Wheeler v. American Security Insurance Company et al

Filing 33

Opinion and Order written by the Honorable Sara L. Ellis on 8/28/2015. For the foregoing reasons, ASIC's motion to dismiss 29 is granted in part and denied in part. Counts III (fraud), IV (ICFA violation), and V (unjust enrichment) are dismissed without prejudice. Mailed notice.(pjg, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
STEPHEN A. WHEELER,

)
)
Plaintiff,
)
)
v.
)
)
ASSURANT SPECIALTY PROPERTY d/b/a )
ASSURANT, AMERICAN SECURITY
)
INSURANCE COMPANY d/b/a ASSURANT, )
)
Defendants.
)

No. 15 C 673
Judge Sara L. Ellis

OPINION AND ORDER
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

1

Counts VII through XI were directed at Wells Fargo Bank, N.A. and Wells Fargo Insurance, Inc., who
had previously been named as Defendants in the lawsuit. Wells Fargo Bank, N.A. and Wells Fargo
Insurance, Inc. were dismissed without prejudice on April 1, 2015, and so those counts are no longer
pending. Doc. 28.

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.
BACKGROUND 2
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

2

The facts in the background section are taken from Wheeler’s complaint and the exhibits attached
thereto and are presumed true for the purpose of resolving ASIC’s motion to dismiss. See Virnich v.
Vorwald, 664 F.3d 206, 212 (7th Cir. 2011); Local 15, Int’l Bhd. of Elec. Workers, AFL-CIO v. Exelon
Corp., 495 F.3d 779, 782 (7th Cir. 2007).

2

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

3

Although the complaint does not mention any events between April 25, 2012 to March 11, 2013,
Wheeler attached a letter from his counsel to ASIC dated June 27, 2013, which includes a timeline of
events. Ex. L to Compl. at 4. The timeline indicates that in August 2012, Moersfelder prepared an
estimate of $51,000 for investigative demolition and preliminary construction specifications, which was
forwarded to Parello. In October 2012, architectural and engineering notes were prepared for the needed
repair work. In December 2012, Parello sent a letter to Wheeler indicating that he had attempted to
contact Wheeler for several months before issuing a check for approximately $18,000. In January 2013,
ASIC was notified of multiple bids Wheeler received for the necessary repair work.

3

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.

4

LEGAL STANDARD
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 wellpleaded 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.
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.

5

ANALYSIS
I.

Breach of Contract (Count I)
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) (noting that plaintiff “clearly has stated claims for breach of the
insurance policy” where plaintiff brought suit for the insured’s denial of coverage for a claimed
loss to insured property). 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) (breach of contract claim subject to Rule 8’s pleading
standard as the claim “exist[s] independent of the alleged fraudulent scheme”). Nor are
Wheeler’s allegations of ASIC’s bad faith subject to Rule 9(b)’s standards. See GMP Techs.,
LLC v. Zicam, LLC, No. 08 C 7077, 2009 WL 5064762, at *3 (N.D. Ill. Dec. 9, 2009) (bad faith
allegations subject to Rule 8(a)); Skinner v. Metro. Life Ins. Co., 829 F. Supp. 2d 669, 678 (N.D.
Ind. 2010) (“[B]ad faith does not need to be pled with particularity[.]”); cf. Kennedy v. Venrock
Assocs., 348 F.3d 584, 593 (7th Cir. 2003) (“Rule 9(b) is strictly construed; it applies to fraud
and mistake and nothing else.”). Thus, Wheeler may proceed on his breach of contract claim.

6

II.

