On July 26, 2011, Lashaunda Carter was driving her car when she was involved in a crash with an uninsured motorist, Cortez Williams. Jasmine Carter was in Carter’s car and was injured as a result of the collision. Lashaunda was insured by American Access Insurance Co. Lashaunda’s insurance policy covered any compensatory damages Lashaunda would have to pay arising from bodily injury caused by her in an auto accident.
Under the terms of the insurance policy, American Access “shall defend any civil suit alleging such bodily injury.” The auto policy also required Lashaunda to give American Access written notice of any accident or loss as well as any filings in a lawsuit brought against her.
The policy stated that American Access would “not be obligated to pay . . . unless [American Access] received actual notice of a lawsuit before judgment had been entered in said suit.”
The policy also had a provision allowing passengers in the vehicle to seek recovery against American Access for injuries from an uninsured motorist. The policy provided that the disputes would be resolved by way of arbitration. The policy also required that Jasmine file a lawsuit against the uninsured motorist to protect American Access’ subrogation rights. A lawsuit was filed against Williams and Tommy Brown, who owned the car that Williams had been driving. Lashaunda was not named as a defendant.
At the arbitration, Jasmine demanded the limits of Lashaunda’s insurance coverage, noting that if the issue was not settled within 21 days, the “demand will expire and we will add Lashaunda Carter as a defendant.” Jasmine was awarded $12,000 in arbitration with her counsel being explicit that “the check cannot include language absolving American Access of all claims, since we still have a claim against Lashaunda Carter.”
An amended complaint was filed on March 20, 2013, naming Lashaunda as a party defendant. She was served on Aug. 28, 2013. On Aug. 13, 2014, Lashaunda did not appear and the trial court entered judgment in favor of Jasmine, finding Lashaunda and Williams “jointly and severally liable for $30,000.”
Jasmine filed a citation to discover assets seeking $18,000 which was the difference between the $30,000 judgment and the $12,000 arbitration award.
American Access refused to pay arguing that in line with the terms of the insurance policy, it must receive notice of the lawsuit before judgment is entered and claimed that it was not notified until Jan. 13, 2014.
Jasmine moved for summary judgment, citing the warning that she would add Lashaunda as defendant and the letter explicitly listing a claim against Lashaunda as evidence that American Access had notice. The trial court granted summary judgment. American Access appealed.
On appeal, American Access argued that it had not received actual notice of the lawsuit or that at least there was a question of fact as to whether it received notice, which would bar the entry of a summary judgment.
The appellate court agreed, quoting the Supreme Court’s definition of actual notice as “notice sufficient to permit the insurer to locate and defend the suit.”
The possibility or threat of a lawsuit against an insured individual is not “actual notice.”
Jasmine made no showing that American Access had ever received actual notice of the lawsuit being filed until after the January 13, 2014 judgment was filed. Because American Access is not obligated to defend because it did not receive notice of the suit before judgment was entered, the circuit court’s grant of summary judgment was made in error and vacated that order. As a result, the case was remanded for further proceedings in line with its opinion back to the trial court.
Jasmine Carter v. Lashaunda Carter, Tommy Brown and Cortez Williams, 2015 IL App (1st) 143925-U.
Kreisman Law Offices has been handling automobile accident cases, pedestrian accident cases, bicycle accident cases, insurance claims, motorcycle accident cases and truck accident cases for individuals and families who have been harmed, injured or died as a result of the carelessness or negligence of another for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Western Springs, LaGrange Park, Palos Heights, Midlothian, Oak Forest, River Forest, Wheeling, Willow Springs, South Holland, Park Ridge, Hazelcrest, Country Club Hills, Burr Ridge, Brookfield, Broadview, Lansing, Chicago (Rogers Park, Chinatown, Bronzeville, Greek Town, Jackson Park, Irving Park, Jefferson Park, Buena Park, Brighton Park, Back of the Yards, Armor Square, Austin, Little Italy, Lincoln Park), Hinsdale and Palatine, Ill.
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