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Area Erectors, Inc., Corporation v. Travelers Property Casualty

December 7, 2012

AREA ERECTORS, INC., CORPORATION,
PLAINTIFF-APPELLANT,
v.
TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, A CONNECTICUT INSURANCE COMPANY, DEFENDANT-APPELLEE.



Appeal from the an Illinois Circuit Court of Cook County. No. 10 CH 13192 Honorable Kathleen M. Pantle, Judge Presiding.

The opinion of the court was delivered by: Justice Howse

JUSTICE HOWSE delivered the judgment of the court, with opinion.

Justices Palmer and Taylor concurred in the judgment and opinion.

OPINION

¶ 1 Plaintiff Area Erectors, Inc., appeals from a circuit court order granting defendant Travelers Property Casualty Company of America's motion for judgment on the pleadings. For the reasons set forth below, we affirm the judgment of the circuit court.

¶ 2 BACKGROUND

¶ 3 Plaintiff Area Erectors, Inc. (AEI), filed a complaint for declaratory judgment in the circuit court of Cook County, against defendant Travelers Property Casualty Company of America (Travelers), seeking a declaration that it is entitled to recover the replacement costs of its damaged property and seeking statutory penalties from Travelers for its vexatious refusal to settle its claim. At issue is the measure of the valuation of the property under the policy.

¶ 4 In its complaint for declaratory judgment, AEI alleges that on July 21, 2008, an American 7150 crane it owned was damaged when an unexpected microburst storm came through a construction site and toppled concrete walls onto the crane. Two days later, on July 23, 2008, a Link-Belt crane owned by AEI was damaged in an unrelated incident when the boom hoist cable snapped and fell onto the manlift.

¶ 5 AEI is the insured under a commercial inland marine insurance policy issued by Travelers. AEI filed claims under the policy for the two damaged cranes.

¶ 6 AEI argues it is entitled to recover the replacement cost for the loss of the American 7150 crane. Travelers argues AEI is entitled to recover the actual cash value of the equipment under the policy, a lesser sum than replacement cost.

¶ 7 On September 19, 2008, Travelers determined the 7150 crane to be a total loss. In a letter dated October 2, 2008, Travelers offered $379,868.75 in settlement of AEI's claim on the American 7150 crane. This sum represented what Travelers calculated as the actual cash value of the crane less a $25,000 deductible.

¶ 8 Travelers alleged it tendered the proper amount due under the policy, which is the actual cash value of the crane as specified under paragraphs A and B of the " 'Contractors Equipment' Coinsurance and Valuation" endorsement.

¶ 9 AEI claims it is entitled to recover the replacement cost of the damaged American 7150 crane, not actual cash value. AEI argues that the policy is ambiguous as to whether replacement cost or actual cash value applies to a loss of the property. Therefore, the policy should be construed against Travelers and AEI seeks a declaration that Travelers is liable to pay replacement costs.

¶ 10 In count I of AEI's complaint for declaratory judgment, AEI is seeking a declaration that the proper method of valuation for the loss of the American 7150 crane is the replacement value, not the actual cash value.

¶ 11 In count II of AEI's complaint, AEI is seeking a declaration that Travelers acted in a vexatious and unreasonable manner in handling the claim on the American 7150 crane and breached the implied duty of good faith and fair dealing pursuant to sections 154.6 and 155 of the Illinois Insurance Code (215 ILCS 5/154.6, 155 (West 2006)) and section 919.50 of title 50 of the Illinois Administrative Code (50 Ill. Adm. Code 919.50 (2004)). AEI is seeking to recover attorney fees, costs and expenses incurred in seeking coverage from Travelers.

¶ 12 In count III of its complaint for declaratory judgment, AEI is seeking statutory penalties and attorney fees, alleging it should be awarded such penalties because: (1) Travelers failed to acknowledge its liability for the Link-Belt crane claim within a reasonable time period; (2) Travelers failed to respond with reasonable promptness to communications from AEI; and (3) Travelers failed to effectuate a prompt, fair and equitable settlement of the Link-Belt crane.

¶ 13 Travelers filed an answer and affirmative defenses and a motion for judgment on the pleadings. In granting Travelers motion for judgment on the pleadings, the trial court determined that the actual cash value was the proper valuation under the policy.

¶ 14 The trial court found:

"There is no ambiguity in this policy.

It is clear from the plain reading of the policy that replacement costs is applicable to items less than five years old from the date of manufacture and actual cash value is applicable to items that are more than five years old from the date of manufacture. As the American 7150 crane was manufactured in 1993, it was over five years old."

¶ 15 The trial court found that penalties under the Illinois Insurance Code are not warranted for Travelers' response to either claim because Travelers did not knowingly violate the Code, a bona fide dispute existed between the parties, and the provisions of sections 919.50 and 919.20 of title 50 of the Illinois Administrative Code do not apply to inland marine policies.

¶ 16 AEI filed this timely appeal from the trial court's order granting Travelers' motion for judgment on the pleadings.

¶ 17 ANALYSIS

¶ 18 "Judgment on the pleadings is proper where the pleadings disclose no genuine issue of material fact and the movant is entitled to judgment as a matter of law, i.e. similar to a motion for summary judgment but limited to the pleadings." Parkway Bank & Trust Co. v. Meseljevic, 406 Ill. App. 3d 435, 442 (2010).

ΒΆ 19 In ruling on a motion for judgment on the pleadings, the court must consider only those facts apparent from the face of the pleadings, judicial admissions in the record and matters subject to judicial notice. Illinois Tool Works, Inc. v. Commerce & Industry Insurance Company, 2011 IL App (1st) 093084. We review the circuit court's grant of judgment on the ...


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