Huntington Chase Condo. Ass'n v. Mid-Century Ins. Co.

379 F.Supp.3d 687

HUNTINGTON CHASE CONDOMINIUM ASSOCIATION, Plaintiff,

v.MID-CENTURY INSURANCE COMPANY, Defendant.

No. 16 CV 4877

United States District Court, N.D. Illinois, Eastern Division.

Signed March 29, 2019

Andrew Milan Plunkett, Daniel Thomas Loucks, Childress Loucks & Plunkett, Ltd., Chicago, IL, for Plaintiff.

Matthew Peter Fortin, Michael Leonard Foran, Alexander J. Bialk, Foran Glennon Palandech Ponzi & Rudloff, PC, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

John J. Tharp, Jr., United States District Judge

On May 12, 2014, and May 20, 2014, hail storms took place in and around Elk Grove Village, Illinois. Or maybe they didn't. The plaintiff, Huntington Chase Condominium Association ("Huntington"), which operates a complex of condominium buildings, contends that these storms occurred and caused direct physical damage to its property. Its insurer, defendant Mid-Century Insurance Company ("Mid-Century"), denies that there were significant hail storms on those dates and asserts that the only substantial hail storm to hit Huntington's property between January 2010 and April 2017 occurred in April 2010, well before its policy with Huntington was in effect. After Mid-Century denied Huntington's insurance claim, Huntington filed this lawsuit accusing Mid-Century of breaching its insurance policy. Mid-Century has moved for summary judgment. In addition, each party has filed a motion to exclude the other side's expert witness on forensic meteorology. All three motions are denied. The foundational questions of whether and, if so, when a hail storm damaged the Huntington complex, as well as myriad subsidiary Facts, are disputed. And though each side denigrates the other's expert, their basic methodologies—which bear significant similarities—are sufficiently reliable to let a jury weigh their merit. Resolution of these fact disputes, and the attendant battle of the experts, requires a trial.

BACKGROUND

Huntington operates a 53-building, 336-unit condominium association that is located in Elk Grove Village. Def.'s Statement of Material Facts ("DSOF") ¶ 3, ECF No. 58. The buildings on that property were constructed in 1994 and 1995. Id. ¶ 4. From August 21, 2013, to August 21, 2014, that property was covered by an insurance policy issued by Mid-Century. Id. ¶ 5. That policy provided that Mid-Century would pay for "direct physical loss of or damage to Covered Property," subject to the terms in the agreement. Condominium Property Coverage Form 1, ECF No. 1-1. One such condition of recovery contained in the contract is that "in the event of loss or damage to Covered Property," Huntington was required to give Mid-Century "prompt notice of the loss or damage." Id. at 18.

According to Huntington, on May 12, 2014, and May 20, 2014, severe hail storms occurred at the property. Huntington alleges that these storms caused direct physical damage to the roofs and siding of its buildings. It appears that Huntington was first made aware of this event in August 2014, when an individual who lived at the property informed Edward Bartosch, the president of Huntington's board of directors and also a resident, that he believed the roofs and siding of the property had been damaged in a storm back in May. See DSOF ¶¶ 27-28; Pl.'s Statement of Additional Material Facts ¶ 17, ECF No. 64. On November 3, 2014, Huntington first notified Mid-Century that a loss had occurred, and in April 2015, it submitted a claim to Mid-Century. See DSOF ¶¶ 46, 48. Mid-Century denied that claim shortly thereafter. It stated that, along with Haag Engineering, it had conducted its own investigation into the alleged incident. This investigation concluded that any hail damage to the property was minimal and that, to the extent there was hail damage, it had most likely occurred in 2010, prior to the beginning of the policy period. See Ex. 16, ECF No. 64-17. In December 2015, Huntington submitted additional information to Mid-Century and requested that the company reconsider the denial of its claim. DSOF ¶ 50. Mid-Century then rejected that request and reaffirmed its denial of Huntington's claim. Id. ¶ 51.

Huntington filed this lawsuit in April 2016 in the Circuit Court of Cook County, suing Mid-Century for breach of contract. Mid-Century removed the case to this Court, based on diversity jurisdiction.¹ Mid-Century has now moved for summary judgment. In addition, each party has filed a motion to bar the testimony of one of the other side's expert witnesses. Those three motions are all now before this Court.

