Coca-Cola Enterprises, Inc. v. ATS Enterprises, Inc.
2012 U.S. App. LEXIS 3460
| 7th Cir. | 2012Background
- S & S performed maintenance and repair on Coca-Cola's delivery fleet, sometimes at Coca-Cola's plant and sometimes at S & S's shop.
- In November 2007, S & S employee Zacha drove a Coca-Cola tractor-trailer to S & S's shop and caused a fatal head-on collision while en route.
- Coca-Cola's ACE policy covered the vehicle owner, while S & S and Zacha were insured under Universal; the decedent's estate settled with Universal for $1.9 million.
- The district court held Coca-Cola's ACE policy was primary under Illinois omnibus and the tow-truck statute did not apply because the accident did not involve a tow-truck.
- The Seventh Circuit affirmed, holding both policies provide coverage and that Coca-Cola and ACE are ultimately responsible for the settlement, with ACE being primary under the omnibus statute and State Farm, but Universal also applicable under the circumstances.
- The court declined to rely on the tow-truck statute as displacing Coca-Cola’s owner’s policy since the accident did not involve a tow-truck or S & S vehicle.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does ACE provide primary coverage under omnibus rules? | Coca-Cola argues ACE is primary. | S & S argues ACE should be treated as primary per State Farm framework. | ACE remains primary under omnibus statute. |
| Does Universal apply to cover the accident | Universal may cover as owner of a non-owned vehicle used in business. | Universal only applies if owner’s policy is implicated and business-use triggers coverage. | Universal applies to cover the accident. |
| Does tow-truck statute override omnibus priority? | Tow-truck statute requires higher limits and could make Universal primary. | Tow-truck statute only applies to tow-trucks and not non-towed vehicles. | Tow-truck statute does not displace Coca-Cola's omnibus primary policy here. |
| What is the effect of Illinois public policy on coverage | Public policy supports omnibus coverage for permissive users. | Public policy does not alter the express policy language where it provides coverage. | Public policy supports applying ACE and Universal, with ACE primary and Universal also applicable. |
Key Cases Cited
- Pekin Ins. Co. v. Fidelity & Guar. Ins. Co., 357 Ill. App. 3d 891 (Ill. App. 2005) (tow-truck rule distinguished; applicability depends on accident context)
- State Farm Mut. Auto. Ins. Co. v. Universal Underwriters Grp., 182 Ill. 2d 240 (Ill. 1998) (omnibus statute requires owner’s policy to be primary over operator’s unless statutory exceptions apply)
- Zurich Am. Ins. Co. v. Key Cartage, Inc., 236 Ill. 2d 117 (Ill. 2009) (omnibus coverage amplified by statutory requirements; permissive user read into policies)