Wolfensberger v. David Eastwood

SUPREME COURT CASES

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State: Illinois

Court: 1st District Appellate

Docket No: 1-07-0121 Rel

Case Date: 05/12/2008

Preview:FIRST DIVISION May 12, 2008

No. 1-07-0121 JOAN A. WOLFENSBERGER and PARESH SONANI, ) ) ) Plaintiffs-Appellants, ) ) v. ) ) DAVID EASTWOOD, and ILLINOIS ) NATIONAL INSURANCE COMPANY, an ) Illinois Corporation, ) ) Defendants-Appellees. ) ) ----------------------------------) ) ILLINOIS NATIONAL INSURANCE COMPANY, ) ) Counterclaimant/Cross-Appellant, ) ) v. ) ) JOAN A. WOLFENSBERGER and PARESH ) SONANI, ) ) Counterdefendants/Cross-Appellees. ) Appeal from the Circuit Court of Cook County.

Honorable James F. Henry, Judge Presiding.

JUSTICE WOLFSON delivered the opinion of the court: Joan Wolfensberger sued David Eastwood for injuries arising out of a car accident that occurred in the early mornings hours of March 8, 2002. driven by Eastwood. Wolfensberger was a passenger in the car Wolfensberger filed a declaratory judgment

action against the liability insurance carrier for Eastwood's employer, seeking coverage for her injuries. motions for summary judgment. Both sides filed

1-07-0121 The primary question presented to the trial court was whether Eastwood was acting within the scope of his employment at the time of the accident. The trial court denied Wolfensberger's We affirm the

motion and granted the insurance carrier's motion.

order denying Wolfensberger's motion, but we reverse the order granting the insurance carrier's motion and remand this cause to the trial court for the determination of the factual issues. FACTS In March 2002, Wolfensberger and Eastwood were employees of Accenture, LLP (Accenture), a worldwide consulting business. Accenture operated a training facility in St. Charles, Illinois, for its employees. The facility contained sleeping rooms, On the week of the accident,

conference rooms, and a cafeteria.

Wolfensberger and Eastwood traveled from Philadelphia and Ohio, respectively, to attend training programs at the facility. Eastwood drove to the facility in his wife's car. was teaching a training session. separate session. On the evening of March 7, 2002, Wolfensberger, Eastwood, and another Accenture employee, Per-Anders Wendin, met in the social center at the St. Charles facility. They drank at the Wolfensberger

Eastwood was attending a

social center until around midnight, when the center closed. The three left the facility and went to a bar called

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1-07-0121 Scotland Yard. they arrived. Ranch. Eastwood drove. Scotland Yard was closing as

They then drove to a bar called the Cadillac

They stayed until about 3:30 a.m. on March 8, 2002.

After leaving the Cadillac Ranch, Eastwood crossed the median and began driving in the opposite lane of traffic. with another vehicle. Wendin were unhurt. Wolfensberger filed a personal injury action against Eastwood. Eastwood tendered his defense to his personal The car collided Eastwood and

Wolfensberger was injured.

insurance carrier, Geico Insurance (Geico), and to Accenture's carrier, Illinois National Insurance Company (Illinois National). Illinois National denied coverage and never filed an appearance on behalf of Eastwood. The parties entered into a settlement agreement for a total of $5 million to Wolfensberger and $20,000 to Paresh Sonani, a separate party who was injured in the accident.1 court approved the settlement. The circuit

The parties agreed Geico would

pay Wolfensberger $285,000 and Sonani $15,000, the total of the $300,000 policy limit. The remainder of the settlement was to be

satisfied under Accenture's primary and umbrella auto liability policies issued by Illinois National "to the extent another court finds such policies applicable to David Eastwood and/or the

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Sonani did not file a brief in this appeal. 3

1-07-0121 alleged occurrence." liability limit. The primary policy has a $1,000,000

