Towne Place Condo. Ass'n v. Phila. Indem. Ins. Co.

• Decision Date: 22 July 2019
• Docket Number: 17 C 1561
• Parties: TOWNE PLACE CONDOMINIUM ASSOCIATION, Plaintiff, v. PHILADELPHIA INDEMNITY INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Illinois

TOWNE PLACE CONDOMINIUM ASSOCIATION, Plaintiff, v. PHILADELPHIA INDEMNITY INSURANCE COMPANY, Defendant.

17 C 1561

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

July 22, 2019

Judge Gary Feinerman

MEMORANDUM OPINION AND ORDER

Towne Place Condominium Association sued its insurance carrier, Philadelphia Indemnity Insurance Company, claiming breach of contract and violation of Section 155 of the Illinois Insurance Code, 215 ILCS 5/155. Doc. 1-1 at 3-6. Trial has been set for September 2019. Doc. 96. Philadelphia Indemnity moves for summary judgment, Doc. 87, and each side moves under Evidence Rule 702 to bar the other side's expert opinions, Docs. 83, 85, 91-92. Philadelphia Indemnity's summary judgment motion is granted, and the motions to bar are denied as moot.

Background

The following facts are set forth as favorably to Towne Place, the nonmovant, as the record and Local Rule 56.1 permit. See Johnson v. Advocate Health & Hosps. Corp., 892 F.3d 887, 893 (7th Cir. 2018). On summary judgment, the court must assume the truth of those facts, but does not vouch for them. See Donley v. Stryker Sales Corp., 906 F.3d 635, 636 (7th Cir. 2018).

Towne Place is a condominium association that manages eighty-nine buildings in Schaumburg, Illinois. Doc. 105 at ¶ 1; Doc. 110 at ¶ 14. Philadelphia Indemnity insured the buildings from August 1, 2013 to August 1, 2014. Doc. 105 at ¶ 5. Section E(3)(a) of Towne Place's insurance policy for that policy period includes this notice provision:

E. Loss Conditions

The following conditions apply ... :

...

(3) Duties in the Event of Loss

(a) You [Towne Place] must see that the following are done in the event of "loss" to Covered Property:

...

(2) Give us [Philadelphia Indemnity] prompt notice of the "loss." Include a description of the property involved.

(3) As soon as possible, give us a description of how, when and where the "loss" occurred.

Doc. 110 at ¶ 12; Doc. 105-6 at 119-120.

Sometime in 2014, roofing contractor Barry Roofing inspected Towne Place's buildings and identified what it believed to be hail damage. Doc. 105 at ¶ 30. Barry Roofing and Towne Place entered into an agreement under which Towne Place would make an insurance claim for the damage, Barry Roofing would help investigate and repair the damage, and Towne Place would pay Barry Roofing out of any insurance proceeds. Id. at ¶¶ 29, 31-32; Doc. 88-24. On July 24, 2014, a Towne Place representative made a claim on the policy in this email to Philadelphia Indemnity:

I am officially reporting a claim for possible hail damage to the roofs and siding (possible gutters too). The loss date is April 12, 2014. After the storm someone offered to check and found damage. We don't know if we've had damage from any other storms.

Doc. 88-4 at 2; Doc. 105 at ¶ 6.

Philadelphia Indemnity investigated the claim and then denied coverage on September 17, 2014, stating in a letter that Towne Place's buildings "did not sustain damage from this year's storms which produced hail in the area where Towne Place Condominium Association is located." Doc. 105 at ¶¶ 8-11; Doc. 110 at ¶ 16. Philadelphia Indemnity heard nothing from Towne Place for the next nine months. Doc. 105 at ¶ 12.

On June 11, 2015, Towne Place informed Philadelphia Indemnity that it had retained counsel in connection with the claimed hail damage of April 12, 2014. Id. at ¶ 13. In October 2015, after realizing that it would be difficult to prove that the April 12, 2014 storm caused the damage, Towne Place's counsel hired meteorologist Bryan Rappolt to investigate whether the damage was caused by a different hail storm during the policy period. Id. at ¶ 33. On November 25, 2015, Rappolt issued a report opining that hail fell on Towne Place on May 20, 2014. Id. at ¶ 46; Doc. 110 at ¶ 19.

On December 3, 2015, Towne Place notified Philadelphia Indemnity by letter that it was now asserting a May 20, 2014 loss date based on Rappolt's findings. Doc. 105 at ¶ 15. Philadelphia Indemnity opened a new claim, conducted a new investigation, and denied coverage on the grounds that any damage was caused not by hail, but by normal wear and tear, and that Towne Place did not give timely notice of the May 20, 2014 loss date. Id. at ¶¶ 17-25. When asked at her deposition why Towne Place did not provide Philadelphia Indemnity with notice of the May 20, 2014 damage date sooner, Towne Place president Debra Lucas replied, "I do not [know]. I know we had consultants working on getting the information." Id. at ¶ 56; Doc. 88-31 at 19.

