United States District Court, N.D. Illinois, Eastern Division
June 8, 2005.
IN RE: COMDISCO VENTURES, INC., et al., Debtors. COMDISCO VENTURES, INC. Plaintiff,
FEDERAL INSURANCE COMPANY, VIGILANT INSURANCE COMPANY, ABD INSURANCE AND FINANCIAL SERVICES, HAMPSON MOWRER KREITZ AGENCY, INC., SUMMIT GLOBAL PARTNERS OF TEXAS, INC., CRIST ELLIOT MACHETTE INSURANCE SERVICES, and ACCORDIA OF CALIFORNIA INSURANCE SERVICES, INC., Defendants.
The opinion of the court was delivered by: JOAN H. LEFKOW, District Judge
MEMORANDUM OPINION AND ORDER
On February 18, 2004, plaintiff, Comdisco Ventures, Inc.
("Comdisco"), filed a fifteen-count Adversary Complaint in United
States Bankruptcy Court for the Northern District of Illinois
(case number 04-A-00285) against defendants, Federal Insurance
Company ("Federal"), Vigilant Insurance Company ("Vigilant")
(together, the "Chubb defendants"), ABD Insurance and Financial
Services ("ABD"), Hampson Mowrer Kreitz Agency, Inc. ("HMK"),
Summit Global Partners of Texas, Inc. ("Summit"), Crist Elliot
Machette Insurance Services ("Crist"), and Accordia of California Insurance Services, Inc. ("Accordia")
(together, the "broker defendants"). Counts I and II allege
breach of contract and breach of the implied covenant of good
faith and fair dealing against the Chubb defendants. The
remaining counts allege professional negligence against Crist
(Count XII) and professional negligence, negligent
misrepresentation, and intentional misrepresentation against each
of the other broker defendants. Subsequently, two defendants in
case number 04-A-00285 filed motions to withdraw the reference to
bankruptcy court, and their motions were assigned to this court
as case numbers 04-C-2007 and 04-C-2393. On June 18, 2004, this
court granted the motions to withdraw the reference. Before the
court are the following motions: the Chubb defendants' Motion to
Dismiss Count II (breach of the implied covenant of good faith
and fair dealing);*fn1 ABD's Motion to Dismiss or, in the
alternative, for a more particularized statement of plaintiff's
fraud claims; HMK's Motion to Dismiss Counts VII (negligent
misrepresentation) and VIII (intentional misrepresentation);
Summit's Motion to Dismiss; Crist's Motion to Dismiss Count XII
(professional negligence);*fn2 and Accordia's Motion to
Dismiss. For the reasons stated below, the court denies all of
MOTION TO DISMISS STANDARDS
A motion to dismiss under Rule 12(b)(6) challenges the
sufficiency of the complaint for failure to state a claim upon
which relief may be granted. General Elec. Capital Corp. v.
Lease Resolution Corp., 128 F.3d 1074, 1080 (7th Cir. 1997).
Dismissal is appropriate only if it appears beyond a doubt that
the plaintiff can prove no set of facts in support of his claim
that would entitle it to relief. Conley v. Gibson, 355 U.S. 41,
45-46 (1957); Sanville v. McCaughtry, 266 F.3d 724, 732 (7th
Cir. 2001). In ruling on a motion to dismiss, the court accepts
as true all well-pleaded facts alleged in the complaint, and it
draws all reasonable inferences from those facts in the
plaintiff's favor. Dixon v. Page, 291 F.3d 485, 486 (7th Cir.
In addition to the mandates of Rule 12(b)(6), Federal Rule of
Civil Procedure 9(b) requires "all averments of fraud" to be
"stated with particularity," although "[m]alice, intent,
knowledge, and other condition of mind of a person may be averred
generally." "The rule requires the plaintiff to state the
identity of the person who made the misrepresentation, the time,
place, and content of the misrepresentation, and the method by
which the misrepresentation was communicated to the plaintiff."
Vicom, Inc. v. Harbridge Merch. Servs., Inc., 20 F.3d 771,
777 (7th Cir. 1994); see also DiLeo v. Ernst & Young,
901 F.2d 624, 627 (7th Cir. 1990) ("Although states of mind may be
pleaded generally [under Rule 9(b)], the `circumstances' must be
pleaded in detail. This means the who, what, when, where, and
how: the first paragraph of any newspaper story.").
