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Rice v. Doe

Supreme Court of South Carolina.

Peter RICE, Respondent,

v.

John DOE, Petitioner.

Appellate Case No. 2021-000894

|

Opinion No. 28190

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Heard March 8, 2023

|

Filed January 24, 2024

Synopsis

Background: Passenger who was injured in accident after his friend veered off road allegedly to avoid unknown, oncoming vehicle brought “John Doe” action against alleged tortfeasor so that he could recover uninsured motorist (UM) benefits. The Circuit Court, Fairfield County, Daniel Dewitt Hall, J., dismissed suit on ground that passenger had filed suit months before filing witness affidavit about accident. Passenger appealed. The Court of Appeals, 2021 WL 2577035, reversed and remanded. Defendant’s petition for writ of certiorari was granted.

[Holding:] The Supreme Court, Few, J., held that compliance with statutory requirement of witness affidavit attesting to truth of facts of accident involving unknown automobile was not condition precedent to suit.

Affirmed as modified.

Kittredge, J., concurred and filed opinion.

West Headnotes (8)

[1] Judges

Judicial powers and functions in general  

It is clearly impermissible act for one circuit court judge to reverse earlier substantive order of another judge.    

[2] Judges

Judicial powers and functions in general

One circuit court judge has the authority to make a different ruling than a prior judge in some circumstances.    

[3] Judges

Judicial powers and functions in general

If the trial judge is different from the judge who ruled on the pretrial motion, the trial judge has an obligation to hear the arguments as to why the ruling during trial should be different from the pretrial ruling.  

[4] Judges

Judicial powers and functions in general

If the prior ruling by trial court addresses a substantive point of law, or if nothing of significance has changed, the second judge should consider the previous judge’s ruling to be final.  

[5] Judges

Judicial powers and functions in general

The simple fact a trial judge disagrees with a prior ruling by another judge is not grounds to change the ruling.    

[6] Judges

Judicial powers and functions in general

When circumstances that led to prior ruling have changed, trial judge should not be bound by order that no longer serves interests of justice.  

[7] Judges

There is no appeal from one Circuit judge to another.    

[8] Insurance

Corroboration;  independent or disinterested witness Insurance Uninsured or underinsured motorist coverage  

Compliance with statutory requirement of witness affidavit attesting to truth of facts of accident involving unknown automobile was not condition precedent to filing “John Doe” civil action against alleged tortfeasor and to recovery of uninsured motorist (UM) benefits; statute contained no requirement that affidavit be filed at same time the action was filed. S.C. Code Ann. § 38-77-170.    

ON WRIT OF CERTIORARI TO THE COURT OF APPEALS

Appeal from Fairfield County, Daniel Dewitt Hall, Circuit Court Judge

Attorneys and Law Firms

Sarah Rand-McDaniel and Seth Thomas McDaniel, both of Walker Allen Grice Ammons & Foy, LLP, of Mount Pleasant, for Petitioner.

Sherod Hampton Eadon III, of Eadon Law, LLC, of Columbia, for Respondent.

Opinion

JUSTICE FEW:

*1 This case presents the question whether compliance with the witness affidavit requirement in subsection 38-77-170(2) of the South Carolina Code (2015) is a condition precedent to the filing of a “John Doe” civil action. We hold it is not. Rather, the witness affidavit may be produced after the commencement of the lawsuit. As we will explain, however, the affidavit should be produced promptly upon request, and if it is not, the action is subject to dismissal pursuant to Rule 56(c) of the South Carolina Rules of Civil Procedure. We affirm the court of appeals as modified and remand the case to circuit court for trial.

I. Background and Procedural History

Peter Rice was the passenger in a friend’s car when the car veered off the road and hit a tree. Rice filed a civil action against the unidentified driver—“John Doe”—of a vehicle Rice contends crossed the center line into his friend’s lane of travel, causing the friend to swerve to avoid colliding with the vehicle. Rice alleges he “suffered severe and painful injuries and damages.”

