Ervin v. Travelers Personal Insurance Company
Filing
46
MEMORANDUM Opinion and Order Signed by the Honorable Elaine E. Bucklo on 4/5/2018. Mailed notice. (mgh, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
)
)
)
)
)
)
)
)
)
)
)
)
)
)
Felicia Ervin
Plaintiff,
v.
Travelers Personal Insurance
Company,
Defendant.
No. 17 C 5492
MEMORANDUM OPINION AND ORDER
In this insurance dispute, Felicia Ervin sues her property
insurance carrier for its refusal to cover her losses arising out
of a fire in a building she owns. Plaintiff alleges that defendant
issued her a policy effective November 18, 2016, through November
17, 2017, and that on or around December 22, 2016,1 the insured
premises were damaged by fire. Plaintiff submitted a claim to
defendant
for
her
complaint
asserts
losses,
breach
but
of
defendant
contract
and
denied
seeks
coverage.
relief
Her
under
Section 155 of the Illinois Insurance Code based on defendant’s
allegedly vexatious and unreasonable conduct in denying coverage.
1
The operative complaint alleges that the fire occurred on or
about December 22, 2017, but defendant’s answer corrects what I
assume was a typographical error in the year. Plaintiff’s motion
for judgment on the pleadings states that the fire occurred on
December 20, 2016.
Defendant’s
amended
answer
asserts
seven
affirmative
defenses. The third of these states that coverage for plaintiff’s
losses is excluded by a policy provision the parties refer to as
the “vandalism and malicious mischief” exclusion. The exclusion
provides that defendant does not insure for loss caused by:
Vandalism and malicious mischief, and any ensuing loss
caused by any intentional and wrongful act committed in
the course of the vandalism or malicious mischief, if
the dwelling has been vacant for more than 30
consecutive days immediately before the loss.
In support of this affirmative defense, defendant alleges that the
insured premises had been vacant for over two years at the time of
the fire, and that “[i]f plaintiff was not involved in the fire in
any
way,”2
then
the
fire
was
an
intentional
and
wrongful
act
committed by a third party in the course of vandalism or malicious
mischief.
Plaintiff has moved for partial judgment on the pleadings,
asking me to dispose of this affirmative defense as a matter of
law. For purposes of her motion, she does not dispute that the
insured premises were vacant for two years before the loss or that
the fire resulted from the intentional wrongful or malicious acts
of a third party. Nor does she dispute that on these facts, her
claim falls within the scope of the vandalism exclusion as it is
2
In a separate affirmative defense, defendant asserts that
coverage is excluded by a policy exclusion for intentional loss,
which applies when the claimed loss arises out of an act an
“insured” commits or conspires to commit with the intent to cause
a loss.
2
written.
She
enforced
as
argues,
written
however,
because
that
it
the
exclusion
impermissibly
cannot
provides
be
less
coverage than is required by the Illinois Standard Fire Policy.
For the reasons explained below, I agree and grant her motion.
I.
A motion for judgment on the pleadings is subject to the same
standards as a motion to dismiss under Fed. R. Civ. P. 12(b)(6).
Lodholtz v. York Risk Servs. Group, Inc., 778 F.3d 635, 639 (7th
Cir.
2015).
Accordingly,
it
may
be
granted
when
the
factual
allegations in the pleading, accepted as true, raise a facially
plausible claim, or, in this case, affirmative defense. See id.
Because my jurisdiction is based on diversity of citizenship, I
apply Illinois substantive law. Id. If the Illinois Supreme Court
has not decided an issue before me, I must give “great weight” to
relevant decisions of the Illinois Appellate Court, absent some
indication that the state’s highest court would decide the issue
otherwise. Pisciotta v. Old Nat. Bancorp, 499 F.3d 629, 635 (7th
Cir. 2007).
All fire insurance policies written in Illinois must conform
to the requirements of the Standard Policy. Lundquist v. Allstate
Ins. Co., 732 N.E. 2d 627, 629 (Ill. App. Ct. 2000) (citing 50
Ill. Adm. Code § 2301.100). This means that “insurance policies
may not provide less coverage than that set forth in the Standard
Policy.”
Id.
“In
essence,
the
Standard
3
Policy
sets
forth
the
minimum coverage upon which an insured can rely under any fire
insurance policy issued in Illinois.” FBS Mortg. Corp. v. State
Farm Fire and Cas. Co. of Bloomington, Ill., 833 F. Supp. 688, 695
(N.D.
Ill.
insurer’s
1003).
policy
“[I]n
and
the
the
event
of
Standard
a
conflict
Policy,
Fire
between
the
an
latter
controls.” Streit v. Metropolitan Casualty Insurance Company, 863
F.3d 770, 773 (7th Cir. 2017).
II.
Plaintiff argues that application of the vandalism exclusion
to deny her fire loss conflicts with the vacancy provision of the
Standard Policy. She points to the Standard Policy’s suspension of
coverage
for
losses
occurring
“while
a
described
building...is
vacant or unoccupied beyond a period of sixty consecutive days.”
As
plaintiff
provision
as
observes,
Illinois
establishing
a
courts
prospective,
have
interpreted
60-day
vacancy
this
period
that begins to run at the policy’s inception, regardless of how
long
the
premises
were
actually
vacant,
citing
Kolivera
v.
Hartford Fire Ins. Co., 290 N.E. 2d 356, 360 (Ill. App. Ct. 1972).
See also West Bend Mut. Ins. Co. v. New Packing Co., Inc., 2012 WL
6962117, at *3 (Ill. App. Ct. 2012).
