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Libman v. Great Northern Insurance Co.

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

March 29, 2017

Jody Libman, Plaintiff,
v.
Great Northern Insurance Company; Chubb Group of Insurance Companies; TA Cummings Jr. Company; Assured Partners, Inc., and David Schwartz, Defendants.

          MEMORANDUM OPINION AND ORDER

          Honorable Thomas M. Durkin United States District Judge

         Jody Libman (“Libman”) alleges that Great Northern Insurance Company and the Chubb Group of Insurance Companies breached his home owner's insurance policy (Count I). R. 1-1 at 8. He also alleges that Great Northern and Chubb, along with the agent that brokered the policy, David Schwartz, and the agency Schwartz works for, TA Cummings Jr. Company (which is owned by AssuredPartners, Inc.) (collectively, the “Agency Defendants”), fraudulently induced Libman to sign the policy (Count III) and are liable for consumer fraud (Count II). Id. at 9-11. Lastly, Libman alleges that the Agency Defendants were negligent in not relaying information regarding the property to Great Northern and Chubb (Count IV). Id. at 11-12. Great Northern has moved to dismiss the fraud claims (Counts II & III) for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). R. 6. (Great Northern has not made a motion with respect to Count I.) The Agency Defendants joined Great Northern's motion, see R. 37; R. 40, and separately moved to dismiss the negligence claim (Count IV) pursuant to Rule 12(b)(6). R. 38; R. 42; R. 43; R. 45. Great Northern has also moved to have Chubb stricken from the complaint, R. 5, and to dismiss for failure to join a necessary party, namely Libman's ex-wife, Tami Libman (“Tami”). R. 4. For the following reasons, the motions to dismiss Counts II, III, and IV are granted, the motion to strike is denied, and the motion to dismiss for failure to name a necessary party is denied in part and granted in part.

         Legal Standard

         A Rule 12(b)(6) motion challenges the sufficiency of the complaint. See, e.g., Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). A complaint must provide “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), sufficient to provide defendant with “fair notice” of the claim and the basis for it. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). This standard “demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While “detailed factual allegations” are not required, “labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. The complaint must “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). “‘A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'” Mann v. Vogel, 707 F.3d 872, 877 (7th Cir. 2013) (quoting Iqbal, 556 U.S. at 678). In applying this standard, the Court accepts all well-pleaded facts as true and draws all reasonable inferences in favor of the non-moving party. Mann, 707 F.3d at 877.

         Background

         Great Northern renewed a home owner's insurance policy for Jody and Tami Libman effective August 30, 2014 (the “Policy”). See 4-1. The Policy is described as a “Chubb Masterpiece Policy” and was printed on “Chubb” letterhead. Id. at 3. The Policy's cover letter stated, “This mailing contains information about the renewal of your insurance policy with Chubb. . . . Relax. You're insured by Chubb.” Id. at 2. The fine print at the bottom of the cover letter provided

Chubb Group of Insurance Companies (“Chubb”) is the marketing name used to refer to the insurance subsidiaries of The Chubb Corporation. Chubb Personal Insurance (“CPI”) is the personnel lines property and casualty strategic business unit of Chubb & Son, a division of Federal Insurance Company, as manager and/or agent for the Insurers of Chubb Group of Insurance Companies.

Id. The Policy states that “Chubb Group of Insurance Companies” “provided” the Policy, id. at 5, and “Chubb” is generally referred to as the insurer throughout the Policy.

         Libman purchased the Policy from defendant TA Cummings. R. 1-1 at 5 (¶ 12). TA Cummings is listed as the Policy's “producer” and “contact” for any questions. R. 4-1 at 2-3. Defendant Schwartz was the “account executive” at TA Cummings who worked with Libman. R. 1-1 at 6 (¶ 16).

         Between August and December 2014 no one lived in the property covered by the Policy (the “Property”). Id. at 6 (¶ 19). Libman alleges that during the time the Property was unoccupied, he “was in regular contact with Schwartz. . . . [and] informed Schwartz . . . that the Property's units remained unoccupied, but that Libman was taking necessary steps to protect the Property.” Id. (¶ 20). Libman also alleges that he regularly showed the Property to prospective tenants, thereby checking the status of the Property, and ensuring that “all utilities . . . were in working order, ” and “the temperature inside the Property was kept at a reasonable level.” Id. (¶¶ 22-23). On December 4, 2014, water pipes at the Property burst and caused “extensive damage.” Id. (¶ 24).

         After investigating the incident, Chubb and Great Northern denied coverage under the Policy by letter dated September 14, 2015 (the “Letter”). Id. at 7 (¶¶ 27-31). The Letter provides the following in relevant part:

[recitation of certain Policy provisions]
No coverage is afforded under [the Policy] because the loss was intentionally caused or directed to be caused by you. Alternatively, no coverage is afforded under the Policy because you failed to use ...

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