WILLIAM R. BARHAM and STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Claimant v. STATE OF ILLINOIS, Respondent Order entered March 7, 2019
Case summary
Claimant sought coverage for an auto accident while driving a state vehicle, alleging he was acting within the scope of employment. The court denied the claim, finding that his four-hour stay at a bar was a frolic outside the scope of employment, and that the respondent acted in good faith in denying coverage.
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ORDER
BIRNBAUM, CJ.
THIS MATTER is before the Court on the parties’ cross Motions for Summary Judgment.
STATEMENT OF FACTS
The Accident
Somewhere around midnight between October 14, 2000, and October 15, 2000, a motor vehicle accident occurred in Johnson County, Illinois. The vehicle involved in the accident was owned by the State of Illinois. It was occupied by the Claimant, William R. Barham (“Barham”), and Jerry Isom. Barham was the Warden and Isom was an employee of the Illinois Department of Corrections at the time of the accident.
Prior to the accident, Barham and Isom travelled to Harrisburg, Illinois, to pick up the Director of the Department of Corrections at the Harrisburg-Raleigh Airport to take him to a political event at Southeast Illinois College, and return him to the airport. After they returned the Director to the airport in Harrisburg, Barham and Isom met some colleagues at the Lakeside Bar and Grill (the Bar), also located in Harrisburg. Barham drank while at the bar. Barham and Isom left the bar 4-5 hours later to drive home to Vienna. Sometime around midnight, their vehicle left the roadway and struck a tree. Barham was seriously injured in the accident and Jerry Isom died as a result of his injuries in the accident. A witness at the scene saw Barham leaning against the steering wheel. Mr. Isom was trapped in the vehicle. His legs were pinned between the passenger seat and floorboard. His head and torso were lying across the middle of the hood. At 12:50 a.m., Illinois State Trooper Jay Hall informed Barham that he was under arrest for driving under the influence of alcohol. On October 16, 2000, Trooper Hall filed an Affidavit of Probable Cause stating that, to the best of his knowledge, Barham committed the crimes of reckless homicide and aggravated DUI.
The Isom Lawsuit
On October 27, 2000, Lori A. Isom (“Isom”), as Administratrix of the Estate of Jerry W. Isom, brought a wrongful death action against Barham in the Saline County Circuit Court arising [*143] out of the motor vehicle accident. Isom alleged that Barham negligently drove the vehicle, causing it to crash, and that as a result of the crash, Jerry Isom was injured and died. Barham denied that he was the driver of the vehicle. Barham filed a responsive pleading attacking the Complaint on December 22, 2000. Four days later, Isom’s estate filed an Amended Complaint, and then filed a Second Amended Complaint on October 25, 2001.
The lawsuit proceeded to a three-week jury trial on April 27, 2010. Legal counsel engaged by State Farm represented Barham. At trial Barham again denied that he was the driver of the vehicle at the time of the accident. The jury rejected Barham’s testimony and returned a verdict in favor of Isom in the amount of $1 million, a verdict for the defendant pursuant to the survival action, and a $12,000 verdict for the plaintiff under the Family Expense Act. The jury specifically found that Barham was the driver of the vehicle at the time of the occurrence by answering in the affirmative to the special interrogatory, “Did the plaintiff meet her burden of proof that the defendant was the driver of the automobile at the time of the negligent operation of the automobile?”
Barham’s Worker’s Compensation Decision
Barham filed a worker’s compensation claim with the Illinois Worker’s Compensation Commission (“IWCC”). On August 25, 2005, an arbitrator for the IWCC awarded Barham benefits, finding that Barham’s injuries “arose out of and in the course of employment.” The State appealed the decision, which was affirmed on or about April 17, 2007. The arbitrator found Barham was a passenger in the vehicle. “There may also be some doubt as to whether Petitioner was the driver of the vehicle. Petitioner testified that he had been ill for about two weeks prior to the accident. Petitioner further testified that he asked Isom to drive and was lying in the back of the vehicle when the accident occurred.” (Respondent’s Motion for Summary Judgment, Exhibit 2, pg. 6).
Tender of Barham’s Defense to the State
On November 9, 2000, the Illinois Department of Central Management Services (“CMS”), pursuant to the State of Illinois Self-Insured Motor Vehicle Liability Plan (“Liability Plan”) notified Barham that the State would not be providing insurance coverage or defense of him for the reasons that he was not conducting official State business at the time of the accident, and he was not acting within the scope of his employment. The notice also informed him that he or his personal insurance company would be responsible for the disposition of any liability claim.
Approximately four months after Lori Isom filed her wrongful death action against Barham, he tendered a defense action, by and through his attorney on February 22, 2001. The letter stated that the State had a duty to defend, indemnify and hold harmless Barham against the Isom lawsuit. On March 14, 2001, the State denied the letter for the same reasons stated above.
Barham renewed his demand letter on January 21, 2003 to the Illinois Attorney General. On February 23, 2003, the State refused to accept the defense of Barham, stating that he acted outside the scope of his employment, and was therefore ineligible for insurance under the [*144] Liability Plan. After the IWCC’s final decision that Barham’s injuries arose out of and in the course of his employment with the State, Barham again renewed the demand letter on May 9, 2007.
