2022 IL App (1st) 211217-U
FIFTH DIVISION
August 19, 2022
No. 1-21-1217
NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent
by any party except in the limited circumstances allowed under Rule 23(e)(1).
IN THE
APPELLATE COURT OF ILLINOIS
FIRST JUDICIAL DISTRICT
STATION TWO, LLC, an Illinois Limited Liability ) Appeal from the Circuit Court of
Company, d/b/a FIREHOUSE GRILL; STATION ) Cook County.
TWO, LLC, an Illinois Limited Liability Company, )
d/b/a CASA FUEGO TACOS; STATION TWO, LLC, )
an Illinois Limited Liability Company, d/b/a ETOWN )
BURGER; STATION TWO, LLC, an Illinois Limited )
Liability Company, d/b/a STIX N STUFF; 7452 )
NORTH WESTERN AVENUE, INC., an Illinois )
Corporation, d/b/a CANDLELITE CAFE; 7452 )
NORTH WESTERN AVENUE, INC., an Illinois )
Corporation, d/b/a CANDLELITE PIZZA; 7452 )
NORTH WESTERN AVENUE, INC., an Illinois )
Corporation, d/b/a CANDLELITE CHICAGO; 7452 )
NORTH WESTERN AVENUE, INC., an Illinois )
Corporation, d/b/a CANDLELITE EVANSTON; 7452 )
NORTH WESTERN AVENUE, INC., an Illinois )
Corporation, d/b/a CHI BURGER; 7452 NORTH )
WESTERN AVENUE, INC., an Illinois Corporation, )
d/b/a CANDLELITE RESTAURANT; )
)
Plaintiffs-Appellants, )
)
v. ) No. 20 CH 3843
)
SOCIETY INSURANCE, A MUTUAL COMPANY, ) Honorable
) Moshe Jacobius,
Defendant-Appellee. ) Judge Presiding.
1-21-1217
PRESIDING JUSTICE DELORT delivered the judgment of the court.
Justices Hoffman and Connors concurred in the judgment.
ORDER
¶1 Held: Because the plaintiffs’ insurance policies did not provide coverage for losses caused
by governmental COVID-related mitigation orders, the circuit court did not err in
granting the defendant insurance company’s motion for judgment on the pleadings.
Affirmed.
¶2 Plaintiffs Station Two, LLC, d/b/a Firehouse Grill; Station Two, LLC, d/b/a Casa Fuego
Tacos; Station Two, LLC, d/b/a Etown Burger; Station Two, LLC, d/b/a Stix N Stuff; 7452 North
Western Avenue, Inc., d/b/a Candlelite Cafe; 7452 North Western Avenue, Inc., d/b/a Candlelite
Pizza; 7452 North Western Avenue, Inc., d/b/a Candlelite Chicago; 7452 North Western Avenue,
Inc., d/b/a Candlelite Evanston; 7452 North Western Avenue, Inc., d/b/a Chi Burger; 7452 North
Western Avenue, Inc., d/b/a Candlelite Restaurant filed a declaratory judgment action against
defendant Society Insurance (Society) seeking insurance coverage for alleged business
interruption losses caused by the governor’s executive orders, which were instituted to limit the
operations of restaurants during the height of the COVID-19 pandemic. Defendant filed a motion
for judgment on the pleadings pursuant to section 2-615(e) of the Illinois Code of Civil Procedure
(Code) (735 ILCS 5/2-615(e) (West 2020)), which the circuit court granted. Plaintiffs appeal,
contending that the court erred in denying their claims for declaratory judgment, breach of contract,
and statutory bad faith denial of coverage. We affirm.
¶3 BACKGROUND
¶4 Plaintiffs own and operate various restaurants and bars in the Chicago area. Plaintiffs each
obtained a “Businessowners Policy” (the policy) from Society. Each policy included a
“Businessowners Special Property Coverage Form” (the Special Coverage Form). The operative
portions of the policies at issue here are identical to the operative portions of the policies at issue
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in a case we recently decided. See State & 9 Street Corp. v. Society Insurance, 2022 IL App (1st)
211222-U, ¶¶ 6-13. These portions include the following: section (A)(3) (entitled “Covered
Causes Of Loss”) of the Special Coverage Form; subsection (g) (entitled “Business Income”),
subsection (h) (entitled “Extra Expense”), subsection (k) (entitled “Civil Authority”), and
subsection (m) (entitled “Contamination”) of section (A)(5) (entitled “Additional Coverages”) of
the Special Coverage Form; subsection (a) (entitled “Ordinance Or Law”) of section (B)(1)
(entitled “Exclusions”) of the Special Coverage Form; and section (H) (entitled “Property
Definitions”) of the Special Coverage Form. For the sake of brevity, we do not repeat them here,
but we incorporate these portions herein by reference.