The umbrella policy pays on behalf of the

insured "those sums in excess of the Retained Limit that the Insured becomes legally obligated to pay," up to $50,000,000. Eastwood assigned his rights against Illinois National to Wolfensberger. Wolfensberger filed a declaratory judgment action against Illinois National. Illinois National filed a counterclaim for

declaratory judgment. Both sides filed motions for summary judgment. The trial

court denied plaintiff's motion and granted the defendant's motion. The trial court found neither the umbrella policy nor the primary policy provided coverage because Eastwood was not acting within the scope of his employment at the time of the accident. Wolfensberger appeals the court's judgment. Illinois National

cross-appeals the trial court's factual finding that Eastwood was a "named insured" under the umbrella policy. DECISION Plaintiff contends the trial court erred in granting Illinois National's summary judgment motion. Specifically,

plaintiff contends the trial court erred in determining Eastwood was not acting in the "business or personal affairs" of Accenture

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1-07-0121 at the time of the accident, as required by the "Employees as Insureds" endorsement in Accenture's commercial auto liability policy, the primary policy. We review de novo a trial court's grant of summary judgment. Rich v. Principal Life Insurance Co., 226 Ill. 2d 359, 370, 875 N.E.2d 1082 (2007). The construction of an insurance policy is Rich, 226 Ill. 2d at

also a question of law we review de novo. 370-71.

Our primary objective in construing the language of an insurance policy is to determine and give effect to the intention of the parties as expressed by the words of the policy. Rich,

226 Ill. 2d at 371; Profitt v. One Beacon Insurance, 363 Ill. App. 3d 959, 962, 845 N.E.2d 715 (2006). "If the words used in a

policy are clear and unambiguous, they must be given their plain, ordinary, and popular meaning, and the policy will be applied as written, unless it contravenes public policy." at 371; Profitt, 363 Ill. App. 3d at 962. Rich, 226 Ill. 2d

A contract is not

ambiguous, however, simply because the parties disagree on a provision's meaning. Rich, 226 Ill. 2d at 371; Central Illinois

Light Co. v. Home Insurance Co., 213 Ill. 2d 141, 153, 821 N.E.2d 206 (2004). We consider only reasonable interpretations of the policy language, and we will not strain to find an ambiguity where none

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1-07-0121 exists. Rich, 226 Ill. 2d at 371. " `Although policy terms that

limit an insurer's liability will be liberally construed in favor of coverage, this rule of construction only comes into play when the policy is ambiguous.' " Rich, 226 Ill. 2d at 371, quoting

Hobbs v. Hartford Insurance Co. of the Midwest, 214 Ill. 2d 11, 17, 823 N.E.2d 561 (2005). I. Scope of Employment At issue in this case is whether Eastwood was using a covered automobile in Accenture's "business or personal affairs" when he was driving back from the Cadillac Ranch. The primary It

policy includes an "Employees as Insureds" endorsement.

provides: "Any employee of yours [Accenture's] is an `insured' while using a covered `auto' you don't own, hire or borrow in your business or your personal affairs." A "covered auto"

includes a personal automobile owned by an employee or the employee's family. The use of the term "personal affairs" in the "employees as insureds" endorsement makes this case unique in this State. Plaintiff contends the "personal affairs" language added coverage to the policy for employee activities that might not be strictly business related, such as after-hours social networking for the benefit of Accenture. While Illinois has not considered the use

of the term "personal affairs" in an "Employees as Insured"

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1-07-0121 endorsement, other jurisdictions have interpreted phrases such as "in your business or your personal affairs" to protect "employees while acting in the scope of their employment." See Wausau

Underwriters Insurance Co. v. Baillie, 281 F. Supp. 2d 1307, 1316 (M.D. Fla. 2002). We agree with this interpretation and find the

relevant question here is whether Eastwood was acting in the scope of his employment for some corporate purpose when the accident occurred. Although not raised by the parties, we first address the question of whether summary judgment is appropriate in this case. Summary judgment is appropriate only where "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." 735 ILCS 5/2-1005(c) (West 2006). The

purpose is not to try an issue of fact, but rather to determine whether a triable issue of fact exists. Giannoble v. P & M

Heating and Air Conditioning, 233 Ill. App. 3d 1051, 1056, 599 N.E.2d 1183 (1992). Illinois courts have not discussed the propriety of granting summary judgment on a scope of employment issue within the context of an "Employees as Insured" endorsement. However,

Respondeat superior cases, which both parties cite as relevant to

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1-07-0121 this case, have uniformly held "[s]ummary judgment is generally inappropriate when scope of employment is at issue." Pyne v.

