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Philadelphia Indemnity Insurance Co. v. Pace Suburban Bus Service

Court of Appeals of Illinois, First District, Fourth Division

November 17, 2016

PHILADELPHIA INDEMNITY INSURANCE COMPANY, individually and a/s/o Countryside Association for People with Disabilities, Plaintiff-Appellant,
PACE SUBURBAN BUS SERVICE, a Division of the Regional Transportation Authority, Defendant-Appellee.

         Appeal from the Circuit Court of Cook County. No. 14 CH 9166 Honorable Diane J. Larsen, Judge Presiding.

          JUSTICE McBRIDE delivered the judgment of the court, with opinion. Presiding Justice Ellis and Justice Howse concurred in the judgment and opinion.



         ¶ 1 Plaintiff, Philadelphia Indemnity Insurance Company (Philadelphia), filed a four count declaratory judgment complaint against defendant, Pace Suburban Bus Service (Pace), in the circuit court with claims of equitable subrogation, equitable contribution, unjust enrichment, and "Assignment from Countryside of all rights against Pace" relating to a $1.5 million settlement it paid on behalf of Countryside Association for People with Disabilities (Countryside) to Lisa Gomez, who had been injured while in Countryside's care. Philadelphia claimed that it should be reimbursed by Pace, in whole or in part, for that settlement, which it had paid after Gomez had communicated a pre-suit settlement demand to Philadelphia. Pace moved to dismiss Philadelphia's complaint pursuant to section 2-619 of the Code of Civil Procedure (Code). 735 ILCS 5/2-619 (West 2012). The circuit court granted that motion, and Philadelphia now appeals.

         ¶ 2 The record shows that Pace, a division of the Regional Transportation Authority, entered into an agreement with Countryside, entitled "Pace Advantage Vehicle Program Agreement" (the leasing agreement) in 2010. Under the leasing agreement, Pace agreed to furnish a vehicle to Countryside to transport individuals with disabilities to and from the Countryside facility in exchange for $365 per month per vehicle. The leasing agreement further specified that Pace would provide the vehicle and Countryside was responsible for providing its own drivers. Pace vehicles utilized pursuant to the leasing agreement would be included in Pace's "Risk Financing Program, " which:

"shall provide commercial auto liability coverage to [Countryside] for any claims of bodily injury, death, or property damage arising directly out of the provision of Transportation Services provided with Pace vehicles as described in this agreement, within the scope of Pace's Self-Insured Retention and up to the liability limits of such excess insurance that Pace may purchase, subject to the following terms, conditions, and exclusions:
(a) Pace specifically excludes from insurance coverage afforded to [Countryside] herein any claims, actions, damages arising as the result of willful and wanton, reckless, or intentional conduct of [Countryside], its officers, agents, employees, contractors, subcontractors, agents, or volunteers." (emphasis in original).

         ¶ 3 The leasing agreement further provided that:

"The policies of excess insurance purchased by Pace and Pace's Self-Insured Retention shall be primary over insurance carried by [Countryside] for claims within the scope of Pace's Risk Financing Program. Any insurance or self-insurance maintained by [Countryside] shall be in excess of Pace's Self Insured Retention and the policies of excess insurance purchased by Pace, without right of contribution, for claims within the scope of Pace's Risk Financing Program."

         ¶ 4 Countryside obtained additional automobile liability coverage from Philadelphia, which provided that it would:

"pay all sums an 'insured' legally must pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies, caused by an 'accident' and resulting from the ownership, maintenance or use of a covered 'auto.' "

         ¶ 5 Philadelphia described the following descriptions of "Covered Auto[s]" in its policy. "Owned 'Autos' Only" were described as, "Only those 'autos' you own *** includ[ing] those 'autos' you acquire ownership of after the policy begins." "Hired 'Autos' Only" were described as, "Only those 'autos' you lease, hire, rent or borrow." Finally, "Non-owned 'Autos' Only" were described as, "Only those 'autos' you do not own, lease, hire, rent or borrow that are used in connection with your business."

