Moje v. Federal Hockey League LLC et al

Filing 75

ENTER MEMORANDUM Opinion and Order: The David Agency's motion for reconsideration, ECF No. 57 , is denied. A status conference is set for September 22, 2017, at 9:30 a.m. Signed by the Honorable Joan B. Gottschall on 9/12/2017. Mailed notice(mjc, )

IN THE 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
The Illinois Insurance Placement Liability Act (“the Act”) requires “[a]n insurance
producer, registered firm, and limited insurance representative [to] exercise ordinary care and
skill in renewing, procuring, binding, or placing the coverage requested by the insured or
proposed insured.” 735 Ill. Comp. Stat. 5/2-2201(a) (West 2017). The motion to reconsider
before the court presents questions about an insurance producer’s duties to parties other than the
insured.
The plaintiff, Kyler Moje, played professional hockey in the minor league for the
Danville Dashers. During a game on February 10, 2012, a player for the opposing team
allegedly hit him in the face with a hockey stick. He suffered serious injuries and lost the sight
in one of his eyes.
Moje sued in this court (but not in this case) and obtained an $800,000 default judgment
against the Federal Hockey League (“the League”). See Moje v. Fed. Hockey League, LLC, 792
F.3d 756, 758–59 (7th Cir. 2015) (affirming denial of motion to vacate default judgment). He

also sued the manufacturer of the visor he was wearing, but Moje’s second amended complaint
(“SAC”) does not say what became of that claim. See SAC ¶¶ 19–27.
After obtaining the default judgment, Moje brought this action seeking declaratory relief
regarding an insurance policy issued in June 2012 by defendant National Casualty Co. (“National
Casualty”). See Policy, SAC Ex. 1. The policy identifies defendant the David Agency as the
policy’s producer, National Casualty as the insurer, and the League and its commissioner,
defendant Dan Kirnan as the insureds. Moje v. Federal Hockey League LLC, 207 F. Supp. 3d
833, 836 (N.D. Ill. 2016), Slip Op. at 6, ECF No. 55.
In count two, Moje seeks a declaratory judgment against the David Agency. He alleges
that the League communicated to the David Agency the type of insurance it needed to insure
against the type of loss he sustained, that the David Agency knew what type of policy the League
wanted, and that the League “was under the impression that the policy at issue covered personal
injury losses, such as that sustained by Plaintiff.” SAC ¶¶ 38–41 (quotation in ¶ 41). Moje has
since made clear his theory is that the David Agency negligently failed to procure the insurance
the League wanted. See Slip Op. at 8. Whether the policy covers Moje’s claim has yet to be
determined.
The David Agency moved to dismiss for failure to state a claim. See Fed. R. Civ. P.
12(b)(6). The court granted its motion in part and denied it in part in a memorandum opinion
and order entered September 19, 2016 (“the September 2016 opinion”). See Slip Op. at 1, 11.
The David Agency asks the court to reconsider the denial of its request to dismiss count two.
Reconsideration Standard
“Motions for reconsideration serve a limited function: to correct manifest errors of law
or fact or to present newly discovered evidence.” Caisse Nationale de Credit Agricole v. CBI

