February 2015 Case Notes & Comments

"When those waiters ask me if I want some fresh ground pepper, I ask if they have any aged pepper." ~ Andy Rooney (1919 - 2011)

MONTHLY QUIZ: After spending the day drinking beer, taking Xanax and smoking marijuana at the beach, Insured and his friends return to Insured's house to hang out. During the party, Insured decides to brandish and display his loaded, street-purchased semi-automatic handgun, which discharges and kills Guest. Insured is charged and convicted of involuntary manslaughter of Guest, which crime is proven if the committed "acts are likely to cause death" and are performed "recklessly." Guest's Estate sues Insured under a homeowner's policy, which contains an exclusion for bodily injury "intended by, or which may reasonably be expected to result from the intentional or criminal acts of ... any insured." Insurer files a declaratory action. Does Insurer have a duty to defend Insured in a negligence claim filed by Guest's Estate? Is Guest's Estate estopped from contending that Insured's actions were not reasonably likely because of Insured's conviction? You be the judge (Answer below).

PERSONAL INJURY - CLOSELY INTERTWINED BUSINESS RELATIONSHIP COULD CONSTITUTE JOINT VENTURE: Manufacturer, a producer of extruded plastic sheets, employed Plaintiff-Employee as a plant worker. Seller, which operated one of its divisions next door to Employer's manufacturing plant, sold several of Manufacturer's products, including the plastic sheets. While making the plastic sheets, Plaintiff-Employee was seriously injured by a machine and sued Employer and several other defendants, including Seller. As to Seller, Plaintiff-Employee alleged that Seller was liable because it was engaged in a joint venture with and retained control over Manufacturer and that Seller had actual or constructive knowledge that the subject machine was unreasonably dangerous. Despite a Manufacturing Agreement that provided that neither Manufacturer nor Distributor was an agent of the other, the Illinois Supreme Court held that even if the parties disclaim an agency relationship, such as a joint venture, the factfinder may still find that such a relationship exists, based upon the parties' conduct.  In reversing the appellate court, the Court analyzed the details of the relationship between the Seller and Manufacturer, ultimately concluding that the most it could say was that it was a "long-term, closely intertwined relationship, in which they dealt nearly exclusively with each other, jointly contributed equipment and raw material, and worked together to implement mutually beneficial 'cost improvements.'" Taken together, the evidence of the parties' unique business model raised a material fact question as to whether it was a joint venture, precluding summary judgment.  (On a related note, the Appellate Court held that because Seller failed to assert the affirmative defense of the Workers' Compensation Act's exclusive remedy provision, it was therefore barred from arguing that it was immunized from liability if it were found to be engaged in a joint venture with Manufacturer.)  Hiatt v. Western Plastics, Inc., 2014 IL App (2d) 140178 (December 29, 2014). 

NEGLIGENCE / CAUSATION / RES IPSA LOQUITUR - LOSS OF MEMORY RESULTS IN LOSS OF CASE: Plaintiff-Driver suffered a serious head injury while picking up a load of freight from Customer and Customer's Employee. Driver testified that he had no memory of how he was injured, and Employee denied any knowledge of the injury.  Driver sued Customer and Employee under the theory of negligence and, in an amended complaint, under the theory of res ipsa loquitur.  The trial court granted summary judgment in favor of Customer and Employee on the negligence claim on the basis that the cause of Driver's injury remained a matter of speculation.  The trial court subsequently dismissed Driver's res ipsa loquitor claim on res judicata grounds, in light of its prior dismissal of the negligence claim.  On review, the Appellate Court affirmed, holding that, because Driver had no memory of how he injured his head, because Employee denied any knowledge about the injury and because Driver's injuries could have been caused in any number of ways (e.g. Driver could have fallen, bumped his head on the truck door, or collided with Employee), the cause of Driver's injury was a matter of speculation, and therefore Driver failed to establish proximate causation. The court further held that where there are differing possible causes for the injury and nothing in the evidence to suggest that defendants' negligence or the instrumentality under defendants' control was the most plausible explanation, res ipsa loquitur cannot be invoked. Rahic v. Satellite Air-Land Motor Service, Inc., 2014 IL App (1st) 132899 (December 30, 2014).

LEF WINS SUMMARY JUDGMENT WITH REGARD TO INSURER'S DUTY TO INDEMNIFY Congratulations to Howard Randell and Scott Wing who were recently awarded summary judgment with regard to an insurer's duty to indemnify its insured in a matter arising out of the theft of a shipment of cellular phones valued at more than $2 million. The insured, a motor carrier and logistics provider, was initially hired to transport the shipment from Illinois to Pennsylvania; however, due to a shortage of equipment, the insured retained a separate motor carrier to actually perform the transit. After accepting the load for delivery, the driver parked his truck near his home to take a brief rest, at which point the load was stolen, along with the cargo inside. Suit was filed by the owner of the cargo against its logistics provider which, in turn filed suit against the insured to recover the value of the stolen cargo. The insured tendered its defense and indemnity to its motor truck cargo insurer, which accepted the tender, subject to a reservation of its rights. LEF filed suit for declaratory judgment and, during the early stages of litigation, secured a summary judgment with regard to the insurer's duty to defend, with the court acknowledging that the subject policy extended the insurer a right, but not a duty to defend, at which point the insurer was able to withdraw its defense of the underlying case prior to extensive discovery and motion practice. The underlying case ultimately settled on the eve of trial, at which point LEF moved for summary judgment with regard to the insurer's duty to indemnify, citing the policy provision requiring that covered property be within the insured's "care, custody, and control" and a policy exclusion for the insured's liability as a "transportation broker." Following lengthy briefing and oral argument, the court agreed with LEF's position on both the "care, custody, and control" and transportation broker issues, ruling that the insurer had no duty to indemnify its insured for the underlying settlement. Hartford v. Atlas SN, Inc. et al., Case No. 12 CH 1633 (Cook). 

ANSWER TO QUIZ: Insurer wins, Insured and Estate lose. The trial court's holding that Insurer was not required to defend or indemnify Insured affirmed. The criminal findings, that Insured's actions were reckless and likely to cause the death of Guest, were conclusive as to the issue of whether Insured's actions could be "reasonably expected" to cause Guest's death within the meaning of the policy. Note: Dissenting Opinion. Allstate Indemnity Co. v. Hieber, 2014 IL App (1st)132557.


Past Publications


June 2024
May 2024
March 2024
January 2024


December 2023
October 2023
September 2023
August 2023
May 2023
March 2023
February 2023


December 2022
October 2022
August 2022
July 2022
April 2022
March 2022
January 2022


December 2021
October 2021
August 2021
July 2021
May 2021
April 2021
March 2021
January 2021


December 2020
November 2020
October 2020
September 2020
August 2020
February 2020
January 2020


December 2019
October 2019
September 2019
July 2019
May 2019
March 2019
February 2019
January 2019


December 2018
October 2018
August 2018
June 2018
May 2018
April 2018
March 2018
February 2018


December 2017
November 2017
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
March 2017
February 2017


December 2016
October 2016
September 2016
August 2016
July 2016
June 2016
March 2016
January 2016


December 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015


December 2014
October 2014
September 2014
July 2014
June 2014
April 2014
April 2014
March 2014
February 2014
January 2014


December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
January 2013


December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012


December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011


December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010


December 2009