CHICAGO (Legal Newsline) - An Illinois appeals court agreed with a lower court that an insurance company is not responsible for additional interest on a 2015 payout to a former Chicago-area attorney injured in a cab accident.
In the case, Marc Jacobs, who suffered a brain injury in the 2005 accident, and his wife, Deborah, received a $26 million judgment from a Cook County jury against Yellow Cab Affiliation, Inc. and the driver, Cornelius Ezeagu. Marc Jacobs was 44 at the time of the accident.
Hours after the 2015 verdict, Yellow Cab filed for bankruptcy. Ten days later, American Country Insurance Co., which insured Yellow Cab and Ezeagu, deposited $427,319.40 with the clerk of the circuit court of Cook County. The payment included $350,000, the maximum amount on the policy, plus interest on the $26 million judgment.
In a suit filed in district court in 2018, the Jacobses argued that American Country was still on the hook for $6.6 million in post-judgment interest payments. They said that the $427,319.40 was “not a sufficient ‘tender’ within the meaning of the post-judgment interest."
They also claimed that a provision in the policy allowing the insurer to circumvent the tender requirement is void as against public policy.
In an opinion issued Dec. 9, the First District Appellate Court, said that American Country upheld all the conditions of the insurance policy and that the driver and the cab company were the “judgment debtors” in the case not the insurance company.
“An insurer of a defendant owes no duty to, and has no direct relationship with, that lawsuit’s plaintiff,” Judge David Ellis wrote. “An insurer owes a contractual duty only to its insured, a relationship that is …framed entirely by the terms of the insurance contract between them.”
He continued: “The fact that we find this matter at the stage of a post-judgment supplemental proceeding changes nothing. In such a proceeding, the plaintiff-judgment creditor steps into the shoes of the... insured judgment debtor and collects directly from the insurer. But as the circuit court correctly emphasized, that judgment creditor, in the shoes of the insured judgment debtor, is entitled to no more than that to which the judgment debtor itself would be entitled under the insurance policy.”
The appellate court also refuted another argument brought by the Jacobses where they cited Halloran, 287 Ill. App. 3d at 859, a case where the court ruled that a car insurance company payment to a clerk did not satisfy all the company’s obligations. But in this case, the Union Automobile Insurance Co. had not fulfilled all the provisions of the policy.
Finally, the court shot down the plaintiffs’ claim that the supplementary-payments provision in the policy is unenforceable as against public policy.
Ellis wrote: “We will not invalidate a contract or provision of that contract on public-policy grounds ‘unless it is clearly contrary to what the constitution, the statutes or the decisions of the courts have declared to be the public policy or unless it is manifestly injurious to the public welfare.’” -- Progressive Universal, 215 Ill. 2d at 129-30.