Section 155 Damages (Count II)
Next, ASIC argues that Wheeler’s request for section 155 damages should be dismissed

because the claim is subject to Rule 9(b) and Wheeler has not adequately alleged how ASIC’s
conduct was vexatious or unreasonable. Section 155 allows an insured to recover attorney’s fees
and extracontractual damages if an insurer’s actions with respect to a claim made under a policy
are “vexatious and unreasonable.” Cramer v. Ins. Exch. Agency, 675 N.E.2d 897, 902, 174 Ill.
2d 513, 221 Ill. Dec. 473 (1996). This statute, “while not the exclusive remedy for tortious
conduct by an insurer, essentially substitutes for a separate tort of ‘bad faith.’” W. Howard Corp.
2011 WL 2582353, at *3. But section 155 damages may not be awarded if “(1) there is a bona
fide dispute concerning the scope and application of insurance coverage; (2) the insurer asserts a
legitimate policy defense; (3) the claim presents a genuine legal or factual issue regarding
coverage; or (4) the insurer takes a reasonable legal position on an unsettled issue of law.”
Citizens First Nat’l Bank of Princeton v. Cincinnati Ins. Co., 200 F.3d 1102, 1110 (7th Cir.
2000) (citations omitted). As already discussed in connection with Wheeler’s breach of contract
claim, to the extent they do not sound in fraud, Wheeler’s allegations regarding ASIC’s bad faith
and unreasonable conduct need not meet Rule 9(b)’s standards. See GMP Techs., LLC, 2009
WL 5064762, at *3. Because at least some of these actions could be considered only to rise to
the level of bad faith and not fraud (indeed, as discussed below, Wheeler’s fraud claim is
insufficiently pleaded), the Court will not apply Rule 9(b)’s pleading requirements to conduct
that does not necessarily sound in fraud.
Determining whether conduct is vexatious or unreasonable is a factual question
determined by looking at the totality of the circumstances. See Med. Protective Co. v. Kim, 507
F.3d 1076, 1086 (7th Cir. 2007). But “[s]imply pleading that [the insurer] knowingly and

7

intentionally refused to provide insurance coverage and that [the insurer’s] refusal ‘was and
continues to be vexatious and unreasonable,’ without some modicum of factual support, is
insufficient to plausibly suggest that [the insured] is entitled to relief under the statute.”
Scottsdale Ins. Co. v. City of Waukegan, No. 07 C 64, 2007 WL 2740521, at *2 (N.D. Ill. Sept.
10, 2007). Here, Wheeler alleges that ASIC acted in bad faith, providing a detailed list of
allegations that he contends amount to vexatious and unreasonable conduct. Compl. ¶ 62. This
is sufficient at this stage to allow the damages request to go forward. See Strategic Capital
Bancorp, Inc. v. St. Paul Mercury Ins. Co., No. 10-CV-2062, 2014 WL 562970, at *5–6 (C.D.
Ill. Feb. 13, 2014) (noting that although defendant may “have the winning argument that a
Section 155 award is unwarranted” because the insurer’s position was based on a bona fide
coverage dispute, such a conclusion was inappropriate at the motion to dismiss stage); W. Wind
Express v. Occidental Fire & Cas. Co. of North Carolina, No. 10-CV-6263, 2013 WL 2285799,
at *4 (N.D. Ill. May 23, 2013) (“[B]ecause [determining if an insurer’s conduct was vexatious or
unreasonable] presents a factual question, the Court may not decide the issue on the pleadings
alone, although the issue may be susceptible to disposition at summary judgment if the facts
developed fail to show a genuine issue of disputed material fact.”); W. Howard Corp., 2011 WL
2582353, at *3 (section 155 claim could proceed where plaintiff alleged that insurer took
approximately a year and a half to make coverage determination and requested additional
documentation over that time, despite plaintiff’s belief many of the requests were irrelevant to
loss); Markel Am. Ins. Co. v. Dolan, 787 F. Supp. 2d 776, 779 (N.D. Ill. 2011) (allegations that
insurer misrepresented facts and conducted inadequate investigation sufficient to survive motion
to dismiss).

8

III.