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Indus., Inc., 90 F.3d 1264, 1270 (7th Cir. 1996) (quoting Keene Corp. v. Int’l Fid. Ins. Co., 561 F.
Supp. 656, 665 (N.D. Ill. 1982)). The losing party’s disappointment with the outcome does not
demonstrate manifest error. Oto v. Metro. Life Ins. Co., 224 F.3d 601, 606 (7th Cir. 2000). But
new cases (especially binding ones) can warrant reconsideration if they would manifestly
produce a different outcome. See U.S. Fid. & Guar. Co. v. John Buck Co., No. 00 C 2460, 2001
WL 1298708, at *2 (N.D. Ill. Oct. 24, 2001) (considering whether newly decided case warranted
reconsideration of decision on in insurance coverage); Great W. Cas. Co. v. Marathon Oil Co.,
No. 99 C 3101, 2001 WL 699957, at *2 (N.D. Ill. June 21, 2001) (considering motion to
reconsider based on new case law but denying motion because “the new cases would not compel
a different result[; . . . ] none of the cases are controlling authority for this court”).
The M.G. Skinner Decision
After the September 2016 opinion, the Seventh Circuit applied the Act to reject a claim
that an insurance broker owed parties other than the insured or proposed insured a duty of
ordinary care in M.G. Skinner & Associates Insurance Agency, Inc. v. Norman-Spencer Agency,
Inc., 845 F.3d 313, 318–20 (7th Cir. 2017). A group of owners and managers of commercial
property formed a company, called WCPP for brevity’s sake here, to purchase insurance for their
properties; the total insured value exceeded $3.5 million. Id. at 315. WCCP hired an insurance
broker to purchase renewal coverage in 2001. Id. The broker hired a sub-broker, and the subbroker hired a sub-sub-broker. See id. at 315–16 (stating that use of sub-brokers is common with
a placement of this size). The insurance ultimately purchased proved not to exist, and Michael
A. Ward, the person who issued the policy, received a ten-year prison sentence for wire fraud.
Id. at 316. The third party, a company referred to here as Norman-Spencer, became involved in
the transaction when the brokers decided to split one of the property groups from the rest;

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Norman-Spencer separately underwrote insurance for the split-off group. See id at 316.
Norman-Spencer “pushed to be involved in more business,” but Ward didn’t allow it to
participate in the WCPP deal. See id. As a result of the transaction, Norman-Spencer became
aware of facts about Ward and his company which WCPP and its agents later alleged should
have been “red flags.” Id. WCPP, the insured, brought, among other things, a negligence claim
against Norman-Spencer on the theory that Norman-Spencer owed it a duty to warn it of the redflag facts about Ward. See id. at 318.
The Seventh Circuit upheld the entry of summary judgment for Norman-Spencer. It first
considered whether Norman-Spencer could be directly liable to WCPP under § 2-2201(a). See
id. at 318–19. “[T]here was no evidence that any broker in the procurement chain ever requested
that Norman–Spencer serve as a sub-broker to procure insurance for WCPP,” so WCPP could not
prevail on its claim under the Act. Id. at 319.
Statutory Analysis
M.G. Skinner’s statutory analysis illuminates an additional reason the SAC should not be
dismissed. Players of professional sports often buy personal injury insurance for themselves;
leagues buy commercial general liability coverage. 1 Walter Champion, Fundamentals of Sports
Law, Contracts § 16:6 (West 2016). This practice does not appear to be entirely uniform,
however. Champion, supra, notes a 2005 case, for instance, in which the Houston Astros bought
an insurance policy for a pitcher, albeit one insuring the salary it paid him if he became disabled.
See id. (citing and discussing Hous. McLane Co., Inc. v. Conn. Gen. Life Ins. Co., No. Civ.A. H1

As stated in the cited hornbook:
Many athletes, both professional and amateur, take out insurance policies against the possibility of
injury. In addition, many teams, arenas, leagues, universities, school districts, etc., take out
liability insurance so they can be paid by the insurer for loss that results from legal liability to a
third person. It protects the insured against financial loss brought upon by lawsuits based on
negligence. Common subjects for liability insurance are risks from use of the premises, from
faulty products, from use of vehicles, and from the practice of professions. Id. (internal quotations
and citations omitted).

