From time to time, an insurance defense attorney will receive an assignment to defend an individual involved in a motor vehicle collision where the defendant was also charged with driving under the influence (DUI). With the legal limit of Blood/Breath Alcohol Concentration (BAC) recently lowered to the .08% in Illinois1, it is of increased importance that insurance defense practitioners understand the nuances of defending against personal injury claims arising out of an automobile accident where the insured driver had alcohol in his system. The purpose of this article is to outline briefly what your duties and responsibilities are in this situation and to highlight a few practice tips to consider in defending your client.
Dual Representation and Potential for Conflict of Interest. When an insurance company retains an attorney to defend their insured, in any case, the attorney has, in essence, two clients. This dual representation of both the insured and the insurance company is permissible, so long as the interests of both are being advanced simultaneously.2 The attorney who represents both parties is bound by the same professional and ethical obligations to the insured as they would be had the insured personally retained them.3 Under the terms of its policy with the insured, the insurance company retains the right to direct the litigation. Attorneys should be especially careful of conflicts of interest arising in cases involving alcohol consumption because that conduct may not covered by the policy.4
Conflicts of interest may arise between the insured and the insurance company in two general categories. One category involves situations where defense counsel can develop evidence so that coverage may not exist. A second category involves situations where the insurer is less than vigorous in defending the insured. If a conflict of interest arises between the insured and the insurance company, the insured must be apprised of the conflict. If the insured is willing to accept the defense following a full disclosure of the conflict, then counsel can continue to represent the insured.5 If the conflict of interest cannot be overcome, the insured, rather than the insurance company, is entitled to control the litigation, with the insurance company paying the reasonable costs incurred by the insured in defending the action with counsel of its choosing.6
A potential for a conflict of interest arises when alcohol consumption is alleged in a complaint against the insured defendant. Insurance policies may exclude coverage where the alcohol consumption results in a loss. In addition, the policy may exclude punitive damages. A defense attorney is not allowed to advocate against the interest of the defendant by trying to exclude coverage for his client. If the insurance company desires to deny coverage for one or both counts against their insured, they must retain separate counsel for this undertaking. The attorney hired to defend the insured must not take a position contrary to the defendant.
Duty to Indemnify and Duty to Defend. By its insurance policy, the insurance company has two basic duties that it must provide its insured: (i) the duty to defend7, and (ii) the duty to indemnify the insured against any judgment or settlement8. The duty to defend is a broad duty the insurance company owes its insured. Generally speaking, the duty to defend is determined by the allegations in the complaint. If the allegations in the complaint are potentially within the coverage of the policy, the insurance company is obligated to defend its insured9. The general rule under Illinois law is that an insurer must pay for the defense of an insured when any theory of the complaint gives rise to the possibility that the insurer would be liable for its costs.10 This duty requires that the insurer may have to defend against claims which are not covered by the policy.11 Since the insurer usually pays out most, if not all, of any judgment or settlement, they usually assume control of the litigation.12 However, throughout the defense, the attorney must not either (a) consider the interests of the insurer or (b) take any actions adverse to the interests of the insured.
The insurance company’s duty to indemnify is narrower. The duty to indemnify arises only if the insured’s activity and resulting loss or damages actually falls within the policy’s coverage13. Under its duty to indemnify, the insurance company will pay an amount for which their insured is obligated to pay up to its policy limits for conduct or conditions that are covered under the policy. Most intentional conduct and accidents arising out of alcohol consumption are specifically excluded. The defense attorney for the insured cannot take a position contrary to that of his client by advocating for no coverage. Rather, the defense attorney needs to defend the insured against all counts as though the insured will be covered. If the insurance company chooses to contest whether the conduct of the insured falls within the coverage, the insurance company must proceed with the assistance of separate counsel. Once these duties are understood and negotiated by counsel, then the defense of the insured can proceed.
In defending an insured in a motor vehicle collision, the typical cause of action plead is negligence. Defendant’s alcohol consumption may be plead as an act or omission in the typical negligence complaint. From time to time however, a plaintiff will plead a count for willful and wanton conduct with the goal to ask for punitive damages. Punitive damages are not covered by the typical insurance policy. Under a scenario where a plaintiff files two counts, one which is covered by the policy and once which is not, the defense attorney must defend the client against both counts in order to meet its duty to defend its insured.
Evidence of Intoxication. Under Illinois law, an individual is criminally culpable for driving under the influence if they operate a motor vehicle with the presence of .08% alcohol in the blood or breath.14 The state presumes an individual with .08 BAC is intoxicated and that their ability to operate a vehicle has been impaired. In a civil context, the plaintiff has the burden of proving that the intoxication resulted in an impairment of mental or physical abilities and a corresponding diminution in the ability to act with ordinary care.15 An intoxicated person is held to the same standard of care as a sober person.
