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Continental Western Insurance Co. v. Country Mutual Insurance Co.

United States District Court, S.D. Illinois

September 3, 2019

CONTINENTAL WESTERN INSURANCE COMPANY, Plaintiff/Counter-Defendant,
v.
COUNTRY MUTUAL INSURANCE COMPANY, Defendant/Counter-Claimant.

          MEMORANDUM AND ORDER

          NANCY J. ROSENSTENGEL CHIEF U.S. DISTRICT JUDGE.

         This declaratory judgment action arises from a vehicle accident that occurred in September 2012. The accident resulted in significant injuries to the passengers of both vehicles-and three separate lawsuits, all of which have now settled. The issue presently before this Court is which insurance company's policy provided primary coverage for the Hamel Fire Protection District (“Hamel Fire”), a defendant in each of the three lawsuits.[1]

         On November 9, 2017, Plaintiff/Counter-Defendant Continental Western Insurance Company (“Continental”) filed a Complaint for Declaratory Judgment against Country Mutual Insurance Company (“Country Mutual”) (Doc. 1). On June 13, 2018, Country Mutual filed a Counterclaim for Declaratory Judgment (Doc. 25). Continental contends that Country Mutual's policy provided primary coverage for its insured, Hamel Fire, while Country Mutual claims Continental's policy provided primary coverage for both Hamel Fire and Country Mutual's insured, Alhambra-Hamel Ambulance Service. Both insurance companies contend that the other's policy provided primary coverage over and above any coverage provided by its own policy.

         Continental has now moved for summary judgment on Counts I, II, and III of its Complaint for Declaratory Judgment, as well as on Counts I, II, and III of Country Mutual's Counterclaim (Doc. 38). Country Mutual did not file a cross-motion for summary judgment. For the reasons set forth below, Continental's motion is granted.

         Background

         A. The Underlying Accident

         On September 17, 2012, an ambulance responding to an emergency call suddenly turned right from the left-hand lane of southbound Interstate 55 in an attempt to go up the exit ramp of a rest area for southbound traffic (Doc. 38-1). A semi-truck owned by Specialized Transportation, Inc. (“STI”) and driven by Daniel Eddinger was in the right-hand land of the interstate (Id.). Unable to stop, the truck struck the right side of the ambulance (Id.).

         The ambulance, driven by Theodore Berg., Jr., was operated by Alhambra-Hamel Ambulance Service. The Alhambra-Hamel Ambulance Service is a joint enterprise formed in 1989 by Hamel Fire and the Alhambra Fire Protection District (“Alhambra Fire”) to provide ambulance service to the residents of both fire districts (Doc. 49 at p. 14).

         The agreement between the Alhambra and Hamel fire protection districts provided that “[a]ll property; both real and personal, acquired by Alhambra and Hamel hereunder shall be owned equally by them” (Id. at p. 15). Under Section 3 of the Bylaws of the ambulance service, the trustees agreed to “join funds, tax monies, clerical and equipment to function as one service” called the Alhambra-Hamel Ambulance Service (Id. at p. 21).

         B. The Underlying Lawsuits

         The September 17, 2012 accident resulted in significant injuries to passengers of both the ambulance and the semi-truck, as well as three separate lawsuits filed in the Circuit Court of Madison County, Illinois.

         1. Conway, et al. v. Alhambra-Hamel Ambulance Services, et al. (Doc. 38-1)

         Rayburn Conway, the co-driver and passenger in the semi at the time of the accident, was seriously injured in the collision. He filed suit asserting negligence claims against Alhambra Fire, Hamel Fire, and Alhambra-Hamel Ambulance Service, alleging Berg was their agent and driver acting within the scope of his employment. He also sued Berg individually.

         2. Eddinger v. Alhambra-Hamel Ambulance Service, et al. (Doc. 38-2)

         Eddinger, the driver of the semi owned by STI, also suffered injuries and filed suit against Berg, Alhambra-Hamel Ambulance Service, Alhambra Fire, and Hamel Fire. His lawsuit alleged Berg was an agent of the defendants and that, while acting within the scope of his agency, he operated an ambulance owned by Alhambra-Hamel Ambulance Service and caused the ambulance to collide with the truck. Eddinger alleged claims of negligence against each defendant.

         3. Specialized Transportation, Inc. v. Alhambra-Hamel Ambulance Service, et al. (the “STI Third-Party lawsuit”) (Doc. 38-3)

         Michele Logue, a passenger in the ambulance, filed a lawsuit against Eddinger and STI, titled Logue v. Eddinger, et al. STI then filed a third-party complaint against Alhambra-Hamel Ambulance Service, Alhambra Fire, and Hamel Fire. The STI Third-Party Complaint denied liability to Logue but contended that, if judgment was entered against STI and in favor of Logue, STI was entitled to contribution from Alhambra Fire, Hamel Fire, and/or Alhambra-Hamel Ambulance Service.

         All three cases have settled; the remaining issue is which insurance company- Continental or Country Mutual-is responsible for paying the defense fees incurred in defending Hamel Fire in the three lawsuits.

         Relevant Policy Provisions

         1. The ...


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