St. Paul Fire & Marine Insurance v. Schilli Transportation Services Inc.
672 F.3d 451
7th Cir.2012Background
- St. Paul issued policies to Schilli Transportation, Atlantic, WVT and others for 2000–2002 with a $1,000,000 per-accident limit and a $100,000 deductible basket.
- Repayment of Expenses provision requires insureds to reimburse St. Paul up to the deductible for expenses incurred defending or settling claims.
- Policy lists nine named insureds, including Atlantic and WVT, with 'Insured Names Continued on Back' and no address for the back-listed entities.
- Six claims arose during the policy periods, with St. Paul advancing defense/settlement costs and seeking reimbursement from the named insureds.
- District court held the policy unambiguously imposes joint and several liability for deductible payments.
- The appeal challenges whether the policy is ambiguous about joint/several liability and whether a Separation of Protected Persons clause affects allocation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the policy is ambiguous on joint liability for deductibles | St. Paul | Schilli, Atlantic, WVT | Ambiguity exists; not clearly joint and several. |
| Effect of the Separation of Protected Persons clause | St. Paul | Schilli, Atlantic, WVT | Clause creates ambiguity; supports reversal. |
| Whether policy language unambiguously defines 'you' as jointly liable as a group | St. Paul | Schilli, Atlantic, WVT | Not unambiguous; could be read to treat insureds separately or collectively. |
| Whether evidence on policy formation and prior dealings may be admitted | St. Paul | Schilli, Atlantic, WVT | Remand allowed; such evidence may be admissible to show intent. |
Key Cases Cited
- Colonial Penn Ins. Co. v. Guzorek, 690 N.E.2d 664 (Ind. 1997) (interpretation of ambiguous policy language against insurer)
- Fed. Ins. Co. v. Stroh Brewing Co., 127 F.3d 563 (7th Cir. 1997) (scope of contract interpretation in insurance policies)
- Indiana Ins. Co. v. O.K. Transp., Inc., 587 N.E.2d 129 (Ind. Ct. App. 1992) (named insured listing can create ambiguity about joint/separate liability)
- Over the Road Drivers, Inc. v. Transport Ins. Co., 637 F.2d 816 (1st Cir. 1980) (whether named insureds are treated as a group or separate entities for policy purposes)
- Dunn v. Meridian Mut. Ins. Co., 836 N.E.2d 249 (Ind. 2005) (rules for interpreting insurance contracts in Indiana)