Travelers Property Casualty Co. v. ArcelorMittal USA Inc.
2019 IL App (1st) 180129 (Ill. App., 2019)Words & Phrases
Waiver Of SubrogationTrial Judge
Raymond W. MitchellAppellate Judge
PierceHolding
No subrogation waiver obtained.Fact Summary
ArcelorMittal leased lift truck tractors (which are essentially forklifts with detachable masts) from Gallo pursuant to a written equipment supply contract (supply contract) dated January 1, 2011. ArcelorMittal used the tractors to move steel coils at its steel fabrication mill in East Chicago, Indiana. In September 2012, one of the leased tractors caught fire at the East Chicago mill. The tractor, which Gallo purchased in 2005, was maintained by ArcelorMittal mechanics under the direction and supervision of a Gallo employee. The fire reportedly started as a result of a fuel hose being improperly routed across the engine during an earlier repair. Although it was not established when that repair was done or who made that repair, there is no dispute that ArcelorMittal was responsible for the loss. ArcelorMittal offered to compensate Gallo for the tractor, but Gallo rejected the offer as too low. Gallo then submitted a claim to its insurer, Travelers, under an inland marine policy. Travelers settled Gallo’s claim for $305,625.
¶ 4 In June 2015, Travelers, as subrogee of Gallo, filed a two-count complaint against ArcelorMittal for negligence and breach of contract. Travelers voluntarily dismissed its negligence claim, and therefore Travelers’ only claim before us is its breach of contract claim. Travelers alleged that under the terms of the supply contract, ArcelorMittal was responsible for any damage to the tractor that occurred while ArcelorMittal was using it and that ArcelorMittal was liable for the cost to replace or repair the tractor. Travelers paid Gallo’s claim filed under an inland marine policy issued by Travelers and sought recovery from ArcelorMittal of the amount paid to Gallo. ArcelorMittal answered the complaint, and the parties engaged in discovery.
¶ 5 ArcelorMittal moved for summary judgment on Travelers’ breach of contract claim, arguing that Travelers was barred from asserting a subrogation claim because the supply contract required Gallo to obtain subrogation waivers from its insurers for claims arising out of the supply contract. Travelers filed a cross-motion for summary judgment on its breach of contract claim, arguing that ArcelorMittal was responsible for damage to the tractor under the supply contract, that ArcelorMittal failed to resolve Gallo’s claim under ArcelorMittal’s self-insurance program, and that the correct measure of damages was $318,000, based on the testimony of Michael Gallo and supported by a repair quote that Gallo received. After the cross-motions for summary judgment were briefed, the circuit court, in a written order, granted Travelers’ motion for summary judgment and awarded Travelers $305,625. The circuit court denied ArcelorMittal’s motion for summary judgment.