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The Connectors Realty Group Corp. v. State Farm Fire & Casualty Co.

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

October 9, 2019

THE CONNECTORS REALTY GROUP CORPORATION, DARRYL WILLIAMS, and ANTOINE NASH, Plaintiffs,
v.
STATE FARM FIRE & CASUALTY COMPANY, Defendant.

          MEMORANDUM OPINION

          Charles P. Kocoras United States District Judge.

         Before the Court is Defendant State Farm Fire & Casualty Company's (“State Farm”) motion to dismiss Plaintiffs The Connectors Realty Group Corporation (“Connectors”), Darryl Williams (“Williams”), and Antoine Nash's (“Nash”) (collectively, “the Plaintiffs”) amended class action complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the motion to dismiss is granted in part and denied in part.

         BACKGROUND

         For purposes of this motion, the Court accepts as true the following facts from the amended complaint. Murphy v. Walker, 51 F.3d 714, 717 (7th Cir. 1995). All reasonable inferences are drawn in the Plaintiffs' favor. Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008).

         Connectors' Factual History

         Connectors is an Illinois corporation that manages and owns residential and commercial real estate. Williams, an African-American male, was Connectors' owner and sole shareholder. State Farm is an insurance company authorized to do business in Illinois.

         At all relevant times, Connectors owned a property at 622-624 West 79th Street, Chicago, Illinois 60620 (“the Premises”). The Premises includes two commercial spaces, six apartment units, and a basement.

         To insure the Premises, Connectors contacted State Farm at some time before January 5, 2017. State Farm inspected the Premises and determined that it was fully occupied, that all of the operating systems-including heat, electrical, plumbing, and boilers-were fully operational, and that the Premises met State Farm's standards for insurability. State Farm recommended that the Premises be insured for a replacement value amount of $400, 000.

         On or about January 5, 2017, State Farm executed and delivered to Connectors its Insurance Policy No. 93-GQ-Z610-71 (“the Connectors Policy”) for property and liability insurance on the Premises. Under the terms of the Connectors Policy, State Farm insured against loss and damage to the Premises, including water damage, equipment breakdown, theft, vandalism, and loss of income for one year from the date of the loss. The Connectors Policy provides that loss will be payable 30 days following receipt of a proof of loss statement.

         i. Weather Event Claims

         On January 10, 2017, there was a below freezing weather event (“the Weather Event”) in Chicago, Illinois. Tenant Lynette Crawley (“Crawley”) left a bathroom window open in Unit 2R of the Premises during the Weather Event. This caused pipes to freeze and burst, resulting in damage to the walls, floors, ceilings, drywall, electric, heating and gas, pipelines, and water tank to the tune of $86, 155. Connectors filed a corresponding claim (“Claim No. 13-0670-8L5”) with State Farm for the cost of the damage and the loss of rental income for one year at a rate of $3, 850 per month. In total, Connectors claimed $132, 355. They submitted a proof of loss statement for that amount minus the amount of the deductible on August 4, 2017.

         As an additional result of the Weather Event and Crawley's action, water from the burst pipes submerged the boilers in water, causing them to become rusted and inoperable. This resulted in damage of $60, 000, for which Connectors filed in a second claim (“Claim No. 13-1390-8S1”). They filed a corresponding proof of loss statement minus the amount of the deductible on September 5, 2017.

         Connectors submitted a third claim (“Claim No. 13-1390-8N9”) related to the Weather Event for damage to pipes, shelves, equipment, ceilings, walls, flooring, radiators, gas lines; the collapse of the store front; and electric and gas lines being down, resulting in $116, 955 in damage. On August 11, 2017, Connectors filed a corresponding proof of loss statement minus the amount of the deductible.

         According to Connectors, State Farm refused to repair or replace the inoperable boilers. Therefore, the residents vacated the Premises and stayed in a hotel at Connectors' expense, leaving the Premises almost entirely unoccupied.

         ii. Vandalism Claims

         On February 4, 2017, a theft and vandalism occurred at the Premises, for which Connectors filed a claim with State Farm (“Claim No. 13-0790-6C6”). Connectors claimed damages for stolen copper pipes, copper plumbing fixtures, fire alarm system, fire extinguishers, lights, smoke detectors, carbon monoxide detectors, industrial heaters, cabinets, and radiators; for broken light bulbs, doors, electric outlets, and windows; and for damaged stairwells, ceilings, and walls, resulting in a total loss of $120, 000.

         On April 23, 2017, a second theft occurred at the Premises, for which Connectors suffered loss and damage in the amount of $48, 500. Connectors filed a claim (“Claim No. 13-1390-8K9”) for this loss with State Farm. On August 11, 2017, Connectors filed a corresponding proof of loss statement minus the amount of the deductible.

         iii. Hail Event Claim

         On April 17, 2017, a hail event (“the Hail Event”) occurred in Chicago, Illinois. The Hail event caused a hole in the third-floor roof of the Premises, damaging the ceiling and drywall in the amount of $17, 500. Connectors filed a claim (“Claim No. 13-1390-8F4”) with State Farm for their losses and filed a corresponding proof of loss statement on August 11, 2017.

         iv. State Farm's Processing of Connectors' Claims

         Tina Beavers (“Beavers”) is a Caucasian State Farm employee and claim adjuster who was assigned to the three claims arising from the Weather Event. Between January 10, 2017 and January 20, 2017, Williams had several telephone conversations with Beavers regarding the claims. Beavers inquired as to who was living at the Premises and how the losses occurred. Williams explained that Crawley left the bathroom window open, which froze and burst the pipes. Beavers asked for the tenants' leases and stated that she wanted to speak with Crawley. Williams complied with Beavers' request and provided her with the leases.

On January 20, 2017, Williams and Beaver had the following conversation:
Tina Beavers said, “Are you sure someone was living there (meaning Unit 2R)?[”]
Darryl Williams said, “Yes. Somebody's living there.”
Tina Beavers said, “Well, I couldn't get a hold of her. Do you have any other phone No. for her?”
Darryl Williams said, “No.”
Tina Beavers said, “Well, you get a hold of her, if she really exists.” Darryl Williams said, “That's not my job to get a hold of her. I gave you all the information.”
Tina Beavers said, “You mean to tell me you people don't use Facebook and other social media and you don't know any of her homeys who could ...

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