Nelson v. Artley
2015 IL 118058
Ill.2015Background
- DeShaw Nelson obtained a $600,000 default judgment against Donald Artley after Artley (an uninsured driver) failed to appear; the vehicle was rented from Enterprise Leasing Company of Chicago.
- Nelson initiated a supplementary (turnover) action against Enterprise to satisfy the judgment; Enterprise conceded some liability but disputed the amount.
- Enterprise had elected to meet Illinois’ proof-of-financial-responsibility requirement by obtaining a certificate of self-insurance rather than purchasing a liability policy or posting a bond.
- Enterprise had already paid $50,000 to one claimant (Ousley) and tendered another $50,000 to be allocated between Nelson and a second claimant (Page); under the circuit court’s application of Fellhauer, Enterprise’s exposure was capped at $100,000 per occurrence, leaving $25,000 available to Nelson.
- The appellate court rejected Fellhauer and held that a self-insured rental company’s liability was not limited by the statutory minimums and therefore Enterprise was liable for the full $600,000.
- The Illinois Supreme Court granted review, reversed the appellate court, and affirmed the circuit court: self-insured rental companies are subject to the same minimum coverage limits as companies that satisfy requirements via insurance or bond.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a rental company that proves financial responsibility via a certificate of self-insurance is liable only to statutory minimums or for full judgments against its driver | Nelson: Fellhauer was wrongly decided; self-insurance creates no express statutory cap so company should be liable for full judgment | Enterprise: Self-insurance is an alternate method to prove financial responsibility and should be treated the same as insurance or bond, limiting liability to statutory minimums | Held: Self-insured rental companies are subject to the same statutory minimum coverage limits as companies using insurance or bond (capping exposure) |
| Whether the appellate court’s reading (imposing unlimited liability for self-insurers) conflicts with statutory purpose and basic rules of construction | Nelson: Statute’s silence means no cap; public policy favors full recovery | Enterprise: Imposing unlimited liability renders self-insurance option meaningless and yields absurd/inconsistent results | Held: Appellate court’s reading would nullify statutory options and produce absurd inequities; rejected |
| Whether legislative acquiescence supports following Fellhauer | Nelson: Fellhauer should be overruled despite legislative inaction | Enterprise: Fellhauer stood for a decade without amendment, indicating legislative acquiescence | Held: Legislative inaction over a decade supports Fellhauer’s construction; appellate decision reversed |
| Whether common-sense and statutory purpose justify treating self-insurers like insureds | Nelson: Court should not rely on ‘common sense’ over text | Enterprise: Common-sense interpretation consistent with Code’s purpose and avoids absurd results | Held: Common-sense statutory interpretation appropriate and supports parity between self-insurance and other proof-of-responsibility methods |
Key Cases Cited
- Fellhauer v. Alhorn, 361 Ill. App. 3d 792 (Ill. App. Ct.) (held self-insured rental companies are subject to same statutory minimum limits as insured/bonded companies)
- Progressive Universal Ins. Co. v. Liberty Mut. Fire Ins. Co., 215 Ill. 2d 121 (Ill. 2005) (purpose of mandatory liability coverage is to protect public by securing payment of damages)
- McVey v. M.L.K. Enterprises, LLC, 2015 IL 118143 (Ill. 2015) (statutory construction is reviewed de novo)
- Exelon Corp. v. Dep’t of Revenue, 234 Ill. 2d 266 (Ill. 2009) (courts may rely on common experience and common sense when construing statutes)
- Zimmerman v. Village of Skokie, 183 Ill. 2d 30 (Ill. 1998) (legislative failure to amend a statute after judicial construction can be viewed as acquiescence)