In a negligence case, evidence that a person consumed alcoholic beverages is not, by itself, admissible.16 While evidence of alcohol consumption may be highly probative, it is also extremely prejudicial; and therefore is inadmissible on its own.17 For example, the mere odor of alcohol on the defendant’s breath is not alone sufficient to present to a jury.18 There must be some evidence tending to show the consumption resulted in a defendant’s impairment in order for the probative value of the evidence to exceed its prejudicial effect, thereby making it admissible.19
Intoxication may be proven through a variety of means, even where there is no evidence of blood alcohol content. Under those circumstances, lay witnesses may provide testimony of behavioral observations tending to show intoxication, such as stumbling, slurred speech, red eyes or erratic behavior.20 This circumstantial evidence can be combined with evidence of any alcohol consumption to meet the standard for admissibility.21
There will be cases, however, where a BAC was drawn and the defendant will have been over the legal limit in Illinois. A BAC in excess of .08 creates a presumption of intoxication. However, the .08 standard of intoxication was created by using averages. It assumes that someone of a certain height and weight will be intoxicated at a certain BAC without accounting for variation in how different individuals are affected by alcohol. Therefore, the presumption that a person with a BAC over .08 is intoxicated is rebuttable. An expert can use a defendant’s physical traits to obtain a more precise percentage than a typical BAC reading which is based upon averages.
The Insured’s Personal Assets. In personal injury cases where alcohol consumption is alleged, the plaintiff may choose to include a count for willful and wanton conduct. Under these circumstances, the plaintiff may request from the court leave to ask the jury for punitive damages.22 Insurance policies generally contain provisions specifically excluding coverage for intentional acts and punitive damages, including the actions of driver while intoxicated. If the conduct is not covered by the policy language, the insurance company will not be obligated to indemnify the insured. This will subject the insured’s personal assets to judgment through a verdict.
Juries evaluate injuries and damages differently in actions involving intoxication than they do in a standard negligence action. Juries are inflamed by the combination of alcohol and a car accident. As a result, even before assessing a punitive verdict, they place a higher premium on otherwise ordinary injuries. A verdict rendered against a defendant for damages arising out of his operation of any motor vehicle (including boats and planes) while intoxicated is not dischargeable in bankruptcy23 and therefore any judgment against personal assets will not be subject to relief.
Effect of a DUI Conviction on the Civil Case. A DUI conviction is not considered res judicata such that a plaintiff may use the conviction as evidence in a civil action.24 The doctrine of res judicata is available only where there has been a final judgment on the merits by a competent court of jurisdiction as to the rights of the parties on the same claim.25 A criminal and a civil action for driving under the influence involve two different prosecuting parties, the government and the plaintiff.26 Therefore, a plaintiff cannot use res judicata to prove the defendant was driving under the influence. However, any witnesses called in the criminal action may be called in the civil action and any statements or admissions made by the insured under oath in criminal court may be used against him for purposes of impeachment.
A guilty plea to a DUI charge in a criminal court is considered a judicial admission for the purposes of a civil case.27 However, the admission is that the defendant had a BAC of over .08 while operating a vehicle, not that he was intoxicated, impaired or that he proximately caused an accident. The intoxication issue remains a rebuttable presumption and proximate cause must still be proven by the plaintiff.
· Ask your client for the contact information of the attorney hired to defend him in the criminal proceedings. Contact that attorney and let them know you represent the same client in the companion civil matter and coordinate your defense with them. Exchange copies of your files - the claim of privilege will be maintained since you both represent the same individual. Be careful not to make admissions in pleadings which may jeopardize the client’s defense in the criminal proceedings. Be mindful of 5th Amendment issues your client may be invoking.
· Consider how a plea of guilty affects your case and how an admission of conduct that may not be covered by the policy affects coverage. Consider attending any hearings of proceedings where your client may testify. This can be a trial, a deposition or a plea agreement hearing. Will your client make any admissions regarding his conduct? Will the admission at a criminal hearing be evidence of conduct which effects coverage? Does the plea at a criminal hearing create a conflict of interest by excluding the conduct from coverage?
· Be sure to fully disclose any potential conflict of interest to the insured and the insurance company. These conflicts are often resolved by full disclosure and consent of the parties.28 If a significant conflict arises, the insurer and insured may agree to hire a separate attorney for the insured which the insurer will bear the costs for.
