, not to grant coverage” and so it should not be used to expand the Policy's initial coverage grant for non-trucking uses only.

“Motions for reconsideration serve a limited function: to correct manifest errors of law or fact or to present newly discovered evidence.” Caisse Nationale de Credit Agricole v. CBI Industries, Inc., 90 F.3d 1264, 1269 (7th Cir. 1996). Reconsideration is “inappropriate where a party seeks to raise arguments that could have been raised in the original briefing.” Netherlands Insurance Company v. Knight, 2014 WL 3376873, at *1 (C.D. Ill. Jul. 10, 2014).

Plaintiff made essentially the same arguments in the numerous briefings filed in advance of the court's prior Order. The court considered and rejected Plaintiff's position that “other insurance” provisions cannot create ambiguity when an unambiguous provision otherwise bars coverage. In doing so, the court analyzed and distinguished the instant case and Policy from the cases previously relied upon by Plaintiff. See Order (#85), at p. 20-21.

To the extent that Plaintiff cites additional cases in the instant motion to reconsider, Plaintiff could have raised these arguments in the original briefings. However, even if the court considers the cases raised by Plaintiff in the instant motion, they do not reveal any “manifest errors of law or fact” necessitating reconsideration of the court's prior Order.

Plaintiff primarily cites to Institute of London Underwriters v. Hartford Fire Insurance Co., 234 Ill.App.3d 70, 175 Ill.Dec. 297, 599 N.E.2d 1311 (1992), and its progeny in support of the argument that an “other insurance” provision should not be used to determine or expand the initial coverage grant because “if the policy is never triggered, the issue of liability under the ‘other insurance’ clause does not arise.” 175 Ill.Dec. 297, 599 N.E.2d at 1315. Plaintiff misinterprets the holding of Institute. When Illinois courts indicate that an insurance policy must be “triggered” before an “other insurance” provision becomes relevant for analysis, the “triggering” event is not (as Plaintiff suggests) that the loss must first fall within the policy's initial grant of coverage. Rather, a policy is “triggered” when the insured party requests coverage under the policy.⁴ See Institute of London Underwriters, 175 Ill.Dec. 297, 599 N.E.2d at 1313 (“An insurer's obligations under an insurance contract are ordinarily triggered when the insured ․ tenders the defense of an action potentially within the policy coverage.”); see also Alcan United, Inc. v. West Bend Mutual Insurance Co., 303 Ill.App.3d 72, 236 Ill.Dec. 560, 707 N.E.2d 687, 693 (1999) (“The insured still must be given the right to determine whether it wishes to invoke its rights to such other coverages before those coverages become accessible under the ‘other insurance’ provision of a triggered policy.”).⁵ Here, there is no dispute that Defendants requested defense and indemnification in the underlying lawsuit from Plaintiff. Therefore, the Policy was “triggered” and its Other Insurance provision may be analyzed to determine the scope of the Policy's coverage and to coordinate that coverage with any other insurance.

Plaintiff's motion amounts to a disagreement with the court's prior decision. That is not the purpose of a motion to reconsider. See Moro v. Shell Oil Co., 91 F.3d 872, 876 (7th Cir. 1996). The motion is supported by additional case citations that do not reveal any “manifest errors of law or fact” in the court's prior Order. Therefore, Plaintiff's Motion to Modify or to Partially Reconsider (#86) is DENIED to the extent it requests reconsideration of this issue.

B. Defendants’ Motion for Reconsideration

In Defendants’ Motion for Reconsideration and Motion to Provide Policies (#88), Defendants’ “renew their arguments that the Court should have found that Great West is legally obligated to defend [Defendants] on a primary basis for the allegations in the [underlying suit],” because the underlying plaintiffs “pleaded at least one theory against [Defendants] that is potentially covered under the policy.” Defendants renew this argument in a cursory manner, neither presenting newly discovered evidence nor arguing that the court's prior Order contained manifest errors of law or fact.

The court carefully and fully considered Defendants’ arguments on this matter in Section II.B.4 of the prior Order. See (#85) at p. 37-42. In the instant motion, Defendants apparently acknowledge that their current position simply amounts to disagreement with the court's prior decision. As already indicated, that is not the purpose of a motion to reconsider. See Moro, 91 F.3d at 876. Therefore, Defendants’ Motion for Reconsideration and Motion to Provide Policies (#88) is DENIED to the extent that it requests reconsideration of this issue.

