On October 5, 2011, Israel P. Nwidor, a Chicago Cab employee, was driving a 2007 Ford Crown Victoria taxi, owned by Chicago Cab. The taxi collided with a motorcycle being operated by James Carrington. In April 2012, Phillip Carrington, as guardian of the estate of James, brought a personal injury action against Chicago Cab and Nwidor. Chicago Cab owned a commercial automobile liability insurance policy, No. 11UCC2060, issued by the Ullico Casualty Company (Ullico). Chicago Cab tendered its defense to Ullico, which retained defense counsel. An appearance on behalf of Chicago Cab was filed in August 2012. In January 2013, Carrington filed the instant amended complaint against Nwidor, Chicago Cab, and related corporate entities. Carrington alleged that Nwidor and Chicago Cab negligently owned, operated, and maintained the subject taxi, which proximately resulted in James’s severe and permanent injuries.
On May 30, 2013, Ullico went into liquidation. In a letter dated June 7, 2013, IIGF notified Chicago Cab of the liquidation. The letter informed Chicago Cab that IIGF would assume responsibility for Ullico’s obligations to its Illinois policyholders and claimants, subject to the limitations and conditions of the Illinois Insurance Guaranty Fund, codified as article XXXIV of the Illinois Insurance Code (215 ILCS 5/532 et seq. (West 2014)). The letter advised Chicago Cab that it had to satisfy certain prerequisites before IIGF could “proceed to investigate, adjust, compromise, settle and pay covered claims as provided for, and in accordance with our governing statutory requirements.”
The letter also included a general reservation of rights, which was updated several times including the fact that the taxi involved had been deleted from coverage.