Comdisco Ventures, Inc. is a Delaware Corporation with its
principal place of business in Rosemont, Illinois. On July 16,
2001, Comdisco, Inc. filed a Voluntary Bankruptcy petition in the
United States Bankruptcy Court of the Northern District of
Illinois (the "Bankruptcy Court") for reorganization relief under
Chapter 11 of the Bankruptcy Code, 11 U.S.C. § 101 et seq. On
July 30, 2002, the Bankruptcy Court entered an order confirming
the First Amended and Joint Plan of Reorganization of Comdisco,
Inc. and its Affiliate Debtors in Possession dated June 13, 2002.
The Reorganization Plan became effective on August 12, 2002.
Comdisco, Inc. continues to operate its business and manage its properties as a
reorganized debtor pursuant to 11 U.S.C. §§ 1107(a) and 1108 of
the Bankruptcy Code. Comdisco Ventures, Inc. is a wholly owned
subsidiary of Comdisco, Inc. formed pursuant to the
Reorganization Plan. Comdisco Ventures, Inc. holds all of the
assets constituting the former Venture Finance Division of
Comdisco, Inc. For purposes of the pending motions, the parties
treat Comdisco Ventures, Inc. as synonymous with the debtor,
Comdisco, Inc., and the court does as well, referring to them
collectively as Comdisco.
Federal is a stock insurance company incorporated in the state
of Indiana with its principal place of business in Warren, New
Jersey. At all relevant times, Federal was duly authorized and
licensed to write and issue insurance policies in the state of
Vigilant is a stock insurance company incorporated in the state
of New York with its principal place of business in Warren, New
Jersey. At all relevant times, Vigilant was duly authorized and
licensed to write and issue insurance policies in the state of
ABD is an insurance brokerage service incorporated in the state
of California with its principal place of business in Redwood
City, California. At all relevant times, ABD was duly licensed to
broker insurance policies in the state of Illinois.
HMK is an insurance brokerage service incorporated in the state
of Pennsylvania with its principal place of business in
Bethlehem, Pennsylvania. At all relevant times, HMK was duly
licensed to broker insurance policies in the state of Illinois.
Summit is an insurance brokerage service incorporated in the
state of Texas with its principal place of business in Dallas,
Texas. At all relevant times, Summit was duly licensed to broker
insurance policies in the state of Illinois. Crist is an insurance brokerage service incorporated in the
state of California with its principal place of business in
Oakland, California. At all relevant times, Crist was duly
licensed to broker insurance policies in the state of Illinois.
Accordia is an insurance brokerage service incorporated in the
state of California with its principal place of business in San
Francisco, California. At all relevant times, Accordia was duly
licensed to broker insurance policies in the state of Illinois.
At all relevant times, Comdisco was in the business of leasing
computer equipment, office furniture, and other office equipment
to various venture capital backed "dot.com" companies. According
to Comdisco, it entered into separate Master Lease Agreements
("MLAs") with numerous lessees to lease computer and other office
equipment. Pursuant to the MLAs, Comdisco retained title and
ownership of the equipment and each lessee was responsible for
obtaining insurance for such equipment and adding Comdisco as an
additional insured and loss payee under the policies. Comdisco
claims that the lessees instructed and authorized the broker
defendants to procure the required insurance policies and to have
Comdisco named as an additional insured and loss payee under the
policies. The Chubb defendants issued insurance policies
allegedly covering Comdisco's equipment to the following lessees:
iBeam Broadcasting, Inc. ("iBeam") (Federal policy
number 3538-43-88, covering property located at
premises in Arizona, California, Oklahoma, Virginia,
and any other location);
Altium, Inc. ("Altium") (Federal policy number
3535-92-62, covering property located at premises in
Aristasoft Corporation ("Aristasoft") (Vigilant
policy number 3539-08-18, covering property located
at premises in California, Massachusetts, and India); eCoverage, Inc. ("eCoverage") (Federal policy number
3538-17-73, covering property at premises in
California and "any other location");
Naxon Corporation ("Naxon") (Federal policy number
3539-94-81, covering property located at premises in
California and Michigan);
Christianity.com, Inc. ("Christianity") (Federal
policy number 3576-00-83, covering property located
ay premises in California and Missouri);
New Access Communication a/k/a Centerpoint Broadband
("Centerpoint") (Federal policy number 3538-59-75,
covering property at premises located in California,
Florida, and the United Kingdom);
Quixi, Inc. ("Quixi") (Federal policy number
3537-33-59, covering property at premises located in
California, New York, and Texas);
eLaw, Inc. ("eLaw") (Federal policy number
3575-41-06, covering property at premises located in
Texas and "any other location");
Vectris Communications a/k/a Vectris Financing, Inc.
