Name of Assigned Judge Sitting Judge if Other or Magistrate Judge Amy J. St. Eve than Assigned Judge
The Court grants Defendant's motion to dismiss , and dismisses the Complaint, without prejudice. Plaintiff may file an amended complaint, if at all, by 11/4/11. Status hearing set for 10/25/11 is stricken and reset to 11/8/11 at 8:30 a.m.
O[ For further details see text below.] Notices mailed by Judicial staff.
Before the Court is Defendant's motion to dismiss Plaintiff's Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the following reasons, the Court grants Defendant's motion, and dismisses the Complaint, without prejudice.
In this case, Plaintiff Apps Communications, Inc., an Illinois corporation with its principal place of business in Illinois, alleges that Defendant Hartford Casualty Insurance Company, an Indiana corporation with its principal place of business in Connecticut, breached an insurance contract between the parties. Plaintiff pleads the following facts.
Defendant issued a first-party insurance policy ("Policy") to Plaintiff, providing coverage from August 25, 2008 to August 25, 2009. (R. 1, Compl. ¶ 6 & Ex. 1.) The Policy's Special Property Coverage Form ("Property Form") provides coverage for "direct physical loss of or physical damage to Covered Property . . . caused by or resulting from a Covered Cause of Loss." (Id., Ex. 1, Property Form § A.) The Property Form states that "Covered Property" excludes, among other things, the following:
"Data" and "software" which exists on electronic "media" including the cost to research, replace or restore them, except as may be provided for in any additional Coverages or Optional Coverages. (Id. § A(2)(i).)
The Policy includes four endorsements of particular relevance: the (1) Actual Loss Sustained Business Income & Extra Expense -- Specified Limit Coverage Endorsement ("Business Income Endorsement"); (2) Computers and Media Endorsement ("Media Endorsement"); (3) Super Stretch for Technology and Software Service Providers Endorsement ("Super Stretch Endorsement"); and (4) Employee Dishonesty Endorsement ("Dishonesty Endorsement"). The Policy, together with each of the endorsements, is annexed to the Complaint as Exhibit 1. (R. 1, Compl., Ex. 1.)
The current dispute arises out of alleged losses that Plaintiff incurred on or about May 15, 2009 and June 8, 2009. (Id. ¶¶ 11-17.) The Complaint alleges that a "computer virus was introduced" that "deleted, damaged or disrupted" more than 1,000 files on Plaintiff's computer system (id. ¶¶ 11-12), and "caused files and libraries to be deleted, damaged or disrupted from a workstation and back-up servers" (id. ¶¶ 15-17), in addition to generally disrupting Plaintiff's business operations. (Id. ¶ 17.) The Complaint alleges in the "alternative" that "dishonest acts committed by [Plaintiff's] employees" caused the loss. (Id. ¶ 89.)
Plaintiff "provided timely notice" of the alleged losses to Defendant, which thereafter denied coverage. (Id. ¶¶ 14, 18-22; see also id., Exs. 2-4 (correspondence between the parties).) On May 13, 2011, Plaintiff filed a seven-count state court complaint against Defendant, seeking declaratory and ...