Continental Western Insurance Co. v. Country Mutual Insurance Co., No. 20-2962 (7th Cir. 2021)
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In 1989, the Hamel Fire Protection District and Alhambra Fire Protection District formed a joint venture, “the Service” to provide ambulance service to residents of both districts. In 2012, a Service-operated ambulance collided with a semi-truck. The semi-truck drivers and ambulance passengers were seriously injured. The accident produced three lawsuits that eventually settled. Continental paid all attorney’s fees assessed for Hamel Fire’s defenses. Country Mutual had issued a multiperil commercial lines insurance policy to the Service.. Hamel Fire was the named insured on the Continental policy. Continental defended Hamel Fire in each lawsuit after first tendering them to Country Mutual, which ignored each tender. The ambulance was a covered auto under policies issued by both, which provided primary coverage for owned autos and excess coverage for non-owned autos.
Continental sued Country Mutual. The district court granted Continental’s motion for summary judgment finding that the Service, and not Hamel Fire, owned the ambulance. Based on that finding, and both policies’ “Other Insurance” clauses, the court determined that Country Mutual owed primary coverage for the costs to defend Hamel Fire in the underlying lawsuits, while Continental only owed excess coverage. The Seventh Circuit affirmed, reasoning that the evidence strongly reflects the parties’ intent that Country Mutual’s insured owned the ambulance. The resulting award of attorney’s fees under Illinois law was reasonable.
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