("Vectris") (Federal policy number 3537-35-98,
covering property at premises located in Texas and
"any other location"); and
Voter.com, Inc. ("voter") (Federal policy number
3575-49-57, covering property located at premises in
California, the District of Columbia, and
Comdisco alleges that the broker defendants issued Certificates
of Insurance or Evidence of Insurance to Comdisco, representing
to Comdisco that it had been added as an additional insured
and/or loss payee under policies issued by the Chubb defendants.
Subsequently, all of the lessees went out of business and the
leased equipment disappeared. Comdisco alleges that it sustained
$12,117,100.53 in equipment-related losses during the effective
dates of those policies. Comdisco alleges that it notified the
Chubb defendants of the losses and that the Chubb defendants have
denied coverage on the grounds that Comdisco is not named as an
additional insured or loss payee under the policies. DISCUSSION
I. Chubb Defendants Preemption
The Chubb defendants contend that Comdisco's claim for breach
of the covenant of good faith and fair dealing (Count II) should
be dismissed because that cause of action is preempted by Section
155 of the Illinois Insurance Code, 215 ILCS 5/155. Comdisco
argues that its claim is not preempted because Illinois law does
not apply to claims against the Chubb defendants. Comdisco
instead contends that each insurance policy is governed by the
law of the state in which the insured equipment was located.
Federal courts sitting in diversity must look to the
choice-of-law rules of the forum state for applicable law.
Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941).
The Seventh Circuit has not yet ruled on whether this rule
applies in the bankruptcy context. However, those courts that
have considered the issue have held that it does. Master
Mortgage Inv. Fund, Inc. v. Am. Nat. Fire Ins. Co.,
151 B.R. 513, 518 (W.D. Mo. 1993); In re Merit Dredging Co., Inc.,
839 F.2d 203, 205-06 (4th Cir. 1988). The forum state in this
case is Illinois; thus, the court applies Illinois'
conflict-of-law rules. Under Illinois law conflict-of-law rules,
when an insurance policy lacks a choice of law provision,
Illinois courts employ a "most significant contacts" test to
determine the governing law for the contract. Jupiter Aluminum
Corp. v. Home Ins. Co. et al., 225 F.3d 868, 873 (7th Cir.
2000). Under this test, "insurance policy provisions are
generally governed by: the location of the subject matter, the
place of delivery of the contract, the domicile of the insured or
insurer, the place of the last act giving rise to a valid
contract, the place of performance, or other place bearing a
rational relationship to the general contract." Lapham-Hickey
Steel Corp., v. Protection Mut. Ins. Co., 655 N.E.2d 842, 845
(Ill. 1995) (quotation marks and citation omitted). "While all of these factors must be
considered in the choice-of-law analysis, the location of the
insured risk is given special emphasis." Society of Mount Carmel
v. Ben Franklin Ins. Co. of Ill., 643 N.E.2d 1280, 1287
(Ill.App. 1st Dist. 1994) (citing RESTATEMENT (SECOND) OF
CONFLICTS OF LAWS § 193 (1971)). However, the location of the
insured risk "is entitled to little weight when the subject
matter or risk is located in more than one state." Employers
Ins. of Wasau v. Ehlco Liquidating Trust, 723 N.E.2d 687, 694
(1999) (citing RESTATEMENT § 193). In addition, some Illinois
courts have given special emphasis to the state where the policy
was issued or delivered or the place of the last act giving rise
to a valid contract. See, e.g., United States Fire Insurance Co.
v. CNA Insurance Cos., 572 N.E.2d 1124 (Ill.App. 1st Dist.
