Clarendon Nat'l Ins. v. Medina, No. 10-1943 (7th Cir. 2011)Annotate this Case
A semi-truck jackknifed while making a delivery for a federally licensed carrier and struck a vehicle, killing its driver. The estate brought a wrongful death action in Illinois state court against the driver, his wife (titular owner of the truck), and the company. The suit settled with entry of a $2 million consent judgment against the company, the driver, and his wife. The estate agreed that payment by the company's carrier of the $1 million policy limit would satisfy part of the judgment; the remainder would come from the driver's policy for "Non-trucking/bobtail liability" that covers driving cabs without trailers outside the service of the federally licensed carriers under whose authority drivers operate. That carrier declined coverage, citing a policy exclusion for vehicles "while in the business of anyone to whom ... rented," and obtained summary judgment in federal district court. The Seventh Circuit affirmed, citing 49 C.F.R. 376.2(d)(2), which defines "owner" as including someone like the driver, "who, without title, has the right to exclusive use of equipment" and reasoned that the driver, as agent for his wife, leased the truck to the company, even though the company was unaware that the wife held title.