Appeal from the Circuit Court of Cook County Honorable Kenneth L. Gillis, judge Presiding.
The opinion of the court was delivered by: Justice Quinn delivered the opinion of the court:
On April 19, 1992, a fire destroyed the Harvey Fruit Market and the contents therein. Plaintiffs, Harvey Fruit Market, Inc., Konstantinos Kokkinis, and Zenophon Labos, one or more d/b/a Harvey Fruit Market and Deli, Inc., subsequently filed a claim which was denied by defendant, Hartford Insurance Company of Illinois, due to a finding of arson, misrepresentation, and fraud. Plaintiffs then filed a complaint for breach of contract, which was dismissed by the trial court pursuant to section 2-619 of the Code of Civil Procedure. 735 ILCS 5/2-619 (West 1994). On appeal, we address the following issues: (1) when did plaintiffs' loss occur; and (2) whether the insurance policy's time limitation on lawsuits was tolled when plaintiffs provided notice of loss on the day of the fire.
For the following reasons, we affirm.
The relevant facts are as follows. Defendant issued plaintiffs an insurance policy, effective December 1, 1991, to December 2, 1992. The policy covered, among other items, plaintiffs' building, business personal property, money and securities, and loss of income sustained over 12 consecutive months. The policy included the following specific provisions:
"2. Duties of the Named Insured After a Loss a. give immediate notice of such loss to theCompany;
e. submit to the Company within 60 days afterrequested a signed, sworn statement of loss ***
No suit shall be brought on this policy unless theinsured has complied with all the policy provisionsand has commenced the suit within one year after theloss occurs."
On April 19, 1992, a fire destroyed the Harvey Fruit Market and the contents therein. That same day, plaintiffs contacted their insurance carrier, defendant, to inform defendant of the loss. Defendant assigned an adjuster to the claim the same day. On April 20, 1992, the adjuster prepared an internal memorandum which stated that the loss for business personal property and business income was to be determined in the future. Plaintiffs filed a sworn statement of loss on July 28, 1992, and defendant denied the plaintiffs' claim on October 25, 1993, due to a finding of arson, misrepresentation, and fraud. Plaintiffs then filed a complaint on October 25, 1994, which was dismissed by the trial court as untimely on May 31, 1996. This appeal followed.
Plaintiffs first maintain that their complaint in the circuit court was timely filed because they could not determine the extent of their loss of earnings as covered by the policy until the one- year period expired. Therefore, plaintiffs maintain, their loss did not occur until one year after the fire, on April 19, 1993. We disagree.
In Illinois, the date utilized for determining the date of loss is the date on which the actual physical loss of property occurred. See Wilson v. Indiana Insurance Co., 150 Ill. App. 3d 669, 672, 502 N.E.2d 69 (1986). Plaintiffs' loss here occurred on the date of the fire, April 19, 1992. Thus, as discussed in further detail below, plaintiffs' complaint was untimely.
Plaintiffs cite to Pichel v. Hanover Insurance Cos., 155 Misc. 2d 746, 589 N.Y.S.2d 979 (1992), to support the proposition that their loss actually occurred on April 19, 1993. In Pichel, the trial court of Onondaga County, New York, ruled that the commencement date for a two-year period of limitations for filing suit on an insurance policy began on the date when the full extent of loss of income could be ascertained, not on the date when the actual physical loss occurred. Pichel, 155 Misc. 2d at 748, 589 N.Y.S.2d at 980. The court reached its decision after resolving conflicting provisions in the policy in favor of the insured. Pichel, 155 Misc. 2d at 748, 589 N.Y.S.2d at 980. We decline to adopt the New York court's approach.
In the instant case, the fire completely destroyed plaintiffs' building. Plaintiffs' losses, including future business proceeds, could be adequately ascertained at the time of the fire. In reaching this decision, we equate the situation in the present cause with the business interruption scenario where the loss of future net profits and necessary earned expenses are calculated at a fixed point in time. See Cohen Furniture Co. v. St. Paul Insurance Co., 214 Ill. App. 3d 408, 415, 573 N.E.2d 851 (1991) (also interpreting a fire insurance policy for a retail business). Furthermore, to adopt plaintiffs' position would be the equivalent of adopting the discovery rule on damages, which states that the limitation period for filing suit does not begin until the loss is discovered. Wabash Power Equipment Co. v. International Insurance Co., 184 Ill. App. 3d 838, 845, 540 N.E.2d 960 (1989). This position has been consistently rejected by this court because to hold otherwise would allow the insured to determine the time of loss. See Wabash, 184 Ill. App. 3d at 845-46; Wilson, 150 Ill. App. 3d at 672; Naghten v. Maryland Casualty Co., 47 Ill. App. 2d 74, 197 N.E.2d 489 (1964). Thus, for the purpose of determining whether plaintiffs' complaint was timely filed, we find that plaintiffs' loss occurred on April 19, 1992. Accordingly, the circuit court properly dismissed the complaint as untimely pursuant to section 2-619 of the Code of Civil Procedure. 735 ILCS 5/2-619 (West 1994).
Plaintiffs also contend that their complaint was filed timely because their notice to defendant on the day of the fire was sufficient to initiate the tolling of ...