The opinion of the court was delivered by: Judge Virginia M. Kendall
MEMORANDUM OPINION AND ORDER
Plaintiff Clarendon National Insurance Company ("Clarendon") brought suit against Defendants Maria Medina, Guillermo Medina, Town Trucking Company, and Jerry Schulman and Mary Falat Schulman as the co-administrators of the estate of Michael Walter Schulman, deceased (collectively "Defendants") for a declaratory judgment of its insurance liability under a policy issued to Guillermo Medina. The parties have filed cross-motions for summary judgment. For the reasons set forth below, Clarendon's Motion for Summary Judgment is granted and Defendants' Motion is denied.
STATEMENT OF UNDISPUTED FACTS*fn1
Clarendon, a New Jersey corporation, issued an insurance policy (the "Clarendon policy") to Guillermo Medina ("Guillermo"), which provided coverage for a 1998 Volvo trucking tractor (the "tractor"). (Def. 56.1 Resp. ¶¶ 1, 6; Pl. 56.1 Resp. ¶¶ 31, 34.) The tractor was owned by Maria Medina ("Maria") and registered in Illinois to her, but Maria did not drive the tractor and did not have a license to do so. (Def. 56.1 Resp. ¶¶ 14-15, 17; Pl. 56.1 Resp. ¶ 17.) Instead, Guillermo drove the tractor with Maria's knowledge and permission in order to work as a truck driver. (Def. 56.1 Resp. ¶¶ 19, 21-25.) Guillermo, with Maria's knowledge and permission, signed at least one agreement with Town Trucking related to the use of the tractor. (Def. 56.1 Resp. ¶¶ 27, 33.) In fact, a Contract Operator Agreement was signed by Town Trucking and Guillermo Medina, and was in effect on the date of the accident at issue here. (Def. 56.1 Resp. ¶ 37.)
With Maria's knowledge and permission, Guillermo obtained the Clarendon policy in order to insure the tractor. (Def. 56.1 Resp. ¶ 28.) Maria paid Insurance Pro Agencies for the policy. (Pl. 56.1 Resp. ¶¶ 27-28.) The Clarendon policy was a form of insurance known within the trucking industry as "bob-tail" insurance,*fn2 which Town Trucking required its drivers to purchase. (Def. 56.1 Resp. ¶ 11.) The policy contained a provision stating that it "does not apply to . . . a covered 'auto' while in the business of anyone to whom the auto is rented."*fn3 (Def. 56.1 Resp. ¶ 12.) The policy further required that, "[i]n the event of 'accident', claim, 'suit' or 'loss', you must give us or our authorized representative prompt notice . . . ."*fn4 (Def. 56.1 Resp. ¶ 13.)
On November 28, 2006, Guillermo was driving the tractor but towing an empty trailer traveling from McHenry, Illinois where he had dropped off a load of freight, to Summit, Illinois in order to pick up another load of the same freight. (Def. 56.1 Resp. ¶ 40.) Guillermo was involved in a highway accident, which resulted in the death of Michael Walter Schulman. (Pl. 56.1 Resp. ¶ 10.)
Subsequent to the accident, the Estate of Michael Schulman filed suit in Illinois state court against Guillermo Medina, Maria Medina, and Town Trucking. (Def. 56.1 Resp. ¶ 41.) The parties to that suit have now reached a settlement agreement, under which Occidental Fire and Casualty has paid $997,500 to the Estate of Michael Schulman. (Def. 56.1 Resp. ¶ 43.) During the state court litigation, Maria and Guillermo received a certified letter from a representative of Clarendon notifying them of a declination of coverage and a reservation of Clarendon's rights. (Pl. 56.1 Resp. ¶ 52.) In their settlement agreement, the parties reserved the issue of whether there is additional coverage under the Clarendon policy. (Pl. 56.1 Resp. ¶ 14.)
Summary judgment is proper when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ.P 56(c). When determining if a genuine issue of fact exists, the Court must view the evidence and draw all reasonable inferences in favor of the party opposing the motion. Bennington v. Caterpillar Inc., 275 F.3d 654, 658 (7th Cir. 2001); see also Anderson v. Liberty Lobby, Inc.,477 U.S. 242, 255 (1986). However, the Court will "limit its analysis of the facts on summary judgment to evidence that is properly identified and supported in the parties' [Local Rule 56.1] statement." Bordelon v. Chicago Sch. Reform Bd. of Trustees,233 F.3d 524, 529 (7th Cir. 2000). Where a proposed statement of fact is supported by the record and not adequately rebutted, the court will accept that statement as true for purposes of summary judgment. An adequate rebuttal requires a citation to specific support in the record; an unsubstantiated denial is not adequate. See Albiero v. City of Kankakee,246 F.3d 927, 933 (7th Cir. 2001); Drake v. Minnesota Mining & Mfg. Co.,134 F.3d 878, 887 (7th Cir. 1998) ("'Rule 56 demands something more specific than the bald assertion of the general truth of a particular matter[;] rather it requires affidavits that cite specific concrete facts establishing the existence of the truth of the matter asserted.'"). On cross-motions for summary judgment, each movant must satisfy Federal Rule of Civil Procedure 56's requirements. See Cont'l Cos. Co. v. Northwestern Nat'l Ins. Co., 427 F.3d 1038, 1041 (7th Cir. 2005).
I. Whether the Tractor was Rented to Town Trucking
At the core of the dispute between the parties is the question of whether, at the time of the accident, the 1998 Volvo was "rented" by Guillermo to Town Trucking, or whether he was operating the tractor as an independent contractor. If the tractor was "rented," then the rental exclusion applies and Clarendon has no liability under the policy, as the parties do not dispute that Guillermo was driving on behalf of Town Trucking, rather than for personal reasons, at the time of the accident.*fn5
If the rental exclusion applies, then the Court need not decide the other issue contested by the parties, which is whether adequate and timely notice of the accident was given to Clarendon. Thus, the Court will analyze the potentially-dispositive rental issue first.
Title 49 of the Code of Federal Regulations requires that a federally-authorized motor carrier, which Town Trucking is, "may perform authorized transportation in equipment it does not own only under the following conditions . . . ." 49 C.F.R. § 376.11. Primary among those conditions is a requirement that "[t]here shall be a written lease granting the use of the ...