¶5 On March 16, 2020, pursuant to the emergency powers granted him under section 7 of the
Illinois Emergency Management Agency Act (20 ILCS 3305/7 (West 2020)), Governor JB
Pritzker entered several executive orders in response to the COVID-19 pandemic. See, e.g., Exec.
Order No. 2020-07, 44 Ill. Reg. 5536 (Mar. 16, 2020) (ordering the suspension of on-premises
consumption of food and beverages but allowing off-premises consumption), https://
www2.illinois.gov/Documents/ExecOrders/2020/ExecutiveOrder-2020-07.pdf; Exec. Order No.
2020-10, 44 Ill. Reg. 5857 (Mar. 20, 2020) (designating restaurants serving food for off-premises
consumption to be “essential” businesses), https://www2.illinois.gov/Documents/ExecOrders/
2020/ExecutiveOrder-2020-10.pdf; Exec. Order No. 2021-10, 45 Ill. Reg. 22 (May 17, 2021)
(modifying the parameters related to on-premises dining), https://coronavirus.illinois.gov/
resources/executive-orders/display.executive-order-number-10.2021.html. None of the orders
prevented restaurant or tavern operators from selling food for carry-out or delivery.
¶6 On June 15, 2020, plaintiffs filed their complaint for declaratory relief, breach of contract,
and bad faith denial of insurance coverage. Plaintiffs sought, inter alia, a declaration of rights
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pursuant to the Society policies. Society filed its answer and affirmative defenses, as well as a
countercomplaint against plaintiffs for declaratory judgment. On May 4, 2021, Society moved for
judgment on the pleadings under section 2-615(e) of the Code (735 ILCS 5/2-615(e) (West 2020)).
After briefing and oral argument, the circuit court entered an order granting Society’s motion for
judgment on the pleadings on August 24, 2021. This appeal followed.
¶7 ANALYSIS
¶8 Plaintiffs argue that the circuit court erred when it held that the pleadings failed to establish
the existence of “direct physical loss of or damage to” their properties under the Business Income
and Extra Expense coverages of their policies. Plaintiffs also contend that the court erred in finding
that their pleadings failed to establish the existence of coverage under the civil authority coverage
of the policies. Finally, plaintiffs argue that they properly pleaded a claim for bad faith denial of
coverage.
¶9 We note that in the circuit court, this case was designated as related to multiple other cases
where restaurants and/or taverns sued regarding coverage under a Society Insurance
businessowners policy. The cases were all assigned to the same judge, proceeded on the same
track, and were terminated through identical orders dismissing each case for essentially the same
reasons. Many of the plaintiffs have appealed to this court, and, in this court, the appeals have
been designated as related and assigned to the same author and panel.
¶ 10 In one of those appeals, this court recently issued a decision rejecting the same arguments
plaintiffs raise here. See State & 9 Street, 2022 IL App (1st) 211222-U. In that case, the plaintiffs
also sought insurance coverage for Covid-related shutdowns and procured businessowners policies
from the same defendant as in this case. Id. ¶¶ 2, 6. As noted above, the relevant portion of the
plaintiffs’ insurance policies were verbatim copies of the relevant portion of the policies at issue
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here. Id. ¶¶ 6-13. Society filed a motion to dismiss, which the circuit court granted, and the
plaintiffs appealed. Id. ¶ 14.
¶ 11 We initially noted that the policies at issue were not “all risk” policies that would also cover
business interruption losses; rather, they were policies that only covered property losses, which
require “physical loss of or damage to property.” Id. ¶ 25.
¶ 12 The plaintiffs in State & 9 Street contended that they sufficiently alleged the existence of
a direct loss of or damage to their property and that the circuit court erred in finding that coverage
is unavailable if the loss could not “ ‘be seen with the naked eye.’ ” Id. ¶ 27. There, as here, the
plaintiffs sought coverage under the “Business Income,” “Extra Expense,” and “Civil Authority”
provisions, 1 claiming that they suffered “direct physical loss of or damage to” property at their
premises. Id. We noted that the policies defined “Covered Causes of Loss” as “Direct Physical
Loss unless the loss is excluded or limited under this coverage form.” Id. ¶ 28.
¶ 13 We began with a discussion of a recent second district case—which involved precisely the
same policy language—and a well-established decision from our supreme court. Id. ¶¶ 29-33
(citing Sweet Berry Café, Inc. v. Society Insurance, Inc., 2022 IL App (2d) 210088; and Travelers
Insurance Co. v. Eljer Manufacturing, Inc., 197 Ill. 2d 278, 292-93 (2001)). We quoted Sweet
Berry’s holding that the policy “ ‘unambiguously’ ” required a physical alteration or substantial
dispossession, not merely loss of use. Id. ¶ 32. We also noted both Sweet Berry’s statement that
“physical injury to tangible property” was unambiguous and also our supreme court’s holding that
a physical injury must alter the property either in appearance, shape, color, or some other “material
1
Plaintiffs in this case provide a single sentence—with no additional analysis—in their
opening brief in support of their claim of coverage pursuant to the “Civil Authority” provision. It
repeats that same sentence (indeed, the entire paragraph) in their reply brief, along with a second
paragraph bereft of case analysis or discussion. This argument is undeveloped and thus forfeited.
