Moje v. Federal Hockey League LLC et al

Filing 55

MEMORANDUM Opinion and Order Signed by the Honorable Joan B. Gottschall on 9/19/2016. Mailed notice(mjc, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
KYLER MOJE,
Plaintiff,
v.
FEDERAL HOCKEY LEAGUE LLC,
NATIONAL CASUALTY COMPANY,
THE DAVID AGENCY INSURANCE
INC., and DON KIRNAN
Defendants.

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Case No. 15-cv-8929
Judge Joan B. Gottschall

MEMORANDUM OPINION & ORDER
Plaintiff Kyler Moje (“Moje”) filed a two-count second amended complaint (“SAC”)
against Federal Hockey League (the “League”), the National Casualty Company (“National
Casualty”), the David Agency Insurance (the “David Agency”), and Don Kirnan (“Kirnan”)
seeking a declaratory judgment regarding the coverage of an insurance policy between the
League and National Casualty and the David Agency. Moje alleges that the David Agency failed
to procure insurance that the League requested in order to insure its players for the type of
injuries sustained by Moje. Kirnan was dismissed from the action following a stipulation by the
parties. Presently before the Court is the David Agency’s motion to dismiss the second amended
complaint pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(6) for failing to state a
claim upon which relief can be granted. An insurance producer’s duty to exercise ordinary care
and skill in renewing, procuring, binding, or placing the coverage requested by the insured or
proposed insured extends to a foreseeable plaintiff, like Moje, harmed by the insured’s tortious
conduct. For the following reasons, the David Agency’s motion is granted in part and denied in
part. Count I as directed toward the David Agency is dismissed with prejudice.

I.

BACKGROUND

On February 10, 2012, Moje was playing in a professional hockey game as a member of
the Danville Dashers team against the Akwesasne Warriors. Both teams belonged to the League.
During the game, an Akwesasne Warrior made an illegal maneuver by lifting his hockey stick
and thrusting the blade end forcefully under Moje’s helmet, which caused significant injury to
Moje, including blindness. A lawsuit was filed in the Northern District of Illinois, alleging
willful and wanton negligence against the League and a products liability action against Oakley,
Inc., the manufacturer of the facemask worn by Moje. That case resulted in a default judgment
against the League in the amount of $800,000. Moje has been unable to collect his judgment
from the League.
On October 9, 2015, Moje filed this action seeking a declaration of the rights of the
League under the insurance policy issued by National Casualty and the David Agency. Moje
seeks to determine whether there is coverage under the insurance policy for the insurer to pay for
a judgment entered in favor of Moje against the League. Moje filed his First Amended
Complaint on October 28, 2015 following an order by this court dismissing the complaint for
lack of subject matter jurisdiction.
In lieu of filing an answer, National Casualty filed a motion to dismiss Moje’s first
amended complaint on January 4, 2016. One day before Moje was set to file a response, he filed
a second amended complaint on February 4, 2016. The second amended complaint removed
Don Kirnan from the caption and added Count II. Moje directs Count II against the David
Agency and seeks a declaration that the David Agency was negligent in procuring the insurance
coverage sought by the League.

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Moje alleges that on or about June of 2012, the David Agency produced and brokered an
insurance agreement between the other two Defendants, the League and National Casualty. The
insurance policy at issue, policy number KKO0000002184300, was issued for a period from
October 19, 2011 to October 19, 2012. Moje attached a copy of certificate of liability insurance
that identifies the League as the insured, the David Agency as the producer, and the
“INSURER(S) AFFORDING COVERAGE” as National Casualty. The certificate also contains
the following disclaimer:
“THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND
CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE
DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER
THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE
OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE
ISSUING INSURERS, AUTHORIZED REPRESENTATIVE OR PRODUCER, AND
THE CERTIFICATE HOLDER.”
The David Agency filed its motion to dismiss Moje’s second amended complaint on
February 18, 2016. The David Agency also requested the court to strike the second amended
complaint because Plaintiff did not seek the leave of court to amend its complaint in violation of
Federal Rule of Civil Procedure 15(a). Defendant National Casualty filed an answer to
Plaintiff’s second amended complaint on February 25, 2016 denying any coverage under the
insurance policy at issue.
II.

