Century National Insurance Company v. GT Transport, Inc. et al
MEMORANDUM Opinion and Order: For the foregoing reasons, Century's motion for summary judgment 22 is granted. Civil case terminated. Signed by the Honorable Thomas M. Durkin on 4/10/2018:Mailed notice(srn, )
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
CENTURY NATIONAL INSURANCE
No. 17 C 4764
Judge Thomas M. Durkin
GT TRANSPORT, INC. and GRAINCO FS,
MEMORANDUM OPINION AND ORDER
Century National Insurance Company seeks a declaratory judgment that it
does not have a duty to defend or indemnify its insured, GT Transport, Inc., in a
lawsuit brought by the estate of a person who died while using a truck GT owned.
Grainco FS is also a defendant in the underlying lawsuit, and Century has
impleaded Grainco here so as to have it bound by any decision of this Court. GT has
defaulted, leaving Grainco to oppose Century’s motion for summary judgment, R.
22, which is before the Court. For the following reasons, that motion is granted.
In the underlying case, the decedent’s estate alleges that Anthony Lincoln
was GT’s employee. R. 1-4 ¶ 5. He drove a truck owned by GT to a Grainco facility to
pick up a load of soybeans. Id. ¶¶ 6-7. He was allergic to soybeans, and while he was
at Grainco’s facility he went into anaphylactic shock, and later died. Id. ¶¶ 8-10.
In answer to the complaint, GT denies that Lincoln was its employee, and
asserts that the day he died he was applying for a job. R. 27-1 at 6 (¶ 5). GT also
asserts that Lincoln used its truck without permission. Id. (¶ 7).
The GT’s insurance policy with Century includes the following relevant
The following words and phrases have special meaning
throughout this policy and appear in boldface type when
A. “You” and “your” mean[s] [GT]. . . .
C. “Accident” [means] a sudden, unexpected occurrence
not intended by the Insured . . . .
F. “Insured” means any person or organization qualifying
as an Insured in the WHO IS INSURED section of the
A. WE WILL PAY, subject to the policy limits:
1. All sums . . . the Insured legally must pay as damages
because of bodily injury or property damage, other than
punitive or exemplary damages, to which this insurance
applies, caused by an accident and resulting from the
ownership, maintenance or use of a covered auto.
2. We have the right and duty to defend any suit asking
for these damages. However, we have no duty to defend
suits for bodily injury or property damage not covered by
C. WE WILL NOT COVER—EXCLUSIONS
This insurance does not apply to . . . .
2. Any obligation for which the Insured or his or her
insurer may be held liable under any workers’
compensation or disability benefits law or under any
3. Any obligation of the Insured to indemnify another for
damages resulting from bodily injury to the Insured’s
employee. . . .
5. Bodily injury to any employee of the Insured arising out
of and in the course of his or her employment by the
Insured. . . .
10. Bodily injury to an insured or liability for bodily injury
to an Insured whenever the ultimate benefits of that
indemnification accrue directly or indirectly to an insured.
18. To anyone operating the Insured vehicle without the
permission of the Insured.
D. WHO IS INSURED
1. You are an Insured for any covered auto.
2. Anyone else is an Insured while using with your
permission a covered auto . . . .
R. 1-5 at 1-4 (capitalization in original). The truck Lincoln was using when he died
is a “covered auto” under the policy.
“Under Illinois law, the interpretation of an insurance policy is a question of
law that is properly decided by way of summary judgment.” Twenhafel v. State Auto
Prop. & Cas. Ins. Co., 581 F.3d 625, 628 (7th Cir. 2009). “Under Illinois law, an
insurer has no duty to defend unless the underlying claim contains explicit factual
allegations that potentially fall within policy coverage.” Amerisure Mut. Ins. Co. v.
Microplastics, Inc., 622 F.3d 806, 810 (7th Cir. 2010). “If the facts alleged in the
underlying complaint fall within, or potentially within, the policy’s coverage, the
insurer’s duty to defend arises.” Id. Moreover, “a liability insurer’s duty to defend is
broader than its duty to indemnify.” Id. The Court must not “simply look to the
particular legal theory pursued by the claimant, but must focus on the allegedly
tortious conduct on which the lawsuit is based.” Id. at 815-16. The Court is to
“liberally construe” the policy terms and the allegations in the complaint in favor of
the insured, and any doubts and ambiguities are resolved against the insurer. See
id. at 811. Nonetheless, “the general rules that favor the insured must yield to the
For Century to have a duty to defend GT in the underlying case, the facts
alleged in the underlying complaint must fall within the policy’s language. The
policy generally covers damages caused by the use of GT’s covered vehicles. See R.