III. THE RESERVED ISSUE: EXCESS COVERAGE

A. Other Collectible Insurance Policy and Underlying Settlement Agreement

In response to a request in the court's prior Order, Defendants have submitted a copy of the other collectible insurance policy that provided coverage in the underlying lawsuit, including proof of the policy limits for that insurance, as well as proof of the settlement amount in the underlying lawsuit. Plaintiff does not dispute these documents and filed substantially identical documents that it had apparently obtained from Defendants during discovery.

The other collectible insurance policy was provided by Federated Insurance, and the named insured on that policy is Transport Services of Sullivan IL LLC.⁶ The court will refer to this policy as the Federated Policy.

The Federated Policy's Other Insurance provision reads as follows:

5. Other Insurance

a. For any covered “auto” that you own, this Coverage Form provides primary insurance. For any covered “auto” that you don't own, the insurance provided by this Coverage Form is excess over any other collectible insurance. However, while a covered “auto” which is a “trailer” is connected to another vehicle, this Covered Autos Liability Coverage this Coverage Form provides for the “trailer” is:

(1) Excess while it is connected to a motor vehicle you do not own; or

(2) Primary while it is connected to a covered “auto” you own.

The limit of liability for the Federated Policy is $1,000,000. Defendant Transport Services also had an “Umbrella Liability Policy” through Federated Insurance. This is an excess policy for which the Federated Policy serves as the underlying insurance. The limit of liability for the Federated Umbrella Policy is $5,000,000.

Defendants settled the underlying lawsuit for $1,750,000. In return, plaintiffs in the underlying suit agreed to release Defendants and Federated (Mutual) Insurance Company. The written settlement agreement specified that the agreement did not waive any rights of Defendants and/or Federated (Mutual) Insurance in this suit, Great West Casualty Company v. Ross Wilson Trucking, et al., Case No. 16-CV-3253.

B. The Parties’ Rights and Obligations under the Great West Policies

Now that the court has a complete record as to other collectible insurance that provided coverage in the underlying lawsuit, the court can fully resolve the issue of the parties’ rights and obligations under the Great West Policy.

As already summarized, the court previously held that, pursuant to the Great West Policy's Other Insurance provision, the Policy provides excess coverage when a covered auto is used in the business of anyone to whom it is rented, leased or loaned. At the time of the accident, the covered auto (the truck owned by Defendant RWT) was being used in the business of Defendant Transport Services, to whom it was leased. Specifically, the truck owned by Defendant RWT was being used to pull a trailer owned by Transport Services. Therefore, coverage under the Great West Policy would be excess.

Upon review of the Federated Policy's Other Insurance provision, the Policy provides primary coverage “[f]or any covered ‘auto’ that you own.” References to “you” refer to the policyholder (the insured); here, Defendant Transport Services. The provision continues: “For any covered ‘auto’ that you don't own, the insurance provided by this Coverage Form is excess over any other collectible insurance.” The Federated Policy's Other Insurance provision concludes:

․ However, while a covered “auto” which is a “trailer” is connected to another vehicle, this Covered Autos Liability Coverage this Coverage Form provides for the “trailer” is:

(1) Excess while it is connected to a motor vehicle you do not own; or

(2) Primary while it is connected to a covered “auto” you own.

Here, Defendant Transport Services owned a trailer that was a covered auto under the Federated Policy. At the time of the accident, it was connected to another vehicle, the truck owned by Defendant RWT. The final clause of the Other Insurance provision (beginning with “However”) therefore applies to the accident at issue. Under that clause, the Federated Policy's coverage was excess.

In sum, under the terms of the Great West Policy's Other Insurance provision, coverage for the accident at issue is excess. So too, under the terms of the Federated Policy's Other Insurance provision, coverage for the accident is excess.

If two policies’ “other insurance” provisions both render coverage excess only, the provisions are considered mutually repugnant and Illinois courts generally require the insurers to share liability and to indemnify on a pro-rata basis. See Continental Casualty Co. v. New Amsterdam Casualty Co., 28 Ill.App.2d 489, 497-98, 171 N.E.2d 406, 410-11 (1960).