Sections 38-77-170 and 38-77-180 of the South Carolina Code (2015) collectively allow recovery under a driver’s uninsured motorist policy when an accident is caused by an unidentified driver. However, section 38-77-170 provides “there is no right of action or recovery under the uninsured motorist provision, unless … (2) the injury or damage was caused by physical contact with the unknown vehicle, or the accident must have been witnessed by someone other than the owner or operator of the insured vehicle ….” In cases in which there was no “physical contact with the unknown vehicle”—as here—subsection 38-77-170(2) requires a “witness must sign an affidavit attesting to the truth of the facts of the accident ….”

John Doe filed an answer to Rice’s complaint in which Doe included a motion to dismiss the case on the basis Rice “has failed to comply with [section] 38-77-170.” The day after Doe filed his answer, Rice produced an affidavit setting forth the facts of the accident. Some months later, Doe filed a motion for summary judgment pursuant to Rule 56(c) in which he again claimed “the Plaintiff has failed to satisfy the terms of [section] 38-77-170.” Rice then produced and later filed an amended affidavit in which he clarified there was no contact between the vehicles and included the “statement” required to be “prominently displayed on the face of the affidavit” by the last sentence of section 38-77-170. Circuit Judge Roger E. Henderson heard Doe’s motion for summary judgment and denied it by written order, finding Rice’s amended affidavit “satisfies the affidavit requirements of S.C. Code § 38-77-170(2).”

The case was called for trial before Circuit Judge Daniel Dewitt Hall. Prior to the court striking a jury, Doe asked the court to hear the motion to dismiss he included in his answer. Doe specifically argued subsection 38-77-170(2) requires a John Doe plaintiff to file the witness affidavit at the same time he files the complaint, and therefore Rice’s claim must be dismissed because he failed to do so. Rice objected to Judge Hall hearing the motion on the basis that Doe’s argument was the same one heard and rejected by Judge Henderson. Judge Hall first determined Judge Henderson’s order denying summary judgment was based on the contents of Rice’s witness affidavit rather than its timing. Judge Hall then found subsection 38-77-170(2) requires a John Doe plaintiff to file the witness affidavit at the same time the complaint is filed as a condition precedent to the right to bring an action under sections 38-77-170 and 38-77-180. Because Rice filed the affidavit many months after he filed the action, Judge Hall dismissed the case.

*2 The court of appeals reversed, finding “Judge Hall did not have the authority to overrule Judge Henderson’s previous rejection of Doe’s timeliness argument.” Rice v. Doe, Op. No. 2021-UP-229, 2021 WL 2577035, at 2 (S.C. Ct. App. filed June 23, 2021). The court of appeals did not address the timeliness of the witness affidavit.

We granted Doe’s petition for a writ of certiorari to address whether Judge Hall had the authority to grant the motion to dismiss after Judge Henderson denied summary judgment and whether filing the witness affidavit required by subsection 38-77-170(2) is a condition precedent to the right to bring a John Doe action under sections 38-77-170 and 38-77-180. We find it unnecessary to rule definitively on whether Judge Hall had the authority to hear the motion to dismiss because—on the merits of that motion—we find the filing of the witness affidavit is not a condition precedent to bringing the John Doe action.

II. Analysis

We first address the court of appeals’ ruling that Judge Hall did not have the authority to grant the motion to dismiss. We then address whether subsection 38-77-170(2) is a condition precedent to filing a John Doe action.

A.

This Court has stated as a general principle, “One Circuit Court Judge does not have the authority to set aside the order of another.” Enoree Baptist Church v. Fletcher, 287 S.C. 602, 604, 340 S.E.2d 546, 547 (1986); see also Steele v. Charlotte, Columbia & Augusta R.R., 14 S.C. 324, 330 (1880) (“The judge may sometimes reconsider his own orders, but all the authorities agree as to the general doctrine, that the decision of one judge is not subject to be reviewed by another.” (internal quotation marks omitted) (citing 1 Simon Greenleaf, A Treatise on the Law of Evidence 543 (Boston, Charles C. Little & James Brown 1850))).

