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Zeller Properties, Inc. v. Hartford Fire Insurance Co.

United States District Court, S.D. Illinois

March 23, 2018

ZELLER PROPERTIES, INC., Plaintiff,
v.
HARTFORD FIRE INSURANCE COMPANY, Defendant.

          ORDER

          DONALD G. WILKERSON UNITED STATES MAGISTRATE JUDGE.

         Now pending before the Court is a Motion for Summary Judgment filed by Defendant, Hartford Fire Insurance Company, on July 24, 2017 (Doc. 30). For the reasons set forth below, the Motion is GRANTED.

         Background

         The following facts are undisputed. Zeller Properties, Inc. owns a commercial building in Marion, Illinois that is used for office space. In November, 2012, Plaintiff became aware of “adhesive oozing” from beneath the carpet of office space leased to Hyatt Hotels. Plaintiff hired engineers to determine the cause of the oozing and discovered that it was due to excessive moisture in the concrete slab underneath the building. Almost a year later, in October, 2013, a water line buried 6-8 feet underground burst, causing flooding along the front of the building. Plaintiff subsequently learned that the pipe had been degrading over time and had caused the increased water content of the concrete slab and hence the liquefaction of adhesive that was observed in the office space. While Defendant disagrees as to the source of the water, it agrees that the problems observed in the building were due to excessive moisture in the concrete slab.

         Plaintiff has a “Special Multi-Flex Policy, ” i.e. property insurance, issued by Defendant that was in force at the time of the above events (Doc. 1-1, pp. 13-63; Doc. 1-2). In April, 2014, Plaintiff made a claim related to the burst pipe. It sought coverage for replacement of the pipe, landscaping, and installation of a VeraShield moisture barrier system (Doc. 30-4, p. 1). Defendant paid $25, 000, the policy limit for “water seepage, ” and $4, 597.16 under the “tear out and repair” provision to complete landscaping outside of the building due to the replacement of the burst pipe (Id. 2). While there is no dispute that Plaintiff was entitled to the above sums pursuant to the terms of the policy, Defendant declined to pay for replacing the burst pipe itself or for any specific preventative measures, like the VeraShield moisture barrier system, due to certain exclusions in the policy (Id.).

         Discussion

         Summary judgment is proper only if the moving party can demonstrate “that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law.” Federal Rule of Civil Procedure 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). See also Ruffin-Thompkins v. Experian Information Solutions, Inc., 422 F.3d 603, 607 (7th Cir. 2005); Black Agents & Brokers Agency, Inc. v. Near North Ins. Brokerage, Inc., 409 F.3d 833, 836 (7th Cir. 2005). The moving party bears the burden of establishing that no material facts are in genuine dispute; any doubt as to the existence of a genuine issue must be resolved against the moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 160 (1970). See also Lawrence v. Kenosha County, 391 F.3d 837, 841 (7th Cir. 2004). A moving party is entitled to judgment as a matter of law where the non-moving party “has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof.” Celotex, 477 U.S. at 323. “[A] complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.” Id. The Seventh Circuit has stated that summary judgment is “the put up or shut up moment in a lawsuit, when a party must show what evidence it has that would convince a trier of fact to accept its version of the events.” Steen v. Myers, 486 F.3d 1017, 1022 (7th Cir. 2007) (quoting Hammel v. Eau Galle Cheese Factory, 407 F.3d 852, 859 (7th Cir. 2005) (other citations omitted)).

         There is no dispute that Illinois law governs this action. The primary objective when interpreting insurance policies, like contracts, is to give effect to the intent of the parties. Valley Forge Insurance Company¸ Swiderski Electronics, Inc., 860 N.E.2d 307, 362 (Ill. 2006). Policies are construed as a whole, “giving effect to every provision, if possible, because it must be assumed that every provision was intended to serve a purpose.'” Id. at 362-3. Unambiguous words in a policy are applied as written; ambiguous words, those that are subject to more than one reasonable interpretation, are construed against the drafter, which in this case is Defendant. Id. Ambiguity does not exist simply because the parties disagree as to meaning and the “court will not search for ambiguity where there is none.” Id.

         As set forth by the parties, the policy covers “water seepage” which is defined as “physical loss or direct physical damage . . . resulting from water under the ground surface pressing on, or flowing or backing up or seeping through . . . foundations, walls, floors or paved surfaces.” (Doc. 1-1, p. 43, Section A.36). Defendant paid the policy limit of $25, 000 under this provision. The policy also covers water damage which kicks in when monies are paid for “the escape of water or other liquid” (Id. Section A.35). Defendant paid $4, 597.16 under this provision. The parties dispute concerns whether Defendant should pay for the burst water pipe: Plaintiff contends that it is part of the sprinkler system and covered by the policy and Defendant contends that the part of the policy allowing for such claims does not apply.

         Defendant argues that the claim for the water pipe is excluded by the following provision:

         B. SPECIFIC EXCLUSIONS

         9. Flood, Water, and Water Under the Ground

         a. We will not pay for loss or damage caused by, resulting from, arising ...


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