1991); Jadczak v. Modern Service Insurance Co., 503 N.E.2d 794
(Ill.App. 1st Dist. 1987). The last act giving rise to an
insurance contract usually occurs in "the state where the policy
is delivered and the premiums are paid." Emerson Elec. Co. v.
Aetna Casualty & Surety Co., 743 N.E.2d 629, 641 (Ill.App.
1st Dist. 2001).
Because all of the policies except one (Altium) insure property
located in more than one state, and because all of the policies
provide varying degrees of coverage for property in transit,
property at unscheduled locations, property at "any other
location," and property in an "exhibition, fair or trade show,"
the location of the insured risk is entitled to little weight.
The places where the policies were issued and delivered, however,
is entitled to significant weight. The policies issued to iBeam,
Altium, Aristasoft, eCoverage, Naxon, Christiantiy, and
Centerpoint were all prepared by insurance brokers based in
California and purchased by and delivered to*fn3 companies located in California. These
policies' contacts with California, given the weight assigned
them under Illinois law, are more significant than their contacts
with any other state. Thus, California law governs these
policies. Likewise, the policies issued to eLaw and Vectris were
prepared by insurance brokers in Texas and purchased by and
delivered to companies located in Texas. Thus, Texas law governs
these policies. The policy issued to Voter was prepared by an
insurance broker based in Massachusetts and purchased by and
delivered to a company located in Massachusetts. Thus,
Massachusetts law governs this policy. Finally, the policy issued
to Quixi was prepared by an insurance broker based in
Pennsylvania and purchased by and delivered to a company located
in New York. Because the last act giving rise to the contract
the delivery of the policy occurred in New York, New York law
governs the policy.
Because Illinois law does not govern any of the policies at
issue in this case,*fn4 the Chubb defendants' motion to
dismiss is denied.
II. Broker Defendants Choice of Law
As in contract cases, Illinois courts employ a most significant
contacts test to determine the governing law for tort claims.
Jones v. State Farm Mutual Auto. Ins. Co., 682 N.E.2d 238,
249 (Ill.App. 1st Dist. 1997). With respect to fraud and
misrepresentation claims, Illinois courts follow the Restatement
(Second) of Conflict of Law in looking to the following six
factors to determine which state has the most significant
relationship to the action: (a) the place, or places, where the plaintiff acted in reliance upon the defendant's
representations; (b) the place where plaintiff received the
representations; (c) the place where the defendant made the
representations; (d) the domicile, residence, nationality, place
of incorporation and place of business of the parties; (e) the
place where a tangible thing which is the subject of the
transaction between the parties was situated at the time; and (f)
the place where the plaintiff is to render performance under a
contract he has been induced to enter by the false
representations of the defendant. Telular Corp. v. Mentor
Graphics Corp., 282 F. Supp. 2d 869, 873 (N.D. Ill. 2003);
RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 148.
The alleged misrepresentations in this case were made in the
various states (California, Pennsylvania, Texas) where the broker
defendants prepared and issued the Certificates of Insurance.
Comdisco received these Certificates and acted in reliance upon
them in Illinois. Comdisco is a Delaware corporation with its
principal place of business in Illinois. The broker defendants
are incorporated under the laws of California (Accordia, Crist,
ABD), Pennsylvania (HMK), and Texas (Summit) and each has its
principal places of business in its state of incorporation. As
explained above, the insured property the "tangible thing which
is the subject of the transaction between the parties" was
located in more than one state. Thus, the location of the insured
property is entitled to little weight. The last factor is
The comments to section 148 of the Restatement provide some
assistance in assigning weight to these various factors. The
state where Comdisco received the representations (Illinois) is
as important a contact as the state where broker defendants made
them (California, Pennsylvania, Texas), but neither is as
important a contact as the place where Comdisco acted in reliance
(Illinois). See Telular, 282 F. Supp. 2d at 873 (citing
RESTATEMENT § 148, cmt g). Further, plaintiff's principal place of business (Illinois) is a
contact "of substantial significance" when the loss is pecuniary
in nature, more so than the place of incorporation (Delaware).
