Park Ridge Presbyterian Church v. Am. States Ins. Co.
| Decision Date | 17 September 2014 |
| Docket Number | Case No. 11 C 5321 |
| Court | U.S. District Court — Northern District of Illinois |
| Parties | PARK RIDGE PRESBYTERIAN CHURCH, Plaintiff, v. AMERICAN STATES INSURANCE COMPANY, Defendant. |
OPINION AND ORDER
After Plaintiff Park Ridge Presbyterian Church ("PRPC" or "the Church") experienced massive water damage in July 2010, its insurance carrier, American States Insurance Company ("ASIC"), denied coverage. PRPC filed suit against ASIC for breach of contract and violations of the Illinois Insurance Code. ASIC filed a counterclaim for a declaratory judgment that the causes of loss are excluded from PRPC's coverage. The dispute turns on what is clearly a question of fact: what caused the damage at the Church? Regardless, the parties filed cross motions for summary judgment. (Dkts. 64, 68.) The parties' respective motions are denied, although the court herein circumscribes the issues for trial in accordance with Federal Rule of Civil Procedure 56(g).1
Summary judgment obviates the need for a trial where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A genuine issue of material fact exists if "the evidence is such that a reasonable jurycould return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). To determine whether any genuine fact issue exists, the court must pierce the pleadings and assess the proof as presented in depositions, answers to interrogatories, admissions, and affidavits that are part of the record. Fed. R. Civ. P. 56(c). In doing so, the court must view the facts in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Scott v. Harris, 550 U.S. 372, 378, 127 S. Ct. 1769, 167 L. Ed. 2d 686 (2007). When considering cross-motions for summary judgment, the court must be careful to draw reasonable inferences in the correct direction. See, e.g., Int'l Bhd. of Elec. Workers, Local 176 v. Balmoral Racing Club, Inc., 293 F.3d 402, 404 (7th Cir. 2002). The court may not weigh conflicting evidence or make credibility determinations. Omnicare, Inc. v. UnitedHealth Grp., Inc., 629 F.3d 697, 704 (7th Cir. 2011).
If a claim or defense is factually unsupported, it should be disposed of on summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). The party seeking summary judgment bears the initial burden of proving there is no genuine issue of material fact. Id. at 323. In response, the non-moving party cannot rest on bare pleadings alone but must designate specific material facts showing that there is a genuine issue for trial. Id. at 324; Insolia v. Philip Morris Inc., 216 F.3d 596, 598 (7th Cir. 2000).
PRPC has three buildings on its property, one on the west end, one on the south end ("the South Sanctuary"), and one on the north end ("the North Building"). Both the South Sanctuary and the North Building have "light well walkways" adjacent to some of the exterior walls of their basements. One wall of the walkways is formed by the basement wall and the other is a concrete wall at least ten feet high facing the building. The buildings have downspouts from the roof gutters that drain into the light wells, where storm drains are embedded. The buildings contain other architectural features to deal with water, such as weep holes in the exterior walls of some of the light well walkways to relieve hydrostatic pressure.3 In addition, the storm drains in the walkways flow into basins under the boiler room in the South Sanctuary's basement. The basement also contains a floor drain in the boiler room, recessed floor urinals, and showers with a four inch shower pan. The showers lead to the storm drain system. Electric pumps pump water from the basins into a sewage ejector well that flows into the city sewers.
(2) Mudslide or mudflow;
(3) Water that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment;
(4) Water under the ground surface pressing on, or flowing or seeping through:
1. Foundations, walls, floors or paved surfaces;
2. Basements, whether paved or not; or
3. Doors, windows or other openings.
(5) Waterborne material carried or otherwise moved by any of the water referred to in Paragraph 1., 3. or 4., or material carried or otherwise moved by mudslide or mudflow.
This exclusion applies regardless whether any of the above, in Paragraphs 1. through 5., is caused by an act of nature or is otherwise caused. . . .
EXCLUSIONS - Water that backs up from a B.1.g.(3) sewer or drain. This exclusion is deleted.
(Dkt. 67, ex. 10 at 14.) The Rider thus effectively states that ASIC will provide coverage for loss caused by "[w]ater that backs up or overflows from a sewer, drain, or sump[.]" (Policy at 2.)
On July 23 and 24, 2010, there was a massive storm and a subsequent power outage at PRPC. When Church members arrived on the morning of July 24, they observed large amounts of water in the light well walkways and stairs leading down to them and realized the basement had flooded with more than 100,000 gallons of water, causing extensive damage.
PRPC contacted ASIC about the water damage. It reported that there had been a power outage, causing the ejector pumps in the basement to fail. Because the pumps were not operating to evacuate water from the basement, PRPC explained, the basement had filled with water. ASIC sent an adjuster to the Church to make an initial inspection on August 13, 2010. PRPC also engaged an engineer, Karl Koenig, to write a report regarding the cause of damage. (Dkt. 67, ex. 15.) In his September 15, 2010 report, Koenig opined that "[t]he primary cause of the water accumulation in the Low Basement of the Church complex was the reported loss ofelectrical power that prevented the ejector pumps from removing the normal and increasing quantity of ground water." (Id. at 4.) In the meantime, ASIC advanced PRPC $125,000.
On October 6, 2010, ASIC denied coverage for the damage ). (Dkt. 67, ex. 17 at 6-15.) ASIC explained that it determined the cause of the basement flooding was "surface water and water under the ground infiltrating the Building envelope through door openings and the foundation walls," not the pump failure leading to a backup of the Church's sewer system. (Id. at 8, 14.) ASIC also cited weather conditions, improper maintenance of the Church's storm water collection system, and "substantial evidence of ongoing and chronic water intrusion through the basement foundation." (Id. at 8, 13.) ASIC further noted the anti-concurrent clause in the Policy providing that it would not pay for damage caused directly or indirectly, in whole or in part, by excluded events. Thus, "even if PRPC were able to establish that an amount of sewage water was able to bypass the backflow preventers, and enter the basement in addition to the surface and ground water, the [anti-concurrent clause] excludes any coverage for the loss." (Id. at 14.)
PRPC continued to assert that the damage to its basement was the result of the backed-up sewer or drain and ASIC had representatives of DocAir and Donan Engineering conduct a follow-up inspection. They concluded that the rainwater on July 23 and 24 combined with the water discharging onto the ground surrounding the structures and into the light well walkways from the downspouts to cause ground and surface water to infiltrate the building's foundation walls and slab. (Id. at 17.) ASIC reiterated its denial of coverage in a December 31, 2010 letter and sought recovery of the $125,000 that it had advanced the Church. (Id. at 24.)
PRPC filed suit against ASIC in Cook County Circuit Court on July 6, 2011, and ASIC removed the suit to this court. (Dkt. 1.) PRPC then filed a two-count amended complaint for breach of contract and vexatious and unreasonable actions under the Illinois Insurance Code, 215 Ill. Comp. Stat. 5/155(1). (Dkt. 49.) ASIC filed an amended two-count counterclaim seeking a declaratory judgment that there is no coverage for PRPC's damages based on the water exclusion and for return of the...
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