Wheeler v. Assurant Specialty Property
125 F. Supp. 3d 834
N.D. Ill.2015Background
- Wheeler owned a Chicago house insured by Assurant Specialty Property/American Security Insurance Co. (ASIC) after Wells Fargo required coverage; a July 11, 2011 windstorm damaged the property.
- Wheeler filed a timely claim; ASIC delayed investigation for months, then hired Kelsey Engineering (Moersfelder) who reported the storm likely caused much visible damage.
- ASIC later retained Rimkus Consulting, which concluded there was no structural storm damage and attributed most issues to construction defects and deterioration; ASIC largely denied Wheeler’s claimed losses and made small payments Wheeler did not accept.
- Wheeler submitted a sworn proof of loss for $695,943 in March 2013; ASIC rejected most of it in September 2013 after Rimkus’s report; Wheeler’s property later entered foreclosure.
- Wheeler sued alleging breach of contract, section 155 (vexatious/unreasonable conduct), ICFA, common-law fraud, unjust enrichment, and breach of fiduciary duty; ASIC moved to dismiss Counts I–VI.
- The court denied dismissal of breach of contract, section 155, and breach of fiduciary duty (allowed to proceed); it dismissed ICFA, fraud, and unjust enrichment (without prejudice for ICFA/fraud/unjust enrichment).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract (Count I) | ASIC breached policy by refusing to pay covered storm damage. | Claim sounds in fraud and should be subject to Rule 9(b). | Claim survives: classic breach claim; not subject to Rule 9(b) here. |
| Section 155 (Count II) | ASIC’s delays, misrepresentations, and tactics were vexatious and unreasonable. | ASIC contends bona fide coverage dispute and legitimate defenses bar §155 relief. | Claim survives pleading stage: factual issue whether conduct was vexatious; Rule 9(b) not applied to non‑fraud bad‑faith allegations. |
| ICFA (Count III) | ASIC deceptively delayed and used multiple experts to deny a valid claim. | ASIC: ICFA is a rebranding of contract/bad‑faith claims and/or fails under Rule 9(b). | Dismissed for failure to plead deceptive conduct with Rule 9(b) particularity, despite sufficiency to go beyond a mere contract claim. |
| Fraud (Count IV) | ASIC misrepresented claim value to induce acceptance of inadequate payments. | ASIC: Plaintiff did not reasonably rely because he refused tenders and continued dispute. | Dismissed: plaintiff did not plead detrimental reliance (he refused payments). |
| Unjust enrichment (Count V) | ASIC unjustly retained premiums and delayed claim resolution. | Existence of express insurance contract bars quasi‑contract relief. | Dismissed: unjust enrichment unavailable where an express contract governs the relationship. |
| Breach of fiduciary duty (Count VI) | ASIC owed fiduciary duties due to superior expertise and insured’s trust. | ASIC: No fiduciary relationship as a matter of law between insurer/insured. | Allowed to proceed for now: pleading alternative claims permitted; defendant’s fiduciary‑duty argument deemed forfeited in reply. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading must state a plausible claim)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for complaints)
- Cramer v. Ins. Exch. Agency, 675 N.E.2d 897 (Ill.) (section 155 vexatious/unreasonable standard)
- Citizens First Nat’l Bank v. Cincinnati Ins. Co., 200 F.3d 1102 (7th Cir.) (when §155 damages are precluded by bona fide dispute or reasonable legal position)
- Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen Co., 631 F.3d 436 (7th Cir.) (Rule 9(b) and pleading on information and belief)
- Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732 (7th Cir.) (distinguishing deceptive ICFA claims that require Rule 9(b) from unfairness claims)