         ¶ 6 The Philadelphia policy further provided that:

"For any covered 'auto' you own, this coverage form provides primary insurance. For any covered 'auto' you don't own, the insurance provided by this coverage form is excess over any other collectible insurance."

         ¶ 7 The following facts regarding the underlying incident come from the September 6, 2013, pre-suit settlement demand letter of Lisa Gomez and her draft complaint, which were attached to Philadelphia's complaint. On the morning of July 10, 2013, Robert Gottardo, a Countryside employee, drove a Pace van to pick up and transport Countryside clients to the facility for daily services. Lisa Gomez, a 42 year-old woman who suffers from an intellectual disability and who "functions at the level of a five year-old child, " was picked up from her home in Schaumburg around 7:30 a.m. Upon arriving at the Countryside facility at approximately 8:30 a.m., Gottardo rolled up the windows, exited the vehicle and placed a sign in the van window reading "Vehicle Checked, Vehicle Empty" while Gomez remained strapped into her seat inside. Gottardo entered the facility and informed other Countryside employees that Gomez was a "no-show" that day. Gottardo then left the Countryside lot in his personal vehicle. Gomez was left unattended in the vehicle for more than five hours, during that time the temperature outside the van reached 90 degrees.

         ¶ 8 At approximately 1:50 p.m., Gottardo returned to the van. He later admitted to another Countryside employee that he saw Gomez in the back of the van at that time, but he decided not to tell anyone at Countryside that he had abandoned her in the van all day. Gottardo did not check on Gomez at that time, and instead began to drive his normal route. Gottardo arrived at Gomez's home at approximately 2:45 p.m., at which time Gomez was having a heat-induced seizure. Gomez's mother recognized that Gomez was having a seizure, and yelled to Gottardo to call 9-1-1. Gottardo left the scene before emergency personnel arrived. Gomez was unconscious when the Schaumburg Fire Department and paramedics arrived. It was determined that she had suffered numerous medical conditions, including a heart attack, septic shock, gastrointestinal hemorrhage, and infections caused in part by exposure to urine and feces soaked clothing.

         ¶ 9 The record further contains an incident report and account from Kim Nygaard, a Countryside employee. In the incident report, Nygaard described the "Type of Incident" as one of "egregious neglect." In her account, Nygaard explained that around 3:55 p.m., she was contacted by a case worker, "Lori, " who told her that a parent had called to express concern that an ambulance "had to come to the bus because a girl was having a seizure." Nygaard stated that, at that point, Countryside was unaware of any issue involving Gomez. About 10 minutes later, Gottardo returned to Countryside and was asked by staff member Maggie Kukielka about the parent's complaint. Gottardo admitted that he had abandoned Gomez in the van and that he did not inspect the van that morning. He further admitted that when he realized Gomez had been abandoned in the van, he did not tell anyone at Countryside, call for emergency medical treatment, or check on her well-being. Nygaard further stated that "effective immediately" Countryside would be implementing a new safety protocol, requiring all vans to be searched by both the driver and another Countryside employee.

         ¶ 10 That evening, the Lake County Sheriff's Office arrested Gottardo and charged him with a Class 4 felony of reckless conduct under section 12-5(a)(2) of the Criminal Code of 2012 (Criminal Code) (720 ILCS 5/12-5(a)(2) (West 2012)), which provides that "A person commits reckless conduct when he or she, by any means, lawful or unlawful, recklessly performs an act or acts that *** cause great bodily harm or permanent disability or disfigurement to another person." Gottardo was indicted of two counts of reckless conduct, which specifically provided that he did the following:

"Count 1 *** committed the offense of RECKLESS CONDUCT, in that the said defendant, while acting in a reckless manner, caused great bodily harm to Lisa Gomez in that the said defendant, the bus driver of Lisa Gomez, left Lisa Gomez, who was ...

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