7th Circuit: Insurer has no obligation to ambulance fleet service after fatal crash

An ambulance that crashed into a car and killed its driver was not covered under an insurance policy, the 7th Circuit Court of Appeals ruled Thursday. As a result, the insurer had no obligation to either the ambulance service or its employee.

At the time of the accident, Markel Insurance Company insured United Emergency Medical Services’ fleet of ambulances. But the ambulance that crashed – referred to as Ford #4497 – was not listed on the policy.

Before the accident, confusion about adding the ambulance to the policy took place in an email exchange between United administrative director Steven Pavek and Jack Rosen with Insurance Service Center, who served as Markel’s agent. Pavek had emailed Rosen, requesting to add Ford #4497 back onto the policy and that a different ambulance be removed, but Pavek never followed up on the request.

Months later, Ford #4497 crashed into a vehicle driven by Chester Stofko, who eventually died from injuries sustained in the collision. At that point, the ambulance had never been formally added back to the policy. Eventually, United’s owner found a copy of Pavek’s email and forward it to Rosen, who claimed it was the first time he had seen it.

Lillian Rau, as personal representative of Stofko’s estate, filed a lawsuit in state court against United and the ambulance’s driver to recover damages. She argued that it was nevertheless covered by the policy because before the crash, United sent Rosen an email requesting that the vehicle be added to the policy.

The U.S. District Court for the Northern District of Indiana found that Markel had no duty to defend or indemnify United or the driver with respect to Rau’s suit. It also denied both Rau’s and United’s cross-motions for summary judgment against Markel.

Rau’s appeal focused primarily on United’s email to Center, arguing that despite Rosen’s denial, Center actually received the email but failed to forward it to Markel. But in affirming the district court, the 7th Circuit noted that the cases cited by Rau were not based in Indiana Law and were otherwise distinguishable.

“Here, unlike in (State Farm Mut. Auto. Ins. Co. v. Oss, 127 Ill. App. 3d 119 (1984)), Center in no way assured United that Ford #4497 was covered. Moreover, as the district court pointed out, the holding in Oss was dictated by the existence of an oral contract. The contract in this case is the Policy, which required more than notice before a change takes effect: Markel also had to approve any such change. It is undisputed that Markel did not approve the addition of Ford #4497,” Chief Judge Diane Wood wrote for the 7th Circuit.

“Based on (Wille v. Farmers Equitable Ins. Co., 89 Ill. App. 2d 377 (1967)), Rau argues that Markel should be responsible for Center’s failure to forward the requested change in the March 30 email. Wille is distinguishable, however, because no one gave United assurances that Markel accepted the change. Moreover, in Wille, there was again no written contract,” the 7th Circuit wrote.

Regardless of whether the contested email was sent or received, the 7th Circuit concluded that it was undisputed that neither Center nor Markel accepted or responded to United’s request to reinstate coverage for Ford #4497. Thus, Markel did not endorse any such change to the policy and the ambulance was not covered.

Additionally, it rejected Rau’s argument that Markel should be estopped from denying coverage for Ford #4497 as a matter of public safety, noting that it would not hear the issue for the first time on appeal.

Lastly, the 7th Circuit found Rau’s argument that equity requires coverage for Ford #4497 as not persuasive, finding that Markel’s amenability to past changes did not mean that it was estopped from rejecting amendment requests, among other factors.

The case is Markel Insurance Company v. Lillian Rau, 19-2433.