See Id. (citing RESTATMENT § 148, cmt i). These status
contacts of Comdisco are more important than similar contacts of
broker defendants (California, Pennsylvania, Texas). Id.
Examining the factors of section 148 and assigning them the
respective weights suggested by the comments leads to the
conclusion that Illinois is the state with the most significant
relationship to Comdisco's claims against the broker defendants.
III. Broker Defendants Statute of Limitations Defense
Accordia, Summit and Crist move to dismiss Comdisco's claims
against them, arguing that those claims are barred by Illinois'
two-year statute of limitations on claims concerning the failure
to procure insurance. Under Illinois law, "[a]ll causes of action
against insurance producers, limited insurance representatives,
and registered firms concerning the . . . failure to procure any
policy of insurance shall be brought within 2 years of the date
the cause of action accrues." 735 ILCS 5/13-214.4. Comdisco
alleges in its Complaint that the loss of its equipment occurred
during the "effective dates" of the relevant policies, which,
under each of the policies at issue, concluded over two years
before Comdisco filed its Complaint on February 18, 2004. Thus,
Accordia, Summit and Crist argue that Comdisco's claims are
Ordinarily, affirmative defenses such as statute of limitations
are not grounds for dismissal under Rule 12(b)(6), Fed.R. Civ.
P. See U.S. Gypsum Co. v. Indiana Gas Co., 350 F.3d 623, 626
(7th Cir. 2003). Dismissal may be appropriate, however, where
"the existence of a valid affirmative defense is so obvious from
the face of the complaint that the suit can be regarded as
frivolous." Walton Risk Services, Inc. v. Clarendon America
Ins. Co., 2005 WL 78951, at *4 (N.D. Ill Jan. 12, 2005) (citing Walker v.
Thompson, 288 F.3d 1005, 1010 (7th Cir. 2002)).
The existence of a defense based on Illinois' two-year statute
of limitations is not obvious from the face of Comdisco's
Complaint. Under Illinois law, a cause of action for most torts
accrues when the plaintiff suffers injury. West American Ins.
Co. v. Sal E. Lobianco & Son Co., 370 N.E.2d 804, 807 (1977).
Literal application of the statute of limitations, however,
sometimes produced such harsh results that Illinois courts
developed the "discovery rule." The discovery rule "delays the
commencement of the relevant statute of limitations until the
plaintiff knows or reasonably should know that he has been
injured and that his injury was wrongfully caused." Jackson
Jordan, Inc. v. Leydig, Voit & Mayer, 633 N.E.2d 627, 630-31
(1994). Applying that rule here, Comdisco's causes of action did
not accrue when Comdisco lost its property but rather when the
Chubb defendants denied Comdisco's claims under the relevant
policies. See, e.g., Broadnax v. Morrow, 762 N.E.2d 1152,
1157 (Ill.App. 4th Dist. 2002) (holding that an insurance
policyholder's negligence claim against his insurance agents
accrued when insurance company denied policyholder's claim).
These dates do not appear in Comdisco's Complaint.
Accordia argues that the court should not allow Comdisco "to
defeat dismissal by intentionally omitting dates in the
allegation." (Accordia's Reply, at 12.) This argument is
meritless. "A complaint is not required to allege all, or any, of
the facts logically entailed by the claim. . . . [A] complaint
does not fail to state a claim merely because it does not set
forth a complete and convincing picture of the alleged
wrongdoing." American Nurses Ass'n v. State of Illinois, 783 F.2d 716, 727 (7th Cir. 1986). Comdisco's Complaint
does not establish on its face that the claims are time-barred.
Thus, the motions to dismiss on this ground are denied.
IV. Broker Defendants Rule 8(a)
ABD, Accordia, and Crist each argue that Comdisco's Complaint
should be dismissed for failure to allege sufficient facts to
satisfy the pleading requirements of Rule 8(a) of the Federal
Rules of Civil Procedure. First, ABD and Crist argue that
Comdisco must allege specific facts showing that its losses were
covered under the relevant policies. While such facts may be
required in a fact-pleading jurisdiction, Rule 8(a) of the
Federal Rules of Civil Procedure requires no such detail.
