Wells v. State Farm Fire & Cas. Ins. Co.

Decision Date04 January 2021
Docket NumberNO. 5-19-0460,5-19-0460
Citation447 Ill.Dec. 259,173 N.E.3d 613,2021 IL App (5th) 190460
CourtUnited States Appellate Court of Illinois
Parties Connie K. WELLS, William Wells, and Brian Wells, Plaintiffs-Appellants, v. STATE FARM FIRE AND CASUALTY INSURANCE COMPANY, Defendant-Appellee.

Alfred E. Sanders Jr., of Sanders & Associates, of Marion, for appellants.

Joseph M. Baczewski, of Brandon & Schmidt, of Carbondale, for appellee.

PRESIDING JUSTICE BOIE delivered the judgment of the court, with opinion.

¶ 1 The plaintiffs, Connie K. Wells, William Wells, and Brian Wells, owned a warehouse building located in Marion, Illinois. They purchased a casualty insurance policy from the defendant, State Farm Fire and Casualty Insurance Company (State Farm), to insure the building and its contents from accidental loss. In February 2011, during a period of below freezing weather, the building's water pipes burst, and water from the pipes flooded areas of the building. State Farm refused to cover the damages. The plaintiffs filed a complaint against State Farm alleging claims for declaratory judgment, breach of contract, and bad faith claims practices. The plaintiffs requested the circuit court to construe the insurance policy and find that their loss caused by the burst water pipes was covered under the policy.

¶ 2 As an affirmative defense, State Farm invoked an exclusion in the policy that excluded coverage for damages from burst water pipes unless the plaintiffs did their "best to maintain heat in the building." State Farm asserted that the plaintiffs failed to do their best in maintaining heat in the building and, therefore, it was not liable for any damages. The circuit court bifurcated the triable issues and first conducted a bench trial on State Farm's affirmative defense, placing the burden on State Farm to prove that the policy's exclusion applied. After the bench trial, the circuit court concluded that State Farm carried its burden of proving that the policy exclusion applied. The circuit court, therefore, entered a judgment finding that there was no coverage for the building's water damage under the policy. The plaintiffs now appeal the circuit court's judgment.


¶ 4 The insurance policy in this case required State Farm to insure the plaintiffs' building and its contents for accidental loss. However, the policy exclusion at issue in this case stated that the policy does not insure for loss caused by "water that leaks or flows from plumbing, heating, air conditioning or other equipment (except fire protective systems) caused by freezing unless: (1) you do your best to maintain heat in the building or structure ." (Emphasis added.) At the beginning of the trial, the circuit court held that State Farm had the burden of proving the facts necessary to establish that the policy exclusion applies. Three witnesses testified at the trial: (1) coplaintiff William Wells, (2) a heating, ventilation, and air conditioning (HVAC) and electrical contractor who testified as an expert on behalf of the plaintiffs, and (3) a State Farm claims adjuster supervisor.

¶ 5 William's testimony established that he purchased the building in 1994 and that he owned the building along with his wife, Connie, and his son, Brian. William lived in the building for a period of time and later converted the building into a law office. When William lived in the building, its heating system included a furnace and a heat pump. Nonetheless, on three occasions while William lived in the building, the building's water pipes burst while the furnace and heat pump were both in operation. According to William, on those occasions, the circuit breaker had tripped. William testified that these incidents led him "to believe that the furnace was a dangerous way to prevent freezing during really cold times."

¶ 6 Sometime in 2010, the building's heat pump was stolen. The plaintiffs made a claim for the stolen heat pump, and State Farm paid the plaintiffs the replacement costs for the heat pump less the policy deductible. The plaintiffs, however, never replaced the heat pump. According to William, he had the furnace and circuit breakers checked and found that "[n]othing was wrong." However, because of his prior experience, he did not believe that the furnace was reliable. Despite the fact that the building's heating system was inadequate to keep the building's pipes from bursting, there is no evidence that the plaintiffs did anything further to repair or replace the building's heating system to bring it into proper working order. Instead, at some point, the plaintiffs shut off water service to the building.