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06-1508, 2006 WL 3050812 (S.D. Tex. Oct. 24, 2006)). Moje played minor league hockey. As
recently as 2009, the National Hockey League (“NHL”) purchased insurance policies covering
its players, but that trend does not appear to be universal in the world of hockey. Compare
Champion, § 16:6 (citing Jeff Klein, In Olympic Camps, It’s Skate at Your Own Risk, N.Y.
Times, Aug. 6, 2009, at B14), with Elbing v. Blair, No. 2005AP1653, 2007 WL 1322101, at *1
(Wis. Ct. App. May 8, 2007) (hockey player hurt in fight sued the other player and player’s
insurer rather than opposing team, the league, or their insurers). Read against this background,
the SAC’s allegations sweep broadly enough to claim that the League intended to procure a
policy like that the NHL bought for its players naming Moje as an additional insured. See SAC
¶¶ 38–41. So the SAC plausibly alleges that Moje was “a proposed insured” under § 2-2201 to
whom the David Agency owed a duty of reasonable care. See Skaperdas v. Country Cas. Ins.
Co., 28 N.E.3d 747, 757–58, 770 (Ill. 2015) (holding insurance broker owed duty to insured and
proposed insured where insured asked insurance producer to add his fiancée as an additional
insured).
General Negligence Principles
The Seventh Circuit also rejected WCPP’s alternative argument that Norman-Spencer
owed it a duty of care under “more general ‘common law negligence principles.’” 845 F.3d at
320–21. This court must follow the Seventh Circuit’s interpretation of Illinois law unless and
until subsequent Illinois cases supplant it. See Reiser v. Residential Funding Corp., 380 F.3d
1027, 1029 (7th Cir. 2004) (Seventh Circuit’s decision interpreting state law must be followed
unless “[a] decision by a state’s supreme court terminates the authoritative force of our decisions
interpreting state law”); Gschwendtner v. John Hancock Mut. Life Ins. Co., No. 90 C 2589, 1990
WL 186572, at *2 (N.D. Ill. Nov. 16, 1990) (“[T]his court is bound to follow [Seventh Circuit

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decisions] on state law issues absent subsequent state cases undermining Seventh Circuit
precedent . . . .”).
But nothing in M.G. Skinner’s analysis demonstrates that this court manifestly erred when
it applied general negligence principles. This court relied on the same “duty of ordinary care”
language in Skaperdas quoted by the M.G. Skinner court. Slip Op. at 9. True, the M.G. Skinner
court stated in general terms the plaintiff’s’ argument under Skaperdas’s “duty of ordinary care”
language this way: “After the enactment of § 2-2201, Illinois courts considering negligence
claims against insurance brokers have been reluctant to expand the duties of brokers and agents
beyond those articulated in the statute. Generally, a duty to the insured arises only after specific
coverage is requested, and courts have not considered negligence claims grounded in more
general negligence principles outside the scope of § 2-2201(a)’s language.” M.G. Skinner, 845
F.3d at 320 (emphasis added) (citing Skaperdas, 28 N.E.3d at 756) (other citations omitted). As
the qualifier “[g]enerally” suggests, M.G. Skinner also specifically acknowledged Illinois cases
hold that insurance producers owe a duty of care to people other than the insured or proposed
insured in auto-insurance cases, e.g., Gothberg v. Nemerovski, 208 N.E.2d 12 (Ill. App. Ct.
1965), or in certain circumstances when obtaining life insurance (and this list is not meant to be
exhaustive). The M.G. Skinner court reinforced the point by citing a pair of life insurance cases
holding that “[i]f an insurance agent acts so as to induce detrimental reliance by the proposed
insured, the agent thereby undertakes an individual duty not to betray that reliance by his
subsequent acts.” Bovan v. Am. Family Life Ins. Co., 897 N.E.2d 288, 294 (Ill. App. Ct. 2008)
(quoted in M.G. Skinner, 845 F.3d at 319).
M.G. Skinner does no more than read Illinois cases decided after the Act as sounding a
note of caution when expanding liability beyond § 2–2201(a)’s ambit under common law

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negligence principles. See 845 F.3d at 319 (citations omitted). M.G. Skinner’s general note of
caution does not demonstrate manifest error, especially given its acknowledgement of voluntaryundertaking cases. Even if it did, the SAC states a claim under § 2-2201 for the reasons already
explained.
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For these the foregoing reasons, the David Agency’s motion for reconsideration, ECF No.
57, is denied. A status conference is set for September 22, 2017, at 9:30 a.m.

Date: September 12, 2017

/s/
Joan B. Gottschall
United States District Judge

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