In 2005, a van containing six family members slipped off the edge of an Illinois roadway. In the rollover crash, everyone was hurt and one passenger died. The crash occurred in a construction zone. A guardrail had been removed and was not replaced. All lines had not been repainted on the repaved road, and pieces of asphalt laid on the shoulder.
In the lawsuit against the construction companies, the defendant attorneys told the plaintiffs that the two companies were operating as a joint venture with a $1 million liability insurance policy. The parties settled for $1 million. The plaintiffs signed a release of all claims, which stated that plaintiffs agreed that they were not relying on any statements by any parties’ attorneys. Four years later, the plaintiffs discovered that the companies in fact carried separate liability policies.
The U.S. District Court for the Northern District of Illinois ruled as a matter of law that the failure to identify the individual policies violated Federal Rule of Civil Procedure 26. The undisclosed policies would have covered plaintiffs’ claim, and no joint venture agreement existed under Illinois law; therefore, joint venture exclusions and the individual policies were inapplicable.