Artisan & Truckers Cas. Co. v. Dollar Tree Stores, Inc.

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Artisan & Truckers Cas. Co., Plaintiff, v. Dollar Tree Stores, Inc. et al., Defendant

No. 20 C 290

United States District Court, N.D. Illinois, Eastern Division

May 23, 2023

MEMORANDUM OPINION AND ORDER

Lindsay C. Jenkins, Judge

In this diversity action, Plaintiff Artisan & Truckers Casualty Company (“Artisan”) seeks a declaratory judgment settling its rights and obligations under an insurance policy it issued to Defendant Ljupka Logistics, Inc. (“Ljupka”), its insured. Before the Court is Artisan's motion for summary judgment. [Dkt. No. 76]. For the reasons set forth below, the Court grants the motion in full.

I. Background

The Court draws its facts primarily from the parties' Local Rule 56.1 statements and responses. [78], [92], [93], [94] [95]. However, where the Court feels that the parties' filings leave out relevant information, it pulls additional material from the record. See FED. R. CIV. P 56(c)(3) (noting that “courts need consider only the cited materials, but . . . may consider other materials in the record” as well). The Court's decision to cite as undisputed a statement of fact that a party has attempted to dispute reflects its determination that the evidence cited by the disputing party fails to show a genuine dispute as to that fact.

A. The Dollar Tree Delivery and the McCoy Accident

Ljupka Logistics, Inc., is a motor carrier of property for hire, [Dkt. No. 92, ¶ 2], meaning it “transports, for compensation, the goods or property” of others. 49 U.S.C. § 13102(14); 49 C.F.R. § 387.5. On August 1, 2018, Ljupka executed a Broker/Carrier Agreement with Defendant U.S. Xpress, Inc. (“USX”). [Dkt. No. 92-1]. In its capacity as a broker, USX facilitates the transportation of goods by matching carriers, like Ljupka, with shipments in need of delivery. By entering into the agreement, Ljupka could take on work brokered by USX on behalf of its customers.

In late August of 2018, one of those customers-Defendant Dollar Tree Stores, Inc. (“Dollar Tree”)-needed freight delivered to stores in Des Plaines, Mount Prospect, and Villa Park, Illinois. See [Dkt. No. 78-2, 119-121, Exhibit 7] (Load Tender and Rate Agreement Sheet). USX brokered the shipment to Ljupka which, in apparent violation of its contract with USX, assigned the load to another trucking company, Defendant GLS Group LLC (“GLS”). [Dkt. No. 92, ¶ 36]. Ljupka's owner, Frosina Gjorgjevska, is married to GLS's owner and sole member, Zoran Gjorgevski. [Dkt. No. 78-1, Frosina Dep. Tr. 8:13-17].^[1]

GLS dispatched the load to Elliott McCoy, who began driving for GLS on October 30, 2017. [Dkt. No. 78-2, 205, Exhibit 15]; [Dkt. No. 78-2, Zoran Dep. Tr. 59:10-15]. In the early hours of August 29, McCoy drove Zoran's tractor-a 2007 Volvo-to a warehouse in Joliet, Illinois, to pick up the shipment. [Dkt. No. 78-3, McCoy Dep. Tr. 25:2-9]; [Dkt. No. 92, ¶¶ 14]. The warehouse was managed by Defendant Dollar Tree Distribution, Inc. (“Dollar Distribution”), in conjunction with Defendant Securitas Security Services USA, Inc. (“Securitas”), which apparently manned the facility's security gate. [Dkt. No. 92, ¶¶ 34, 43, 46]; [Dkt. 52-1, ¶¶ 12, 14].

The Dollar Tree job was what is known in the trucking industry as a “drop and hook” operation-the freight Ljupka (and, by further assignment, GLS) was responsible for transporting was pre-loaded onto a trailer prior to McCoy's arrival. [Dkt. No. 78-2, Zoran Dep. Tr. 30:17-31:5]; [Dkt. No. 92, ¶ 46]. That trailer, a 2016 Wabash, was supplied by USX, which sub-leased it from another company. [Id. at ¶ 22]. There is some dispute whether McCoy was able simply to hook up the trailer to his tractor and hit the road or whether McCoy was responsible for installing load locks and storing the conveyer system^[2]used to unload the shipment. [Dkt. No. 92-2, McCoy Dep. Tr. (state case) 39-45]; [Dkt. No. 92, ¶ 48]. Although this fact is of unquestionable significance to the merits of the underlying state case, it is immaterial to Artisan's motion.

