Wrongful Death in Tractor-Trailer Head-On Crash Leads to Insurance Coverage Fight; Coca-Cola Enterprises, Inc. v. ATS Enterprises

In this case the parties fought over the insurance policies arising out of the wrongful death of Daniel Zacha, an employee of S&S Service Co. Mr. Zacha was driving a tractor-trailer owned by Coca-Cola Enterprises back to the S&S garage for repairs; in the process, he caused a head-on crash with the driver of a minivan, which resulted in that driver’s death.

Under the Illinois Vehicle Code, insurance companies are generally required to extend protection under liability policies to persons who are driving insured vehicles with express or implied permission of the owners.

The Illinois Supreme Court explained the statutory requirement of the Illinois Vehicle Code naming it “omnibus coverage,” which means “primary liability is generally placed on the insurer of the owner of an automobile rather than on the insurer of the operator” – unless a statutory exception applies.

The wrongful death claim brought by the family of the person driving the minivan settled for $1.9 million through the S&S’ liability insurer, Universal Underwriters Insurance Co. It in turn demanded reimbursement from Coca-Cola’s carrier, ACE American Insurance Company. In a lawsuit for declaratory judgment that Coca-Cola and ACE filed, they both sought a decision on whether Universal’s policy provided primary coverage. Declaratory judgment actions are usually referred to as a jump ball where the court is asked to decide who gets the tip — in other words, who’s right on this particular issue of insurance coverage.

Coca-Cola and ACE argued that the general rule on primary coverage didn’t apply in this case. Section 12-606(d) of the vehicle code specified the types of amounts of insurance coverage that tow-truck companies such as S&S are required to have. The federal court in Central Illinois disagreed with Coca-Cola and ACE and granted summary judgment for S&S, Universal and Zacha.

Coca-Cola and ACE appealed to the Seventh Circuit U.S. Court of Appeals, where the summary judgment was affirmed. The court explained that Coca-Cola’s “argument is hard to square with the language of the relevant statutes.”

The threshold issue in the case was whether both insurance policies provided coverage for the crash. The federal court of appeals held that there was no dispute that the ACE policy does. That policy covers permissive drivers of Coca-Cola’s vehicles, although it purports to exclude “someone using a covered ‘auto’ while he or she is working in a business of servicing or repairing an ‘auto.'”
Under Illinois law, all vehicle-owner insurance policies are required to cover any “person using or responsible for the use of such motor vehicle or vehicles with express or implied permission of the insured.”

Where omnibus requirements apply, the “permissive user clause must be read into every such policy.”

Zacha was using the Coca-Cola tractor-trailer with permission. Therefore, Illinois law mandates coverage under the ACE policy, notwithstanding its exclusionary language.

The more problematic issue is whether the Universal policy applied here. The question was whether the Coca-Cola tractor-trailer, not owned by S&S, is nonetheless considered an “owned auto” under the policy. In this case, the reading of Illinois law and the district court’s finding was that the Universal policy did not apply because Illinois law does not require the Universal policy to cover an accident not involving the towing company’s tow-truck.

The question became: Which of the policies is primary? In Illinois, “primary liability is generally placed on the insurer of the owner of an automobile rather than on the insurer of the operator.”
The court found that the accident did not involve a tow-truck or any other S&S vehicle. Subsection (d)(1), requiring tow-truck operators to maintain higher levels of coverage for their own trucks and other vehicles, did not displace Coca-Cola’s owner’s policy. Accordingly, Coca-Cola’s policy with ACE was found to be the primary policy of insurance pursuant to the Illinois Omnibus Statute and the rule found in the State Farm case.

Kreisman Law Offices has been handling truck crashes, bicycle accidents, nursing home abuse cases and has been protecting the safety of individuals and families for more than 36 years in and around Chicago, Cook County and its surrounding areas, including Bridgeview, Elmhurst, Midlothian, Orland Park, Alsip, Richton Park, Chicago (Logan Square), Bensenville and Wheaton, Illinois.