United States District Court, S.D. Illinois
MEMORANDUM AND ORDER
J. ROSENSTENGEL United States District Judge
insurance coverage dispute stems from an accident that
occurred when Carl Brumit was backing his truck out of a
parking space at a gas station and he hit Delores Menard as
she walked through the parking lot. At the time of the
accident, Brumit was insured through a business auto
liability policy issued by State Auto Property and Casualty
Insurance Company (“State Auto”). Twenty-one
months later, Mrs. Menard and her husband Allen filed suit
against Brumit for injuries she allegedly sustained as a
result of the accident. State Auto then filed this lawsuit
seeking a declaration that it has no duty to defend Brumit or
his business, Brumit Services Inc., in the underlying lawsuit
filed by the Menards because Brumit failed to promptly notify
the company about the accident as required by the insurance
policy (Doc. 1). State Auto also seeks reimbursement of the
costs it has incurred in defending Brumit and Brumit Services
(Doc. 1). Brumit and Brumit Services then filed a
counterclaim against State Auto basically seeking a
declaration that the notice to State Auto was timely, and
therefore State Auto does, in fact, have a duty to defend
them in the underlying lawsuit (Doc. 29). This matter is
currently before the Court on the cross-motions for summary
judgment filed by Plaintiff State Auto Insurance, Defendants
Delores and Allen Menard, and Defendants Carl Brumit and
Brumit Services, Inc. (Docs. 66, 68, 70). The only issue
presented by the cross-motions is whether Carl Brumit
breached the notice provision of his insurance policy. The
Court has carefully reviewed the briefs and exhibits
submitted by the parties. For the reasons explained below,
the motion for summary judgment filed by State Auto is
denied, and the motions filed by Carl Brumit and Brumit
Services and the Menards are granted.
case concerns the business auto liability insurance policy
issued by State Auto to Carl Brumit doing business as Brumit
Services, Inc. (Doc. 1-1). The policy was effective for the
period of June 1, 2013 to June 1, 2014 (Doc. 1-1).
coverage section of the policy provides, in pertinent part:
SECTION II-LIABILITY COVERAGE
We will 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”. . . .
We have the right and duty to defend any
“insured” against a “suit” asking for
such damages . . . . However, we have no duty to defend any
“insured” against a “suit” seeking
damages for “bodily injury” or “property
damage” . . . to which this insurance does not apply.
We may investigate and settle any claim or “suit”
as we consider appropriate.
(Doc. 1-2, p. 2).
portion of the policy referred to as the “notice
SECTION IV-BUSINESS AUTO CONDITIONS
The following conditions apply in addition to the Common
(A) Loss Conditions . . .
(2) Duties in the Event of Accident, Claim, Suit Or Loss We
have no duty to provide coverage under this policy unless
there has been full compliance with the following duties:
(a) In the event of “accident”, claim,
“suit” or “loss”, you must give us or
our authorized representative prompt notice of the
“accident” or “loss”. Include:
(1) how, when and where the “accident” or
(2) the “insured's” name and address; and
(3) to the extent possible, the names and addresses of any
injured persons and witnesses
(Doc. 1-2, p. 7).
policy does not define “prompt” (see
Docs. 1-2, 1-3, 1-4, 1-5). The policy also does not define
“accident, ” but indicates that an accident
“includes continuous or repeated exposure to the same
conditions resulting in ‘bodily injury' or
‘property damage'” (Doc. 1-2, p. 8). The
Accident & Underlying Lawsuit On September 6, 2013,
Delores Menard parked her vehicle at a Phillips 66 gas
station located in Columbia, Illinois (Doc. 70-3). She got
out of her vehicle and began walking across the parking lot
to the gas station's convenience store (Id.).
Carl Brumit was backing his truck out of a parking space and,
according to Mrs. Menard, the tailgate of his truck
“tapped” her left shoulder (Id.). Mrs.
Menard fell to the ground and scraped her right elbow and
right knee on the parking lot (Id.). She testified
that it was a “low-velocity” impact, but she
suffered a “hard fall” (Doc. 70-3).
did not even realize what had happened, and he began to exit
the parking lot (Doc. 70-2; Doc. 70-3). Another driver in a
passing car alerted him, however, that “a lady was on
the ground, ” and he circled back around and parked his
truck (Doc. 70-2). Mrs. Menard indicated that she did not
need an ambulance and was not hurt, but Brumit nevertheless
called 911 and asked the dispatcher to send an ambulance
(Docs. 70-2, 70-3). The paramedics arrived and bandaged Mrs.
Menard's elbow, checked her knee, and gave her an ice
pack (Doc. 70-3). Mrs. Menard declined to have the paramedics
transport her to a hospital because she did not think she was
seriously hurt (Id.).
Assistant Police Chief, Jerry Paul, was at the convenience
store at the time of the accident (Doc. 70-5). He viewed the
footage from the gas station's security cameras and spoke
with both Carl Brumit and Delores Menard (Id.). He
did not complete a police report at the scene (see
Id.). Instead, Officer Paul advised Mrs. Menard that she
could obtain a copy of the police report in a couple days at
the Columbia police station (Id.; Doc. 70-3).
Officer Paul does not recall if he relayed that same
information to Brumit (Doc. 70-5). According to Brumit,
Officer Paul never told him that he could obtain a copy of
the report, let alone that a report would be completed (Doc.
Paul did not issue a traffic citation to Brumit, and Brumit
was permitted to leave the gas station (Docs. 70-2, 70-5).
Delores Menard also was permitted to leave the gas station,
and she walked herself to her car and drove away (Doc. 70-3;
see Doc. 70-5). Brumit did not report the accident
to State Auto because he “was under the impression that
[Mrs. Menard] was not injured, ” much less
“injured in a way that she would have to file a claim
or pursue a lawsuit” (Doc. 70-2). Brumit did not have
any further contact with Mrs. Menard, the Columbia Police
Department, or anyone else about the accident (see
Docs. 70-2, 70-3, 70-5).
Delores Menard did not believe her injuries were serious at
the time of the accident, she testified that a “couple
days later” she developed impact trauma to her low and
mid back as a result of the impact with Carl Brumit's
truck and her fall (Doc. 70-3). Eventually, her back injuries
required surgery in April 2015. On June 18, 2015, Mrs. Menard
filed a lawsuit against Carl Brumit and Brumit Services in
the Circuit Court of St. Clair County, Illinois (Doc. 2).
Brumit was served with summons and a copy of the complaint on
June 23, 2015. (Doc. 70-7). Around that same time, he
received a lien letter and a copy of the police report from
Mrs. Menard's attorney (Id.). On June 24th,
Brumit contacted his insurance agent and turned all of the
papers over to him, who in turn sent all of the papers to the
State Auto claims department on June 25th (Id.).
three days of receiving the papers, State Auto decided to
provide a defense to Brumit and Brumit Services in the
lawsuit under a full reservation of rights (Doc. 29-4; Docs.
72, 73, 78-1). On August 27, 2015, State Auto filed this
lawsuit seeking a declaration that it has no duty to defend
Brumit and Brumit Services and that it is entitled to
reimbursement of the money it has already spent on the
defense of the underlying lawsuit (Doc. 1).
judgment is only 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, 332-24 (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 genuine issue exists “when
‘the evidence is such that a reasonable jury could
return a verdict for the ...