ICFA Claim (Count III)
To state an ICFA claim, Wheeler must allege (1) a deceptive or unfair act or practice by

ASIC, (2) ASIC’s intent that Wheeler rely on the deceptive or unfair practice, (3) the unfair or
deceptive practice occurred in the course of conduct involving trade or commerce, and (4)
ASIC’s unfair or deceptive practice caused Wheeler actual damage. 4 Wigod v. Wells Fargo
Bank, N.A., 673 F.3d 547, 574 (7th Cir. 2012); Kim v. Carter’s Inc., 598 F.3d 362, 365 (7th Cir.
2010). Recovery may be had for conduct that is either deceptive or unfair. Robinson v. Toyota
Motor Credit Corp.,775 N.E.2d 951, 960, 201 Ill. 2d 403, 266 Ill. Dec. 879 (2002); Siegel v.
Shell Oil Co., 612 F.3d 932, 935 (7th Cir. 2010) (“A plaintiff may allege that conduct is unfair
under ICFA without alleging that the conduct is deceptive.”). A deceptive practices claim must
meet Rule 9(b)’s heightened pleading standard, while an unfair practices claim need not because
it is not based on fraud. Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 737 (7th Cir.
2014). Conduct is considered unfair if it (1) violates public policy, (2) is “so oppressive that the
consumer has little choice but to submit,” or (3) causes consumers substantial injury. Siegel, 612
F.3d at 935. Wheeler appears to proceed only on a deceptive practices theory, and thus his
pleading must meet Rule 9(b)’s heightened standard. 5

4

Unlike for common law fraud, reliance is not an element of an ICFA claim. See, e.g., Cozzi Iron &
Metal, Inc. v. U.S. Office Equip., Inc., 250 F.3d 570, 576–77 (7th Cir. 2001) (although common law fraud
claim was barred because plaintiff could not show it relied on oral representations different from contract
terms, ICFA claim could proceed past motion to dismiss based on the same facts because reliance is not a
required element of an ICFA claim).

5

Wheeler mentions in his response that an unfair practices theory need only meet the notice pleading
standard of Rule 8(a), but he makes no argument as to how the conduct alleged in his complaint is based
on unfair practices instead of deceptive conduct. Wheeler’s allegations are premised on allegedly
deceptive conduct. See, e.g., Compl. ¶ 66 (“Assurant and American Security willfully, purposely and
deceptively failed to settle Wheeler’s insurance claim against his homeowners policy at or near the time
of loss by the deceptive use of multiple experts . . . .”). Wheeler’s argument in response about the
applicable pleading standard does not transform his ICFA claim into one for unfair practices as well. See
Camasta, 761 F.3d at 737 (addition of “unfairness” language did not change ICFA claim “entirely
grounded in fraud” into unfairness claim); Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v.

9

ASIC first argues that Wheeler’s ICFA claim fails because it is merely a duplicate of his
breach of contract claim. Wheeler may not take his breach of contract claim and “dress [it] up in
the language of fraud” in an attempt to state an ICFA claim. See Greenberger v. GEICO Gen.
Ins. Co., 631 F.3d 392, 395 (7th Cir. 2011) (“[F]raud claims must contain something more than
reformulated allegations of a contractual breach. . . . [B]reach-of-contract allegations dressed up
in the language of fraud . . . . cannot support statutory or common-law fraud claims.”); Avery v.
State Farm Mut. Auto Ins. Co., 835 N.E.2d 801, 844, 216 Ill. 2d 100, 296 Ill. Dec. 448 (2005)
(“A breach of contractual promise, without more, is not actionable under the Consumer Fraud
Act.”). Wheeler cannot merely claim that ASIC acted in bad faith to pay him less on his claim
than allowed under the policy. See M.W. Widoff, P.C. v. Encompass Ins. Co. of Am., No. 10 C
8159, 2012 WL 769727, at *4 (N.D. Ill. Mar. 2, 2012) (“The deceptive act must involve
something more than the promise to do something and a corresponding failure to do it.”).
Courts have found that plaintiffs cannot proceed on ICFA or fraud claims against their
insurers where they merely allege that the insurer “failed to pay the claim, made ‘bad faith’
demands for documents, conducted a burdensome investigation, delayed in resolving the claim,
rested the denial of the claim on the actions or inactions of [the insured] or its agents, and
represented in its policy that ‘it would pay valid claims,’ when in fact it has not paid.” W.
Howard Corp., 2011 WL 2582353, at *5. Such conduct has been found to amount to nothing
more than “a denial of benefits and breach of contract, with an accompanying bad faith claim
under § 155.” Id.; see also New Park Manor, Inc. v. N. Pointe Ins. Co., No. 13 C 4537, 2013
WL 5408856, at *4–7 (N.D. Ill. Sept. 26, 2013) (dismissing ICFA claim where plaintiff alleged
that it relied on insurer’s settlement evaluation figures in submitting proof of loss based on those
Walgreen Co., 631 F.3d 436, 446–47 (7th Cir. 2011) (pleading was premised on intentional concealment
and so it was appropriately interpreted not as an unfair practices claim but as a deceptive practices claim
subject to Rule 9(b)).

