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American Alternative Ins. Co. v Metro Paramedic Services, Inc.

829 F.3d 509 (7th Cir. 2016)

Words & Phrases

Duty To Defend: Additional Insured

Trial Judge

John Tharp Jr.

Appellate Judge



Insurer had duty to defend named insured as well as a separate company who was alleged by underlying complaint to be a joint venturer.

Fact Summary

In the underlying lawsuit, three female employees of Metro Paramedic Services sued Metro Paramedic Services and Antioch Rescue Squad, two Illinois ambulance services, alleging an unrelenting practice of egregious sexual harassment, assault and battery, retaliation for whistleblowing, and failure to supervise. Two of the employees resolved their claims on the basis of an offer of judgment from Metro and Antioch; the third reached a settlement with both.

American Alternative Insurance Corporation (AAIC) is Antioch’s liability insurer. In the underlying suit, AAIC covered Antioch’s defense costs and indemnified its offers of judgment and settlement. It insisted, however, that it had no obligation to cover Metro under Antioch’s policy. Seeking a declaratory judgment to this effect, it filed this suit. On cross‐motions for judgment on the pleadings, the district court found that AAIC owed Metro a duty to defend. We conclude that this is indeed what the policy provides, and so we affirm the district court’s judgment.