1-5 at 3 (the policy covers “[a]ll sums . . . the Insured legally must pay as damages . .
. caused by an accident and resulting from . . . use of a covered auto”). The policy
excludes from coverage, however, injury to GT’s employees, see R. 1-5 at 4 (¶ C5)
(policy excludes “[b]odily injury to any employee of the Insured”), and injury to
anyone using a covered auto with GT’s permission, see id. at 4 (¶¶ C10, D2) (policy
excludes “[b]odily injury to an Insured,” including “[a]nyone . . . using with . . .
permission a covered auto”).
The complaint in the underlying case alleges that Lincoln was GT’s employee
at the time of his death. The complaint also alleges that Lincoln was using the truck
to haul soybeans for GT, permitting the inference that he was using the truck with
GT’s permission. Since the policy does not cover injuries to employees or people
using covered vehicles with permission, and the underlying case alleges that
Lincoln was GT’s employee using the truck with permission, the policy does not
cover the injury as alleged in the underlying complaint.
Grainco does not contest this interpretation of the policy or this application of
the policy to the facts alleged in the underlying complaint. Rather, Grainco contends
that GT’s denial of these facts in its answer in the underlying case is sufficient to
establish Century’s duty to defend. Pleadings beyond the underlying complaint can
be relevant to assessing a duty to defend. For instance, in Pekin Insurance Co. v.
Wilson, the policy contained a self-defense exception to the coverage exclusion for
intentional torts, making the counterclaim relevant to the duty to defend. 930
N.E.2d 1011, 1021 (Ill. 2011). In another case cited by Grainco, the underlying
complaint alleged that a contractor was negligent and a third-party complaint
alleged that a sub-contractor was directly responsible for the work in question. See
Am. Econ. Ins. Co. v. Holabird and Root, 886 N.E.2d 1166, 1179 (Ill. App. Ct. 1st
Dist. 2008). In Holabird, although the underlying complaint did not name the
subcontractor, the court found it appropriate to consider the third-party complaint’s
naming of the subcontractor in assessing the duty to defend. Id. The Wilson and
Holabird cases presented “unusual circumstances” making it reasonable to look
beyond the underlying complaint itself in assessing the insurers’ duties to defend in
those cases. See Scottsdale Ins. Co. v. Walsh Constr. Co., 2011 WL 4538456 (N.D. Ill.
Sept. 29, 2011).
Grainco does not contend that any such unusual circumstances are present in
the underlying pleadings, but rather asks the Court to deny Century’s motion
simply based on GT’s denials of the underlying plaintiff’s allegations. Grainco cites
no authority supporting its reliance on GT’s straightforward denials to oppose this
motion. This lack of authority is unsurprising. A defendant’s denials are generally
designed to counter a claim of liability. Only pleadings that can demonstrate
potential liability for the insured can possibly demonstrate a duty to defend. Here,
the policy excludes coverage for the facts as alleged in the underlying complaint,
and the answer of course is designed to counter the claimed liability. Absent
liability there is nothing to defend. Thus, none of the pleadings demonstrate
circumstances in which Century would owe coverage to GT.
This is doubly true here because even if liability for GT was still possible if
the facts of the underlying case are as GT alleges in its answer, the policy does not
provide coverage. GT alleges that Lincoln was not its employee at the time of his
death, and that he was using the truck without permission. The policy expressly
excludes coverage “[t]o anyone operating the Insured vehicle without the permission
of the Insured.” R. 1-5 at 4 (¶ 18). Thus, Grainco’s reliance on GT’s answer is
unavailing (even if it was a proper argument, which it is not).
Since the express terms of the policy exclude coverage for the accident at
issue in the underlying case—whether as alleged by the plaintiff in that case or in
GT’s answer—summary judgment is granted to Century. For the same reason, it is
unnecessary to address Century’s arguments that coverage is precluded by (1) a
provision in the policy regarding injury from “irritants, pollutants or contaminants,”
or (2) the policy’s notice provision.
For the foregoing reasons, Century’s motion for summary judgment, R. 22, is
Honorable Thomas M. Durkin
United States District Judge
Dated: April 10, 2018
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