10

numbers but that insurer then demanded more documentation and examination under oath of
plaintiff’s principals, ultimately rejected claim, and accused plaintiff of fraud, claim inflation,
and failure to produce documents in support of its damage claims).
But in General Insurance Co. of America v. Clark Mali Corp., the court allowed an ICFA
claim to proceed where the insured alleged that the insurer promised it would pay valid claims
but then consistently delayed bringing the claim process to a resolution while demanding
additional information and presenting a “façade of compliance.” No. 08 C 2787, 2010 WL
1286076, at *4 (N.D. Ill. Mar. 30, 2010). The court found that “[s]tringing the insureds along
with the intimation that things were progressing toward a resolution when, in reality, there is no
end in sight, making unreasonable and irrelevant demands, and never providing a definite answer
certainly qualifies as an allegation of deception and intent that the other party rely on that
deception.” Id.; see also Burress-Taylor v. Am. Sec. Ins. Co., 980 N.E.2d 679, 689, 2012 IL App
(1st) 110554, 366 Ill. Dec. 586 (2012) (ICFA claim not preempted by section 155 where
allegations suggested an insurance company taking “a series of dilatory, deceptive and punitive
maneuvers to mask [its] non performance” and “doing all in its power to wear down the insureds
and to put off indefinitely a frank decision regarding coverage and the reasons for the denial”).
Here, like in Clark Mali, Wheeler alleges that ASIC represented it was complying with its
contractual obligations and working on settling the claim by engaging Moersfelder and working
with him and Wheeler to repair the house, only to later delay and insist on engaging a second
expert—whom Wheeler claims ASIC paid specifically to contradict Moersfelder’s report—so as
to deny the majority of Wheeler’s claimed loss. At this stage, these allegations are sufficient to
take Wheeler’s allegations out of the realm of a mere breach of the insurance contract, as they
rise to the level of alleged fraud in paying off a retained expert to render a contrary opinion so as

11

to provide a basis for denying a valid claim. Although the validity of Wheeler’s allegation
remains to be proven, the Court cannot say it is merely one for breach of contract accompanied
by a claim for section 155 damages.
But even so, Wheeler’s ICFA claim must be dismissed as Wheeler has not adequately
alleged the purported deceptive conduct with particularity as required by Rule 9(b). The
complaint does not allege who specifically paid Rimkus Consulting to contradict Moersfelder’s
report or who gave Rimkus Consulting such instructions. See Nalco Co. v. Chen, No. 12 C 9931,
2013 WL 4501425, at *4 (N.D. Ill. Aug. 22, 2013) (“References to the name of the company as
being the source of the misrepresentation, without identifying the parties to them, is not enough
to meet Rule 9(b)’s pleading standard.”). Even the fraudulent scheme itself is implied but
undefined. Although the Court recognizes that some of this information may be outside of
Wheeler’s knowledge, he has not adequately provided the grounds for his suspicions. See
Pirelli, 631 F.3d at 442–43 (“[A] plaintiff generally cannot satisfy the particularity requirement
of Rule 9(b) with a complaint that is filed on information and belief. The general rule that fraud
cannot be pled based on information and belief is not ironclad; the practice is permissible, so
long as (1) the facts are not accessible to the plaintiff and (2) the plaintiff provides ‘the grounds
for his suspicions.’” (citations omitted)). Given the pleading deficiencies here, Wheeler’s ICFA
claim is dismissed.
IV.

