7th Circuit Court of Appeals
Case Name: Prime Insurance Company v. Darnell Wright
Case No.: 22-1002
Officials: Easterbrook, Hamilton, and Kirsch, Circuit Judges.
Focus: Insurance Claim-Jurisdiction
Humphrey drove for Riteway Trucking. All of his trips began in South Holland, Illinois. Riteway would send him to a destination, often in another state; after unloading, Humphrey would receive instructions about where to pick up his next load, which he would take to South Holland or another destination. He always ended up in Illinois to start another trip.
In November 2013 Humphrey drove a truck to Fort Wayne, Indiana. After he dropped off the freight, Riteway directed him to another site in Fort Wayne to pick up a load. While en route, Humphrey’s truck collided with a car driven by Darnell Wright. After cooperating with Wright and the police, Humphrey picked up his new load and delivered it in Illinois.
Wright, who accused Humphrey of negligence, eventually sued Riteway in Indiana state court. Riteway did not appear, and a default judgment for $400,000 was entered against it. Riteway also did not cooperate with Prime Insurance Co. and thus forfeited the benefit of the policy that Prime had issued. Riteway’s Prime Insurance policy contained an endorsement that provides payments to an injured party even when the insurer need not defend or indemnify its client.
A federal court determined that Riteway’s inflexibility had cost it the benefit of Prime’s policy but reserved all questions about whether Wright could recover under the Endorsement. The state’s judiciary declined to allow Prime to attack the default judgment. Prime Insurance Co. v. Wright, 133 N.E. 3d 749 (Ind. App. 2019). This led Prime to file a second suit in federal court, seeking a declaratory judgment that the Endorsement does not entitle Wright to any money. The district court held that the Endorsement applies and ordered Prime to pay up. 2021 U.S. Dist. LEXIS 228400 (N.D. Ind. Nov. 30, 2021).
The Seventh Circuit affirmed. Humphrey was engaged in interstate freight transportation under the statutory definition regardless of intent, whether a truck was carrying freight, or the “totality” of the circumstances.