Driver’s Actions Must Conform to Typical Use of Automobile and is Key to Determining Automobile Liability Insurance Coverage
In Am. Country Ins. Co. v. Chi. Carriage Cab, automobile insurer brought a declaratory judgment action in which it alleged that it had no duty to indemnify Steven Cox (“Cox”), passenger, of insured taxi for injuries sustained during a robbery. Cox hailed a taxi at the corner of Randolph and Halsted in Chicago. The taxi contained license and registration for a driver along with a photograph. Cox instructed the driver to proceed on Halsted to Milwaukee Ave. The driver turned the wrong way down Wayman Street and stopped in an alley. A moment later a man in a ski mask entered the backseat of the taxi and robbed Cox. After the crime, Cox identified Williams as the man he believed was involved in the robbery.
Williams testified that he allowed his friend Kingsley to drive the tax at night. Williams knew that Kingsley’s driver’s license was suspended. Williams left his photo and driver’s license posted in the taxi when Kingsley drove so that passengers believed someone with a valid license was driving. Hail Hacking Corporation (“Hail Hacking”) held the license and medallion for the taxi and procured the insurance policy covering the taxi from American Country Insurance Company (“American Country”). American Country filed its declaratory judgment action to absolve it of an obligation to pay damages.
The court reviewed that the passenger’s injuries arose out of the ordinary use of the taxi, as covered by the American Country policy. Coverage under the American Country policy applies if the damages were “caused by an accident and resulting from the ownership, maintenance or use of the covered auto.” Negligent entrustment of a cab involves the “use of a covered auto” as provided by the policy. The salient question is whether what happened to Cox, which commenced with the use of the taxi, qualifies as an “accident” under the terms of the policy. The court reasoned that when criminal acts occurred which were related to an auto, but outside the realm of typical use of an auto, there was no coverage. A connection must exist between the accident or injury and the ownership, use, or maintenance of the vehicle in order for the accident or injury to be covered under the policy. The fact that a vehicle is the site of an injury is not enough to create a connection between the use of the vehicle and the injury to make the injury covered by the policy. For coverage to exist, the driver’s actions must conform to the typical use of an automobile. An injury resulting from an assault inside the vehicle is not a normal consequence of operating the vehicle.
Cox alleged in his complaint that he was assaulted, battered, and robbed in the taxicab. Cox’s testimony is provided in the underlying case and included in the summary judgment proceeding. As a result of that testimony, he is judicially estopped from now claiming that a material issue of fact exists. Cox testified that Kingsley took him into an area where he did not want to go; exited the cab; and together with the other man who arrived at the scene, proceeded to beat and rob him. After the beating and robbery, Kingsley, along with the other assailant, returned to their vehicles and drove away, leaving Cox in the street. Since coverage here is determined based on the undisputed facts of the case, Cox is judicially estopped from presenting a new position in a legal proceeding contrary to a position that was successfully argued in an earlier legal proceeding.
Williams argued that Hail Hacking was deficient in obtaining proper liability insurance, as required under the Chicago Municipal Code. However, the Municipal Code requires a minimum policy of $350,000 per occurrence to cover injuries resulting from occurrences caused by, or arising out of, the operation or use of the licensee’s vehicles. Chicago Municipal Code § 9-112-220 (amended July 12, 1990). The Municipal Code does not require licensees to carry policies for anything beyond occurrences that arose out of the normal operation or use of a vehicle. Hail Hacking obtained liability coverage from American Country to cover injuries caused by accidents that resulted from ownership, maintenance, or use of the covered vehicles.
The court found that passenger’s injuries did not arise out of the operation, maintenance, or use of a vehicle. Thus, these injuries were not covered under the taxicab company’s automobile insurance policy. Passenger was judicially estopped from arguing that his injuries resulted from taxicab driver’s negligent act of stopping in an unsafe area that constituted a use of a covered auto under cab company’s automobile policy. Taxicab license and medallion holder complied with city municipal code requirements by obtaining a policy of insurance in the amount of at least $350,000 per occurrence to cover injuries caused by, or arising out of, the operation or use of licensee’s vehicles.
Am. Country Ins. Co. v. Chi. Carriage Cab, 976 N.E.2d 573 (Ill.App. 1st Dis. 2012).