Therefore, with respect to the underlying policies, the court holds that Plaintiff Great West has a duty to indemnify Defendants on a pro-rata basis with Federated Insurance. Specifically, “each [insurance] company is liable for a pro rata share of the ․ settlement, usually for that per cent of the liability which its policy limits bear to the total limits available to the insured.” Continental Casualty Co., 28 Ill.App.2d at 498, 171 N.E.2d at 411.⁷ This is also consistent with the language of the Great West Policy's Other Insurance provision, subsection d.:

When this Coverage Form and any other Coverage Form, policy, or self-insurance covers on the same basis, either excess or primary, we shall pay only our share. Our share is the proportion the that Limit of Insurance of our Coverage Form bears to the total of the limits of all the Coverage Forms, policies and self-insurance covering on the same basis.

As to the issue of defense costs, the Illinois Supreme Court has rejected a pro rata allocation. Zurich Insurance Co. v. Raymark Industries, Inc., 118 Ill.2d 23, 112 Ill.Dec. 684, 514 N.E.2d 150, 165 (1987). Instead, “[u]nder Raymark, ․ any insurer that has a duty to defend is jointly and severally liable for the defense costs.” Illinois Tool Works, Inc. v. Travelers Casualty and Surety Co., 389 Ill.Dec. 331, 26 N.E.3d 421, 429 (Ill. App. Ct. 2015). Therefore, under the underlying Great West Policy ICP00923B, Plaintiff is jointly and severally liable for defense costs. However, as noted in the court's prior Order, the Great West excess policy IEP00648B expressly states that it “will not apply to defense[.]”

Only after both underlying policies (the $100,000 Great West Policy and the $1,000,000 Federated Policy) are exhausted can Defendants seek indemnification under either of the companies’ excess or umbrella policies for the remaining $650,000 of the underlying settlement. See Kajima Construction Services, Inc. v. St. Paul Fire and Marine Insurance Co., 227 Ill.2d 102, 316 Ill.Dec. 238, 879 N.E.2d 305, 314-15 (2007) (holding that “to the extent that defense and indemnity costs exceed the primary limits of the targeted insurer, the deselected insurer or insurers’ primary policy must answer for the loss before the insured can seek coverage under an excess policy”).

Defendants assert that they have a choice as to which insurer's excess or umbrella policy provides indemnification for the remainder of the underlying settlement. Defendants maintain that they may “target tender”⁸ either Plaintiff Great West or Federated Insurance, or that they may seek indemnification from both on a pro rata basis. Plaintiff, however, argues that “target tendering” is inapplicable here, due to the public policy of the Federal Motor Carrier Safety Administration.

Although Defendants cite to caselaw in support of their assertion that they can “target tender” excess insurers after exhausting the underlying policies, Defendants also state that their argument regarding “targeted tender” is “beyond the scope of [their] motion.” See Defendants’ Motion for Reconsideration and Motion to Provide Policies (#88), at p. 13. Defendants do not ask the court to determine that Plaintiff (rather than Federated) has an obligation to indemnify for the remaining $650,000, nor do Defendants ask the court to determine that Plaintiff owes a duty to indemnify on a pro rata basis with the Federated umbrella policy following exhaustion of the underlying policies.

Similarly, while Plaintiff cites to caselaw in support of its argument that a “targeted tender” would be against public policy in the context of motor carrier operations, Plaintiff also argues that Federated Insurance is not a party to the lawsuit and that this court has no prudential basis to allocate the settlement between the insurers.

To the extent that Plaintiff's argument suggests that the court should not have considered whether there was any other collectible insurance or compared the two policies’ “other insurance” provisions, the court reiterates that it will not reconsider its prior Order, for the reasons already stated. The court already determined that the Great West Policy's Other Insurance provision was ambiguous, that it therefore would provide excess coverage for the loss at issue, and that in order to determine the parties’ rights and obligations under the Great West Policy, they must submit proof of any other collectible insurance. Plaintiff submitted the Federated Policy at the court's request. In doing so, Plaintiff did not assert Federated's rights or attempt to recover any settlement contributions already paid by Federated.