Fraud (Count IV)
To state a claim for fraud, Wheeler must allege that (1) ASIC made a false statement or

omission of material fact, (2) ASIC knew of or believed in its falsity, (3) ASIC intended to
induce Wheeler to act, (4) Wheeler acted in reliance on the truth of ASIC’s statements, and
(5) damages resulted from Wheeler’s reliance. Weidner v. Karlin, 932 N.E.2d 602, 605, 402 Ill.

12

App. 3d 1084, 342 Ill. Dec. 475 (2010). Wheeler alleges that ASIC falsely represented that his
insurance claim was worth less than it was so as to deny him adequate funds to repair the house.
He further alleges that ASIC intended to induce Wheeler to accept payments in an amount less
than what his claim was worth and that he relied on the statements “with the good faith intention
of attempting to fairly resolve his claim so that Wheeler could perform repairs on the Wheeler
Residence that were the result of the storm of July 11, 2011.” Compl. ¶¶ 73–74. But his
allegation of reliance falls short, as he specifically states that he refused to accept ASIC’s
tendered payments, and so he did not resolve his claim with ASIC on the basis of these alleged
misrepresentations, and indeed, as evidenced by this lawsuit, is continuing to contest ASIC’s
denial of his claim. See Compl. ¶ 44. Without having compromised the claim, Wheeler cannot
contend that he relied on ASIC’s alleged representations regarding the value of Wheeler’s claim
to his detriment. See Reid v. Harvey Motorcycle & Camper, No. 05 C 5375, 2007 WL 4277435,
at *6 (N.D. Ill. Nov. 30, 2007) (“Reid must demonstrate that he entered into a transaction in
reliance on Watson’s fraudulent statements and suffered damages as a result of his reliance.
Since Reid did not enter into a transaction with Watson in reliance on Watson’s fraudulent
statements, . . . his claim once again fails[.]”). Thus, Wheeler’s fraud claim is dismissed.
V.

Unjust Enrichment (Count V)
For his unjust enrichment claim, Wheeler pleads that he paid ASIC inflated premiums,

which ASIC unjustly retained when it did not expeditiously resolve his claim. Although the
existence of a contract “does not automatically bar an unjust enrichment claim,” Muehlbauer v.
GMC, 431 F. Supp. 2d 847, 856 (N.D. Ill. 2006), a quasi-contractual claim cannot be sustained
when an express contract governs the relationship of the parties, id. at 855; People ex rel.
Hartigan v. E & E Hauling, Inc., 607 N.E.2d 165, 177, 153 Ill. 2d 473, 180 Ill. Dec. 271 (1992)

13

(“Because unjust enrichment is based on an implied contract, ‘where there is a specific contract
which governs the relationship of the parties, the doctrine of unjust enrichment has no
application.’” (citation omitted)). Although Wheeler purports to plead his unjust enrichment
claim in the alternative, he expressly incorporates the existence of the insurance policy into his
unjust enrichment claim. This is cause for dismissal. 6 See Cohen v. Am. Sec. Ins. Co., 735 F.3d
601, 615 (7th Cir. 2013) (unjust enrichment claim unavailable where insured alleged that insurer
was liable for breaching contract and that if insurer did not breach contract, then it owed insured
damages for unjustly enriching itself with her premiums); Ford v. Pacific Webworks, Inc., No.
09 C 7867, 2011 WL 529265, at *4 n.7 (N.D. Ill. Feb. 4, 2011) (“[B]reach of contract and unjust
enrichment may be pleaded in the alternative as long as plaintiffs have not incorporated
allegations of a contract into their unjust enrichment claim.”).
VI.

