Area Erectors, Inc. v. Travelers Property Casualty Company of America
981 N.E.2d 1120
Ill. App. Ct.2012Background
- AEI seeks replacement cost for two damaged cranes under inland marine policy; endorsement governs coinsurance and valuation.
- Two cranes damaged: an American 7150 (manufactured 1993) and a Link-Belt crane; both are older than five years.
- Travelers offered actual cash value (ACV) for the American crane, with a deductible; AEI contends replacement cost (RC) applies.
- Policy endorsement provides RC for listed items under five years, ACV for items over five years or unlisted, with a coinsurance penalty if insured value is less than 80% of value.
- Court held endorsement read as a whole governs valuation; both cranes were over five years old, thus ACV governs unless RC applies under the terms.
- Trial court granted judgment on the pleadings that ACV is proper valuation for the American crane, and penalties under 154.6/155 were not warranted; AEI appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Valuation method under endorsement | AEI seeks RC for American crane | Travelers argues ACV applies | ACV is the proper method under the endorsement. |
| Private remedy under §154.6 | §154.6 supports penalties | §154.6 is regulatory, not private remedy | No private §154.6 damages; AEI cannot recover under §154.6. |
| §155 penalties for American crane | Travelers acted vexatiously | There was a bona fide coverage dispute | No §155 penalties due to bona fide dispute. |
| Link-Belt crane penalties/claims | Penalty issue should be decided | Record lacked requested declaration; issue not preserved | Issue forfeited for lack of appellate briefing decision. |
| Timeliness of liability acknowledgment | Travelers delayed liability acknowledgment | Response time was reasonable given negotiations | No §155 penalties for Link-Belt claim; reasonable response times. |
Key Cases Cited
- Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90 (1992) (contract interpretation; unambiguous terms given plain meaning)
- Illinois Tool Works, Inc. v. Commerce & Industry Insurance Co., 2011 IL App (1st) 093084 (2011) (de novo review of interpretation; terms construed as a whole)
- Bank of Chicago v. Park National Bank, 277 Ill. App. 3d 167 (1995) (consider pleadings and exhibits as judicial admissions)
- State Farm Fire & Casualty Co. v. Young, 2012 IL App (1st) 103736 (2012) (de novo review of judgment on the pleadings in insurance context)
- Uhlich Children’s Advantage Network v. National Union Fire Co. of Pittsburgh, 398 Ill. App. 3d 710 (2010) (section 155 penalties are extracontractual remedy for vexatious delays)
- McGee v. State Farm Fire & Casualty Co., 315 Ill. App. 3d 673 (2000) (limits of section 155 penalties; court discretion in awarding fees)