4220 Kildare, LLC v. Regent Insurance Co.
171 N.E.3d 957
Ill. App. Ct.2020Background
- Kildare owned a refrigerated warehouse; in September 2008 a door to “Freezer K” was left open over a long weekend, producing heavy frost/ice, which was later deiced.
- Deicing melted ice that, Kildare contends, seeped through cracks and saturated the floor insulation; the insulation was later found waterlogged and required replacement (demolition of the slab was necessary to replace it).
- Several months later the floor heaved; experts for both sides agreed the heave resulted from freezing/expansion of soil beneath the footings, though they disputed timing and the causal chain.
- Kildare sued Regent for breach of an all-risk policy and sought damages (~$722,111). A jury returned a $544,366 verdict for Kildare (repair costs + lost rent).
- The trial court granted Regent’s post-verdict motion (directed verdict / JNOV), concluding the policy’s Earth Movement exclusion unambiguously barred coverage; Kildare appealed.
- The appellate court rejected the exclusion-based directed verdict because the record supported a separate, prior covered loss (damaged insulation) vesting before the later earth-movement loss, reversed the trial court, reinstated the jury verdict, and remanded for consideration of prejudgment interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Earth Movement exclusion unambiguously bars recovery | Exclusion is ambiguous or should be read to exclude only natural earth movement; alternatively, even if exclusion applies to later heave, earlier insulation damage was a separate covered loss | Exclusion unambiguously excludes losses caused by soil freezing/expansion, which caused the loss here | Court: need not decide ambiguity; evidence supported a separate, prior covered loss (damaged insulation) vesting before excluded earth movement, so directed verdict/JNOV on that ground was improper |
| Whether anti-concurrent-causation language defeats recovery for damages from the earlier event | The insulation damage was a distinct loss occurring before any excluded earth movement, so coverage vested before any excluded cause intervened | Anti-concurrent clause excludes loss when an excluded cause contributes in any sequence; thus any later excluded event bars recovery if it contributed | Court: Analogy to Corban/Robichaux controls—when covered damage occurs first and is a separate loss, anticoncurrent clause does not bar recovery for that vested loss |
| Whether the Faulty Maintenance exclusion independently bars recovery | N/A (Kildare disputed maintenance failure) | Regent: loss caused by Kildare's failure to heat/circulate air in crawl space (faulty maintenance), so exclusion applies | Court: There was conflicting evidence about maintenance; jury reasonably rejected Regent’s maintenance theory; exclusion did not justify directed verdict/JNOV |
| Whether prejudgment interest should be awarded | Kildare requested prejudgment interest and asked remand for court to consider it | Regent opposed as trial court had denied damages when it entered directed verdict | Court: Trial court erred in granting directed verdict; remanded for trial court to consider Kildare’s prejudgment interest motion (no opinion on whether it should be awarded) |
Key Cases Cited
- Pedrick v. Peoria & Eastern R.R. Co., 37 Ill.2d 494 (sets the Pedrick standard for directed verdict/JNOV review)
- Maple v. Gustafson, 151 Ill.2d 445 (directed verdict/JNOV standards; view evidence in light most favorable to nonmovant)
- York v. Rush-Presbyterian-St. Luke’s Medical Center, 222 Ill.2d 147 (explains JNOV as question whether evidence, with inferences for plaintiff, shows total lack of proof)
- Lawlor v. North American Corp. of Illinois, 2012 IL 112530 (directed verdict/JNOV reviewed de novo)
- Cincinnati Insurance Co. v. American Hardware Manufacturers Ass’n, 387 Ill. App.3d 85 (describes scope of all-risk policies and insurer burden to show exclusions)
- Mattis v. State Farm Fire & Casualty Co., 118 Ill. App.3d 612 (interpreting earth-movement exclusions; insurer reliance on exclusion language discussed)
- Pekin Insurance Co. v. Miller, 367 Ill. App.3d 263 (insurer bears burden to demonstrate applicability of an exclusion)
- Cohen Furniture Co. v. St. Paul Insurance Co. of Illinois, 214 Ill. App.3d 408 (when insurer relies on exclusion, its application must be clear and free from doubt)
- Northern Trust Co. v. University of Chicago Hospitals & Clinics, 355 Ill. App.3d 230 (trial court may not reweigh evidence to set aside jury verdict)