At least eight other Philadelphia Indemnity insureds in the Chicago area have made claims on their policies relating to the May 20, 2014 hail storm. Doc. 110 at ¶ 11. The partiesmake competing assertions concerning the geographic proximity of Towne Place to the other insureds' properties, but their respective assertions either are not supported by the record, ibid. (Philadelphia Indemnity stating that the other properties were 30-80 miles away from Towne Place and its affiliate Towne Place West, but citing to a document that does not give the other properties' addresses or affiliations), or were not properly presented in a Local Rule 56.1 statement or response, Doc. 103 at 11 (Towne Place arguing that three of the other properties were very close to Towne Place, but citing only Doc. 110 at ¶ 11, which asserts that ten claims based on the May 20, 2014 hail storm were made in the Chicago area without describing their locations or proximity to Towne Place). The court therefore disregards those assertions. See Flint v. City of Belvidere, 791 F.3d 764, 767 (7th Cir. 2015) (observing that the Seventh Circuit "has consistently upheld district judges' discretion to require strict compliance with Local Rule 56.1"); Curtis v. Costco Wholesale Corp., 807 F.3d 215, 219 (7th Cir. 2015) ("It is the litigants' duty to clearly identify material facts in dispute and provide the admissible evidence that tends to prove or disprove the proffered fact. A litigant who denies a material fact is required to provide the admissible evidence that supports his denial in a clear, concise, and obvious fashion, for quick reference of the court."); Friend v. Valley View Cmty. Unit Sch. Dist. 365U, 789 F.3d 707, 710-11 (7th Cir. 2015) ("[T]he district court did not abuse its discretion in disregarding the facts contained in [the non-movant's] statement of additional facts that were not supported by proper citations to the record."); Shaffer v. Am. Med. Ass'n, 662 F.3d 439, 442 (7th Cir. 2011) (noting that it "is certainly within a district court's prerogative" to decline to consider "any facts that were not contained in the parties' Rule 56.1 statements").

Discussion

The operative complaint alleges that Philadelphia Indemnity breached the insurance policy by refusing to cover the alleged hail damage, and that Towne Place is entitled to damages under Section 155 of the Illinois Insurance Code due to Philadelphia Indemnity's allegedly vexatious and unreasonabe conduct in denying coverage. Doc. 1-1 at 3-6.

Before proceeding to those claims, the court addresses the question of the date(s) on which the alleged hail damage occurred. The complaint alleges that the damage occurred on at least one of two dates, April 12, 2014 and May 20, 2014. Id. at 4. Philadelphia Indemnity contends that the damage was not caused by any April 12, 2014 storm, reasoning that there is no record evidence that hail fell on or damaged Towne Place's property on that date. Doc. 89 at 9-10. Towne Place does not respond to that argument, thereby forfeiting the issue. See Nichols v. Mich. City Plant Planning Dep't, 755 F.3d 594, 600 (7th Cir. 2014) ("The non-moving party waives any arguments that were not raised in its response to the moving party's motion for summary judgment."); Keck Garrett & Assocs. v. Nextel Commc'ns, Inc., 517 F.3d 476, 487 (7th Cir. 2008) ("Nextel specifically requested summary judgment on the quantum meruit claim. Keck Garrett, however, did not defend that claim in its reply to Nextel's motion for summary judgment. By failing to present its argument to the district court, Keck Garrett abandoned its claim."); Witte v. Wis. Dep't of Corr., 434 F.3d 1031, 1038 (7th Cir. 2006) ("By failing to raise [an argument] in his brief opposing summary judgment, [the plaintiff] lost the opportunity to urge it in both the district court and this court."), overruled in other part by Hill v. Tangherlini, 724 F.3d 965, 967 n.1 (7th Cir. 2013). Accordingly, Philadelphia Indemnity is entitled to summary judgment on the issue whether an April 12, 2014 storm caused the damage. Therefore, to avoid summary judgment on its contract claim, Towne Place must show that a reasonable jurycould find based on the summary judgment record that Philadelphia Indemnity was contractually obligated to cover damage caused by a May 20, 2014 hail storm.

I. Breach of Contract Claim

Philadelphia Indemnity contends that it is entitled to summary judgment on the contract claim because Towne Place did not provide it with adequate notice of the May 20, 2014 storm date, as required by Section E(3)(a)(3) of the policy. Doc. 89 at 10-13. As no party has raised a conflict of law issue and both parties agree that Illinois law governs, Doc. 89 at 5 n.4; Doc. 103 at 9, the court will apply Illinois law. See Roh v. Starbucks Corp., 881 F.3d 969, 973 (7th Cir. 2018) ("In a diversity case such as this one, where neither party raises a conflict of law issue, federal courts apply the law of the state in which they sit.").

A. Mend-the-Hold

Towne Place argues at the threshold that the mend-the-hold doctrine precludes Philadelphia Indemnity from pressing a notice defense in this suit because, in the parties' pre-suit communications, Philadelphia Indemnity denied coverage on the ground that Towne Place's property did not sustain covered hail damage, not on the ground that Towne Place provided it with inadequate notice. Doc. 103 at 7. That argument rests on...