Comdisco clearly alleges ABD and Crist issued Certificates of
Insurance to Comdisco representing that Comdisco was a named
insured and loss payee under the relevant policies, that it
sustained losses covered by the policies, and that the Chubb
defendants have denied Comdisco's requests for indemnification of
the losses on the grounds that Comdisco is not an additional
insured or loss payee under the policies. This is all that Rule 8
(a) requires. ABD and Crist have sufficient notice of the
substance of the allegations against them.
Similarly, Accordia argues that Comdisco must allege specific
facts demonstrating how Comdisco derives its specific damage
amounts and the dates of any alleged injury. Again, Comdisco's
Complaint satisfies the requirements of Rule 8(a). It alleges
specific damages and alleges that the damages to the equipment
occurred during the effective dates of the Chubb policies. This
is all that Rule 8(a) requires.
V. Broker Defendants Duty of Care
To state a claim for either professional negligence or
negligent misrepresentation, Comdisco must allege that the broker
defendants owed Comdisco a duty of care. See Mt. Zion State Bank & Trust v. Consol Communications, Inc.,
660 N.E.2d 863, 867 (1996). Summit argues that Comdisco cannot state a claim
against it for professional negligence or negligent
misrepresentation because, as a matter of law, Summit owed no
duty to Comdisco. Crist, against whom Comdisco alleges only
professional negligence, argues that that claim should be
dismissed for the same reason. Because Crist's argument is
perfunctory and not supported by any citations to relevant case
law, the court will only address Summit's motion.
Summit cites Pacific Tall Ships Co. v. Kuehne & Nagle,
Inc., 76 F. Supp. 2d 886 (N.D. Ill. 1999), in support of its
argument that it owed no duty of care to Comdisco. In that case,
plaintiff hired a shipping company to arrange the shipment of a
number of model wooden ships. The shipping company, pursuant to
its contract with the plaintiff, utilized its in-house insurance
broker to acquire insurance for the plaintiff's cargo. The cargo
was damaged during transit, and the plaintiff, subsequent to the
denial of its claim by the insurance company, sued the insurance
broker, among others, for breach of fiduciary duty and
negligence. Id. at 888. The court granted the insurance
broker's motion for summary judgment, holding that the broker
owed no duty of care to the plaintiff. Id. at 895-96.
According to Summit, Pacific Tall Ships holds that, as a
matter of law, an insurance broker has no duty of professional
care to a third party with whom it has no contractual
relationship. (Reply, at 6.) This is incorrect. The court held,
rather, that the plaintiff "has not produced any evidence that it
had any sort of relationship" with the broker. Id. at 895. The
court's holding turned on the evidence in the record, not on the
legal sufficiency of the complaint. Indeed, the Pacific Tall
Ships court had denied the broker's 12(b)(6) motion to dismiss
the complaint. See Minute Order of Sept. 1, 1998. Because
Summit has failed to show that Comdisco can prove no set of facts in support of its claim
that Summit owed Comdisco a duty of care, Summit's motion to
dismiss on this ground is denied.
VI. Broker Defendants Reasonable Reliance
To state a claim for either negligent misrepresentation or
intentional misrepresentation, Comdisco must show that its
reliance on the alleged misrepresentations of the broker
defendants was reasonable. Bd. of Educ. of City of Chicago v.
A, C and S, Inc., 546 N.E.2d 580, 593 (1989). Summit argues
that Comdisco's reliance on the "Evidence of Property Insurance"
was not reasonable as a matter of law. The court disagrees.
First, the Evidence of Property Insurance issued by Summit to
Comdisco states, "This is evidence that insurance as identified
below has been issued, is in force, and conveys all the rights
and privileges under the policy." The document does not contain a
disclaimer of the type commonly found in certificates of
insurance. See, e.g., American Country Ins. Co. v. Kraemer
Bros., Inc., 699 N.E.2d 1056, 1059 (Ill.App. 1st Dist. 1998)
("This certificate is issued as a matter of information only and
confers no rights upon the certificate holder. This certificate
does not amend, extend or alter the coverage afforded by the
policies below."). If a certificate of insurance does not include
a disclaimer, the insured may rely on representations made in the
certificate. Id. at 1060. Thus, Comdisco's reliance on the
Evidence of Property Insurance was reasonable.
