The truck involved in the accident was owned by Franklin Truck Group, Inc., and was under a long-term lease to Rose Cartage Services, Inc. Shortly before the accident, Key Cartage (whose owners were related to the owner of Rose Cartage), borrowed the truck from Rose Cartage for use in a new line of business.

Key Cartage and its driver were insured under a policy issued by defendant, West Bend Mutual Insurance, Inc. The truck was scheduled on a policy issued by the plaintiff, Zurich American Insurance Company, to Rose Cartage. After the underlying lawsuit was filed, a dispute arose between West Bend and Zurich regarding coverage for the accident. West Bend provided a defense to Key Cartage and its driver, but asserted that Zurich had the primary duty to defend because Key Cartage and the driver were permissive users of the truck insured under the Zurich policy. Zurich disagreed and filed a complaint for declaratory judgment, seeking a declaration that it owed no coverage for Key Cartage or its driver.

While Zurich acknowledged that the policy issued to Rose Cartage insured permissive users of Rose Cartage's trucks, it contended that coverage was precluded in this case based on a reciprocal coverage provision in the policy. According to Zurich, in order for Key Cartage and its driver to be insured under Rose Cartage's policy, the reciprocal coverage clause required that Rose Cartage be covered under the West Bend policy. Because the West Bend policy did not cover Rose Cartage, Zurich maintained that it was not obligated to defend Key Cartage and its driver in the underlying lawsuit.

West Bend filed an answer and counterclaim for declaratory judgment. In its counterclaim, West Bend did not dispute that its policy did not provide coverage to Rose Cartage. However, West Bend maintained that Zurich's reciprocal coverage provision violated Illinois public policy requiring the insurer of a vehicle to provide omnibus coverage, i.e. primary insurance, to a permissive user of the vehicle. West Bend sought a declaration that Zurich owed a primary duty to defend and indemnify and the circuit court entered judgment in favor of Zurich.

The appellate court reversed and remanded. The appellate court acknowledged that Rose Cartage was a "motor carrier of property" governed by the Illinois Commercial Transportation Law and that, while the law required all motor carriers of property to have liability insurance, it contained no language requiring omnibus coverage for commercial truckers.

However, the appellate court also noted that the Illinois Safety and Family Financial Responsibility Law provided that a motor vehicle liability policy "shall insure the person named therein and any other person using or responsible for the use of such motor vehicle or vehicles with the express or implied permission of the insured." The appellate court concluded that the requirement of omnibus coverage applied to the entire Illinois Vehicle Code, including the Commercial Transportation Law. Accordingly, the appellate court determined that Zurich's policy was required to insure permissive users. Further, because Zurich's reciprocal coverage provision precluded omnibus coverage for Key Cartage and its driver, the appellate court concluded that the provision violated the public policy set forth in the statute and, therefore, was void and unenforceable.

In addition to contending that Zurich's reciprocal coverage provision was void as against public policy, West Bend also argued, as an alternative contention, that the reciprocal coverage provision was unenforceable because it was ambiguous.

The Illinois Supreme Court determined that the truck that was borrowed from Rose Cartage was being used exclusively by Key Cartage's business, and, thus, the reciprocal coverage provision in its policy precluded coverage for Rose Cartage and the driver whose policy did not provide liability coverage for Key Cartage. The court looked to the facts that Rose Cartage derived no economic benefit from the truck while it was under the borrower's control as well as that Key Cartage's identification placards were displayed on the truck and its name was permanently painted on the door of the truck at the time of the accident.