The court agrees with Defendants that there is a “real and actual controversy” between the parties and that the potential rights of Federated or any other insurer to seek equitable contribution are beyond the scope of this litigation. The parties agree that Federated can bring its own suit if it wishes to seek equitable contribution from Plaintiff. See, e.g., Royal Globe Insurance Co. v. Aetna Insurance Co., 82 Ill.App.3d 1003, 38 Ill.Dec. 449, 403 N.E.2d 680 (1980); Hartford Casualty Insurance Co. v. Argonaut-Midwest Insurance Co., 854 F.2d 279, 281 (7th Cir. 1988) (“Cases in which insurance companies sue each other because of joint coverage are legion.”). At that time, arguments regarding the targeted tender doctrine or pro rata contribution for the final $650,000 of the settlement can be raised and a final allocation of liability between the insurers made.

In summary, the court holds that Plaintiff had an obligation to indemnify and defend Defendants up to the $100,000 limit of the underlying Policy ICP00923B. Any obligation by Plaintiff to further indemnify Defendants via the excess Policy IEP00648B would be determined if Federated brings a new claim for equitable contribution, at which time an allocation could be made between the Great West excess policy and the Federated umbrella policy.

IT IS THEREFORE ORDERED:

(1) Plaintiff's Motion to Modify or to Partially Reconsider (#86) is DENIED.

(2) Defendants’ Motion for Reconsideration and Motion to Provide Policies (#88) is GRANTED in part and DENIED in part, as described herein.

(3) Defendants’ Motion for Leave to File a Reply Brief (#91) is GRANTED.

(4) Plaintiff's Motion for Summary Judgment (#76) is GRANTED in part and DENIED in part, as described in the instant order and the court's prior Order (#85).

(5) This matter is terminated.

FOOTNOTES

1.   Great West Policy ICP00923B is a primary insurance policy in the amount of $100,000. Great West Policy IEP00648B is an excess insurance policy in the amount of $900,000. ICP00923B serves as the underlying policy for IEP00648B.

2.   In the prior Order, the court acknowledged that, under the Policy's Other Insurance Provision, coverage is also primary for any liability assumed under an “insured contract,” regardless of whether the auto is being used to carry property in any business and/or is used in the business of anyone to whom it is rented, leased or loaned. However, the court held that the Independent Contractor Agreement between Defendants did not qualify as an “insured contract” according to the Policy's Definitions Section. Therefore, the Policy did not provide primary coverage for that reason either.

3.   Both in the original summary judgment briefings and in the pending motions, Plaintiff refers to these uses as “trucking uses.”

4.   Plaintiff also cites to John Burns Construction Co. v. Indiana Insurance Co., 189 Ill.2d 570, 244 Ill.Dec. 912, 727 N.E.2d 211 (2000), to support its argument that “the purpose of an ‘other insurance’ clause is not to trigger coverage but to provide a method of apportioning coverage that would be triggered otherwise.” 244 Ill.Dec. 912, 727 N.E.2d at 216. Again, the meaning of “trigger” in John Burns is the same as in Institute. In fact, the court in John Burns is simply quoting Institute with approval.

5.   The Illinois Supreme Court has held that “an insured's ability to forgo [an insurer's] assistance should be protected” and the insured should therefore be able to choose whether to trigger coverage under its policies. Cincinnati Companies v. West American Insurance Co., 183 Ill.2d 317, 233 Ill.Dec. 649, 701 N.E.2d 499, 503 (1998) (“[A]n insured may choose to forgo an insurer's assistance for various reasons, such as the insured's fear that premiums would be increased, or the policy cancelled, in the future.”).

6.   As indicated in the court's prior Order, the named insureds on the Great West Policy are the Independent Contractors of Transport Services of Sullivan IL LLC. The parties agree that Defendant RWT is an insured under the Great West Policy, and that Defendant Muncy is also covered because he was an employee of Defendant RWT. Defendant Transport Services is not a named insured on the Great West Policy.

7.   As already indicated, the underlying Great West Policy limit is $100,000. The underlying Federated Policy limit is $1,000,000.

8.   The “targeted tender” doctrine “allows an insured covered by multiple insurance policies to select or target which insurer will defend and indemnify it with regard to a specific claim.” Kajima Construction Services, 316 Ill.Dec. 238, 879 N.E.2d at 309.

COLIN S. BRUCE, UNITED STATES DISTRICT JUDGE