PEORIA — A judge's ruling in a traffic crash personal injury case could cost insurer Liberty Mutual $4.5 million, even though the policy at the heart of the case supposedly was capped at $25,000.

U.S. District Judge James E. Shadid issued the judgment, which is stayed pending an appeal at the U.S. Court of Appeals for the Seventh Circuit.

Though the payout amount due is in dispute, the facts of the 2013 car crash are not. A Pontiac Grand Prix insured by Kimberly Perkins through Liberty Mutual included coverage for her daughter Michiah Risby. However, it did not insure Miquasha Smith, who was the driver of the car involved in the one-car accident that severely injured Monteil Hyland.

The first issue at hand in the case is the conflicting statements by Risby and Smith. According to Risby, she did not authorize Smith to take her mother’s car from a party, but Smith, a 16-year-old restricted driver who did not have insurance, said she was given permission to take the vehicle from the party they were both attending.

During a Liberty Mutual investigation based on a liability coverage limit of $25,000 per person, it was concluded that Smith was neither credible nor covered under the policy. The case was therefore closed since neither insured, Perkins or her daughter Risby, were named in the lawsuit. But that did not stop Hyland’s mother from filing suit against Smith. Liberty Mutual later informed all parties that it still denied coverage for Smith. 

“Importantly for the instant case, Liberty Mutual did not provide a defense for Smith in the Peoria County case,” Shadid said in his ruling. "Nor did Liberty Mutual file a declaratory judgment action seeking a determination on the issue of the duty to defend or the duty to insure."

In 2014, Judge Stephen Kouri entered a judgement order for Hyland for more than $4.5 million dollars against Smith, and “Smith assigned Hyland any claims against Liberty Mutual for failure to defend Smith in the Peoria County case,” according to Shadid's decision. 

In 2015, Hyland filed a complaint against Liberty Mutual for breach of insurance contract and duty to defend, but the complaint did not include bad faith or tortious conduct against Liberty Mutual.

Shadid deemed that based on Anderson v. Liberty Lobby Inc. 1986, the court “must then determine whether there is a need for trial - whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may be reasonably resolved in favor of either party.” 

The appellant's briefing is due at the end of October and the appellee's brief is due at the end of November. The appellant's reply brief, if any, will be due by December 11.

Liberty Mutual is represented in the action by attorneys with the firm of Shook, Hardy & Bacon LLP, of Chicago.

Hyland is represented by the Janssen Law Center, of Peoria.

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Janssen Law Center Liberty Mutual Shook Hardy & Bacon LLP U.S. District Court for the Central District of Illinois

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