Wheeler v. Assurant Specialty Prop.
| Decision Date | 28 August 2015 |
| Docket Number | No. 15 C 673,15 C 673 |
| Citation | 125 F.Supp.3d 834 |
| Parties | Stephen A. Wheeler, Plaintiff, v. Assurant Specialty Property d/b/a Assurant, American Security Insurance Company d/b/a Assurant, Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Gerald Michael Dombrowski, Sanchez & Daniels, Chicago, IL, for Plaintiff.
William Glenn Beatty, Kevin Patrick Conrad, Jr., Johnson & Bell, Ltd., Chicago, IL, for Defendant.
Plaintiff Stephen A. Wheeler sought coverage for alleged damage to his house caused by a windstorm from the providers of his home insurance policy, Defendants Assurant Specialty Property d/b/a Assurant and American Security Insurance Company d/b/a Assurant (collectively, "ASIC"). After delays in processing his claim, ASIC determined that only a portion of the claimed damages were caused by the windstorm and denied the majority of Wheeler's claim. Wheeler now brings this suit, alleging breach of contract, vexatious and unreasonable conduct in violation of the Illinois Insurance Code, 215 Ill. Comp. Stat. 5/155, violation of the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA"), 815 Ill. Comp. Stat. 505/1 et seq. , fraud, and unjust enrichment. Before the Court is ASIC's motion to dismiss Counts I through VI of the complaint [29], which is granted in part and denied in part.1 Because Wheeler sufficiently alleges breach of the insurance policy, accompanied by actions that could amount to unreasonable and vexatious conduct, those claims survive. Wheeler may also proceed on his breach of fiduciary duty claim because that claim may be pleaded in the alternative to his breach of contract claim. But Wheeler's unjust enrichment claim is dismissed because he has alleged the existence of a valid insurance policy. And although his ICFA claim is not just a reformulation of his breach of contract and bad faith allegations, Wheeler has not met Rule 9(b)'s particularity requirements and so that claim is also dismissed. Finally, Wheeler's fraud claim is dismissed because he has not sufficiently alleged the required element of reliance.
Wheeler owns property at 1317 E. 50th Street in Chicago, Illinois. Wells Fargo Bank, N.A. ("Wells Fargo Bank") holds the mortgage for Wheeler's property. On May 20, 2011, Wells Fargo Bank and Wells Fargo Insurance, Inc. ("Wells Fargo Insurance") required Wheeler to obtain insurance for the property from ASIC. The ASIC policy had an initial annual premium of $4,497.00.
On July 11, 2011, a windstorm near Wheeler's property caused significant damage to the interior and exterior of Wheeler's house. Wheeler filed a timely claim under his ASIC policy that month. But from then until January 2012, ASIC did little to process Wheeler's claim and did not hire a professional expert to examine Wheeler's house. In January 2012, Wheeler contacted ASIC, informing it that he had retained a structural engineer to examine his house. ASIC's Raymond Parello responded that he also had contacted a structural engineer. On March 28, 2012, Parello informed Wheeler that ASIC had hired Alan Moersfelder of Kelsey Engineering and Electric Inc. Moersfelder conducted his inspection on April 4 and provided ASIC with a report on April 9. He concluded that it was possible that "much, if not all, of the visible floor, wall, ceiling, and visible structural member damage inside the house is a direct result of the July 10, 2011 weather event" and that it was "very possible that there is additional damage which is not visible." Ex. F to Compl. at 3. He further noted that it was "difficult to postulate any man-made or natural event, other than a weather event, that could cause the visible damage to the Wheeler residence, cause the visible damage to the trees in the immediate neighborhood, cause the roof damage which has been repaired, and yet not damage other close proximity buildings." Id.
On April 25, after further discussions with Parello but no concrete action, Wheeler wrote Parello a letter expressing his frustration with the delays in processing his claim. He requested written confirmation from an authorized individual at ASIC that the damages to the house and all related repairs and costs were covered claims, with any exceptions, restrictions, and limitations to be set forth at that time. Wheeler also asked to engage his preferred contractors to perform the repairs instead of accepting those chosen by ASIC and for clarification regarding payment of rental, moving, and storage expenses while repairs were being performed on the house.
