May 2010 Case Notes & Comments

“ Spring is nature’s way of saying, ‘Let’s party!’ " ~ Robin Williams

MONTHLY QUIZ: WHICH POLICY IS PRIMARY? Moving Company rented truck from Rental Company that was involved in a collision resulting in injuries. Moving company procured policy with a $750k limit. Rental Company obtained policy listing company’s vehicles that contained a $1 mil. per occurrence limit, as well as an endorsement seeking to limit liability “for rentees to $50,000” per accident. Both policies contained “other insurance” clauses. Query A: Which policy provides primary coverage? Query B: Which limit applies on Rental Company’s policy? You be the judge. (Answer below).


U.S. SUPREME COURT: COURT ADOPTS “NERVE CENTER” TEST IN ALL FEDERAL CASES WHERE JURISDICTION IS BASED UPON DIVERSITY-OF-CITIZENSHIP PURSUANT TO 28 U.S.C. §1332: Plaintiffs, California citizens, sued Hertz claiming violations of state wage and hour laws. Hertz filed a motion, seeking removal to federal court with declaration claiming that Hertz was a citizen of New Jersey, the state where its “corporate headquarters” and “major administrative operations” were located and where “core executive and administrative functions… [were] carried out.” In finding Hertz a citizen of CA, the trial and appellate courts applied the local test, which considered such factors as the volume of business conducted in CA versus other states. In reversing the lower courts and finding Hertz a citizen of New Jersey, the US Supreme Court rejected the different tests applied by the different Circuits over several decades, which were “too complex and impractical to apply.” In an effort to find an easier and unified approach, the court adopted the “nerve center” test, which determines diversity jurisdiction based upon the place “where a corporation’s officers direct, control, and coordinate the corporation’s activities….[which is] normally … the corporation[‘s] headquarters – provided that the headquarters is the actual center of direction, control, and coordination, … and not simply an office where the corporation holds its board meetings.” Hertz Corporation v. Friend, et al., 130 S.Ct. 1181 (S. Ct. Feb. 23, 2010)


ILLINOIS SUPREME COURT: HIGH COURT MODIFIES PRIOR OPINION - CLARIFIES WHICH SETOFFS ARE FOREFEITED IF NOT PLEAD AS COUNTERCLAIM: In original opinion, IL Supreme Court held that doctor forfeited his claim for setoff by not pleading it as a counterclaim pursuant to § 2-608 of the IL Code of Civil Procedure. On rehearing, the court modified its prior opinion, clarifying that § 2-608 applies to defendants who have “a distinct cause of action against the plaintiff who filed suit against him.” Therefore, defendant was not required to plead set-off as a counterclaim. However, in affirming prior result, the court found that defendant was not entitled to any setoff since he waived the argument that plaintiff made a double recovery and failed to prove that any portion of the settlement was allocated, or attributable, to the negligent infliction of emotional distress claim against him. Thornton v. Garcini, ---N.E.2d---, 2010 WL 1714000 (IL S. Ct. April 22, 2010)


LEF WINS APPEAL – RELEASE AND INDEMNITY AGREEMENT BARS CLAIMS AGAINST TOUR OPERATOR: Congratulations to Edward J. Leahy and James J. Sanders, who prevailed as appellee in First Appellate District. On a motion for summary judgment, Mr. Leahy and Mr. Sanders successfully argued that the claims against a Segway tour operator were barred by Plaintiff’s execution of a “Release and Indemnity Agreement”, which included an exculpatory clause, prior to the tour on which she was injured. Plaintiff appealed, arguing that the release was unenforceable. The Appellate Court affirmed, holding that the release was valid, enforceable, and applicable to the underlying occurrence. Hamer v. City Segway Tours of Chicago, Case No. 1-08-3371 (1st District, April 22, 2010).


LEF CONGRATULATES JOHN MCINERNEY: Leahy, Eisenberg & Fraenkel, Ltd. thanks John J. McInerney for his over 30 continuous years of service to the firm. John specializes in large loss litigation.


ANSWER TO QUIZ: Both policies are primary. The “other insurance” clauses cancelled each other out. Court also found Rental Company’s policy was ambiguous since two endorsements, each with different limits, purported to apply. Therefore, Rental Company’s policy also provided $1 mil. in coverage. American Service Insurance Company v. Jones, --- N.E.2d---, 2010 WL 1254856 (1st District, Mar. 31, 2010)

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