· Did witnesses observe your client’s conduct prior to the accident? Juries weigh evidence of consumption together with evidence of impairment. Consider bringing in witnesses who were present at the place of consumption to testify that your defendant did not display any signs of intoxication. Make sure you lay the foundation that the witness has the background, experience and knowledge regarding general intoxication and sobriety so the witness can give an opinion as to your client’s conduct. Bartenders and waitresses are preferable to other patrons who were also drinking, not only because of their clear mind, but because they are trained to identify signs of intoxication to avoid liability for over-serving
· Consider retaining an expert toxicologist to determine intoxication that specifically accounts for your defendant’s height, weight, age, food intake, and metabolism. A toxicologist can testify regarding the level of impairment based upon the consumption or blood alcohol reading. The toxicologist can be retained as a consultant where the opinions are protected, or you can disclose him under Supreme Court Rule 213 (f)(3)
· If the case only involves a negligence count where liability is in question (ie. defendant was above the .08 legal limit but there is no evidence that his actions caused the accident) you may want to consider trading a stipulation of negligence for an agreement that all evidence regarding alcohol is barred. It protects the plaintiff from the risk of a not guilty on questionable liability and protects the insured’s personal assets because a verdict for personal injuries sounding in negligence is dischargeable in bankruptcy.
Conclusion. If civil litigation is initiated for an accident arising out alleged alcohol consumption, the defendant’s insurance company must retain counsel in order to meet their obligations to the insured in defending and indemnifying him. At the same time, a practitioner must understand the policy issues, potential for conflicts of interest and practical realities involved in order to meet their obligations in representing a client when alcohol consumption is involved. n
1 625 ILCS 5/11-501
2 See 1 Insurance Claims and Disputes 4th § 4:19 (2007)3 Illinois Municipal League Risk Management Ass’n v. Siebert, 223 Ill.App.d 864, 871 (4th Dist. 1992).
5 Maryland Cas. Co. v. Peppers, 64 Ill2d 187 (1976)
6 See Employers Ins. of Wausau v. Ehlco Liquidating Trust, 186 Ill.2d 127 (1999); Williams v. American Country Ins. Co., 359 Ill.App.3d 128 (1st Dist. 2005); Illinois Masonic Medical Center v. Turegum Ins. Co., 168 Ill.App3d 158, (1st Dist. 1988)
7 Kinnan v. Charles B. Hurst Co., 317 Ill. 251, 148 N.E. 12 (1925) and Simms v. Illinois National Company of Springfield, 43 IllApp.2d 184, 193 N.E.2d 123 (3rd Dist. 1963)
8 Outboard Marine Corp. v. Liberty Mut. Ins. Co., 154 Ill2d 90 (1992)
9 Cincinnati Companies v. West America Insurance Company, 183 Ill. 2d 317, 301 N.E.2d 479 (1998)
10 Maryland Casualty Co. at 193-94 .
13 Outboard Marine Corp. v. Liberty Mut. Ins. Co., 154 Ill.2d 90 (1992)
14 625 ILCS 5/11-501
15 McGrew v. Pearlman, 304 Ill.App.3d 697, 703 (1st Dist 1999).
16 Rice v. Merchant’s National Bank, 231 Ill.App.3d 790, 798 (2nd Dist. 1991).
17 Marshall v. Osborn, 213 Ill.App.3d 134, 140 (Ill. 1991).
18 McGrew at 703.
19 Rice at 798.
20 Lively v. Kostoff, 167 Ill.App.3d 384, 391 (5th Dist. 1988)
22 Illinois Code of Civil Procedure 5/2-604.1
23 11 U.S.C.§523 (9)
24 Village of Round Lake Beach v. Sams, 96 Ill.App.3d, 683, 687 (2nd Dist. 1983).
27 People v. Chavez, 134 Ill.App.3d 598, 601 (1st Dist. 1985).
28 Maryland Casualty Co. v. Peppers, 64 Ill.2d 187, 198 (Ill. 1976).
E. Angelo Spyratos is an equity partner with the law firm of Momkus McCluskey, LLC in Downers Grove and Chicago, Illinois. He graduated from Elmhurst College in 1988 and Valparaiso University School of Law in 1991. His practice focuses on civil litigation, insurance defense litigation and personal injury litigation with nearly 2 dozen civil jury trials to verdict.
Pamela L. Pierro is an associate with Momkus McCluskey, LLC’s Chicago office. She received her Juris Doctor from Loyola University Chicago and her under-graduate degree from Purdue University, where she was inducted into Phi Beta Kappa. She has a variety of civil litigation experience, including insurance defense, premises liability, personal injury, family law, contract disputes and estates. She is a licensed to practice by the Illinois State Bar, the U.S. District Court for the Northern District of Illinois and the U.S. District Court for the Central Division of Illinois.