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Coca-Cola Has Primary Insurance Policy in Wrongful Death Case

By Robyn Hagan Cain on February 23, 2012 | Last updated on March 21, 2019

The Seventh Circuit Court of Appeals affirmed a ruling against Coca-Cola in an insurance dispute this week, finding that an Illinois tow-truck insurance statute did not trump an Illinois law that a vehicle owner’s insurance policy is primary over the vehicle operator’s insurance policy unless a statute provides otherwise.

S&S Service Company performed occasional maintenance and repair services on a fleet of Coca-Cola delivery trucks regularly kept at the soft-drink company’s bottling plant in central Illinois. S&S would usually provide this service onsite at the Coca-Cola plant, but sometimes it would take the trucks to its shop to perform the repairs.

In November 2007 Daniel Zacha, an employee of S&S, caused a fatal traffic accident while driving a Coca-Cola tractor-trailer to S&S’s repair shop for service.

The lawsuit here concerns which company -- Coca-Cola or S&S -- has the primary insurance policy to settle the claims of the decedent's estate.

The district court concluded that only Coca-Cola's insurance policy provided coverage for the accident under Illinois law, and entered summary judgment in favor of S&S and its insurer. After Coca-Cola appealed, the Seventh Circuit Court of Appeals affirmed the district court's outcome, but disagreed with the contention that S&S's insurance would not provide coverage for the accident.

In concluding that S&S's policy could cover the settlement, the Seventh Circuit noted that the truck involved in the accident qualified as an "owned auto," ("an auto not owned by you ... when used in your business"), that was covered under S&S's insurance. The S&S policy, however, was not the primary insurance policy in the accident.

Noting that the rule in Illinois is that "primary liability is generally placed on the insurer of the owner of an automobile rather than on the insurer of the operator," and that the tow-truck insurance statute applies to tow-truck drivers in tow-trucks -- not tow truck drivers in other vehicles -- the Seventh Circuit Court of Appeals concluded that Coca-Cola's insurance policy was the primary insurance policy.

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