Witmer, 129 Ill. 2d 351, 359, 543 N.E.2d 1304 (1989); Giannoble, 233 Ill. App. 3d at 1056. "Only if no reasonable person could

conclude from the evidence that an employee was acting within the course of employment should a court hold as a matter of law that the employee was not so acting." Pyne, 129 Ill. 2d at 359;

Giannoble, 233 Ill. App. 3d at 1056. In this case, both sides submitted evidence on the issue of whether Eastwood was using his car in Accenture's "business or personal affairs" at the time of the accident. Plaintiff presented evidence that:
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It was the practice for Accenture managers to take their teams out on a weekly basis for purposes of networking, team-building, and morale-boosting. purpose of networking was for employees to become staffed on future projects. Eastwood and Wendin One

Depositions; Wendin Affidavit.
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Accenture encouraged traveling employees to socialize and recreate with fellow employees and with clients on a regular basis. during training. This type of networking also occurred Employees "networked" with fellow

employees to exchange knowledge and experience.

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1-07-0121 Eastwood and Wendin Depositions.
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Accenture managers and partners were entitled to reimbursement for expenses incurred at such events, including expenses for alcohol. Eastwood, Wendin, and Eastwood and

Wolfensberger were managers at Accenture. Wendin Depositions.
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At the Cadillac Ranch on March 8, 2002, Eastwood was engaging in general "networking within the Accenture community." project. He was not looking to get staffed on a

Eastwood Deposition.

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It was a "common occurrence" and a "tradition" for Accenture employees to go to the Cadillac Ranch on Thursdays during training. Depositions. Eastwood and Wendin

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Wendin had been to the Cadillac Ranch on other visits, "when Accenture sponsored or encouraged the activity." Wendin Affidavit.

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Eastwood had the discretion to submit his entertainment expenses to Accenture for the events of March 7-8, 2002, but he chose not to. Eastwood Deposition.

Wendin had the discretion to submit his expenses, but he did not remember if he did so.
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Wendin Affidavit.

Wendin discussed work-related topics with Eastwood and

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1-07-0121 Wolfensberger at the Accenture social center and at the Cadillac Ranch.
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Wendin Affidavit and Deposition.

An employee in Wendin's training group arranged for shuttle transportation to the Cadillac Ranch at 7 p.m. on March 7, 2002. Wendin, Eastwood, and Wolfensberger When they

missed the shuttle because they had to work.

left the St. Charles facility, they were attempting to catch up with other employees from the training facility. They went to Scotland Yard first because

they knew the group would be at one of the two bars. They saw and spoke with fellow employees at the Cadillac Ranch.
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Eastwood and Wendin Depositions.

In the opinions of Eastwood and Wendin, Accenture "sponsored" the outing at Cadillac Ranch on March 7-8, 2002. "It's just a cultural thing. It's a thing that Eastwood

Accenture people go and do around training." Deposition.
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"[T]hey scheduled the training in a way that we could use the evening to go out. Executive--Accenture The

managers invited the group to go out.

transportation was paid for by Accenture, and *** more than 90 percent, if not 100, of everything that was consumed that evening was billed back to Accenture."

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1-07-0121 Wendin Deposition.
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At the Cadillac Ranch, Wolfensberger heard Eastwood discussing technical work-related matters with other Accenture employees. Wolfensberger Deposition.

