What happened: Progressive Northern alleges its cargo policy excludes nondelivery losses and seeks a ruling it owes nothing
Who's involved: Progressive Northern Insurance, A McFadden Express, Haulistic (Mullen Group subsidiary), AMB Logistics, AC Evolution
What's at stake: $278,000 in claimed damages for a lost shipment of speakers
Why it matters: Tests whether a nondelivery exclusion can void coverage when a carrier faces Carmack Amendment liability
Where it stands: Declaratory judgment complaint filed October 2, 2026
Twenty-nine pallets of speakers left a warehouse in Montebello, California, on February 21, 2024. Not one arrived at the buyer's facility in Pleasant Grove, Utah. Now the insurer behind the trucking company that picked them up wants a court to confirm the loss is the exact kind its policy was never designed to pay.
Progressive Northern Insurance Company filed suit in the US District Court for the Northern District of Illinois on October 2, 2026, asking the court to confirm it has no duty to defend or pay for A McFadden Express LLC in the cargo-loss dispute that followed.
The shipment started simply enough. AC Evolution, a wholesale distributor, hired Haulistic - a Chicago-area logistics provider and subsidiary of Canadian-listed Mullen Group Ltd. - to move the speakers cross-country. Haulistic handed the job to a broker, Singh Group of Companies (operating as AMB Logistics), which contracted McFadden to do the actual driving. McFadden picked up the load in California.
After that, according to the underlying lawsuit, the speakers were never delivered.
AC Evolution filed suit in December 2024, initially against Haulistic for breach of contract. The case grew. Haulistic brought in AMB Logistics. AMB brought in McFadden. By May 2026, AC Evolution had added McFadden as a defendant under the Carmack Amendment, the federal law that holds motor carriers responsible for cargo lost or damaged during interstate shipping - regardless of whether the carrier was at fault. AC Evolution claims damages of at least $278,000.
Progressive's filing zeroes in on a clause in McFadden's motor truck cargo coverage. The policy covers "direct physical loss to covered property" caused by a "covered peril," which the policy defines as any external risk of loss except for a specific list of exclusions.
One of those exclusions: "Nondelivery or misdelivery."
The policy also excludes voluntary parting due to fraud and mysterious disappearance. Progressive argues the underlying lawsuit describes exactly the kind of loss the policy was written to exclude. The cargo was picked up and never delivered. That, according to the filing, is nondelivery - full stop.
The cargo coverage had a $250,000 limit and a $1,000 deductible. But Progressive says the limit is beside the point. If the exclusion applies, no coverage exists at all - and with no coverage, there is no obligation to defend McFadden or pay any judgment against it.
If Progressive prevails, the result is a carrier that owes the full value of a lost shipment under federal law with no insurance behind the cargo claim. Under the Carmack Amendment, a shipper only needs to show the goods were handed to the carrier in good condition and arrived damaged or not at all. The carrier then has to prove one of a handful of narrow defences - act of God, fault of the shipper, or inherent vice of the goods. None of those appear to be in play here.
McFadden, listed at a Lake City, South Carolina address, carried a policy with a single power unit on its declarations page and a total annual premium of roughly $15,000.
No response to the complaint appears in the filing reviewed.
The case lays bare a tension that cargo claims professionals and freight underwriters know well but rarely see tested this cleanly: when a motor truck cargo policy carves out nondelivery by name, the carrier may owe the full value of lost goods under federal law while holding a policy that, by its own terms, does not respond.
The allegations in the complaint have not been proven, and no court has ruled on the merits of the claims.