Approximately a year later, on March 11, 2013, at ASIC's request, Wheeler executed a sworn statement in proof of loss regarding the July 11, 2011 damage to his house, claiming $695,943.00 under the policy.3 On March 27, Parello notified Wheeler's counsel that ASIC was reviewing the materials. In an April 24 conversation with Wheeler's counsel, Parello represented that the amount claimed was greater than ASIC had expected. Wheeler's counsel suggested that all engineers and contractors meet to expedite the repairs to Wheeler's house. That meeting occurred on June 7, but no ASIC representative was present. On June 25, ASIC's Tom Frankino told Wheeler's counsel that the claim amount was over his authority and that additional inspections were required. ASIC hired Peter Quinn of Rimkus Consulting to perform the additional inspection, which occurred on July 18. Rimkus Consulting issued its report on August 13, finding that Wheeler's house suffered no structural damage as a result of the windstorm, although it attributed the damage to the roof that had already been repaired and damage to an upper pane of glass in a third floor bathroom window to the storm. Instead, Rimkus Consulting concluded that "[t]he undulations observed in the floor systems, un-level stairs and localized small areas of surface cracks in the ceilings and walls resulted from one or more of the following items: a) Inadequate support for the transfer of dead and live loads from the roof to foundation piers. b) Construction defects. c) Expected natural deterioration over time." Ex. N to Compl. at 12–13. Based on this report, ASIC rejected Wheeler's submitted proof of loss on September 6. But because Rimkus Consulting found that a pane of glass in the third floor bathroom window had been damaged as a result of the windstorm and that damage was not included in the previous allowed payment, the adjuster's estimate was revised to include a supplemental payment of $112.83. This was added to the previous payment of $16,113.87, which had been made on January 17, 2013. ASIC also noted that $992.95 of recoverable depreciation would be available once repairs were complete. Wheeler never accepted any payments for the claimed covered damage, however. His property is now in foreclosure proceedings.
A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint, not its merits. Fed.R.Civ.P. 12(b)(6) ; Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir.1990). In considering a Rule 12(b)(6) motion to dismiss, the Court accepts as true all well-pleaded facts in the plaintiff's complaint and draws all reasonable inferences from those facts in the plaintiff's favor. AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir.2011). To survive a Rule 12(b)(6) motion, the complaint must not only provide the defendant with fair notice of a claim's basis but must also be facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ; see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.
Rule 9(b) requires a party alleging fraud to "state with particularity the circumstances constituting fraud." Fed.R.Civ.P. 9(b). This "ordinarily requires describing the ‘who, what, when, where, and how’ of the fraud, although the exact level of particularity that is required will necessarily differ based on the facts of the case." AnchorBank, 649 F.3d at 615 (citation omitted). Rule 9(b) applies to "all averments of fraud, not claims of fraud."
Borsellino v. Goldman Sachs Grp., Inc., 477 F.3d 502, 507 (7th Cir.2007). "A claim that ‘sounds in fraud’—in other words, one that is premised upon a course of fraudulent conduct—can implicate Rule 9(b)'s heightened pleading requirements." Id.
ASIC argues that the Court must dismiss Wheeler's breach of contract claim because it sounds in fraud but does not meet the particularity requirements of Rule 9(b). But ASIC is asking for too much from Wheeler on this claim. Wheeler alleges the existence of an insurance contract that he claims was breached when ASIC refused to fully compensate him for damage he maintains is covered under the policy. This is a classic claim for breach of an insurance policy. See W. Howard Corp. v. Indian Harbor Ins. Co., No. 1:10–CV–7857, 2011 WL 2582353, at *3 (N.D.Ill. June 29, 2011) (). Although Wheeler does mention deception in pleading his breach of contract claim, this singular mention does not require the imposition of a heightened pleading standard, as the claim exists independent of any allegations of fraud or deception contained in the complaint. See Schaufenbuel v. InvestForClosures Fin., L.L.C., No. 09 C 1221, 2009 WL 3188222, at *3 (N.D.Ill. Sept. 30, 2009) (). Nor are Wheeler's allegations of ASIC's bad faith...
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