LEGAL STANDARD

To survive a motion to dismiss pursuant to Rule 12(b)(6), a complaint must “state a claim
to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), citing Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim satisfies this pleading standard when its
factual allegations “raise a right to relief above the speculative level.” Twombly, 550 U.S. at
555-56. For the purposes of a motion to dismiss, the court takes all facts alleged by the plaintiff
as true and draws all reasonable inferences from those facts in the plaintiff’s favor, although
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conclusory allegations that merely recite the elements of a claim are not entitled to this
presumption of truth. Virnich v. Vorwald, 664 F.3d 206, 212 (7th Cir. 2011). Federal Rule of
Civil Procedure 10(c) provides that “[a] copy of any written instrument which is an exhibit to a
pleading is a part thereof for all purposes.” Fed. R. Civ. P. 10(c). It is also well-settled in this
circuit that “documents attached to a motion to dismiss are considered part of the pleadings if
they are referred to in the plaintiff's complaint and are central to his claim. Such documents may
be considered by a district court in ruling on the motion to dismiss.” 188 LLC v. Trinity Indus.,
Inc., 300 F.3d 730, 735 (7th Cir. 2002) (citing Wright v. Assoc. Ins. Cos. Inc., 29 F.3d 1244,
1248 (7th Cir.1994)).
III.

DISCUSSION

A. Motion to Strike the Second Amended Complaint
The David Agency asks the court to strike Moje’s second amended complaint because he
did not ask for leave to amend his complaint in violation of Rule 15. Rule 15 states that a party
“may amend its pleading once as a matter of course within: 21 days after serving it, or if the
pleading is one to which a responsive pleading is required, 21 days after service of a responsive
pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier.”
Fed. R. Civ. P. 15(a)(1). “[I]n all other cases, a party may amend its pleading only with the
opposing party's written consent or the court's leave. The court should freely give leave when
justice so requires.” Fed. R. Civ. P. 15(a)(2). Even assuming that Moje retained his right to
amend his complaint once as a matter of course after receiving the court’s leave to amend
previously, his amendment did not come until 30 days after the David Agency filed its motion to
dismiss.

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“The Supreme Court has interpreted [Rule 15] to require a district court to allow
amendment unless there is a good reason—futility, undue delay, undue prejudice, or bad faith—
for denying leave to amend.” Life Plans, Inc. v. Sec. Life of Denver Ins. Co., 800 F.3d 343, 35758 (7th Cir. 2015) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). In the interest of
efficiency and justice, the court will not strike the second amended complaint since it would do
so based only on a technicality. Moving forward, counsel should be mindful of the dates set by
the Federal Rules of Civil Procedure and this court’s scheduling orders.
B. Motion to Dismiss Count I of the Second Amended Complaint
In Count I of the second amended complaint, Moje seeks declaratory relief under the
insurance policy that was in effect at the time of his injury. The crux of the parties’ dispute in
Count I is whether the insurance policy covers the types of injuries sustained by Moje.
“[W]here a plaintiff attaches documents and relies upon the documents to form the basis
for a claim or part of a claim, dismissal is appropriate if the document negates the claim.”
Thompson v. Illinois Dep't of Prof'l Regulation, 300 F.3d 750, 754 (7th Cir. 2002). Additionally,
“where the certificate [of insurance policy] refers to the policy and expressly disclaims any
coverage other than that contained in the policy itself, the courts found that the policy should
govern the extent and terms of the coverage.” T.H.E. Ins. Co. v. City of Alton, 227 F.3d 802, 805
(7th Cir. 2000) (citing American Country Ins. Co. v. Kraemer Brothers, Inc., 699 N.E.2d 1056,
1060 (Ill. App. Ct. 1998) (where the certificate of insurance contains a disclaimer, the insured
may not rely on the certificate but must look to the policy itself to determine the scope of
coverage). See also Pekin Ins. Co. v. American Country Ins. Co., 572 N.E.2d 1112, 1114–15 (Ill.
App. Ct. 1991) (where the certificate of insurance contains a disclaimer and there is no conflict

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between the terms of the certificate and the terms of the policy, the insured will be held to the
terms of the underlying policy).
Moje, in the second amended complaint, alleges that the insurance policy at issue was
between Defendants National Casualty and the David Agency. [SAC ¶ 32, ECF No. 30.] Moje
also alleges that the underlying insurance policy required the David Agency to indemnify the
insureds for any judgments entered against them. However, the Certificate of Liability Insurance
identifies the David Agency as the producer, the League and Don Kirman as the insureds, and
National Casualty as the insurer. Furthermore, the insurance policy with the number
KKO0000002184300 does not mention the David Agency. [Insurance Policy, ECF No. 13-1.]
Although in a motion to dismiss the court takes facts alleged in the complaint as true, documents
produced by Moje clearly show that Defendant David Agency was not an insurer of the policy at
issue but rather a producer. Since the documents show that David Agency was not a party to the
insurance agreement, the Defendant David Agency’s motion to dismiss Count I is granted.
C. Motion to Dismiss Count II of the Second Amended Complaint
Count II is a request for declaratory judgment against Defendant David Agency based on
its role as the producer of the insurance policy. Although Moje does not expressly title Count II
of his second amended complaint in this manner, his response to the David Agency’s motion to
dismiss makes clear that Count II is a negligence claim rather than a breach of fiduciary duty
claim. As discussed below, Moje may seek a declaration that the David Agency is liable for its
negligence. Further, Moje alleges sufficient facts, which, if accepted as true, establish the David
Agency’s liability.

