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Kindra Lake Towing, L.P. v. Donat Insurance Services, LLC

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

February 15, 2017



          Harry D. Leinenweber, United States District Court Judge

         The Defendants' self-styled Motion for Judgment on the Pleadings [ECF No. 23] is granted. The Complaint is dismissed without prejudice with permission to refile if and when the dispute ripens.

         I. BACKGROUND

         The facts of this case, which involved the sinking of a haunted house on a dark and stormy night, were discussed at length in the Court's last memorandum opinion. See, Kindra Lake Towing, L.P. v. Donat Ins. Servs., LLC, No. 16 C 3916, 2016 U.S. Dist. LEXIS 129803, at *1-6 (N.D. Ill. Sep. 20, 2016). Suffice it to recount that Plaintiffs Kindra Lake Towing and Black Diamond Marine Equipment (“Plaintiffs”) had chartered a barge to non-party Foundation Theatre Group (“Foundation”). Plaintiffs contractually required Foundation to carry insurance for the vessel, and Foundation turned to the Defendants, Donat Insurance Services, LLC, and its owner, Ken Donat (the “Defendants”), for insurance brokerage services. Defendants procured for Foundation a policy underwritten by Capitol Indemnity Corporation. The policy named both Foundation and Plaintiffs as insureds.

         The barge, carrying Foundation's staged haunted house, was then docked at Navy Pier. On Halloween 2014, a storm sunk the barge. On its heel followed three federal lawsuits. The interactions of these lawsuits, the last of which is the case before this Court, are important for the resolution of the motion at hand. The Court thus delves into them in some detail.

         The first lawsuit, filed before District Judge Thomas M. Durkin, is a declaratory judgment action brought by Plaintiffs. See, In re Kindra Lake Towing, L.P., No. 15 C 03174 (filed Apr. 4, 2015). In this lawsuit (“the Durkin suit”), Plaintiffs seek to have the court declare that Plaintiffs are not liable to any party for any losses that arose out of the sinking of the barge. See, id., ECF No. 1 ¶¶ 13-15, 24. Foundation and Navy Pier both counterclaim against Plaintiffs. See, id., ECF Nos. 38-39. Foundation seeks damages for its lost haunted house and lost profits in the amount of $375, 000.00, while Navy Pier claims $600, 000.00 in damages to its dock. See, id., ECF No. 38 at pp. 13-21 (Foundation's Countercl.); ECF No. 39 ¶¶ 13, 21, 29, 35 (Navy Pier's Countercl.).

         Importantly, Plaintiffs (and their insurers) also bring a claim for money damages against Foundation as part of the Durkin suit. See, id., ECF No. 24 (“Plaintiffs' Counterclaims against Foundation”). The damages that Plaintiffs seek in that complaint are precisely those that they seek against Defendants in the case before this Court. In particular, Plaintiffs allege that: “As a result of said breaches of contract by Foundation Theatre, the Claimants [Plaintiffs and their insurers] have suffered damages well in excess of $1, 500, 000 arising out of the damages suffered by [the barge] TMS 200, the salvage of said barge and the containers from the bottom of Lake Michigan, transportation fees, surveyor fees, loss of use, storage fees, prejudgment interest, and legal fees.” Id. ¶ 19. Wherefore, Plaintiffs pray for damages “well in excess of $1, 500, 000.” Id. ¶¶ 21, 26.

         The second lawsuit, pending before Judge John Robert Blakey, is a declaratory action brought by Capitol Indemnity Corporation. See, Capitol Indemnity Corporation v. Foundation Theatre Group, No. 15 C 09735 (filed Oct. 30, 2015) (“the Blakey suit”). Capitol, the underwriter behind the insurance policy Defendants procured, requests a judgment declaring that its policy does not provide “coverage, either defense or indemnity . . . for FTG [Foundation Theatre Group], Navy Pier, Kindra, and Black Diamond for . . . the damages alleged in th[e] [Durkin] Action.” Id., ECF No. 1 ¶ 41. Capitol prays for this relief on the basis of various exclusionary clauses written into the insurance policy, including a clause excluding coverage for “watercraft” (Exclusion G) and one excluding “property damage” coverage for “property [that] you own, rent or occupy, ” “property loaned to you, ” and “personal property in the care, custody or control of the insured” (Exclusion J). Id. ¶ 32.

         In short, Capitol seeks a declaration that it is not liable for any damage awards that may flow from the Durkin lawsuit. That lawsuit, as will be recalled, includes the claim for $1.5 million that Plaintiffs brought against Foundation. Both Foundation and Plaintiffs are contesting and making counterclaims against Capitol in the Blakey action. See, id., ECF Nos. 28 and 37.

         Finally, the third and latest filed suit is the one before this Court. In this case, Plaintiffs are suing the Defendant insurance brokers on the theory that Defendants caused Plaintiffs harm by failing “to place the proper and correct insurance [as] requested by Foundation.” Kindra Lake Towing, L.P. v. Donat Ins. Servs., LLC, No. 16 C 03916, ECF No. 1 (Compl.) ¶ 30. Plaintiffs allege that their “damages and losses . . . are still being calculated, but will be in excess of $1, 500, 000.00, including damage sustained to the barge TMS-200 (‘the Vessel'), salvage costs, loss of use, attorneys' fees, pre-judgment interest, and other expenses.” Id. ¶¶ 31, 52. Elsewhere in their filings before the Court, Plaintiffs clarify that the damages they seek include both “1) property damage for the loss of their vessel and the associated costs relating to salvage and cleanup, and 2) liability exposure for the cost of defending themselves against lawsuits from Navy Pier and Foundation and potential damage awards.” See, ECF No. 28 (Pl.'s Resp. to Defs.' Mot.) at 5.

         The Defendants now move for the Court to dismiss the Complaint on the grounds that Plaintiffs will suffer injuries only if the Durkin and Blakey lawsuits are resolved against them. As such, either Plaintiffs lack standing to sue or their claims are not yet ripe for adjudication. For the reasons stated herein, the Court finds that dismissal is appropriate at this stage.

         II. ANALYSIS

         In addition to arguing for standing and ripeness, Plaintiffs urge that the Court deny the Motion because it is untimely. The Court thus addresses this procedural argument ...

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