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Amer. Employers' Ins. Co. v. Yellow Cab





APPEAL from the Circuit Court of Cook County; the Hon. HARRY G. HERSHENSON, Judge, presiding.


This is an appeal of a summary judgment granted by the circuit court of Cook County in favor of the defendant, Yellow Cab Company (Yellow Cab). The action below was for indemnity arising from the settlement by Penn Central Transportation Company (Penn Central), of a separate cause of action brought by Willie Fuson, an employee of Penn Central, for damages under the Federal Employers' Liability Act (F.E.L.A.). Fuson's injuries were sustained while being transported from one railroad yard to another in a cab owned and operated by Yellow Cab. Penn Central settled the Fuson lawsuit and was reimbursed by its insurer, American Employers' Insurance Company (American Insurance). This action was subsequently filed against Yellow Cab, seeking indemnification for American Insurance, as subrogee of Penn Central. Upon motion, Yellow Cab was granted summary judgment, from which American Insurance has taken this appeal.

The issue presented for review is whether the trial court properly determined American Insurance had no right of indemnity against Yellow Cab.

Fuson's personal injury action alleged that on October 23, 1968, Penn Central railroad called and requested Yellow Cab provide Willie Fuson, a railroad employee, with transportation from Penn Central's Englewood Yard, Chicago, Illinois, to its Coehour Yard, Gibson, Lake County, Indiana. As Fuson entered the Yellow Cab and was barely seated, and before leaving the Englewood yard, the driver shifted into reverse and moved the cab backwards. Even though Fuson shouted for the driver to stop, he continued moving for 25 to 30 feet, causing the rear of the cab to crash into a steel post stationed on the railroad's property, the impact being of such force as to cause serious and painful injuries. At the time Fuson was being paid by Penn Central in the course of his employment.

Fuson's action was filed against the railroad under the Federal Employers' Liability Act (45 U.S.C.A. § 51-60), alleging Penn Central was careless and/or negligent within the meaning of that act and therefore, it was liable to Fuson for $50,000 in money damages for his injuries pursuant to that act.

The railroad filed an answer denying most of the foregoing allegations, and specifically asserting defendant and its driver were independent contractors.

On May 7, 1971, A.L. Foster, assistant general counsel of the railroad, wrote to defendant Yellow Cab, making a demand on Yellow Cab for indemnification. The intention of the railroad to settle the Fuson claim was stated in the letter, as well as a request that Yellow Cab object, if it so desired.

On May 14, 1971, Yellow Cab, in a letter from their attorneys to the railroad, refused either to indemnify or defend the railroad or participate in the proposed settlement. The claim was thereupon settled for $29,000 on May 20, 1971, and the Fuson suit was dismissed on June 8, 1971.

Prior to the date of the occurrence American Insurance issued its policy CL A 16-9015-337 to Penn Central and its trustees. The policy was in full force and effect on October 23, 1968. On November 23, 1971, pursuant to the terms of said policy, American Insurance paid to Penn Central the sum of $29,000.

The indemnity complaint in the instant case was originally filed on July 21, 1972, against Yellow Cab. After numerous amendments to the complaint, Yellow Cab filed a motion for summary judgment. On July 1, 1975, summary judgment was entered in favor of Yellow Cab, dismissing the action.

In granting summary judgment in favor of Yellow Cab, the court below made the following findings:

"1. That the transaction whereby Willie Fuson became a passenger in the vehicle of the defendant was a private one between said defendant and Willie Fuson.

2. That no contract, written, oral or implied existed between plaintiff's assured, the employer of Willie Fuson and defendant Yellow Cab Company.

3. That defendant at the time in question was its own independent entity, answerable to no one, either by contract or otherwise, other than lawful public authority; did not hire itself out to anyone in its business; was not at the time and place in question the agent or servant of anyone, including the plaintiff's assured; that defendant was at the ...

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