In
Kolivera,
the
Illinois
Appellate
Court
examined
a
provision that, like the Standard Policy, suspended coverage while
the premises were “vacant or unoccupied beyond a period of sixty
consecutive days.” 290 N.E. 2d at 359. At the time of the loss,
4
several of the policies under which the insured sought coverage
had been in effect for less than sixty days, although the premises
had been vacant (the court assumed for purposes of analysis), for
more
than
sixty
days.
The
court
held
that
“regardless
of
the
actual vacant or unoccupied status of the building, the 60-day
vacancy clause contained in those policies...must be measured from
the date of issuance.” Id. 290 The court agreed with the view
expressed in Old Colony Ins. Co. v. Garvey, 253 F.2d 299 (4th Cir.
1958), that “absent specific language including such, a previous
condition
of
vacancy
or
unoccupancy
of
premises
is
to
be
disregarded upon the issuance of a policy of insurance containing
a vacancy clause, and that such clause is to be measured from the
time
of
issuance
of
the
policy.”
Id.
Further
supporting
its
conclusion, the court observed that the insurers “had a reasonable
opportunity
to
inspect
the
property
to
determine
whether
it
conformed to all requirements of a policy prior to the issuance of
coverage,”
violation
and
of
a
thus
“should
vacancy
not
provision
be
heard
which
they
later
to
took
no
claim
steps
a
to
discover.” Id. at 361.
In plaintiff’s view, Kolivera reflects the Illinois Appellate
Court’s
determination
that
that
the
vacancy
provisions
in
the
Standard Policy do not exclude losses occurring within sixty days
of the inception of coverage, regardless of how long the premises
may have been vacant prior to the policy’s inception. Accordingly,
5
she reasons, any policy whose vacancy provisions are applied to
exclude
coverage
for
fire
losses
within
sixty
days
of
policy
inception provides less coverage than the Standard Policy.
Defendant, unsurprisingly, views matters differently. Without
conceding that the vacancy period in its policy conflicts with the
Standard
Policy,
defendant
argues
that
any
conflict
could
be
resolved by expanding the 30-day vacancy period in its policy to
sixty days. Amended in this fashion, the exclusion would apply to
losses
caused
dwelling
has
by
“[v]andalism
been
vacant
and
for
malicious
more
than
mischief...if
the
consecutive
days
60
immediately before the loss.” Because plaintiff’s loss would be
excluded
even
under
this
amended
version
of
the
provision,
defendant argues, she is not entitled to judgment in her favor.
Moreover,
establishes
vacancy
a
defendant
retrospective
period
Standard
like
Policy.
illustrate
that
excluded
points
under
the
in
the
some
vacancy
one
Defendant
out,
at
the
period,
issue
invokes
in
Policy
not
a
Kolivera
hypothetical
circumstances,
Standard
vandalism
a
but
fire
not
exclusion
prospective
and
in
the
scenarios
to
loss
would
excluded
by
be
the
vandalism exclusion. Because defendant’s policy would, in those
circumstances, provide greater coverage than the Standard Policy,
it
is
not
Standard
provisions
unenforceable
Policy
that
for
requires.
are
facially
providing
In
less
defendant’s
irreconcilable
6
coverage
view
with
than
then,
the
the
only
Standard
Policy-i.e.,
provide
whose
less
“conflict”
application
coverage
with
the
than
would,
the
Standard
in
Standard
Policy,
all
circumstances,
Policy—impermissibly
regardless
of
how
any
particular claim would fare under the respective policies.
Defendant’s view reflects a fundamental misunderstanding of
the role the Standard Policy plays in Illinois insurance law,
which is to provide “a minimum threshold for what fire-insurance
policies must cover.” Streit, 863 F.3d at 771. Indeed, because the
Standard Policy “sets forth the minimum coverage upon which an
insured can rely,” (emphasis added) the fact that a policy might
cover
some
hypothetical
losses
that
would
be
excluded
by
the
Standard Policy is beside the point. Insurers are free to provide
broader coverage than the Standard Policy requires; what they may
not do is provide less coverage for fire loss. FBS Mortg., 833 F.
Supp.
at
696.
Equally
misguided
is
defendant’s
effort
to
distinguish Kolivera on the ground that it construed a prospective
vacancy period, rather than a retrospective period like the one at
issue in this case. The dispute here is not over how to construe
the
vacancy
period
in
the
vandalism
exclusion;
the
issue
is
whether that exclusion can be enforced to deny plaintiff’s claim,
even if her claim would be covered under the Standard Policy.
Plaintiff’s authorities indicate that the answer to that question
is “no.”
7
Defendant’s attack on Kolivera as poorly reasoned does not
persuade me otherwise. Defendant criticizes both Kolivera and New
Packing
to
the
extent
these
cases
declined
to
enforce
vacancy
exclusions where the insurer made no effort to discover whether
the insured premises were vacant prior to issuing the policy. In
defendant’s view, these holdings contravene “the well-established
rules
of
Illinois
contract/statutory
Supreme
Court.”
interpretation
Resp.
at
10.
But
mandated
defendant
by
the
offers
no
authority to suggest that the Illinois Supreme Court would reject
the
conclusion
the
Illinois
Appellate
Court
reached
in
these
cases. Moreover, as noted above, the dispositive issue does not
turn on a matter of contract interpretation but rather on the
primacy of the Standard Policy under Illinois insurance law.
III.
Because I conclude, on the facts alleged here, that Illinois
courts
would
not
permit
defendant
to
exclude
coverage
for
plaintiff’s losses based on the vandalism exclusion, I grant her
motion for judgment on the pleadings.
ENTER ORDER:
Elaine E. Bucklo
United States District Judge
Dated: April 4, 2018
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?