¶ 7 The building was used for many years by William primarily as a storage facility. In addition, William operated a "debt settlement business" that required him to be at the building once or twice a week to get files and make cellphone calls for debt settlements. During this period, William was never at the building for more than a couple of hours at a time. According to William, Brian began remodeling work at the building. Therefore, in January 2011, the plaintiffs turned the water back on for Brian's convenience while working at the building. Again, prior to this time, the plaintiffs had not repaired or replaced the building's insufficient and unreliable heating system although they had years to do so.

¶ 8 Shortly after turning the building's water back on, in February 2011, during a period of below freezing weather, William cordoned off a 400 square foot area where the building's water pipes were exposed and set up three space heaters in the cordoned off area in order to prevent the pipes from freezing. In addition, as further precaution against freezing pipes, William also left water dripping slowly from a sink faucet. William testified that he believed that the building's furnace was turned on when the water was turned on, but the thermostat was turned down to around 40 degrees. However, he agreed that when he turned on the water, he "never really checked [the furnace] to see if it worked."

¶ 9 William testified that he set up the three space heaters in the cordoned off area because he did not believe the building's furnace was reliable but "was sure that the three space heaters were adequate to heat that space." He testified that he believed that the space heaters were sufficient because he had used space heaters in this area of the building before, and the space heaters prevented the pipes from freezing. In addition, according to William, the space heaters had never caused the building's breakers to trip. William also testified that he made sure that the space heaters were plugged into outlets on circuits different than the circuit the furnace was on. He testified that, for one of the space heaters, he used a 20- or 30-foot extension cord that was plugged into a back room and led to the utility room where, according to William, the trouble always occurred when pipes froze. William testified that he plugged the other two heaters into outlets that were near the utility room but were on separate circuits.

¶ 10 At the trial, the plaintiffs offered into evidence the building's floor plan which showed the area that William had cordoned off. The cordoned off area included a kitchen, utility room, and a bathroom which, according to William, were the only areas of the building where water pipes were located. William cordoned off the area by placing a plastic partition that blocked the only doorway that led to the heated area.

¶ 11 William testified that, after setting up the space heaters, he returned to check on the building a day or two later, after a night that was particularly cold. During this inspection, William saw that none of the building's pipes had burst and that water was still dripping slowly from the sink's faucet. A few days later, on February 15, 2011, William returned to the building and discovered that the water pipes in the building had burst which, in turn, had caused flooding in portions of the building.

¶ 12 The plaintiffs submitted a claim for the loss to State Farm, and State Farm initially sent a contractor to begin cleanup of the water damage. However, State Farm discontinued the cleanup effort before it was completed and ultimately rejected the plaintiffs' claim. On February 25, 2011, State Farm sent a letter to the plaintiffs informing them that it was denying the claim following an inspection that took place on February 18, 2011.

¶ 13 When State Farm denied the plaintiffs' claim, William filed a complaint with the Illinois Department of Insurance. This complaint filed with the Illinois Department of Insurance was admitted into evidence at the trial. In the complaint, William wrote about the incident as follows:

"On Tuesday evening (2/18/11) we discovered that our building had flooded. The flood was the result of frozen pipes. We also discovered that two of the three space heaters that were heating the area were not functional. One heater had apparently broken down. The second heater was plugged into an outlet that had a popped circuit breaker. (When we tested the circuit breaker, even after all the water was removed from the building, we discovered that the circuit breaker still would not stay on.)"

¶ 14 At the trial, the plaintiffs presented the testimony of Jeff Castellano, who was an HVAC and electrical contractor. Castellano testified that in December 2017 he inspected the building, the space heaters that William used to heat the cordoned off portion of the building, and the outlets that William identified as the locations where he plugged in the space heaters. Castellano testified that the outlets were on three separate circuits and that each circuit would have been sufficient to handle a heater. There was no power on at the building when Castellano conducted his investigation. However, he testified, "I had separated each of the circuits and ran continuity from the plug to the breaker." He explained that he turned the breakers on and off and...

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