[1]However, this “general doctrine” can be a difficult one to apply. On one hand, it is “clearly an impermissible act” for one judge “to reverse the earlier substantive order” of another judge. Enoree Baptist Church, 287 S.C. at 604, 340 S.E.2d at 547. In Enoree Baptist Church, as an example of how the principle is intended to apply, the plaintiff filed a motion to amend the complaint, which one circuit judge granted. 287 S.C. at 603, 340 S.E.2d at 547. After a mistrial, a different circuit judge reversed the first judge’s ruling, stating, “So your amendment comes too late and I deny your amended complaint.” Id. This Court reversed the second judge and “remanded for a new trial under the amended complaint.” 287 S.C. at 604, 340 S.E.2d at 547. See also Belton v. State, 313 S.C. 549, 554, 443 S.E.2d 554, 557 (1994) (finding on “purely a legal” question of the jurisdiction of a State board, a second circuit judge “was without authority to review [the first judge’s] findings” on the exact same issue).

[2] [3]On the other hand, one circuit judge has the authority to make a different ruling than a prior judge in some circumstances. In Salmonsen v. CGD, Inc., 377 S.C. 442, 661 S.E.2d 81 (2008), for example, we held the general principle set forth in Enoree Baptist Church did not apply to class certification orders, which “may be altered at any time prior to a decision on the merits,” even by a different circuit judge. 377 S.C. at 454, 661 S.E.2d at 88. We have also recognized that pre-trial rulings on evidentiary issues are subject to change by the trial judge. See State v. Jones, 435 S.C. 138, 144, 866 S.E.2d 558, 561 (2021) (observing that if “an evidentiary ruling is pretrial” there could arise a “basis for the trial court to change its initial ruling”). If the trial judge is different from the judge who ruled on the pretrial motion, the trial judge has an obligation to hear the arguments as to why the ruling during trial should be different from the pretrial ruling.

*3 [4] [5]Under our system of rotating judges through the State, circuit and family court judges often confront situations in which another judge made a ruling that might or might not be final. If the prior ruling addresses a substantive point of law, or if nothing of significance has changed, the second judge should consider the previous judge’s ruling to be final. See Steele, 14 S.C. at 329 (observing that if one judge could overrule another, “there would be no end to litigation. No one could tell where it would stop. Nothing could be considered as finally adjudged, and all rights of person and property would be set afloat.”). The simple fact a judge disagrees with a prior ruling by another judge is not grounds to change the ruling.

[6] [7]When the circumstances that led to a prior ruling have changed, however, the trial judge should not be bound by an order that no longer serves the interests of justice. Even in Steele—one of the first cases in which we acknowledged the “general doctrine” stated in Enoree Baptist Church as “One Circuit Court Judge does not have the authority to set aside the order of another”—we recognized, “A motion once heard and decided fully [may] be reviewed upon a new state of facts arising after the decision[,] … such as to make a new case, as … newly-discovered evidence, or that the ground of the order has been removed ….” 14 S.C. at 330. The Enoree Baptist Church principle is intended, therefore, to prevent what is essentially an appeal from one circuit judge to another. As we explained in Steele, “There is no appeal from one Circuit judge to another.” 14 S.C. at 329. The principle was never intended to hamstring a subsequent judge when the circumstances legitimately have changed, or—as here—where there was uncertainty whether the first judge (Judge Henderson) even addressed the specific legal issue.

As Judge Hall was obligated to do, he examined the motion for summary judgment, the memorandum filed in its support, and Judge Henderson’s order, before making the determination Judge Henderson had addressed only the content of the affidavit, not whether subsection 38-77-170(2) required the affidavit be filed as a condition precedent to bringing the action. Judge Hall noted Judge Henderson’s order “did not contain any language that dealt with the issue of [the witness affidavit] being a condition precedent.” The court of appeals disagreed and determined Judge Henderson had ruled on the timeliness issue, in part because Doe’s memorandum in support of the motion specifically addressed the timeliness issue. Rice, Op. No. 2021-UP-229, at 2.