Second, the insurance policy itself may contain a blanket
endorsement provision granting additional loss payee status to
any party required to be named as a loss payee under a written
contract. Since Summit failed to attach a complete copy of the
underlying eLaw policy to its motion, the court does not know
whether the policy contained such a provision. However, the iBeam policy issued by Federal, one of only two policies provided
to Comdisco by the Chubb defendants, contains just such a
provision. (Compl., Ex. A, providing that "[a]ny person or
organization that is required to be named as loss payee under
written contract, and such requirement is evidenced by a
certificate of insurance on file with the company, is added as a
loss payee.") If similar language is included in the eLaw polic,
not only was Comdisco's reliance on the Evidence of Insurance
issued by Summit reasonable, but it may in fact mean that
Comdisco is a loss payee under the eLaw policy, despite not being
specifically named in the policy. See West Amer. Ins. Co. v.
J.R. Construction Co., 777 N.E.2d 610, 615(Ill.App. 1st
Dist. 2002) (holding that defendant was an additional insured
under a policy containing a similar blanket endorsement provision
because, among other things, the insurer's agent issued a
certificate of insurance identifying defendant as an additional
insured). Since Summit has not demonstrated that the eLaw policy
did not contain similar language, the court need not consider
other arguments that Comdisco's reliance on the Certificate of
Insurance was unreasonable. Summit's motion to dismiss on this
ground is denied.
VII. Broker Defendants Rule 9(b)
ABD, HMK, Accordia, and Summit also argue that Comdisco's claim
for intentional misrepresentation should be dismissed for failure
to satisfy the pleading standards of Rule 9(b), Fed.R. Civ.
P.*fn5 Rule 9(b) requires a party alleging fraud to "at
least plead with sufficient particularity facts establishing the
elements of fraud, including what misrepresentations were made, when they were made, who made the representations and to
whom they were made." Wright v. Nissan Motor Corp. U.S.A.,,
1997 WL 106101, at *2 (N.D. Ill. Feb. 10, 1997). The broker
defendants argue that Comdisco's intentional misrepresentation
claim fails to satisfy this requirement because it fails to
allege (1) when the alleged fraudulent communications occurred,
(2) who transmitted the information that is alleged to be
fraudulent and (3) to whom the information was transmitted.
(See, e.g., ABD's Memo. in Supp. of Mot. to Dismiss, at 7.)
Comdisco's Complaint must be read in conjunction with all of
the exhibits attached to the Complaint. Fed.R.Civ.P. 10(c).
The Complaint makes it clear that the alleged fraud concerns the
broker defendants' preparation and issuance of the Certificates
of Insurance representing to Comdisco that it had been added as
an additional insured and/or loss payee under policies issued by
the chubb defendants. The Certificates of Insurance at issue are
attached to Comdisco's Complaint. The Certificate issued by ABD,
to take one example, indicates that it was prepared by ABD
Insurance and Financial Services, 301 Island Parkway, Suite 100,
Belmont, California. It indicates that the certificate holder,
Comdisco, is located at 611 N. River Road, Rosemont, Illinois. It
bears the signature of an "authorized representative" of ABD and
bears the date on which it was prepared. The Certificates issued
by the other broker defendants contain similar information. These
Certificates do not describe the allegedly fraudulent statements
made by the broker defendants; they are the allegedly fraudulent
statements and contain all of the information required by Rule
9(b). It is disingenuous for the broker defendants to claim that
they cannot discern from the Complain the specific behavior that
Comdisco alleges to be fraudulent. Thus, the motions to dismiss
on this ground are denied. In the alternative, ABD seeks a more definite statement of
Comdisco's claims pursuant to Federal Rule of Civil Procedure
12(e). ABD contends that Comdisco should adds statements to its
Complaint explaining how each of the alleged losses to insured
property occurred at each of the lease sites. As Judge Darrah
explained in his opinion rejecting this argument in case number
04 C 3605 and 04 C 3791, the information sought by ABD is readily
available through discovery and need not be specifically pled to
sufficiently place ABD on notice of the claims brought by
Comdisco. Accordingly, ABD's Alternative Motion for a More
Definite Statement is denied.
For the reasons stated above, all of defendants' motions to
dismiss are denied.