General Ins. Co. of America v. Clark Mall, Corp.

• Decision Date: 16 April 2009
• Docket Number: No. 08 C 2787.,08 C 2787.
• Citation: 631 F.Supp.2d 968
• Parties: GENERAL INSURANCE COMPANY OF AMERICA, Plaintiff, v. CLARK MALL, CORP. d/b/a Discount Mega Mall Corp., Marcos I. Tapia, Juan E. Bello, Jose L. Garcia, Leticia Hurtado, Young S. Ko, Mariano Kon, Choong I. Kuan, Rosa G. Madrigal, Hilda Mendoza, Man Ok No, Hee T. Park, Sung W. Park, Maria L. Roman, Victor H. Visoso, Kyun Hee Park, and Jennifer Park, Defendants.
• Court: U.S. District Court — Northern District of Illinois

Page 968

631 F.Supp.2d 968

GENERAL INSURANCE COMPANY OF AMERICA, Plaintiff, v. CLARK MALL, CORP. d/b/a Discount Mega Mall Corp., Marcos I. Tapia, Juan E. Bello, Jose L. Garcia, Leticia Hurtado, Young S. Ko, Mariano Kon, Choong I. Kuan, Rosa G. Madrigal, Hilda Mendoza, Man Ok No, Hee T. Park, Sung W. Park, Maria L. Roman, Victor H. Visoso, Kyun Hee Park, and Jennifer Park, Defendants.

No. 08 C 2787.

United States District Court, N.D. Illinois, Eastern Division.

April 16, 2009.

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Rick L. Hammond, William K. McVisk, Charlene S. Mitchell, Mary K. Cryar, Johnson & Bell, Ltd., Chicago, IL, for Plaintiff.

Jennifer Park, pro se.

Lawrence B. Ordower, Michael Thomas Stanley, Ordower & Ordower PC, Won K. Lee, Lee Law Offices, Ltd. Chicago, IL, for Defendants.

AMENDED MEMORANDUM OPINION AND ORDER

JEFFREY COLE, United States Magistrate Judge.

This case represents another chapter in the troubled history of the Discount Mega Mall in Chicago's Logan Square neighborhood. About a half dozen buildings comprise the mall, which over the years has housed dozens of small vendors, whose wares run an eclectic gamut from food to clothing to electronics and more. The Mall has been a political football and a source of neighborhood controversy; for some it is an example of urban blight; for others it has provided an opportunity to earn a living. In August 2002, the City of Chicago filed a two-count complaint against the mall and its owner, Discount Mega Mall Corp. and its president, Mr. Kyun Hee Park, which charged them with 100 separate violations of the City's health and safety Codes.

In 2005, the City shut the Mall down, this time citing its owners with another 113 Code violations. The Mall reopened in November 2006, but in September of 2007, a fire destroyed one of its buildings. The mall was closed until late November 2007.

This case stems from a state court lawsuit filed in 2007 by 14 vendors who leased space at the Mall. The defendants were Discount Mega Mall Corporation ("Discount Mall"), Clark Mall Corp. d/b/a Discount Mega Mall Corporation ("Clark Mall"), Kyun Hee Park, and Jennifer Park. (Counter-Plaintiffs' Motion for Judgment on the Pleadings, Ex. A, ("Underlying Complaint")). The state court complaint detailed the health and safety code violations and recounted the 2007 fire. It charged the owners with fraud for having represented to the vendors, immediately following the Mall's closure in June 2005, that the Mall would be reopening soon: in fall of 2005, in time for the Christmas season. The plaintiffs/vendors relied, the underlying complaint alleged, on these assurances, staying on as tenants during the prolonged closure, and, as a result, lost profits, good will, and the value of merchandise stored in the Mall the merchandise either expired, went out of season, was damaged, or became otherwise non-sellable.

They also alleged the owners violated Illinois' Consumer Fraud and Deceptive Business Practices Act, by making the foregoing misrepresentations and concealing the true nature of the mall's code violations from the tenants. The vendors add a negligence count, claiming the owners failed to exercise ordinary care in complying with the City's safety and health requirements. They say this failure led to the 2007 fire, which in turn destroyed the plaintiffs'/vendors' merchandise.

Thereafter, General Insurance Company of America ("GICA") filed the instant complaint seeking a declaratory judgment ("Complaint") regarding its duty to defend the defendants in the state court action under the terms of a commercial general liability policy issued to Discount Mega Mall Corp. for the period from January 27 2007, through January 27, 2008. GICA submits that Clark Mall Corp. does not qualify as an insured under that policy, and thus GICA has no duty to defend it against the Underlying Complaint in the state court. (Complaint, ¶¶ 36-43).¹ It also contends that it need not defend any defendant, insured or otherwise, against Count III of the Underlying Complaint because the property and assets of the plaintiffs in the Underlying Complaint were damaged while under the care of Discount Mega Mall Corp., and the policy excludes coverage for damage to "Property in the care, custody or control of the insured." (Complaint, ¶¶ 27, 53-56).