We believe both Judge Hall and the court of appeals had reasonable interpretations of Judge Henderson’s order, which shows the difficulty courts face in applying the Enoree Baptist Church general principle. On this difficult point, we find it unnecessary to definitively say whether we think Judge Hall was correct or the court of appeals was correct, because we find subsection 38-77-170(2) clearly does not require filing the witness affidavit as a condition precedent to bringing a John Doe action.

B.

[8]Turning to the question whether the witness affidavit requirement is a condition precedent to the filing of a John Doe action, our analysis is simple—the statute does not provide that the affidavit must be filed as a condition precedent to filing the action. Section 38-77-170 is titled, “Conditions to sue or recover under uninsured motorist provision when owner or operator of motor vehicle causing injury or damage is unknown.” It provides in part:

If the owner or operator of any motor vehicle which causes bodily injury or property damage to the insured is unknown, there is no right of action or recovery under the uninsured motorist provision, unless:

*4

(2) the injury or damage was caused by physical contact with the unknown vehicle, or the accident must have been witnessed by someone other than the owner or operator of the insured vehicle; provided however, the witness must sign an affidavit attesting to the truth of the facts of the accident contained in the affidavit ….

S.C. Code Ann. § 38-77-170.

There is no requirement in this language or otherwise that the witness affidavit be filed at the same time the action is filed.

Doe makes several points to support his position. Doe relies on the “[c]onditions to sue” language in the title and the “no right of action or recovery … unless” language in the introduction of section 38-77-170. He relies on our use of the phrase “condition precedent” in Wynn v. Doe, 255 S.C. 509, 512, 180 S.E.2d 95, 96 (1971), interpreting an earlier version of the statute that did not apply to no-contact cases and did not contain a witness affidavit requirement. Doe also relies on our statement, “A plaintiff’s strict compliance with the affidavit requirement is mandatory” in Collins v. Doe, 352 S.C. 462, 471, 574 S.E.2d 739, 743 (2002). Collins, however, concerned a plaintiff who never produced a witness affidavit—even at trial—and instead relied on witness testimony to establish the facts of the accident. 352 S.C. at 464-65, 574 S.E.2d at 740.

While perhaps Doe’s points support an argument the statute should require the affidavit before filing the action, the statute simply does not provide that. See Enos v. Doe, 380 S.C. 295, 312, 669 S.E.2d 619, 627-28 (Ct. App. 2008) (recognizing the “uninsured motorist statute ‘is remedial in nature, enacted for the benefit of injured persons, and is to be liberally construed so that the purpose intended may be accomplished’ ” (citation omitted)). If the General Assembly intended such a requirement, it could easily have stated the requirement in the statute. See S.C. Code Ann. § 15-79-125 (Supp. 2023) (“Prior to filing or initiating a civil action alleging … medical malpractice, the plaintiff shall contemporaneously file … an affidavit of an expert witness ….”).

Though we find the witness affidavit is not a prerequisite to filing a John Doe action, we recognize the requirement is essential to the success of the claim. Initially, therefore, we wonder why any plaintiff in such a case would not be eager to produce the affidavit at the earliest opportunity. Certainly, a John Doe defendant or the relevant insurer is entitled to have the affidavit produced promptly upon request. Our courts will not countenance the use of delay in producing the affidavit as an element of strategy. If a defendant or an insurer requests the affidavit in discovery or otherwise, and if the plaintiff does not provide the affidavit promptly, the defendant or insurer may seek relief through Rule 37(a) of the Rules of Civil Procedure (motion to compel) or, if necessary, even Rule 56(c) (motion for summary judgment).