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1. Moje may bring a declaratory judgment action to establish liability for the David
Agency’s alleged negligence.
Moje may bring a declaratory judgment action against the David Agency to determine its
liability for negligence. An injured plaintiff may seek a declaration that an insurance producer
was negligent. Under the Declaratory Judgment Act, “[i]n a case of actual controversy within its
jurisdiction, . . . any court of the United States, upon the filing of an appropriate pleading, may
declare the rights and other legal relations of any interested party seeking such declaration,
whether or not further relief is or could be sought.” 28 U.S.C. § 2201 (2010). “The existence of
another adequate remedy does not preclude a declaratory judgment that is otherwise
appropriate.” Fed. R. Civ. P. 57. While the difference between an abstract question and an
“actual controversy” contemplated by the Declaratory Judgment Act is necessarily one of degree,
the basic question is whether the facts alleged show a substantial controversy, between parties
having adverse legal interests, of sufficient immediacy and reality to warrant a declaratory
judgment. Maryland Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941).
Here, there is an actual controversy between Moje and the David Agency. The coverage
of the insurance policy is a predicate to the David Agency’s liability under the negligence theory.
As discussed in detail below, the David Agency owed a duty of reasonable care to Moje. As
soon as National Casualty denied coverage, Moje and the David Agency were placed at odds
with one another. Cf. Broadnax v. Morrow 762 N.E.2d 1152, 1157 (Ill. App. Ct. 2002) (finding
that the statute of limitations for a producer’s potential negligence liability to the insured started
accruing when the insurer denied insured’s claim). Although Moje could have brought an
ordinary negligence claim, a declaratory judgment claim is not defeated by the “existence of
another adequate remedy.” See Fed. R. Civ. P. 57. Further, inclusion of the David Agency in
this suit will allow this Court to determine the potential liabilities of all parties together and
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avoid inconsistent results since both National Casualty’s and the David Agency’s potential
liability depend on the coverage of the insurance policy. Therefore, a declaratory judgment
action is appropriate.
2. Moje alleges sufficient facts, accepted as true, that establish the David Agency is
liable for negligence
In order to survive a motion to dismiss, Moje must allege sufficient facts, which the court
accepts as true for the purposes of a motion to dismiss, that establish the David Agency’s
liability for negligence. In order to prevail in a negligence action, Moje must allege duty, breach,
causation, and damages. As discussed below, Moje sufficiently alleges each element.
a. Duty
Moje alleges in his second amended complaint and his response brief that the David
Agency owed a duty to him to procure and obtain the type of insurance policy requested by the
League.
A producer’s duty to supply adequate liability coverage to the insured tortfeasor extends
to an injured plaintiff. A plaintiff may bring a direct suit against insurance producer who
contracted to supply a public policy to the insured for personal injuries sustained in an
automobile accident. Gothberg v. Nemerovski, 208 N.E.2d 12 (Ill. App. Ct. 1965). The court in
Gothberg noted that the automobile insurance policies have unique “connotations extending to
the general public above and beyond the private interests of the two contracting parties” and
concluded that “automobile insurance is no longer a private contract merely between two
parties.” Gothberg, 208 N.E.2d at 12. Furthermore, the insurance policy specifically provided
that “[a]ny person . . . who has secured such judgment . . . shall thereafter be entitled to recover
under this policy . . . .” Gothberg, 208 N.E.2d at 12.