The defendants in the instant case have moved for a judgment on the pleadings. Apparently the argument is that since it is undisputed that Discount Mega Mall Corp. is insured under the relevant GICA policy, so too must be Clark Mall Corp. because the complaint charges that it did business as Discount Mega Mall Corp. The instant defendants further argue that the exclusion cited by GICA in the complaint for declaratory judgment does not "clearly and without doubt" apply because there are no allegations in the Underlying Complaint as to whether the property damaged was in the "care, custody or control" of the defendants. They also submit that a determination of whether the exclusion does apply would necessitate an inquiry into the facts pertaining to their liability on the Underlying Complaint—an inquiry which is outside the scope of a declaratory judgment action.

ANALYSIS

A. Law Applicable To A Motions For Judgment On The Pleadings And To An Insurer's Duty To Defend

A court should grant a motion for judgment on the pleadings "[o]nly when it appears beyond a doubt that the plaintiff cannot prove any facts to support a claim for relief and the moving party demonstrates that there are no material issues of fact to be resolved...." Bannon v. University of Chicago, 503 F.3d 623, 628 (7th Cir.2007); Moss v. Martin, 473 F.3d 694, 698 (7th Cir.2007). In assessing such a motion, a court must accept the facts alleged in the complaint as true. Radaszewski ex rel. Radaszewski v. Maram, 383 F.3d 599, 600 (7th Cir.2004).

To determine whether an insurer owes a duty to defend, the court compares the allegations in the underlying complaint with the coverage provisions of the insurance policy, St. Paul Fire and Marine Ins. Co. v. Village of Franklin Park, 523 F.3d 754, 756 (7th Cir.2008); Guillen v. Potomac Ins. Co. of Ill., 203 Ill.2d 141, 271 Ill.Dec. 350, 785 N.E.2d 1, 7 (2003). "In a duty-to-defend action, we begin with the deck stacked in favor of the insured." Del Monte Fresh Produce N.A., Inc. v. Transportation Ins. Co., 500 F.3d 640, 643 (7th Cir.2007). "`[A]llegations of the underlying complaint must be construed liberally, and any doubt as to coverage must be resolved in favor of the insured.'" Id. (quoting Ill. State Med. Ins. Servs., Inc. v. Cichon, 258 Ill.App.3d 803, 196 Ill.Dec. 277, 629 N.E.2d 822, 826 (3rd Dist.1994)). Therefore, "`[i]f the facts alleged in the underlying complaint fall within, or potentially within, the policy's coverage provisions, then the insurer has a duty to defend the insured in the underlying action.'" Del Monte Fresh Produce, 500 F.3d at 643 (quoting Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill.2d 384, 189 Ill.Dec. 756, 620 N.E.2d 1073, 1079 (1993)); St. Paul Fire and Marine Ins., 523 F.3d at 756. Moreover, the possibility that not all of the injuries complained of in the complaint may be covered does not obviate the duty to defend; so long as at least some injuries potentially fall within the scope of the policy, the insurer must defend the insured. Roman Catholic Diocese of Springfield in Ill. v. Maryland Cas. Co., 139 F.3d 561, 565 (7th Cir.1998); Maryland Cas. Co. v. Peppers, 64 Ill.2d 187, 194, 355 N.E.2d 24, 28 (1976). If, on the other hand, it is clear from the face of the underlying complaint that the allegations do not even potentially fall within the scope of the policy, then the insured must mount its own defense. Roman Catholic Diocese Of Springfield, 139 F.3d at 565.

B.

1.

GICA Has No Duty To Defend Clark Mall Corp. Because It Is Not An Insured Under The GICA Policy That Names As the "Insured" Discount Mega Mall Corp.

The named insured in the GICA policy is "Discount Mega Mall Corp." (Complaint for Declaratory Judgment, Ex. A, pp. 1-12). Discount Mega Mall Corp., is designated in the policy as an "Organization Other Than A Partnership Or Joint Venture" (id., p. 11), and so the policy's coverage extends to its "`executive officers' and directors ... but only with respect to their duties as [Discount Mega Mall Corp.'s] ... officers or directors." (Id., Commercial General Liability Coverage Form, p. 9, Sec. II.1.d).² By its plain language, Clark Mall Corp., is not an insured. Indeed, Clark Mall Corp. is not mentioned anywhere in the policy.

Instead, the defendants simply submit that "[GICA] is obligated to defend Clark [Mall Corp.], because the Underlying Complaint named `Clark Mall Corp. d/b/a Discount Mega Mall Corp.'" (Motion for Judgment on the Pleadings, at 4). They do not expound on why this means that GICA must defend Clark Mall as well as Discount Mall which is the only named insured but perhaps they mean to argue that the two are one in the same. But coverage is not a function of speculation, and the complaint for declaratory judgment does not "plausibly" make out a case for ignoring corporate separateness.

Generally, the designation "d/b/a" or "doing business as" is merely descriptive of the person or corporation doing business under some other name and does not create a distinct entity. Pekin Ins. Co. v. Estate of Goben, 303 Ill.App.3d 639, 645-646, 707 N.E.2d 1259, 1264 (5th Dist.1999). But that's not the case here, for public records from the Illinois Secretary of State's Office demonstrate that Discount Mega Mall Corp. and Clark Mall Corp. are two separate entities that the Parks formed in 1993 and 1991, respectively. (www.ilos.gov/corporateilc/CorporateLlc Controller; see also GICA's Response to Motion for Judgment on the Pleadings, Ex. A).³

The plaintiffs in the state court action apparently knew or believed that the Parks used two separate corporations in the...