Insurance Claim

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7^th Circuit Court of Appeals

Case Name: Maria Jimenez v. Travelers Commercial Insurance Company

Case No.: 23-1299

Officials: Hamilton, Kirsch, and Pryor, Circuit Judges.

Focus: Insurance Claim

Maria and Jose Jimenez were involved in a car accident with Stephen Kiefer. Following the incident, the Jimenezes requested $100,000 from Kiefer’s auto insurer, Travelers Commercial Insurance Company, to settle their claim against him. However, Travelers declined the offer, prompting the Jimenezes to file a lawsuit against Kiefer in Illinois court. Subsequently, an agreement was reached between the Jimenezes and Kiefer, wherein Kiefer admitted to a judgment against himself and transferred his rights and claims against Travelers to the Jimenezes. In return, the Jimenezes agreed not to enforce the judgment against Kiefer personally. Thereafter, the Jimenezes initiated a citation proceeding against Travelers to ascertain whether it held any of Kiefer’s assets.

Travelers removed the action to federal court and pursued summary judgment. The district court ruled in favor of Travelers, determining that neither Kiefer nor the Jimenezes (as his assignees) were entitled to anything under the insurance policy, and they had no grounds for claiming breach of any duties owed by Travelers to Kiefer. Dissatisfied with this outcome, the Jimenezes appealed.

The Seventh Circuit acknowledged that the citation proceeding constituted an independent, removable action. Furthermore, it aligned with the district court’s finding that the Jimenezes, as assignees of Kiefer, were ineligible for recovery under the policy due to the legally responsible provision. The court concluded that Travelers could hold Kiefer accountable to the policy’s terms, and as per a strict interpretation of those terms, Kiefer wasn’t legally responsible for the judgment due to the covenant not to execute, rendering the Jimenezes’ recovery as Kiefer’s assignees precluded by the legally responsible provision.

Affirmed.

Decided 05/07/24

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