United States District Court, S.D. Illinois
MEMORANDUM AND ORDER
J. ROSENSTENGEL, United States District Judge.
insurance coverage dispute stems from an automobile collision
involving Nathan Dodd (“Dodd”) that occurred on
August 1, 2014, while Dodd was delivering prescription drugs
to customers of CVS Pharmacy, Inc. (“CVS”) in his
personal vehicle. Angela Stevens, Mary Stevens, and C.T., a
minor, filed suit against Dodd for injuries allegedly
sustained as a result of the accident. At the time of the
accident, Dodd was insured through a policy issued by GEICO
Indemnity Company (“GEICO”) with bodily injury
liability limits of $20, 000 per person/$40, 000 per
accident. GEICO filed this lawsuit seeking a declaration that
the policy issued to Dodd does not provide any coverage for
the claims asserted in the underlying lawsuit, that it does
not owe a duty to defend or indemnify Dodd in the underlying
lawsuit, and that CVS has a duty to defend and indemnify Dodd
and reimburse him/GEICO for defense costs.
Court has subject matter jurisdiction over this action
pursuant to 28 U.S.C. §1332. According to the complaint,
Geico is a Maryland corporation with its principal place of
business in Washington, D.C.; Defendants Nathan Dodd, Angela
Stevens, Mary Stevens, and C.T. are citizens of Illinois; and
Defendant CVS is a Rhode Island corporation with its
principal place of business in Rhode Island. Thus, there is
complete diversity of citizenship between the parties.
Likewise, the complaint alleges that the amount in
controversy exceeds $75, 000, exclusive of interest and
costs; Defendants have not contested this amount, and it does
not appear to a “legal certainty” that the claim
is really for less than the jurisdictional amount. See
Anthony v. Security Pacific Fin. Servs., 75 F.3d 311,
315 (7th Cir. 1996).
matter is currently before the Court on the motion for
summary judgment filed by GEICO on February 10, 2016 (Docs.
22, 23). CVS filed its response on April 25, 2016 (Doc. 27),
GEICO filed a reply on May 9, 2016 (Doc. 29). The Court has
carefully reviewed the briefs and exhibits submitted by the
parties. For the reasons explained below, the motion for
summary judgment is granted.
August 1, 2014, Dodd was driving his 2005 Nissan Sentra when
he collided with a car occupied by Angela Stevens, Mary
Stevens, and C.T. At the time of the accident, Dodd was
delivering prescriptions for his employer, CVS (Doc. 22-4,
¶ 7). Dodd was a part-time pharmacy technician at CVS
working about twenty hours per week, spread out over five
days (Doc. 27-1, p. 12). As a pharmacy technician, CVS paid
Dodd approximately $9.50 per hour to deliver prescriptions,
fill prescriptions, stock medications, work the cash
registers, answer and make phone calls, and handle basic
customer service (Doc. 27-1, p. 9-10). At that point in time,
however, Dodd spent most of his three- or four-hour shifts
making prescription deliveries (Id.). CVS paid Dodd
an additional $0.40 cents per mile while he was delivering
prescriptions, which he would receive in cash at the end of
his shift from one of the cash registers (Doc. 22-4, ¶
5, Doc. 27-1, p. 23).
time of the accident, Dodd had an insurance policy with GEICO
providing liability coverage with limits of $20, 000 per
person/$40, 000 per accident subject to certain exclusions
and provisions within the policy (Doc. 22-1, ¶¶ 12,
14). One such exclusion stated that liability coverage does
not apply: “To any vehicle used to carry persons or
property for compensation or a fee, including but not limited
to the delivery of food or any other products . . . .”
(Doc. 22-1, ¶ 15). CVS also had a policy of insurance
through National Union Fire Insurance Company of Pittsburgh,
Pa. (“National Union”) with a $2, 000, 000 limit
of liability (Doc. 22-1, ¶¶8, 10). There is no
dispute that the National Union policy would provide
liability coverage to Dodd, who was acting in the course and
scope of his employment with CVS, the named insured (Doc.
22-1, ¶ 9).
the underlying lawsuit was filed against Dodd, GEICO filed
this declaratory judgment action seeking a declaration that
it has no duty to provide coverage or a defense to Dodd under
the terms of its policy (Doc. 1). CVS filed a counterclaim
for declaratory judgment seeking a declaration that GEICO has
the duty to defend and indemnify Dodd (Doc. 15). CVS argued
in its counterclaim, and again in its response to GEICO's
motion for summary judgment, that the GEICO policy provides
primary coverage to Dodd for the underlying litigation, and
any coverage provided by the CVS policy is excess to the
coverage provided by GEICO (Doc. 15, Doc. 27).
judgment is appropriate “if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Spurling v. C & M Fine Pack, Inc., 739 F.3d
1055, 1060 (7th Cir. 2014) (quoting Fed.R.Civ.P. 56(a)). Once
the moving party has set forth the basis for summary
judgment, the burden then shifts to the nonmoving party who
must go beyond mere allegations and offer specific facts
showing that there is a genuine issue of fact for trial.