See Ill. S. Ct. R. 341(h)(7) (eff. Oct. 1, 2020).
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dimension.” (Internal quotation marks removed.) Id. ¶ 33 (quoting Sweet Berry, 2022 IL App
(2d) 210088, ¶ 41 (quoting Eljer, 197 Ill. 2d at 301)). We thus rejected the plaintiffs’ contention
and held that the plaintiffs’ claim resulting from the various COVID-19 orders constituted an
economic loss and not a physical loss that would trigger coverage under the policies. Id. ¶ 36.
¶ 14 We further rejected the plaintiffs’ reliance upon a “handful” of federal trial court decisions
because those courts failed to consider our supreme court’s interpretation of the term “physical”
in Eljer. Id. ¶¶ 38-39 (distinguishing In re Society Insurance Co. COVID-19 Business Interruption
Protection Insurance Litigation, 521 F. Supp. 3d 729 (N.D. Ill. 2021); and Studio 417, Inc. v.
Cincinnati Insurance Co., 478 F. Supp. 3d 794 (W.D. Mo. 2020)). We thus elected to follow
Illinois courts and the Seventh Circuit (interpreting Illinois law) because those decisions were both
directly on point and controlling on the question presented. Id. ¶ 39 (citing Sweet Berry, 2022 IL
App (2d) 210088, ¶ 43; Lee v. State Farm Fire and Casualty Co., 2022 IL App (1st) 210105, ¶ 19;
Sandy Point Dental, P.C. v. Cincinnati Insurance Co., 20 F. 4th 327, 335 (7th Cir. 2021)).
¶ 15 Finally, we affirmed the dismissal of the plaintiffs’ bad faith claim against Society.
Id. ¶¶ 51-52. We stated that, since no coverage was owed, plaintiffs’ sole argument that the court
erred in finding that they failed to allege coverage under the policies necessarily failed. Id.
¶ 16 In this case, plaintiffs make precisely the same arguments that the plaintiffs made (and
which we rejected) in State & 9 Street. Plaintiffs’ contentions that (1) they successfully alleged
policy coverage under the “Business Income” or “Extra Expense” provisions and (2) we should
rely upon the federal trial decision in In re Society Insurance necessarily fail because they have
not provided anything to convince us to set aside the persuasive reasoning in State & 9 Street.
¶ 17 Plaintiffs argue, nonetheless, that the absence of a virus exclusion in the policies warrants
coverage, and they cite Village of Rosemont v. Lentin Lumber Co., 144 Ill. App. 3d 651 (1986), in
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support. Plaintiffs’ reliance, however, is misplaced because that case involved an all-risk policy.
See id. at 657. Here, by contrast, the policies at issue cover “physical loss of or damage to
property” (Emphasis added.) See State & 9 Street, 2022 IL App (1st) 211222-U, ¶ 25. Moreover,
since we have held that there was no policy coverage, the absence of an exclusion does not create
coverage. See Sweet Berry, 2022 IL App (2nd) 210088, ¶ 47. Plaintiffs’ argument is thus
meritless.
¶ 18 Finally, plaintiffs’ argument that the circuit court erred in failing to apply the doctrine of
contra proferentem (i.e., to construe ambiguous provisions in the insurance policy against the
drafter—here, Society) is without merit. At the outset, we agree with the holding in Sweet Berry
that the insurance policies were unambiguous. Sweet Berry, 2022 IL App (2nd) 210088, ¶¶ 39-
41; accord State & 9 Street, 2022 IL App (1st) 211222-U, ¶ 25, 32. Moreover, plaintiffs’ argument
hinges upon their characterization of the policies as all-risk policies, and is thus doomed: We have
already held that the policies are not all-risk policies but rather policies that only covered property
losses, which require “physical loss of or damage to property.” Id. ¶ 25; see also supra ¶ 17.
Plaintiffs’ claims of error are thus unavailing.
¶ 19 CONCLUSION
¶ 20 The circuit court did not err in granting defendant’s motion for judgment on the pleadings.
Plaintiffs’ contentions of error here are nearly identical to the plaintiffs’ contentions that we
rejected in State & 9 Street, and plaintiffs here provide no persuasive reason for us to decline to
follow the holding of that case. Accordingly, we affirm the judgment of the circuit court of Cook
County.
¶ 21 Affirmed.
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