Wells v. State Farm Fire & Casualty Insurance Co.
173 N.E.3d 613
Ill. App. Ct.2021Background
- Connie, William, and Brian Wells owned a Marion, Illinois warehouse insured by State Farm; policy excluded loss from frozen plumbing unless "you do your best to maintain heat in the building."
- The building previously experienced burst pipes when its furnace caused breakers to trip; later the heat pump was stolen and not replaced. The Wells turned water back on in winter for remodeling and used three space heaters in a cordoned area; they left heaters unattended for days. Pipes froze and burst in February 2011.
- State Farm initially assisted with cleanup but denied the claim, invoking the policy exclusion and asserting the Wells did not "do [their] best" to maintain heat.
- At bench trial the court placed the burden on State Farm to prove the exclusion applied, found State Farm met its burden, and ruled there was no coverage; plaintiffs moved to reconsider and appealed.
- The appellate court held that (1) the plaintiffs bore the burden to prove the exception to the exclusion (i.e., that they did their best to maintain heat); (2) "do your best" means reasonable efforts measured under the circumstances; and (3) the trial court’s factual finding that the Wells failed to use reasonable efforts was not against the manifest weight of the evidence, so judgment for State Farm was affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper allocation of burden when policy contains an exclusion with an exception | Wells: once coverage is prima facie, insurer must prove exclusion applies (burden on State Farm) | State Farm: exclusion applies but insured must prove exception (they did best) | Insured bears burden to prove an exception to an exclusion restores coverage (burden on Wells) |
| Meaning of phrase "you do your best to maintain heat in the building" | Wells: their use of space heaters satisfied the policy condition | State Farm: "do your best" requires more than intermittent/limited measures; depends on circumstances | Phrase interpreted as requiring "reasonable efforts" measured objectively under the circumstances |
| Standard of review for whether insured used "best efforts" | Wells: disputed findings and weight of evidence warranted reversal | State Farm: bench findings entitled to deference unless against manifest weight | Whether insured used reasonable efforts is a factual question; appellate review defers to bench unless manifest weight of evidence supports reversal |
| Application: did Wells do their best to maintain heat? | Wells: space heaters (and expert testimony) showed reasonable efforts | State Farm: long-standing knowledge of inadequate heating, failure to repair, restoration of water in winter, and intermittent space-heater use show insufficient efforts | Trial court’s factual finding that Wells failed to take reasonable steps (e.g., repair heating, ensure reliable heat) was supported by the record; judgment affirmed |
Key Cases Cited
- Addison Insurance Co. v. Fay, 232 Ill. 2d 446 (2009) (insured must prove coverage initially; insurer must prove exclusions)
- Santa’s Best Craft, LLC v. St. Paul Fire & Marine Ins. Co., 611 F.3d 339 (7th Cir. 2010) (insured bears burden to prove exception to exclusion restores coverage)
- Varlen Corp. v. Liberty Mut. Ins. Co., 924 F.3d 456 (7th Cir. 2019) (insured’s burden to prove exception under Illinois or New York law)
- Coppi v. West American Ins. Co., 524 N.W.2d 804 (Neb. 1994) (distinguishing exclusions from exceptions; exclusions eliminate coverage)
- Avemco Ins. Co. v. Auburn Flying Serv., Inc., 242 F.3d 819 (8th Cir. 2001) (exception to exclusion restores coverage that otherwise would be eliminated)
- Best v. Best, 223 Ill. 2d 342 (2006) (appellate standard for reviewing factual findings)