Fed.R.Civ.P. 56(e); see Celotex Corp. v. Catrett,
477 U.S. 317, 232-24 (1986). The nonmoving party must offer
more than “[c]onclusory allegations, unsupported by
specific facts, ” to establish a genuine issue of
material fact. Payne v. Pauley, 337 F.3d 767, 773
(7th Cir. 2003) (citing Lujan v. Nat'l Wildlife
Fed'n, 497 U.S. 871, 888 (1990)).
determining whether 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). A “court may not assess the
credibility of witnesses, choose between competing inferences
or balance the relative weight of conflicting evidence . . .
.” Reid v. Neighborhood Assistance Corp. of
America, 749 F.3d 581, 586 (7th Cir. 2014) (quoting
Abdullahi v. City of Madison, 423 F.3d 763, 769 (7th
Cir. 2005)). No issue remains for trial “unless there
is sufficient evidence favoring the non-moving party for a
jury to return a verdict for that party. If the evidence is
merely colorable, or is not sufficiently probative, summary
judgment may be granted.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 249-50 (1986) (citations
the construction of an insurance policy is a question of law
to be decided by the court. DeBord v. United States,
870 F.Supp. 250, 252 (C.D. Ill. 1994); American States
Ins. Co. v. Koloms, 687 N.E.2d 72, 75 (Ill. 1997).
Therefore, the “interpretation of an insurance policy
is a question of law that is an appropriate subject for
disposition by way of summary judgment.” Cincinnati
Ins. Co. v. W. Am. Ins. Co., 112 F.Supp.2d 718, 720
(C.D. Ill. 2000) (quoting Jupiter Aluminum Corp. v. Home
Ins. Co., 225 F.3d 868, 873 (7th Cir. 2000)).
diversity cases such as this one, matters of insurance policy
interpretation are matters of state law. See Nation
Athletics Sportswear, Inc. v. Westfield Ins. Co., 528
F.3d 508, 512 (7th Cir. 2008); Allstate Ins. Co. v.
Keca, 368 F.3d 793, 796 (7th Cir. 2004). Here, the
applicable law is the law of the State of Illinois. In
Illinois, insurance policies are contracts; therefore,
“the general rules governing the interpretation and
construction of contracts govern the interpretation and
construction of insurance policies.” Clarendon Nat.
Ins. Co. v. Medina, 645 F.3d 928, 933 (7th Cir. 2011)
(citing Hobbs v. Hartford Ins. Co. of the Midwest,
823 N.E.2d 561, 564 (Ill. 2005)). In interpreting an
insurance policy, a court must “ascertain and give
effect to the intention of the parties, as expressed in the
policy language . . .” Id. In doing so, a
court must “read the policy as a whole and consider the
type of insurance purchased, the risks involved, and the
overall purpose of the contract. Id. (citing
State Farm Mut. Auto. Ins. Co. v. Villicana, 692
N.E.2d 1196, 1199 (Ill. 1998). If the policy terms are
unambiguous, they must be given their plain and ordinary
meaning. Benedict v. Fed. Kemper Life Assur. Co.,
759 N.E.2d 23, 27 (Ill. Ct. App. 2001) “Policy terms
that limit an insurer's liability are liberally construed
in favor of coverage, but only when they are ambiguous, or
susceptible to more than one reasonable interpretation.
Medina, 645 F.3d at 933. Where an exclusion is
unambiguous, courts should apply it as written. Id.
case, GEICO first argues that its motion for summary judgment
should be granted because it is undisputed that, at the time
of the accident, Dodd was delivering prescription drugs for
his employer, CVS, and was being paid an hourly wage as well
as a “mileage fee.” Therefore, the facts fall
squarely within the GEICO policy exclusion stating that
liability coverage does not apply to “any vehicle used
to carry persons or property for compensation or a
fee.” CVS disagrees, asserting that the $0.40 cents
mileage fee was actually “mileage reimbursement.”
Furthermore, CVS argues, Dodd's hourly wage was not tied
to his deliveries; he made the same amount regardless of the
task he was performing while on the clock. Therefore, ...