Breach of Fiduciary Duty (Count VI)
Finally, ASIC argues that Wheeler’s breach of fiduciary duty claim should be dismissed

because it is duplicative of his breach of contract claim. Although duplicative counts may be
dismissed, DeGeer v. Gillis, 707 F. Supp. 2d 784, 795 (N.D. Ill. 2010), the Court is not
persuaded that dismissal is warranted here. Illinois cases have dismissed breach of contract and
breach of fiduciary duty claims where they are duplicative of malpractice claims, allowing only a
malpractice claim to proceed. See Gritters v. Ocwen Loan Servicing, LLC, No. 14 C 00916,
2014 WL 7451682, at *9–10 (N.D. Ill. Dec. 31, 2014) (collecting cases). But this appears to be
specific to malpractice cases and thus not applicable to Wheeler’s breach of contract and
fiduciary duty claims, which have separate elements and can be pleaded in the alternative. See

6

The Court notes that this argument was not explicitly raised by ASIC in its opening brief, in which
ASIC argued that unjust enrichment is not a separate cause of action, but rather was invited by Wheeler in
his response when he argued that a party can properly plead unjust enrichment in the alternative to a
breach of contract claim. Because it was addressed by both sides, it is a proper basis for dismissal.

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id. at *10 (“[T]he Court is not persuaded that relevant authority compels or even encourages the
dismissal of a breach-of-fiduciary duty claim as ‘duplicative’ of a breach-of-contract claim—
especially where Federal Rule of Civil Procedure 8(d) explicitly permits a party to plead
alternative claims.”). This does not mean that Wheeler would be allowed a duplicative recovery
if both claims proceed to trial, but only that at this stage the Court will not dismiss his fiduciary
duty claim as duplicative of his breach of contract claim. Id. (“To be sure, if both claims proceed
to trial and the damages sought are indeed duplicative, Gritters’ potential recovery will be
appropriately limited.”).
In reply, ASIC argues that Wheeler’s breach of fiduciary duty claim must be dismissed
because there is no fiduciary relationship between an insurer and an insured. See Martin v. State
Farm Mut. Auto Ins. Co., 808 N.E.2d 47, 51, 348 Ill. App. 3d 846, 283 Ill. Dec. 497 (2004). In
such a case, the party asserting the existence of a fiduciary relationship must allege that a duty
arose from “the special circumstances of the parties’ relationship, where one party places trust
and confidence in another, thereby placing the latter party in a position of influence and
superiority over the former.” Id. at 52. Wheeler alleges that he “placed his trust in [ASIC] given
their purported expertise, superiority and dominance over the insurance policy, the Wheeler
claim and Wheeler.” Compl. ¶ 83. The Court need not determine whether this is sufficient to
allege a fiduciary duty at this stage, as ASIC raised the argument regarding the existence of a
duty too late. Dexia Credit Local v. Rogan, 629 F.3d 612, 625 (7th Cir. 2010) (“[A]rguments
raised for the first time in a reply brief are waived.”). Thus, the Court will allow Wheeler’s
fiduciary duty claim to proceed to discovery, where the parties can explore whether special
circumstances existed between them that gave rise to a fiduciary duty.

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CONCLUSION
For the foregoing reasons, ASIC’s motion to dismiss [29] is granted in part and denied in
part. Counts III (fraud), IV (ICFA violation), and V (unjust enrichment) are dismissed without
prejudice.

Dated: August 28, 2015

______________________
SARA L. ELLIS
United States District Judge

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