Cisco Communications v. National Fire Insurance Company of Hartford
943 N.E.2d 276
Ill. App. Ct.2011Background
- CIMCO Communications, Inc. and Vascom, Inc. sued National Fire Insurance Company of Hartford seeking coverage for business income losses after a June 2004 flood damaged their downtown Chicago facility and equipment; repair occurred about three months later.
- Policy provided coverage for actual loss of business income due to suspension of operations during the period of restoration and within 12 months after direct loss.
- Defendant paid losses for the three-month restoration period but refused to cover losses incurred after restoration, arguing coverage is limited to the restoration period.
- Parties exchanged views; expert appraisals were obtained but unresolved; May 22, 2007 declaratory judgment action filed; defendant counterclaimed.
- Trial court granted summary judgment to defendant, holding the business income provision covers only the three-month restoration period; circuit court denied leave to amend counterclaim; both sides appealed.
- Plaintiffs appeal the interpretation of the business income provision; defendant cross-appeals on related denial and other issues; appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Properly interpret the business income provision. | CIMCO/Vascom: provision covers 12 months of losses after flood. | Hartford: provision covers only losses during the restoration period (three months). | Provision limited to losses during the period of restoration. |
| Whether the extended business income provision is rendered superfluous by the main provision. | If main provision covers 12 months, extended provision is redundant. | Extended provision complements main provision. | Main provision interpreted to avoid rendering extended provision meaningless; extended provision remains meaningful. |
| Whether the circuit court abused its discretion in denying leave to amend the counterclaim. | N/A (not contested on sufficiency); aim to obtain declaratory relief for full payment. | Amendment would clarify total satisfaction of policy obligation; issue ripe. | No abuse of discretion; amendment denied as not ripe. |
Key Cases Cited
- Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384 (1993) (insurance policy construction is a question of law)
- Founders Insurance Co. v. Munoz, 237 Ill. 2d 424 (2010) (policy must be read as a whole; ambiguity requires more than disagreement as to meaning)
- Alvarez v. Pappas, 229 Ill. 2d 217 (2008) (voluntary payment doctrine; paid claim not recoverable unless unlawful or compulsory)
- Getto v. City of Chicago, 86 Ill. 2d 39 (1981) (voluntary payment doctrine origin; paid under claim of right with knowledge of facts)
- Certain Underwriters at Lloyd's, London v. Boeing Co., 385 Ill. App. 3d 23 (2008) (appropriateness of declaratory judgments in insurance contexts)