Great Lakes Reinsurance v. 1600 W. Venture, LLC

• Decision Date: 13 June 2017
• Docket Number: Case No. 16 C 2145
• Citation: 261 F.Supp.3d 860
• Parties: GREAT LAKES REINSURANCE (UK), Plaintiff/Counter–Defendant, v. 1600 WESTERN VENTURE, LLC, Defendant/Counter–Plaintiff.
• Court: U.S. District Court — Northern District of Illinois

261 F.Supp.3d 860

GREAT LAKES REINSURANCE (UK), Plaintiff/Counter–Defendant,

v.1600 WESTERN VENTURE, LLC, Defendant/Counter–Plaintiff.

Case No. 16 C 2145

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

Signed June 13, 2017

Rick L. Hammond, Isaac Ramiah Melton, James P. Duchateau, Hepler Broom, LLC, Chicago, IL, for Plaintiff/Counter–Defendant.

Francis L. Ostian, Francis Ostian & Associates, Chicago, IL, for Defendant/Counter–Plaintiff.

MEMORANDUM OPINION AND ORDER

AMY J. ST. EVE, United States District Court Judge

On February 6, 2017, Plaintiff Great Lakes Reinsurance ("Great Lakes") filed a four-count Second Amended Complaint for Declaratory Judgment against Defendant 1600 Western Venture, LLC ("Western Venture") in relation to the parties' insurance coverage dispute pursuant to the Court's diversity jurisdiction. See 28 U.S.C. § 1332(a). On February 16, 2017, Western Venture filed its Second Amended Answer, Defenses, and Counterclaim, which includes the insurance dispute claims, a breach of contract claim, and a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA"), 815 ILCS 505/1, et seq. Before the Court is Great Lakes' motion for summary judgment brought pursuant to Federal Rule of Civil Procedure 56(a). For the following reasons, the Court grants Great Lakes' summary judgment motion and dismisses this lawsuit in its entirety.

BACKGROUND

Great Lakes is a wholly-owned corporate subsidiary of Munich Re, which is organized and exists under the laws of Germany with its principal place of business in Munich, Germany. (R. 50, Pl.'s Rule 56.1 Stmt. Facts ¶ 1.)¹ During the relevant time period, Great Lakes was an excess and surplus line insurance carrier that issued a property insurance policy to Western Venture. (Id. ¶ 2.) Western Venture is a limited liability company organized and existing under the laws of the State of Illinois with its primary place of business located at 2443 W. 16th Street in Chicago, Illinois. (Id. ¶ 3.) At all times pertinent to this action, Western Venture owned two structures located at 2443 W. 16th Street and 2444 W. 16th Street in Chicago, Illinois ("Insured Premises"). (Id. ¶ 4.)

Great Lakes issued a property insurance policy to Western Venture, as a member of Commercial Industrial Building Owner's Alliance ("CIBA"), bearing Policy Number B066479244A12 (the "Policy"). (Id. ¶ 12.) From December 5, 2010 through the present, Western Venture was and is a named insured under the Policy. (Id. ¶ 13.) Although Western Venture's agents, employees, and maintenance personnel had unfettered access to the roofs of the Insured Premises, sometime in May 2015, Western Venture discovered that there was hail and wind damage on the roofs of the Insured Premises. (Id. ¶¶ 14–16.) On July 23, 2015, Western Venture reported the existence of hail damage at the Insured Premises to Great Lakes initiating Claim No. IP12–157 for the 2444 W. 16th Street structure ("2444 Claim") and Claim No. IP12–158 for the 2443 W. 16th Street structure ("2443 Claim"). (Id. ¶¶ 17–19.)

On September 18, 2015, Great Lakes issued a reservation of rights letter with respect to the 2444 Claim, and on, September 25, 2015, Great Lakes issued a reservation of rights letter with respect to the 2443 Claim. (Id. ¶¶ 23–28.) On October 8, 2015, Great Lakes issued supplemental reservation of rights letters with respect to both the 2443 and 2444 Claims. (Id. ¶¶ 29–34). These letters explained Great Lakes' reservation of rights in relation to the conditions, limitations, or exclusions of the Policy, as well as defenses available to Great Lakes. (Id. ¶¶ 23–34.) On October 13, 2015, Western Venture, through Brian Flisk—Western Venture's manager and agent—tendered Great Lakes its omnibus Sworn Statement in Proof of Loss for both the 2444 Claim and the 2443 Claim. (Id. ¶ 35.) It is undisputed that the date of loss for these claims was August 30, 2013. (Id. ¶ 36.)

LEGAL STANDARD

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). A genuine dispute as to any material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed. 2d 202 (1986). In determining summary judgment motions, "facts must be viewed in the light most favorable to the nonmoving party only if there is a ‘genuine’ dispute as to those facts." Scott v. Harris , 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007). The party seeking summary judgment has the burden of establishing that there is no genuine dispute as to any material fact. See Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). After "a properly supported motion for summary judgment is made, the adverse party ‘must set forth specific facts showing that there is a genuine issue for trial.’ " Anderson , 477 U.S. at 255, 106 S.Ct. 2505 (quotation omitted). "To survive summary judgment, the nonmoving party must show evidence sufficient to establish every element that is essential to its claim and for which it will bear the burden of proof at trial." Diedrich v. Ocwen Loan Servicing, LLC , 839 F.3d 583, 591 (7th Cir. 2016) (citations omitted).