III. Conclusion

Subsection 38-77-170(2) does not require the witness affidavit to be filed at the time the complaint is filed. For a different reason than the court of appeals, therefore, we find the circuit court improperly dismissed Rice’s claim. We affirm the court of appeals as modified and remand the case for trial.

*5 AFFIRMED AS MODIFIED.

BEATTY, C.J., JAMES, J., and Acting Justice Alison R. Lee, concur.

KITTREDGE, J., concurring in a separate opinion.

JUSTICE KITTREDGE:

I concur. I take no issue with the majority reaching “the question [of] whether compliance with the witness affidavit requirement in subsection 38-77-170(2) of the South Carolina Code (2015) is a condition precedent to the filing of a ‘John Doe’ civil action.” Judicial economy favors a merits-based resolution. I also support and join the result reached by the majority. I write separately to note that, in my judgment, the court of appeals was correct in its determination that the issue of “timing” was heard and rejected by Judge Henderson in the initial summary judgment motion. The motion before Judge Henderson asserted “a plaintiff seeking uninsured motorist coverage … must produce an affidavit that complies with the statute’s terms as a condition precedent to filing suit. The Plaintiff did not produce any affidavit until over 10 months after he filed this action…. [T]his affidavit was required prior to filing suit.” Judge Henderson properly denied summary judgment. Subsequently, the trial judge erred in revisiting the “timing” issue and overruling Judge Henderson. While the court of appeals cannot be faulted for adhering to the rule that one circuit judge lacks authority to overrule another circuit judge on the same issue, I join the majority in reaching and resolving the merits.

All Citations

— S.E.2d —-, 2024 WL 255510

End of Document

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Great West Cas. Co. v. Nationwide Agribusiness Ins. Co.

United States District Court, N.D. Illinois, Eastern Division.

GREAT WEST CASUALTY CO., Plaintiff,

v.

NATIONWIDE AGRIBUSINESS INSURANCE CO.; Timothy A. Brennan; and Conserv FS, Inc., Defendant.

Case No. 23 C 2178

|

Signed January 9, 2024

Attorneys and Law Firms

Scott O. Reed, Robert J. Franco, II, Franco Moroney Buenik LLC, Chicago, IL, for Plaintiff.

Timothy A. Renfro, Jr., Swanson, Martin & Bell, LLP, Chicago, IL, for Defendants Nationwide Agribusiness Insurance Co., Conserv FS, Inc.

Richard Lee Turner, Turner Law Group, Sycamore, IL, for Defendant Timothy A. Brennan.

MEMORANDUM OPINION AND ORDER

MATTHEW F. KENNELLY, District Judge:

*1 This is an insurance coverage dispute, in federal court via diversity jurisdiction. It involves two insurers whose insureds are named as defendants in a wrongful death case pending in state court. Each of the two insurers says that its policy provides “excess” coverage. The plaintiff, Great West Casualty Co., has moved for summary judgment. The motion requires the Court to decide the status of each insurer. In addition, if the Court concludes that both are “excess” insurers, the Court has to decide their relative responsibility regarding defense costs and liability.

Facts

On June 2, 2021, in Sycamore, Illinois, Patrick Brennan was driving a Chevrolet Equinox, and Robert Fisher was driving a tractor-trailer. Fisher was employed by Deerpass Farms Services, LLC (DFS). The tractor was owed by DFS and leased to a related entity, Deerpass Farms Trucking, LLC-II (DFT2). The trailer was owned by an unrelated entity, Conserv FS, Inc., and was also leased to DFT2. Brennan and Fisher both arrived at an intersection. Fisher allegedly failed to stop at a stop sign, and Brennan collided with the tractor-trailer. Brennan died from injuries suffered in the collision. The administrator of his estate sued Fisher, DFS, DFT2, and Conserv, alleging negligence.

Great West Casualty Co. provides liability insurance to DFT2. Nationwide Agribusiness Insurance Co. provides liability insurance to Conserv. (The Court omits as unnecessarily complicating the allegations regarding the insured status of Fisher under both policies and the insured status of DFT2 under the Nationwide policy.)