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Although Gothberg court relied on the public policy implications of automobile
insurance, the Illinois courts later recognized that an injured person is deemed to have an interest
in the adjudication of an insurance coverage dispute between the insured and the insurance
company. Reagor v. Travelers Ins. Co., 415 N.E.2d 512, 514 (Ill. App. Ct. 1980) (liability
insurance abounds with public policy considerations and therefore injured members of the
general public are beneficiaries of liability insurance policies). Most recently in Skaperdas, the
Illinois Supreme Court recognized that “every person owes a duty of ordinary care to all others
to guard against injuries which naturally flow as a reasonably probable and foreseeable
consequence of an act, and such a duty does not depend upon contract, privity of interest or the
proximity of relationship, but extends to remote and unknown persons.” Skaperdas v. Country
Cas. Ins. Co., 28 N.E.3d 747, 754 (Ill. 2015) (citing Simpkins v. CSX Transportation, Inc., 965
N.E.2d 1092 (Ill. 2012). Further, “[a] tort-claimant in an underlying action has a substantial right
in the viability of a policy of insurance that might be the source of funds available to satisfy the
tort claim, and such a claimant possesses rights in the insurance contract which vest at the time
of the occurrence giving rise to the underlying claim.” Record-A-Hit, Inc. v. Nat'l Fire Ins. Co.
of Hartford, 377 Ill. App. 3d 642, 645, 880 N.E.2d 205, 207 (2007) (citing to a collection of
cases holding the same).
The David Agency points out that recent Illinois cases have highlighted the Gothberg
court’s reliance on public policy considerations relating automobile insurance. For instance, in
Central Mutual Insurance Company v. Tracy’s Treasures, the Illinois Appellate Court
distinguished Gothberg, and argued that those public policy considerations are inapplicable in
other contexts. 19 N.E.3d 1100, 1126 (Ill. App. Ct. 2014). The court ruled that there was no
“corresponding public policy requiring those who advertise their businesses through electronic

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transmissions to carry liability insurance to cover the possibility that those to whom the
advertisements are transmitted have not consented to receive them.” Id. However, Tracy’s
Treasures and the other cases cited by the David Agency do not foreclose Moje’s claim that the
David Agency negligently failed to procure the type of insurance coverage that the League
sought. Moje’s underlying claim—a personal injury tort—bears a closer relationship to the long
line of Illinois cases placing a duty on an insurance producer in automobile accident cases to
injured plaintiffs than the cases cited by the David Agency, which relate to business tort claim
like the TCPA. An insurance producer’s duty to "exercise ordinary care and skill in renewing,
procuring, binding, or placing the coverage requested by the insured or proposed insured,"
extends to a plaintiff who suffers personal injuries by the insured. 735 ILCS 5/2-2201(a) (2010).
Turning to the facts alleged in the second amended complaint, Moje alleges that the
David Agency was the producer of the insurance policy between the League and National
Casualty. Further, the League requested from the David Agency to be insured against the type of
loss sustained by Moje. The League’s request to be covered for the type of injury sustained by
Moje may be specific enough to trigger the David Agency’s duty to exercise ordinary care and
skill to obtain the coverage requested by the League. Moje will need to prove with more
specificity whether such request was actually made, and whether it was sufficient to trigger the
David Agency’s duty. At this stage, however, Moje has sufficiently alleged that the David
Agency had a duty to exercise ordinary care towards him.
b. Breach
Moje sufficiently alleges a breach of duty by the David Agency. Specifically, Moje
alleges, as an alternative theory to his claim against National Insurance, that the insurance policy

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did not cover his injuries. A plaintiff is allowed to allege causes of action in the alternative.
Therefore, the allegations show sufficient breach by the Defendant David Agency.
c. Causation
Moje sufficiently alleges causation because he alleges that if the National Casualty is
correct that his injuries are not covered by the insurance policy, Moje may not be able to recover
his losses. Therefore, the David Agency’s failure to procure the type of insurance sought by the
League has caused Moje harm.
Moje need not wait until his case against the insurer is resolved in order to bring an
action against the producer. In Broadnax v. Morrow, the Illinois Appellate court held that the
plaintiff insured should have reasonably known of the defendant insurance producer’s possible
negligence when the plaintiff’s insurer denied his claim and therefore concluded that the
plaintiff’s negligence claim was barred by statute of limitations. 762 N.E.2d 1152, 1157 (Ill.
App. Ct. 2002). In light of Broadnax, although the negligence claim against the David Agency
may eventually turn out to be fruitless, Moje is allowed to plead alternative theories.
d. Damages
Moje sufficiently alleges damages because he was awarded a judgment of $800,000 and
has not been able to recover any of it.
Accordingly, Defendant David Agency’s motion to dismiss Count II is denied.
IV.

CONCLUSION

For the foregoing reasons, Defendant David Agency’s Motion to Dismiss [32] is granted
in part and denied in part. Count I is dismissed. Status is set for October 7, 2016.

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Date: September 19, 2016

/s/
Joan B. Gottschall
United States District Judge

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