Jimenez v. Travelers Commercial Insurance Company, No. 23-1299 (7th Cir. 2024)
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The case involves Maria and Jose Jimenez, who were involved in an auto accident with Stephen Kiefer. After the accident, the Jimenezes requested $100,000 from Kiefer's auto insurer, Travelers Commercial Insurance Company, to settle their claim against Kiefer. Travelers refused the offer, leading the Jimenezes to sue Kiefer in Illinois court. The Jimenezes and Kiefer entered into an agreement where Kiefer stipulated to a judgment against himself and assigned his rights and claims against Travelers to the Jimenezes. In exchange, the Jimenezes agreed not to execute the judgment against Kiefer personally. The Jimenezes then initiated a citation proceeding against Travelers, seeking to discover whether it held any of Kiefer’s assets.
Travelers removed the action to federal court and filed for summary judgment. The district court granted summary judgment for Travelers, finding that Kiefer and the Jimenezes (as his assignees) were entitled to nothing under the insurance policy and had no claim for breach of any duties Travelers owed Kiefer. The Jimenezes appealed this decision.
The United States Court of Appeals for the Seventh Circuit affirmed the district court's decision. The court found that the citation proceeding was an independent, removable action. It also agreed with the district court that the Jimenezes, as Kiefer’s assignees, could not recover under the policy in light of the legally responsible provision. The court concluded that Travelers could hold Kiefer to the terms of the policy, and under a strict construction of those terms, Kiefer was not legally responsible for the judgment because the covenant not to execute precluded its enforcement. Therefore, the legally responsible provision bars the Jimenezes’ recovery as Kiefer’s assignees.
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