Both sides agree that Nationwide’s insurance coverage is “excess” insurance, under the following provision in the Nationwide insurance policy:

5. Other Insurance

a. For any covered “auto” you own, this Coverage Form provides primary insurance. For any covered “auto” 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, the 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 do own.

Great West LR 56.1 Stat. ¶ 29 (emphasis added). Specifically, under this term of the Nationwide policy, its coverage is excess because the covered auto—the trailer—was connected to another vehicle—the tractor, and that was a motor vehicle that Conserv did not own, as DFS owned the tractor.

The key dispute in this case involves the status of Great West’s coverage. The issues before the Court involve construction of insurance policies. Under Illinois law, which both parties agree governs, the proper interpretation of an insurance policy is a question of law. The usual rules of contract interpretation apply. The primary goal is to ascertain and give effect to the parties’ intentions as expressed in the language of the insurance policy. The goal is to give effect to every provision when possible. Terms in an insurance policy are given their ordinary meaning, absent ambiguity. See generally Citizens Ins. Co. of Am. v. Wynndalco Enters., LLC, 70 F.4th 987, 995 (7th Cir. 2023) (citing cases for each of these propositions).

*2 The operative terms are all in the “Commercial Auto Coverage Part” portion of the Great West policy, and specifically in “Section V – Motor Carrier Conditions,” Paragraph B – “General Conditions.” The operative, or at least potentially operative, terms read as follows:

5. OTHER INSURANCE – PRIMARY AND EXCESS INSURANCE PROVISIONS

b. While any covered “auto” is hired or borrowed by you from another “motor carrier” this Coverage Form’s Covered Autos Liability Coverage is:

(1) Primary if a written agreement between the other “motor carrier” as the less or and you as the lessee does not require the lessor to hold you harmless, and then only while the covered “auto” is used exclusively in your business as a “motor carrier” for hire.

(2) Excess over any other collectible insurance if a written agreement between the other “motor carrier” as the lessor and you as the lessee require the lessor to hold you harmless.

e. Except as provided in Paragraphs a., b., c. and d. above, this Coverage Form provides primary insurance for any covered “auto” you own and excess insurance for any covered “auto” you do not own.

g. Regardless of the provisions of Paragraphs a., b., c., d. and e. above, this Coverage Form’s Covered Autos Liability Coverage is primary for any liability assumed under an “insured contract.”

Dkt. No. 14-4 (Great West policy) at ECF pp. 41-42 of 137.

The first issue regarding the Great West policy involves Section 5.b. First of all, the Court concludes that a “covered auto”—the tractor—was hired or borrowed by DFT2 from another “motor carrier,” namely DFS. Nationwide argues that the tractor was not “hired or borrowed” because it was leased. The term “hired or borrowed” is broad enough to include a vehicle that is leased. The proposition that the term “hired or borrowed” is coextensive with, or at least includes, vehicles that are leased is apparent from the language of Section 5.b.(1) and (2) itself, as both (1) and (2) refer to, and only to, leased vehicles. If “leased” in Section 5.b. meant something outside the scope of the term “hired or borrowed,” Section 5.b.(1) and (2) would effectively be superfluous. It is a basic principle of contract law that contracts are to be read so as to give meaning to every term and, conversely, to avoid any term being rendered superfluous. See, e.g., Land of Lincoln Goodwill Indus., Inc. v. PNH Fin. Servs. Grp., Inc., 762 F.3d 673, 679 (7th Cir. 2014). Section 5.b.(1)-(2), which is a single term of the policy, makes it clear from context that “hired or borrowed” has to include leased vehicles; nothing else makes sense.