On June 22, 2007, the State again denied Barham’s defense, this time stating that the issue of whether Barham was acting within the scope of his employment was rendered moot by the determination that he was not the driver of the vehicle at the time of the accident. Barham renewed his demand on April 15, 2010, just prior to the Isom trial. The State renewed its denial on April 30, 2010.
Isom’s Declaratory Judgment Action
Lori Isom filed a declaratory judgment action and mandamus against the State in the Circuit Court of Saline County on March 23, 2010, seeking money damages for violating the CMS law, arguing that the State was obligated to satisfy the verdict rendered by the jury and entered in Isom’s lawsuit. Barham and State Farm intervened in the action and joined Isom’s argument. The Circuit Court found that the State Law Immunity Act, Court of Claims Act, and the CMS law barred Isom’s declaratory judgment and mandamus action. The Fifth District Appellate Court affirmed the circuit court’s decision on June 11, 2012.
Nature of the Claim - Court of Claims
After the 5th District Appellate opinion, Barham and State Farm filed this action with the Court of Claims. Barham and State Farm seek a declaratory judgment that the State breached its duty to defend, indemnify and hold harmless Barham for the Isom lawsuit and resultant judgment. As a result of this breach, State Farm, as the personal insurer of Barham, undertook the defense of the Isom lawsuit.
LEGAL STANDARD
“A triable issue precluding summary judgment exists where the material facts are disputed or where, the material facts being undisputed, reasonable persons might draw different inferences from the undisputed facts.” Bagent v. Blessing Care Corp., 224 Ill. 2d at 154, 162-63 (2007).
ANALYSIS
We will first discuss Claimant’s breach of indemnification claim, for if there is no duty to defend there is no duty to indemnify, but the same is not true in reverse. The jury found (despite Claimant’s assertions to the contrary) that the Claimant was the driver of a state-owned vehicle. The parties disagree as to whether Claimant was acting within the scope of his employment when the accident occurred. Illinois courts consider three general criteria in determining whether an employee’s acts are within the scope of employment. Bagent v. Blessing Care Corp., 224 Ill. 2d at 154. The conduct of a servant is within the scope of employment only if (1) it is of the kind he is employed to perform, (2) it occurs substantially within the authorized time and space limits, and (3) it is actuated, at least in part, by a purpose to serve the master. Restatement (Second) of [*145] Agency § 228 (1958). Id. All three criteria must be met in order to conclude that an employee was acting within the scope of employment. Bagent, 224 Ill. 2d at 165. Further, “Although summary judgment is generally inappropriate when scope of employment is at issue, when no reasonable person could conclude from the evidence that an employee was acting within the scope of employment, a court should hold as a matter of law that the employee was not so acting.” Id. at 170.
A careful review of all of the available evidence demonstrates that the Claimant’s conduct was outside of the authorized space and time limits when he drove his superior to a purely political activity. Afterward he stopped at the bar for a period of four-five hours prior to returning to Vienna from the airport. Even if the activity in driving his superior were work related, a stopover of this duration, while consuming alcohol (Claimant testified that he had two beers; other testimony suggested several more) - clearly severs the timeline between Claimant’s personal business and the business of his employer.
The duration of the stay at the bar is important here, because we recognize that Illinois law allows for minor variations relating to time and space. For example, if a delivery driver stopped at a convenience store for a drink and caused an accident while pulling back into traffic, that would be a minor variation that would not relieve the delivery company of liability under Illinois law. The fact that an employee combines personal business with the employer’s business is not a dispositive factor. However, an unauthorized deviation far beyond those reasonably associated with the employer’s business is commonly referred to as a “frolic.”
Here, we find that Claimant’s conduct in question, i.e. the automobile accident, was outside of his scope of employment as a matter of law, because no reasonable person could conclude that Claimant’s stay at the bar for four hours was in any way associated with his employer’s “business of” bringing the Director of the Department of Corrections in a vehicle to and from a political fundraiser, and then returning the vehicle back to the facility. Therefore, Claimant committed the act while on a frolic.
Claimant asserts affirmative res judicata/collateral estoppel based upon the Worker’s Compensation Commission’s decision that the Claimant was acting within the scope of his employment. But the jury found in Isom v. Barham that Barham was the driver. Those conflicting findings alone defeat the estoppel claim.
As a final note, we find, notwithstanding Claimant’s assertions to the contrary, Respondent did act in good faith when it denied Claimant coverage. The facts are that the Respondent did notify the Claimant that it denied coverage, in the form of several letters responding to Claimant’s demands, for the reasons that Claimant was not the driver of the vehicle and that he was not acting within the scope of his employment. An insurer will only be estopped from raising policy defenses and in extreme cases be exposed to claims of bad faith when it denies coverage without explanation. The fact that Claimant was later found to be the driver of the vehicle in the Isom litigation does not retroactively render Respondent’s decisions not to defend Claimant acts of bad faith.
[*146] For all of these reasons, IT IS HEREBY ORDERED that Respondent’s Motion for Summary Judgment is GRANTED, and Claimant’s Motion for Summary Judgment is DENIED.