ANALYSIS

I. Insurance Coverage Claims and Counterclaims²

In its summary judgment motion, Great Lakes contends that Western Venture's insurance coverage claims are barred by the twelve month suit limitation provision contained in the Policy based on the undisputed evidence that the sworn date of loss for both the 2444 and 2443 Claims was August 30, 2013, and that Western Venture failed to file a lawsuit by August 30, 2014. Great Lakes specifically relies upon the following provision of the Policy:

SUIT AGAINST COMPANY

No suit, action or proceeding for the recovery of any claim under this policy shall be sustainable in any court of law or equity unless the Named Insured shall have fully complied with all the requirements of this policy, nor unless the same be commenced within twelve (12) months next after inception of the loss provided, however, that if under the laws of the jurisdiction in which the property is located such limitation is invalid, then any such claims shall be void unless such action, suit or proceedings be commenced within the shortest limit of time permitted by the laws of such jurisdiction.

(Pl.'s Stmt. Facts ¶ 40.)

"Illinois law recognizes limitation periods as valid contractual provisions in insurance contracts." Country Preferred Ins. Co. v. Whitehead , 410 Ill.Dec. 750, 71 N.E.3d 338, 341 (3d Dist. 2016). "Compliance with the suit limitation provision of the policy is a condition precedent to recovery under a policy." Cramer v. Ins. Exch. Agency , 174 Ill. 2d 513, 529, 221 Ill.Dec. 473, 675 N.E.2d 897 (1996). Although Illinois law recognizes suit limitation periods as valid contractual provisions in insurance contracts, there are restrictions on such limitations provisions, including waiver, estoppel, and statutory provisions, such as Section 143.1 of the Illinois Insurance Code. See Burress–Taylor v. Am. Sec. Ins. Co. , 366 Ill.Dec. 586, 980 N.E.2d 679, 686 (1st Dist. 2012) ; American Access Cas. Co. v. Tutson, 409 Ill.App.3d 233, 236, 350 Ill.Dec. 240, 948 N.E.2d 309 (1st Dist. 2011) ; Mathis v. Lumbermen's Mut. Cas. Ins. Co. , 354 Ill.App.3d 854, 858, 290 Ill.Dec. 958, 822 N.E.2d 543 (5th Dist. 2004).

A. Waiver

Relying on a Seventh Circuit case applying Wisconsin insurance law, Western Venture first argues that Great Lakes waived the suit limitations period because Great Lakes did not provide Western Venture with a complete copy of the Policy or other documentation of its terms. See Miller v. Safeco Ins. Co. of Am. , 683 F.3d 805 (7th Cir. 2012). As the Miller decision explained, "Wisconsin law provides that" if "an insurer does ‘not provide the insured with a copy of the policy or some other documentation of its terms,’ the ‘insurer may not deny coverage based on an exclusion in the policy.’ " Id. at 811 (quoting Kozlik v. Gulf Ins. Co., 268 Wis.2d 491, 500, 673 N.W.2d 343 (2003) ).

Such is not the law in Illinois. Rather, under Illinois law, it is well-established that insureds "bear the burden of knowing the contents of their insurance polices," and that "[e]ven if they do not read the policy, they are deemed to know the information the policy contains." Babiarz v. Stearns , 404 Ill.Dec. 880, 57 N.E.3d 639, 653 (1st Dist. 2016) ("We do not excuse the burden of knowing the contents of an insurance policy where there are no allegations that it was ambiguous."); see also Garrick v. Mesirow Fin. Holdings, Inc. , 374 Ill.Dec. 49, 994 N.E.2d 986, 994 (1st Dist. 2013) ("Illinois law places a burden on the insured to know its needs for coverage and the contents of its insurance policies."). In other words, the "insured cannot blame the insurance company for its failure to read the policy to discover the requirements for bringing suit. It is not the duty of the insurer to inform the insured of his duties." Foamcraft, Inc. v. First State Ins. Co. , 238 Ill.App.3d 791, 793–94, 179 Ill.Dec. 705, 606 N.E.2d 537 (1st Dist. 1992). Western Venture's reliance on a 1979 Illinois Appellate Court case does not save the day because in that lawsuit, the insurer refused to deliver the insurance policy after the insured requested a copy. See Salloum Foods & Liquor, Inc. v. Parliament Ins. Co. , 69 Ill.App.3d 422, 431, 26 Ill.Dec. 399, 388 N.E.2d 23 (1st Dist. 1979). Here, there is no evidence in the record that after Western Venture requested a copy of the Policy, Great Lakes refused to supply it. See, e.g. , Old Republic Ins. Co. v. Ness, Motley, Loadholt, Richardson & Poole, P.A. , No. 03 C 5238, 2006 WL 88666, at *10–11 (N.D. Ill. Jan. 11, 2006). Construing the facts and all reasonable inferences in Western Venture's favor, it has not established...