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Spring Point Condominium Association, Inc. v. QBE Insurance Corp.

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

December 13, 2017

SPRING POINT CONDOMINIUM ASSOCIATION, Plaintiff,
v.
QBE INSURANCE CORPORATION, Defendant.

          MEMORANDUM OPINION AND ORDER

          Young B. Kim United States Magistrate Judge

         Before the court is Plaintiff Spring Point Condominium Association's (“Spring Point”) motion to compel Defendant QBE Insurance Corporation (“QBE”) to submit the parties' insurance dispute to an appraisal. For the following reasons, the motion is granted:

         Background

         On July 17, 2015, a severe hail storm caused significant damage to Spring Point's property in Carpentersville, Illinois. (R. 30, Pl.'s Mot. at 1.) Spring Point had maintained an insurance policy (“the Policy”) with QBE since 2008, and on November 23, 2015, it submitted a claim to QBE in connection with the storm damage. (R. 34, Def.'s Resp. at 2.) QBE retained Hagg Engineering (“Hagg”) to inspect the property. (Id.) In its inspection report, Hagg opined that hail damage to the property's siding, fascia trim, gutters, and downspouts occurred prior to 1999. (Id., Ex. B.) Subsequently, on February 19, 2016, a wind storm caused damage to Spring Point's property. (R. 30, Pl.'s Mot. at 1.) On April 19, 2016, Spring Point informed QBE of damage to its property resulting from the storm, and QBE again retained Haag to inspect the property. (R. 34, Def.'s Resp. at 3.) In its inspection report, Hagg “documented three locations where siding and trim were missing or loosened” and opined that Spring Point sustained minimal damage in connection with the wind storm. (Id., Ex. C.) Based on Hagg's damage estimate, QBE has offered to pay Spring Point $37, 898.33, but denies responsibility for any damage to Spring Point's property that it says occurred prior to the inception of the Policy. (R. 30, Pl.'s Mot. at 2.)

         In January 2017 Spring Point retained Inside-Out Construction Services (“Inside-Out”) to evaluate the extent of the damage caused by the July 17, 2015 and February 19, 2016 storms. (R. 30, Pl.'s Mot., Ex. B.) Inside-Out opined that Spring Point sustained $3, 106, 515.28 in damages in connection with the two storms. (Id.) On March 17, 2016, Spring Point made a written demand for an appraisal of its loss to QBE, but QBE refused to submit the matter to appraisal. (R. 1, Compl. at 3.)

         On September 19, 2017, Spring Point filed the present motion to compel an appraisal. In its motion, Spring Point argues that because the parties dispute the value and amount of loss caused by the storms, it is entitled to an independent appraisal to assess the value and amount of loss as required under the Policy. (R. 30, Pl.'s Mot. at 1.) The relevant provision of the Policy reads:

1. If you and we disagree on the amount of loss or value of property, either may make written demand for an appraisal of the loss. In this event, each party will do the following:
a. Select its own appraiser. You and we must notify the other of the appraiser selected within 20 days of the written demand for appraisal.
(1) The appraisers will state separately and independently the amount of the loss or damage.
(2) If the two appraisers fail to agree they will select an umpire. If the appraisers do not agree on the selection of an umpire within 15 days, they must request selection of an umpire by a judge of a court having jurisdiction.
(3) An agreement by any two will be binding as to the amount of the loss.

(R. 1, Compl., Ex. A at 16-17.) In response, QBE argues that Spring Point's motion should be denied because the dispute in this case amounts to a coverage issue, which is a question to be resolved by the court, and not a disagreement about the valuation of damages that would necessitate the enforcement of the Policy's appraisal clause. (R. 34, Def.'s Resp. at 2.)

         Analysis

         When determining whether to apply a particular clause of a contract, a court's primary objective is to ascertain and give effect to the intention of the parties as expressed in the agreement. Berg v. New York Life Ins. Co., 831 F.3d 426, 428 (7th Cir. 2016); Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill.2d 384, 391 (1993). If the words used in the insurance policy are plain and unambiguous, the words should be accorded their plain and ordinary meaning. Berg, 831 F.3d at 429; State Farm Mut. Auto. Ins. Co. v. Villicana, 181 Ill.2d 436, 441 (1998). When deciding whether a provision is ambiguous, the court “read[s] the policy in light of ‘the insured's reasonable expectation and the policy's intended coverage.'” Berg, 813 F.3d at 429 (quoting Gen. Star Indemn. Co. v. Lake Bluff Sch. Dist. No. 65, 354 Ill.App.3d 118, 127 (2004)). Courts ...


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