DISCUSSION

I. Motion for Summary Judgment

A court shall grant summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A factual dispute is genuine if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In reviewing a motion for summary judgment, the Court "construe[s] all facts and inferences in favor of the nonmoving party." Love v. JP Cullen & Sons, Inc. , 779 F.3d 697, 701 (7th Cir. 2015).

Mid-Century has advanced two arguments as to why it is entitled to summary judgment. First, it argues that Huntington did not provide it with "prompt notice of the loss or damage," as required under the terms of the insurance policy. Second, it contends that Huntington cannot meet its burden of establishing that it suffered loss or damage to its property as a result of the storms such that it is entitled to recovery under the policy.

A. Prompt Notice

The insurance policy at issue in this case states that "in the event of loss or damage to Covered Property," the policy holder must give Mid-Century "prompt notice of the loss or damage." The policy does not define what qualifies as "prompt notice." As both parties agree, Illinois courts interpret such provisions as requiring the insured to provide notice to the insurer "within a reasonable time." See, e.g. , First Chicago Ins. Co. v. Molda , 408 Ill. App. 3d 839, 846, 350 Ill.Dec. 137, 948 N.E.2d 206, 213 (2011). Illinois courts consider a variety of factors in determining whether a party has provided notice within a reasonable time. The most obvious of them is the length of time that has elapsed between the incident and the notice. Nevertheless, a "lengthy passage of time" is not a bar to coverage "provided the insured has a justifiable excuse for the delay." Am. Country Ins. Co. v. Efficient Constr. Corp. , 225 Ill. App. 3d 177, 181, 167 Ill.Dec. 458, 587 N.E.2d 1073, 1075 (1992). The key element of the notification requirement is "the appearance to a reasonable person that a claim covered by a policy may be brought against the insured." Id. In addition to the length of time, the other factors to be considered in the reasonableness analysis include:

(1) the specific language of the policy's notice provisions; (2) the degree of the insured's sophistication in the world of commerce and insurance; (3) the insured's awareness that an occurrence as defined under the terms of the policy has taken place; (4) the insured's diligence and reasonable care in ascertaining whether policy coverage is available once the awareness has occurred; and (5) any prejudice to the insurance company.

Berglind v. Paintball Bus. Ass'n , 402 Ill. App. 3d 76, 86, 341 Ill.Dec. 522, 930 N.E.2d 1036, 1045 (2010). A question of what constitutes notice "within a reasonable time" is "generally a question of fact. However, when there is no controversy as to the facts, the question of what constitutes ‘within a reasonable time’ becomes a question of law." Id. at 86, 341 Ill.Dec. 522, 930 N.E.2d at 1044. Here, while there are a number of factual disputes regarding the alleged storms, there are no significant disagreements about the facts relevant to the prompt-notice analysis, so it is a question of law.

In the present case, Huntington alleges that the hail storms took place on May 12, 2014, and May 20, 2014. DSOF ¶ 23. So far as the record currently reflects, it appears that none of Huntington's board members were aware that any damage may have occurred as a result of the storms until sometime in August 2014. See id. ¶¶ 27-28. Huntington first notified Mid-Century of the potential loss on November 3, 2014. Id. ¶ 46. The key question, therefore, is whether Huntington's delay in notifying Mid-Century was reasonable.

In answering this question, three of the relevant factors—the length of the delay, the language of the contract, and Huntington's awareness of the occurrence—are intimately bound up with one another. Mid-Century characterizes the delay as lasting about six months, the time that elapsed between the (alleged) storms and the notification. Huntington, in contrast, notes that it was not aware of the damage until August 2014, and provided notice a little over two months thereafter. It argues, therefore, that the delay was really only about two months—or, alternately, that the delay between May 2014 and August 2014 was reasonable given that it was not aware of the damage during this time.

Mid-Century contends that this delay was not reasonable because Huntington's duty to notify was triggered by the hail storms, not by Huntington's awareness of the damage. It writes that "[a]s Plaintiff acknowledges, the relevant factor that courts consider is the insured's knowledge and awareness of an occurrence ." Def.'s Reply in Supp. of Its Mot. for Summ. J. ("Reply") 6, ECF No. 68 (emphasis in original). This assertion, however, is supported only by a citation to Huntington's response brief, and Mid-Century cites no authority in support of this proposition. The sentence that it appears to refer to in Huntington's brief is a paraphrase from Berglind ; as noted above, the full phrase in that opinion states that courts will consider "the insured's awareness that an occurrence as defined under the terms of the...