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Heartland Capital Investments, Inc. v. Grange Mutual Casualty Co.

February 2, 2010

HEARTLAND CAPITAL INVESTMENTS, INC., PLAINTIFF/COUNTER-DEFENDANT,
v.
GRANGE MUTUAL CASUALTY COMPANY, DEFENDANT/COUNTER-PLAINTIFF.



The opinion of the court was delivered by: Michael P. McCUSKEY Chief U.S. District Judge

OPINION

Defendant/Counter-Plaintiff Grange Mutual Casualty Company (Grange) filed a Motion for Summary Judgment (#20) on August 5, 2009. Plaintiff/Counter-Defendant Heartland Capital Investments, Inc., (Heartland), filed a Motion for Summary Judgment (#23) on August 21, 2009. For the following reasons, Grange's Motion for Summary Judgment (#20) is GRANTED in full. Heartland's Motion for Summary Judgment (#23) is DENIED.

FACTUAL BACKGROUND

Both parties claim the following as undisputed facts: On April 19, 2005, Heartland purchased real estate at 1000 North 14th Street in Charleston, Illinois, a property composed of seven buildings. At the time of the purchase, each of the seven buildings on the property was vacant, unoccupied, and unused. The electricity in "Building 1" was turned off in the fall of 2005 and Heartland made no attempt to restore electricity until November 2007. On April 25, 2005, Ervin Equipment (Ervin) entered into a lease with Heartland to rent a portion of the property. The lease allowed Ervin to store its trailers on the parking lot of the premises. The actual lease provided:

"Landlord leases to Tenant and Tenant leases from Landlord, storage defined to 150 semi-trailers or containers parking spots (the "Leased Premises") located at 1000 N. 14th, Coles County, Charleston, Illinois. During the term of the lease, Tenant shall have non-exclusive use and possession of the Leased Premises. Tenant shall not have use or possess any building located within the boundaries of the Leased Premises."

The lease further provided that "This agreement: (a) may be amended only by a writing signed by each of the parties." Heartland and Ervin did not amend their lease in writing to reflect any change in their agreement.

In June 2006 Ervin began to use some portion of Building 1 to store its equipment and tools. Prior to this time, from April 2005 until June 2006, Building 1 was not used by Ervin or anyone else for storage or any other purpose except for a small portion that was used by Heartland to store items of personal property, such as mowing equipment and other maintenance tools. While Ervin did use some portion of Building 1, it provided power through its own generators and did not use electrical service. From the April 2005 purchase date by Heartland, through August 2007, there were no occupants, lessees, sub-lessees, nor any person or entity other than Ervin and Heartland for Building 1.

On June 1, 2007, Heartland entered into a lease with Pac-Van, Inc. The lease was identical to the earlier one entered into with Ervin. Building 1 was not leased to Pac-Van. Between April 2005 and August 2007 the only other lease entered into by Heartland on the property was with Everett Livvix, Ltd., which was for a building on the south side of the property. It was not Building 1.

On August 1, 2007, in preparation to show the property to a potential buyer, Heartland inquired about what would need to be done to restore electrical service to Building 1. At this time, Heartland discovered that approximately 9,000 linear feet of copper electrical cables were missing from Building 1. Heartland believes the cause of the missing copper wire to be theft. The date of the theft is unknown, but it occurred sometime between the fall of 2005 and August 1, 2007. Heartland alleges the theft occurred sometime between July 12, 2006, and August 1, 2007.

During the period of July 12, 2006 through August 1, 2007, there was in full force and effect a policy of insurance, provided by Grange, covering certain property owned by Heartland. The policy, by its terms, provided insurance coverage for seven building owned by Heartland. One of those buildings was described in the Grange policy as "Building 1," the building where the theft took place.

The policy contained a vacancy condition that stated:

"If the building where the loss or damage occurs has been vacant for more than 60 consecutive days before that loss or damage occurs:

(1) We will not pay for any loss or damage caused by any of the following even if they are ...


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