In addition, when the Court asked Nationwide’s counsel at oral argument how “borrowed” meant something completely different from “leased,” counsel replied that borrowed means “you’re not paying for it.” That makes no sense; among other things, as the Court pointed out during oral argument, persons who “borrow” money from banks are typically expected to repay it. Counsel’s only other argument was that a separate part of the policy defines the term “leased auto.” But here we are dealing with Section 5.b., not some other part of the policy. The Court concludes that the phrase “hired or borrowed” in Section 5.b. includes autos that the insured has leased.

Nationwide and Brennan, who also weighed in on certain aspects of the dispute between the insurers, next argue that DFS is not a “motor carrier” within the meaning of Section 5.b. because it does not meet the definition of motor carrier in US Department of Transportation regulations. But those regulations don’t provide the appropriate definition. The term “motor carrier” is defined in the Great West policy itself, as follows: “ ‘Motor Carrier’ means a person or organization providing transportation by ‘auto’ in the furtherance of a commercial enterprise.” Dkt. No. 14-4 at ECF p. 45 of 137. DFS is an organization that provides transportation by auto—the tractor1—in furtherance of a commercial enterprise—a farm. It therefore meets the policy’s definition of a motor carrier.

*3 In sum, Section 5.b. of the Nationwide policy applies, because a covered auto, the tractor, was hired or borrowed (in this case leased) by the insured, DFT2, from another motor carrier, DFS.

The next question involves the application of Section 5.b.(2). That provision says that Great West’s insurance is excess coverage “if a written agreement between the other ‘motor carrier’ as the lessor and [DFT2] as the lessee require the lessor to hold you harmless.” Dkt. no. 14-4 at ECF p. 41 of 137. There is such an agreement, specifically, the lease between DFS and DFT2. In that lease, the “Contractor” (DFS) expressly requires to “defend, indemnify, and hold [DFT2] harmless from and against any and all injuries (including death), claims,” and so on as a result of any acts or omissions of DFS or its employees, which is what Fisher was. See Dkt. no. 14-3 at ECF p. 7 of 17.

For these reasons, the Court concludes that under Section 5.b.(2) of the relevant part of the Great West policy, Great West’s coverage is excess coverage.

This does not end the discussion, however. Nationwide also cites Section 5.g., quoted earlier, which says that regardless of Section 5.b. (among other provisions), Great West’s insurance is primary “for any liability assumed under an ‘insured contract.’ ” Dkt. no. 14-4 at p. 42 of 137. The Great West policy defines “insured contract,” as applicable here, as follows:

5. That part of any other contract or agreement pertaining to your business … under which you assume the tort liability of another to pay for “bodily injury” or “property damage” to a third party or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement ….

Dkt. no. 14-4, ECF p. 44 of 137. Nationwide argues that the agreement between Conserv and DFT2—referred to as the Interchange Agreement—is an “insured contract” within the meaning of Section 5.g. That agreement contains the following indemnification provision:

Release and Hold Harmless. Except to the proportionate extent that any Losses are caused by the negligent acts or omissions of [Conserv], [DFT2] hereby releases and agrees to indemnify, defend and hold harmless [Conserv] … from and against any and all claims, lawsuits, causes of action, judgments, expenses, fines, cost [sic], losses, penalties, damages, liabilities and reasonable attorneys’ fees for bodily injury (including injury resulting in death) and loss of or damage to property (collectively, “Losses”) arising out of or released to [DFT2’s] use, operation, maintenance, possession, or Interchange of [Conserv’s] Equipment.

Dkt. No. 32-1 at ECF pp. 7-8 of 10.

Nationwide argues that any liability of its insured Conserv in the Brennan lawsuit, if any, is “liability assumed under an ‘insured contract’ ” within the meaning of Section 5.(g) of the Great West policy. Specifically, Nationwide argues, Conserv is not alleged to have been negligent in any way with respect to the underlying matter; thus DFT2’s liability, if any, is liability assumed under the hold harmless agreement in the Interchange Agreement. (The claim against Conserv in the Brennan lawsuit is based on an assertion of vicarious liability for the alleged negligence of Fisher—DFT2’s agent—not on Conserv’s own alleged negligence.)

