United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
ANDREA R. WOOD, District Judge.
In July 2009, a barge leased by Plaintiff Omega Demolition Corporation ("Omega") was damaged and Omega submitted a claim to its insurer, Defendant Travelers Property Casualty of America ("Travelers"). Travelers denied Omega's claim. Over four years later, Omega filed suit alleging that Travelers wrongfully denied coverage. Now, Travelers moves the Court for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) based on affirmative defenses it has asserted. (Dkt. No. 29.) Specifically, Travelers argues that Omega's suit is barred by a provision in the relevant policy that limits the time in which suit may be filed against Travelers. Omega, on the other hand, argues that Travelers breached its duty to defend Omega and thus it is estopped under Illinois law from raising the suit limitation defense.
For the reasons discussed below, the Court finds that Travelers had the right but not the duty to defend Omega. Therefore, the estoppel doctrine does not apply. Furthermore, Travelers is entitled to judgment in its favor, as there are no material issues of fact to be resolved and it is apparent that Omega's claim is time-barred. Accordingly, the Court grants Travelers's motion and enters judgment in its favor.
Omega's Amended Complaint seeks to recover insurance proceeds from Travelers based on an occurrence on the Fox River in July 2009, when barges and other equipment Omega leased from a third party, Sunflower Enterprises, LLC ("Sunflower"), sustained damages while performing demolition work. (Am. Compl. ¶ 15, Dkt. No. 16.) As part of its leasing agreement with Sunflower, Omega was required to obtain property insurance for the barges. ( Id. ¶ 8.) Omega ultimately obtained this insurance under a policy issued by Travelers that included commercial property and inland marine coverage (the "Policy"). ( See Ex. A to Def.'s Memo., Dkt. No. 30-1.)
Both coverage parts included language limiting the time in which Omega could bring a lawsuit against Travelers based on the Policy. The commercial property portion of the Policy indicated:
No one may bring legal action against us under this Coverage Part unless:
1. There has been full compliance with all of the terms of this Coverage Part; and
2. The action is brought within 2 years after the date on which the direct physical loss or damage occurred.
( Id. at 14-15.) The commercial property section was also subject to the requirement that "[t]he 2 year period for legal action against us is extended by the number of days between the date the proof of loss is filed with us and the date we deny the claim in whole or in part." ( Id. at 100.) The Policy language for the inland marine coverage stated:
No one may bring legal action against us:
1. Until there has been full compliance with all of the terms of this Coverage Part; and
2. More than 2 years after you first have knowledge of the direct loss or damage. But we will extend this 2 year period by the number of days between the date proof of loss is filed and the date the claim is denied in whole or in part.
( Id. at 94-95.) Both coverage parts of the Policy further provided that "[Travelers] may elect to defend you against suits arising from claims of owners of property. [Travelers] ...