This dispute arose from a fatal side-impact collision in Illinois involving a tractor-trailer driven by Robert D. Fisher and an SUV driven by Patrick J. Brennan, who died in the crash. Fisher was an agent for Deerpass Trucking, which leased the tractor from Deerpass Farms and operated a trailer owned by Conserv FS, Inc. Both the tractor and trailer were insured, but by different carriers: Great West Casualty Company insured the tractor, and Nationwide Agribusiness Insurance Co. insured the trailer. When the estate of Patrick Brennan filed a wrongful death suit, both insurers agreed to provide coverage but disputed which policy paid first. Great West sued for a declaratory judgment, arguing its policy was excess over Nationwide's. The district court ruled that both policies provided excess coverage, meaning neither was primary, and ordered the insurers to split costs proportionally. Nationwide appealed, arguing Great West's policy should be primary, while Great West cross-appealed, arguing its policy was 'super excess' over Nationwide's.
The Seventh Circuit applied Illinois contract law to interpret the 'Other Insurance' provisions in both policies. The court first addressed Nationwide's claim that Great West's coverage should be primary. Nationwide argued that Great West's policy language regarding 'hired or borrowed' autos was ambiguous and did not apply to a lease, and that an 'insured contract' clause should override the excess designation. The court rejected these arguments. It found that the structure of Great West's policy, which explicitly referenced 'lessors' and 'lessees,' confirmed that the 'hired or borrowed' language encompassed leases. Furthermore, the court held that the indemnity agreement between the trucking companies did not qualify as an 'insured contract' because it carved out liability for the trailer owner's own negligence, failing to meet the strict Illinois standard for assuming another party's tort liability. Consequently, the court affirmed that Great West's coverage was excess. Next, the court addressed Great West's cross-appeal claiming 'super excess' status. Great West argued that its policy's phrase 'excess over any other collectible insurance' created a higher tier of coverage than Nationwide's standard 'excess' language. The court rejected this, noting that such language is common industry redundancy. Citing Illinois precedent, the court explained that interpreting the phrase as creating a unique 'super excess' tier would render other parts of the policy inconsistent and was not supported by Illinois case law. The court concluded that when both policies are excess, they share equal priority.
The decision establishes that when two commercial auto policies both provide excess coverage under Illinois law, they share equal payment priority. Insurers must pay proportionally according to their respective policy limits rather than one paying first. The ruling clarifies that 'excess over any other collectible insurance' does not create a distinct 'super excess' tier, preventing insurers from using verbose language to gain priority over other excess carriers. The case is remanded to the district court to implement the pro-rata payment scheme based on the $1 million and $2 million policy limits.
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