McCoy was responsible for delivering the freight to three Dollar Tree stores, all located in Illinois. McCoy arrived at his first destination-Dollar Store #3601 in Des Plaines, Illinois-a few hours after leaving the Dollar Distribution facility. [Dkt. No. 92, ¶ 43]; [Dkt. No. 78-3, McCoy Dep. Tr. 41:21-42:3]. Upon arrival, a Dollar Tree manager opened the trailer's rear doors. [Id. at ¶ 48]; [Dkt. No. 78-3, McCoy Dep. Tr. 9:4-17].^[3] When the doors were opened, boxes and the conveyer system stored in the back allegedly fell out of the trailer and onto McCoy. McCoy claims that he was struck with such force that he was “thrown to the ground” and “knocked unconscious.” [Dkt. No. 53-1, ¶ 15]. McCoy was taken by ambulance to Lutheran General Hospital for treatment, [Dkt. No. 78-2, 126, Exhibit 10], and claims to suffer from long-term health problems as a result of the accident. [Dkt. No. 53-1, ¶ 18].

B. The McCoy Suit

On July 17, 2019, McCoy filed a negligence suit against Dollar Tree and USX in Cook County Circuit Court.^[4] On September 11, Dollar Tree and USX removed the case to federal court on the basis of diversity jurisdiction. The case was remanded after McCoy filed his second amended complaint, which asserted additional negligence claims against Dollar Distribution, Ljupka, and GLS. [Dkt. No. 35-1]. The addition of Ljupka and GLS-both Illinois citizens like McCoy^[5]-destroyed diversity.

On remand, McCoy amended the complaint a third time. [Dkt. No. 53-1]. That complaint-which remains the operative complaint below-added an additional negligence claim against Securitas, which allegedly inspected the contents of the trailer before McCoy left the Dollar Distribution facility. [Id. at p. 48, ¶ 14]. On top of that, McCoy's wife joined as a plaintiff and asserted loss of consortium claims against each Defendant.

C. The Ljupka Policy and the Post-Accident Amendment

The McCoy lawsuit is ongoing. This declaratory judgment action arises out of an insurance policy Artisan issued to Ljupka for the period November 14, 2017, to November 14, 2018. See [Dkt. No. 53-5]. That policy was in place at the time of the McCoy accident. Artisan seeks to clarify two things: (1) whether, by virtue of that policy, it has a duty to defend Lujpka, or any other Defendant, against McCoy's claims; and (2) whether it bears, separate and apart from any duty to defend, an obligation to indemnify any Defendant for liability they might ultimately be found to have incurred for McCoy's injuries.

The policy is divided into two principal parts-one covering liability to others (Part I) and one covering damage to insured vehicles (Part II). [Id. at 6]. Because the McCoy accident involved personal injury, not damage to either the 2007 Volvo tractor or 2016 Wabash trailer, Part I applies. That part, in relevant part, provides the following:

Subject to the Limits of Liability, if you pay the premium for liability coverage for the insured auto involved, we will pay damages other than punitive or exemplary damages for bodily injury, property damage, and covered pollution cost or expense, for which an insured becomes legally responsible because of an accident arising out of the ownership, maintenance, or use of that insured auto. However, we will only pay for the covered pollution cost or expense if the same accident also caused bodily injury or property damage to which this insurance applies.

We will settle or defend, at our option, any claim or lawsuit for damages covered by this Part I. We have no duty to settle or defend any lawsuit, or make any additional payments, after the Limit of Liability for this coverage has been exhausted by payment of judgments or settlements.

[Dkt. No. 53-5, 12] (emphasis added).

As the policy makes clear, coverage extends only to liability arising out of the use of an “insured auto.” That phrase is a term of art, defined by the policy to encompass four types of vehicles. [Id. at 8].

First, a vehicle is an “insured auto” if it is “shown on the [policy's] declarations page”-“the document prepared by [Artisan] listing [the insured's] policy information,” including “the specifically described autos covered by [the] policy, and the types of coverage for each specifically described auto.” [Id. at 8].

Second, a vehicle is an “insured auto” if it qualifies as an “additional auto.” [Id.]. An auto qualifies as an additional auto if (1) the insured “acquire[d] the auto during the policy period shown on the declarations page;” (2) Artisan “insure[s] all autos owned by” the insured “that are used in [its] business;” (3) “no other insurance policy provides coverage for that auto; and” (4) the insured informs Artisan “within the 30 day period after” acquisition of its intent to cover the vehicle. [Id.]

Third, a vehicle is an “insured auto” if it qualifies as a “replacement auto.” An auto qualifies as a replacement auto if (1) the insured “acquire[s] the auto during the policy period shown on the declarations page;” (2) that “auto . . . replaces one specifically described on the declarations page due to termination of [the insured's] ownership of the replaced auto or due to mechanical breakdown of, deterioration of, or loss to the replaced auto that renders it permanently inoperable; and” (3) “no other insurance policy provides coverage for that auto.” [Id. at 9].

Finally a vehicle is an “insured auto” if it qualifies as a “temporary substitute auto.” [Id. at 13]. An auto is a temporary substitute auto if it is an auto that the insured does “not own while used with the permission of its owner as a temporary substitute for an insured auto that has been withdrawn from normal use due to breakdown, repair, servicing, loss, or destruction.” [Id. at 11, 13]. The policy defines loss somewhat...