*4 Great West contends that Section 5.g. does not apply. Among other points, Great West cites the policy’s definition of “insured contract”—an agreement under which DFT2 “assume[s] the tort liability of another”—and argues that what DFT2 assumed under the Interchange Agreement’s hold harmless provision is not “the tort liability of another.

The Court agrees with Great West. Any liability that DFT2 assumed under the Interchange Agreement is not someone else’s tort liability; rather, DFT2 agreed to indemnify Conserv for liability arising from DFT2’s own actions. See, e.g., Hankins v. Pekin Ins. Co., 305 Ill. App. 3d 1088, 1093, 713 N.E.2d 1244, 1249 (1999). Thus Section 5.g. of the Great West policy does not apply.

In sum, the Court concludes that Great West’s insurance, like Nationwide’s, is excess insurance.

That leaves the question of who pays what. Great West argues that because of the particular wording of Section 5.b.(2), its coverage is what its lawyer referred to at oral argument as “super excess,” in other words excess over Nationwide’s excess coverage. The term in Great West’s policy says that if the conditions of section 5.b.(2) are satisfied, Great West’s insurance is “[e]xcess over any other collectible insurance.” Section 5.a.(1) of Nationwide’s policy simply says that its insurance is “[e]xcess”; there is no reference to “any other collectible insurance.” As support for the proposition that this difference matters, Great West cites a single case, Truck Insurance Exchange v. Liberty Mutual Insurance Co., 102 Ill. App. 3d 24, 428 N.E.2d 1182 (1981). That case does not support the weight that Great West seeks to place on it. In Truck Insurance Exchange the court, in reading the excess clauses in the two insurance policies at issue, relied on the insureds’ clear intent, as expressed in a lease, to have one insurer provide the primary insurance and the other to provide excess coverage to cover amounts over and above the limits in the primary policy. There is nothing in the present case that is similar. The Court concludes that Truck Insurance Exchange does not govern here. The language in the two separate insurance policies is functionally the same: the insurance provided, in the present situation, is excess.

When two insurers are both excess insurers and there is no primary insurer, the two excess provisions effectively cancel each other out, and the two excess insurers share responsibility on a pro rata basis. See Great West Cas. Co. v. Ross Wilson Trucking, 550 F. Supp. 3d 579, 586 (C.D. Ill. 2021). That is the case here.

The last question, therefore, is how defense costs and liability get divided. On this, both sides agree: it is done in proportion to the respective policy limits. Language to this effect appears in both policies. Section 5.h. of the relevant part of the Great West policy says that

[w]hen this Coverage Form and any other Coverage Form, policy or self-insurance covers on the same basis, either excess or primary, we will pay only our share. Our share is the proportion that the 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.

Dkt. no. 14-4, ECF p. 42 of 137. The Nationwide policy says exactly the same thing. See Great West LR 56.1 Stat. ¶ 29. The limit of the Great West coverage is $1 million; the limit of the Nationwide coverage is $2 million. The two insurers are to share defense costs and liability proportionately to these respective limits.

Conclusion

*5 The Court grants plaintiff Great West Casualty Co.’s motion for summary judgment [17] to the extent stated in this Memorandum Opinion and Order. The Court will enter a declaratory judgment accordingly. The parties are directed to confer and prepare a proposed judgment order, agreed as to form, consistent with the Court’s ruling. A Word version is to be submitted to Judge Kennelly’s proposed order e-mail address by no later than January 12, 2024. Entry of the declaratory judgment should conclude all remaining issues in this case, so the Court will close the case following entry of the judgment.

All Citations

Slip Copy, 2024 WL 98402

Footnotes

  1. The Great West policy defines “Auto” to include “[a] land motor vehicle, ‘trailer’ or semitrailer designed for travel on public roads ….” Dkt. no. 14-4 at ECF p. 43 of 137.  

End of Document

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