United States District Court, N.D. Illinois, Eastern Division
Jody A. Libman and Tami S. Libman, Plaintiff,
Great Northern Insurance Company and Federal Insurance Company, Defendants.
MEMORANDUM OPINION AND ORDER
HONORABLE THOMAS M. DURKIN UNITED STATES DISTRICT JUDGE.
and Tami Libman allege that Great Northern Insurance Company
failed to pay for damage to a residential building they owned
in breach of a property insurance policy. The Libmans and
Great Northern have cross-moved for summary judgment on the
limited issue of whether the Libmans' sale of the
building after the damage occurred serves to limit their
loss. R. 63; R. 65. For the following reasons, the
Libmans' motion is denied and Great Northern's motion
is granted in part and denied in part.
judgment is appropriate “if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986). The Court
considers the entire evidentiary record and must view all of
the evidence and draw all reasonable inferences from that
evidence in the light most favorable to the nonmovant.
Ball v. Kotter, 723 F.3d 813, 821 (7th Cir. 2013).
To defeat summary judgment, a nonmovant must produce more
than “a mere scintilla of evidence” and come
forward with “specific facts showing that there is a
genuine issue for trial.” Harris N.A. v.
Hershey, 711 F.3d 794, 798 (7th Cir. 2013). Ultimately,
summary judgment is warranted only if a reasonable jury could
not return a verdict for the nonmovant. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Libmans renewed a property insurance policy with Great
Northern on August 30, 2014, covering a building they owned
in Chicago. Sometime in the fall of 2014, the property went
into foreclosure and the Libmans agreed to a short sale to
extinguish their debt. Before the sale closed, extensive
water damage occurred in the building on December 4, 2014.
The Libmans contracted to mitigate the damage but did not
fully repair the property. Despite the damage, the short sale
closed on December 29, 2014, for the original sale price,
with no reduction for the damage to the
property. Jody Libman filed this case in state court
on February 4, 2016, and it was removed to this Court on
March 9, 2016.
October 17, 2017, the parties filed a joint motion seeking to
stay discovery and leave to file cross motions for summary
judgment on “case dispositive issues, ” R. 61,
which the Court granted. In its summary judgment motion,
Great Northern does not dispute that the policy provides
coverage for the mitigation costs the Libmans paid. But in
addition to the mitigation costs the Libmans seek the
“replacement cost of the property, ” under a
provision of the policy providing for such payment when the
insured chooses not to “repair, replace or
rebuild.” Great Northern argues that the Libmans have
not suffered a loss beyond the mitigation costs because they
sold the building for a benefit that was not discounted due
to the damage. Great Northern argues that the Libmans would
receive an inequitable “double recovery” if they
are paid the replacement cost of the building in addition to
the benefit from the short sale. The Libmans argue that the
policy contains no provision limiting recovery in this
manner. Both parties seek summary judgment in their favor on
The Scope of the Joint Motion
addressing the “double recovery” issue, the Court
must resolve a dispute the parties have over the proper scope
of these cross motions for summary judgment. In addition to
the “double recovery” issue, Great Northern seeks
summary judgment based on alleged misrepresentations Jody
Libman made during Great Northern's investigation of the
water damage, which Great Northern argues completely relieves
it of any obligation to pay under the policy (including the
mitigation costs). The Libmans cry foul and argue that this
issue is beyond the scope of the issues contemplated by the
“joint motion” that precipitated these
cross-motions, and should not be addressed until they can
have further discovery on this issue. The Libmans, however,
do not explain what further discovery they might need to
adequately address this issue.
under Federal Rule of Civil Procedure 56(d), a party's
contention that they cannot respond to a summary judgment
motion without additional discovery must be supported by
“affidavit or declaration” setting forth
“specified reasons.” Although the Libmans have
failed to do this here, the Court finds that the parties'
joint motion did not clearly provide that issues beyond
“double recovery” were to be briefed. In the
“joint motion, ” the parties stated that
“discovery concerning the issue of double
recovery” was complete, and that settlement discussions
could not proceed without a ruling on “case-dispositive
issues.” The parties further described their dispute
about the significance of the building's sale, and
explained that “[e]xpert and remaining discovery will
be expensive and unnecessary depending upon the court's
ruling on dispositive motions.”
these direct references to “double recovery” and
the effect of the sale on the Libmans' loss, paragraphs
two and seven of the “joint motion” use the terms
“case-dispositive issues” and “dispositive
motions” without direct reference to the “double
recovery” issue. This creates some ambiguity about the
parties' intent regarding the scope of the
“dispositive motions, ” which has resulted in
this dispute. Considering the apparent miscommunication
between the parties, the Court will address only the issue of
“double recovery” at this time, and will reserve
ruling on the issue of Jody Libman's alleged
discussing the case law relevant to the “double
recovery” issue, the Libmans note that “it would
be inequitable for a party to receive the full value of a
policy without having suffered a loss.” R. 70 at 14.
Illinois courts agree with this assertion, holding that
property insurance policies must be “construed”
according to the “fundamental purpose of insurance
coverage, ” which is “indemnity for actual
loss.” Paluszek v. Safeco Ins. Co. of Am., 517
N.E.2d 565, 568 (Ill.App.Ct. 1st Dist. 1987). In other ...