Defendant presented evidence that:
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Eastwood and Wendin admitted there was no formal announcement about a gathering or event at the Cadillac Ranch on March 7, 2002. They did not remember who

arranged for shuttle transportation for Accenture employees to go to a bar outside the campus. and Wendin Depositions.
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Eastwood

Eastwood and Wendin were scheduled to attend a training class at the St. Charles facility at 8 a.m. on Friday, March 8, 2002. Wolfensberger was scheduled to attend a

breakfast meeting at 6:30 a.m. on March 8, 2002. Eastwood and Wolfensberger Depositions; Wendin Affidavit.
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No employee attending or teaching a training class at the St. Charles facility was permitted a per diem allowance. Affidavit of Mary Fulton, Accenture U.S.

Employee Relations & Policy Lead.
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Eastwood was not entitled to reimbursement for any amounts incurred at the Cadillac Ranch, whether for

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1-07-0121 "networking," "talking shop," or socializing with other employees.
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Fulton Affidavit.

In March 2002 and for five years prior, "Accenture did not promote, endorse, encourage, sponsor, host, announce, or advertise any events, affairs or gatherings of Accenture employees, for any purpose, at the Cadillac Ranch in Bartlett, Illinois." Affidavit. Fulton

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"Accenture *** understands that its employees will socialize and `network' with other employees while either teaching or attending training programs and while in residence at the training facility. *** There was and is a Social Center within the training facility for the use of Accenture employees to socialize and network while in residence at the training facility." Affidavit of Andrew White, Accenture Director of Training Operations.

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"Since 1992, other than officially sponsored events, Accenture has not required or encouraged its employees to socialize and/or network at locations or establishments outside of the training facility particularly during early morning hours after the Social Center had closed." White Affidavit.

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1-07-0121
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"[A]s a matter of policy, Accenture directed the training instructors not to organize social events outside the training center where alcohol is served to the attendees." White Affidavit.

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"To the best of my knowledge, Accenture has never sponsored, required or encouraged any social or networking event at the Cadillac Ranch tavern." Affidavit. White

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"Accenture's expectations and intent for purchasing the `Employees as Insureds' endorsement to the Policy were that employees would be covered as additional `Insureds' only while engaged in Accenture's business affairs." Affidavit of Amy L. Daniels, Accenture

Director of Global Risk Management & Insurance.
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"At no time did Accenture expect or intend that employees attending training at its St. Charles, Illinois facility who left the Accenture training campus for recreational drinking or socializing would be covered as acting in the `business or personal affairs' of Accenture." Daniels Affidavit.

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The "employees as insureds" endorsement "is a standard insurance industry form" that "is not intended to extend coverage to employees who are engaged in their

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1-07-0121 own personal affairs or to employees who are acting outside the course and scope of their employment." Affidavit of Thomas Sheridan, underwriting consultant with American International Group Companies (AIG), of which Illinois National is a member.
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"The use of the language `personal affairs' in the endorsement was included because this standard endorsement is used not only for corporations and larger business entities, but also for policies issued to individuals and sole proprietors." Affidavit. Sheridan

After reviewing the record, we find material questions of fact and witness credibility exist on the question of whether Eastwood was acting within the scope of his employment when plaintiff was injured in the auto accident on March 8, 2002. See

Davila v. Yellow Cab Co., 333 Ill. App. 3d 592, 601, 776 N.E.2d 720 (2002). Many of the facts presented by the parties stand in direct contradiction to each other. For example, Mary Fulton,

Accenture's U.S. Employee Relations & Policy Lead, said Eastwood was not entitled to reimbursement for any amounts incurred at the Cadillac Ranch, whether for "networking," "talking shop," or socializing with other employees. Eastwood, however, said he had

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1-07-0121 the discretion to submit his entertainment expenses to Accenture for the event at the Cadillac Ranch, but chose not to do so after the accident. Wendin said he also had the discretion to submit Andrew

his expenses, but he did not remember if he did so.

White, Accenture's Director of Training Operations, said that, "other than officially sponsored events, Accenture has not required or encouraged its employees to socialize and/or network at locations or establishments outside of the training facility particularly during early morning hours after the Social Center had closed." Wendin, however, said: "[Accenture] scheduled the

training in a way that we could use the evening to go out. Executive

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