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Indiana Insurance Co v. Westfield Ins Co

April 21, 2011

INDIANA INSURANCE CO
v.
WESTFIELD INS CO



Name of Assigned Judge Sitting Judge if Other or Magistrate Judge Amy J. St. Eve than Assigned Judge

CASE TITLE

DOCKET ENTRY TEXT

The Court denies Plaintiff's motion for leave to file its second amended complaint [33], with prejudice.

O[ For further details see text below.] Notices mailed by Judicial staff.

STATEMENT

Plaintiff, Indiana Insurance Company ("Indiana"), seeks leave to file its Second Amended Complaint ("the proposed Complaint") pursuant to Federal Rule of Civil Procedure 15(a). (R. 33.) The proposed Complaint seeks damages in the amount of $1,532,046 with an interest rate of 5% per year or $62,500 per year from May 7, 2006, to present. (R. 33-1 at 18.) It alleges that a "written contractual agreement . . . signed in writing" existed between Defendant Westfield Insurance Company ("Westfield") and Indiana, as evidenced by Exhibits 6 and 7 to the proposed Complaint. (Id. at 17.) It further alleges that Westfield breached this agreement. (Id. at 18.)

Previously, on August 26, 2010, the Court granted Westfield's motion to dismiss, finding that the original complaint failed to state a claim for breach of contract or for equitable subrogation. (R. 28.) On October 29, 2010, Indiana filed a motion for leave to file its first amended complaint. The Court denied this motion, without prejudice, on December 13, 2010, explaining that the first amended complaint failed plausibly to allege that Westfield breached a contract to which Indiana was either privy or an intended beneficiary. (R. 32.) Almost two months later, Indiana filed the motion for leave to file its Second Amended Complaint.

Because Indiana's proposed Complaint does not cure the fatal deficiencies that underlay the prior complaints that failed to state a claim, the Court denies Indiana's motion. As Plaintiff has had two opportunities to amend its complaint, and because it is apparent that Plaintiff cannot cure the deficiencies that the Court has explained previously, the Court denies Indiana's motion for leave to file its Second Amended Complaint with prejudice. Accord, e.g., Mehta v. Beaconridge Home Improvement Assoc., No. 10-CV-2253, 2011 WL 494169, at *3 (N.D. Ill. Feb. 3, 2011) ("Because the court has granted Mehta leave to amend his complaint twice before, and because at this point it appears that Mehta can allege no set of facts consistent with the allegations of the Second Amended Complaint that would state a timely claim . . ., the complaint is dismissed with prejudice.").

BACKGROUND

This case arises from an explosion that occurred at the home of Kim Bowen in 1996. (R. 28.) Subsequent litigation focused on the alleged negligence of general contractor, Richard Smykal, Inc., and subcontractor, Professional Plumbing, Inc. (Id. at 1-2.) At the time of the explosion, Indiana insured Smykal and Westfield insured Professional Plumbing. (Id. at 2.) After Indiana refused to defend Smykal, the latter filed a third-party complaint, seeking declaratory judgment. While the parties' cross-motions for summary judgment were pending, Westfield agreed to defend Smykal "without reservation as to coverage," though it did so reserving "its right to seek contribution, apportionment and/or reimbursement for any defense costs and/or payments made on behalf of Smykal[.]" (Id.)

Five years later, the Bowen Estate litigation settled. (Id. at 3.) In settling the litigation, Westfield paid $2,525,000 on behalf of Professional Plumbing and Indiana paid $2,250,000 on behalf of Smykal. (R 33-1 at 14.) As Defendant agreed to defend Smykal without reservation as to coverage, Indiana contends that Westfield should have paid $1,250,000 under its commercial umbrella policy after Indiana exhausted its $1 million commercial general-liability policy. (R. 33-1 at 17-18.) According to Plaintiff, Defendant has not paid that sum. (Id. at 18)

On April 30, 2010, Defendant removed the instant case from the Circuit Court of Cook County, premising the Court's jurisdiction upon diversity of citizenship. (R. 1.) The complaint "for declaratory judgment" sought recovery of damages from Defendant. (R. 1-2 at 4-15.) It alleged that Plaintiff had paid $1,250,000, which Defendant in fact owed under its commercial umbrella policy. (Id. at 14.) Plaintiff also sought $250,000 interest and $282,046.51 in defense fees and costs that it paid in the defense of Smykal. (Id. at 15.)

On May 21, 2010, Defendant filed a motion to dismiss, arguing, first, that the complaint, though purportedly seeking declaratory judgment, failed to plead facts showing that declaratory relief could be granted.

(R. 16 at 6.) Defendant also argued that the complaint failed to state a claim for equitable subrogation or equitable contribution. (Id. at 7-11.) Finally, Defendant argued in the alternative that Plaintiff's claim for ...


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