RVP, LLC, and RIVER VALLEY RECYCLING, LLC, Plaintiffs-Appellants,
ADVANTAGE INSURANCE SERVICES, INC., COMMERCIAL INSURANCE GROUP, INC., and TOM ROULE, Defendants-Appellees.
from the Circuit Court of the 21st Judicial Circuit, Kankakee
County, Illinois. Circuit No. 2013-L-000113 Honorable
Adrienne W. Albrecht, Judge, presiding.
JUSTICE CARTER delivered the judgment of the court, with
opinion. Justices Lytton and O'Brien concurred in the
judgment and opinion.
1 Plaintiffs filed a complaint alleging negligence and breach
of contract counts against their insurance broker agencies,
Advantage Insurance Services, Inc. (Advantage) and Commercial
Insurance Group, Inc. (CIG), and their insurance agent, Tom
Roule. In the complaint, plaintiffs alleged defendants were
negligent and in breach of contract for failing to procure
sufficient insurance coverage, resulting in plaintiffs being
unable to recover insurance proceeds for property that was
destroyed in a fire. The trial court granted defendants'
motion for summary judgment because the plaintiffs'
complaint was filed beyond the applicable two-year statute of
limitations. Plaintiffs appealed, arguing that (1) the trial
court erred in finding, as a matter of law, that plaintiffs
knew or should have known the insufficient coverage limits
upon their receipt of the insurance policies; (2) the trial
court erred by failing to apply the established rule in
Perelman v. Fisher, 298 Ill.App.3d 1007 (1998),
which provided that where an insured brings a claim against
its insurance broker or insurance agent, a court cannot
presume the insured knew or should have known of the contents
of the insurance policy merely because the insured received
that policy; and (3) the trial court erred in finding, as a
matter of law, that plaintiffs' claim that
defendants' failed to procure sufficient coverage was
barred by the statute of limitations. We affirm the trial
court's grant of summary judgment in favor of defendants.
3 Plaintiff, RVP, owned real property at 1244 Grinnell Road
and 1246 Grinnell Road, in Kankakee, Illinois. In 2007,
plaintiff, River Valley Recycling, began operating a
recycling facility out of a portion of RVP's building at
1244 Grinnell Road. Mark Fill was a member of RVP and the
Chief Financial Officer (CFO) of River Valley Recycling. Fill
was responsible for the procurement and for the management of
insurance issues for plaintiffs.
4 Defendants, Advantage and CIG, were the insurance broker
agencies that procured insurance on behalf of plaintiffs.
Defendant, Tom Roule, was an insurance agent employed by
Advantage and, after September 7, 2009, by CIG. In 2007 or
early 2008, Fill began to use Roule to provide insurance
broker services for plaintiffs.
5 A. Travelers Policy
6 On March 1, 2008, Roule procured a policy for RVP from
Travelers Casualty Insurance Company (Travelers policy) for
"building[s] 1 and 2, " which were the buildings
located at 1244 and 1246 Grinnell Road, with coverage limits
of $3, 000, 000 and $600, 000, respectively. On April 21,
2008, a "Change Endorsement" was issued, revising
the limits to $1, 500, 000 for the 1244 building and $1, 500,
000 for the 1246 building, with blanket limits so that $3,
000, 000 of coverage could have applied to either or both of
the buildings. Fill could not recall the reason for change in
coverage and had not initiated the process for the change but
would have been the person who authorized the change. On
April 1, 2009, the policy was renewed with the limits
increased to $1, 545, 000 for each building, with blanket
coverage also provided. The increase in coverage was due to
Travelers' standard policy of a three percent increase
each following year. On January 18, 2010, Travelers issued a
notice of nonrenewal, indicating that the policy would not be
renewed on its expiration date of April 1, 2010.
7 B. Universal Policy
8 In July of 2008, River Valley Recycling was issued a
commercial insurance policy through Universal Underwriters
Insurance Company (Universal policy) for $1, 300, 000 of
blanket replacement cost coverage for its equipment and $1,
000, 000 of coverage for its stock and inventory. The
Universal policy was renewed some time prior to July 1, 2009.
On July 1, 2009, River Valley Recycling was given notice that
the Universal policy was being canceled effective August 1,
9 C. Erie Policies
10 When the Universal policy was canceled, Fill faxed Roule
the canceled policy and asked Roule to find the same or
similar coverage to what plaintiffs had prior to the
cancellation. When Travelers had canceled plaintiffs'
policy, Fill instructed Roule to find the same or similar
coverage as plaintiffs had under the canceled Travelers
policy. Roule had a copy of the Travelers policy so he knew
all the information.
11 In applying for new insurance coverage for business
personal property, on July 29, 2009, Fill executed a
five-page Erie insurance application for $75, 000 of coverage
for plaintiffs' business personal property. Roule did not
send Fill the entire application. Fill executed his signature
on the last page of the application and returned it to Roule.
Fill denied seeing the entire five-page application. It was
Fill's custom to certify insurance applications without
seeing all the pages. Fill did not review the application to
determine whether ...