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Sagar Megh Corp. v. United Nat'l Ins. Co.

United States District Court, N.D. Illinois, Eastern Division

November 19, 2013

SAGAR MEGH CORPORATION, Plaintiff,
v.
UNITED NATIONAL INSURANCE CO., Defendant. NATIONAL REPUBLIC BANK OF CHICAGO and ST. PAUL PROTECTIVE INSURANCE CO., Intervening Plaintiffs

Page 1019

For Sagar Megh Corporation, Plaintiff: Alexander Terras, Ann Elizabeth Pille, Timothy Scott Harris, LEAD ATTORNEYS, Catherine F. Chaskin, Andrea Catherine Yassemedis, Reed Smith LLP, Chicago, IL.

For The National Republic Bank of Chicago, Plaintiff: Charles R. Franklin, Craig Michael Capilla, Julie C. Lerman, Justin Nathan Fielkow, Franklin Law Group, Northfield, IL; Scott W. Hoyne, Johnson & Bell, Ltd., Chicago, IL.

For United National Insurance Company, Defendant: John Joseph McInerney, LEAD ATTORNEY, Leahy, Eisenberg & Fraenkel, Chicago, IL; Edward Joseph Leahy, Jonathan Michael Heilman, Thomas J. Finn, Leahy, Eisenberg & Fraenkel, Ltd., Chicago, IL; Shannon F. O'Shea, Leahy Eisenberg & Fraenkel, Ltd., Joliet, IL.

For St. Paul Protective Insurance Company, Intervenor: Michele A. Chapnick, LEAD ATTORNEY, Gregory And Meyer, P.c., Troy, MI; Scott W. Hoyne, LEAD ATTORNEY, Johnson & Bell, Ltd., Chicago, IL.

OPINION

Page 1020

MEMORANDUM OPINION AND ORDER

JOHN W. DARRAH, United States District Court Judge.

Plaintiff, Sagar Megh Corporation, filed a Complaint against Defendant, United National Insurance Co. (" United" ), on June 21, 2012, asserting United breached its obligations to Sagar Megh under the Insurance Policy it issued and that United acted in bad faith. The National Republic Bank (" NRB" ) was permitted to enter the case as an Intervening Plaintiff and filed an Intervenor Complaint on August 17, 2012, amending it on June 28, 2013. St. Paul Protective Insurance Company (" St. Paul" ) was permitted to intervene on August 13, 2013.[1]

In the Intervening Amended Complaint, NRB asserts United breached its agreement with Sagar Megh, which in turn denied NRB, the mortgagee, the benefits due to it under the insurance policy issued to Sagar Megh. NRB also asserts United violated the Illinois Insurance Code with its vexatious and unreasonable delay, in violation of 215 ILCS § 5/155, and further violated the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS § 505/2, et seq.

NRB and St. Paul, the Intervening Plaintiffs, move jointly for partial summary judgment as to liability, contending that they are entitled to recover under the Policy regardless of any Policy defenses United asserts against Sagar Megh. United filed a cross-motion for summary judgment on Counts I and II of the Amended Intervening Complaint, on the basis that NRB had no rights under the Policy at the relevant time in question. These motions have been fully briefed.

BACKGROUND

Local Rule 56.1(a)(3) requires a party moving for summary judgment to provide " a statement of material facts as to which the moving party contends there is no genuine issue . . . ." Local Rule 56.1(b)(3) requires the nonmoving party to admit or deny each factual statement proffered by the moving party and concisely designate any material facts that establish a genuine dispute for trial. See Schrott v. Bristol-Myers Squibb Co., 403 F.3d 940, 944 (7th Cir. 2005). A litigant's failure to dispute the facts set forth in an opponent's statement in the manner dictated by Local Rule 56.1 results in those facts' being deemed admitted for purposes of summary judgment. Smith v. Lamz, 321 F.3d 680, 683 (7th Cir. 2003). Local Rule 56.1(b)(3)(C) further permits the non-movant to submit additional statements of material facts that " require the denial of summary judgment . . . ."

Page 1021

To the extent that a response to a statement of material fact provides only extraneous or argumentative information, this response will not constitute a proper denial of the fact, and the fact is admitted. See Graziano v. Village of Oak Park, 401 F.Supp.2d 918, 937 (N.D. Ill. 2005). Similarly, to the extent that a statement of fact contains a legal conclusion or otherwise unsupported statement, including a fact which relies upon inadmissible hearsay, such a fact is disregarded. Eisenstadt v. Centel Corp., 113 F.3d 738, 742 (7th Cir. 1997). Only admissible evidence can be considered with a motion for summary judgment. A district court may take judicial notice of documents which are part of the public record, including pleadings from other proceedings.

The following facts [2] are taken from the parties' statements of undisputed material facts submitted in accordance with Local Rule 56.1.[3] On March 5, 2011, a fire occurred at the Lake Motel, located at 9101 South Stony Island Avenue in Chicago, Illinois. (Pls.' SOF ¶ 1.) At that time, NRB held the first and third mortgages on the Lake Motel property, which was owned by Sagar Megh. (Pls.' SOF ¶ ¶ 2, 10.) The terms of these mortgages required Sagar Megh to obtain property insurance and name NRB on said policy as the additional insured. (Pls.' SOF ¶ 3.)[4]

The Insurance Policy

In September 2010, Sagar Megh completed an insurance application requesting insurance and submitted it to the KK Insurance Agency, Inc. (" KK" ). (Pls.' SOF ¶ 6.) NRB was identified as a Mortgagee and Additional Interest on the application. ( Id. ) KK communicated this request for coverage to United's agent, Bass Underwriters, Inc. and requested that the policy be bound. (Pls.' SOF ¶ 7.) In United's documents relating to the Policy, there are three references to NRB as the " Mortgagee" of Sagar Megh: in Sagar Megh's application for insurance, in an " Acord form 126", and in the " Additional Interest Schedule." (Pls.' SOF ¶ ...


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