McMahan v. Sol Holland Co., Inc. , 2023 IL App (1st) 211367-U ( 2023 )


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    2023 IL App (1st) 211367-U
    Order filed: February 2, 2023
    FIRST DISTRICT
    FOURTH DIVISION
    No. 1-21-1367
    NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the
    limited circumstances allowed under Rule 23(e)(1).
    ______________________________________________________________________________
    IN THE
    APPELLATE COURT OF ILLINOIS
    FIRST JUDICIAL DISTRICT
    ______________________________________________________________________________
    JOHN MCMAHAN, LYNN MCMAHAN                               )       Appeal from the
    and TRINITY GREEN, LLC-509 PEYTON,                       )       Circuit Court of
    an Illinois Limited Liability Company,                   )       Cook County
    )
    Plaintiffs-Appellants,                             )
    )
    v.                                                       )       No. 2021 L 002684
    )
    SOL HOLLAND COMPANY, INC., an Illinois                   )
    Corporation and CHUBB NATIONAL                           )
    INSURANCE COMPANY,                                       )       Honorable
    )       Michael F. Otto,
    Defendants-Appellees.                              )       Judge, presiding.
    JUSTICE ROCHFORD delivered the judgment of the court.
    Presiding Justice Lampkin and Justice Martin concurred in the judgment.
    ORDER
    ¶1    Held: We reversed the order dismissing plaintiffs’ complaint on limitations grounds and
    remanded for further proceedings, as there was a question of fact regarding whether
    defendants were equitably estopped from asserting the statute of limitations as a
    defense to plaintiffs’ cause of action.
    ¶2     Plaintiffs, John McMahan (John), Lynn McMahan, and their limited liability company,
    Trinity Green, LLC-509 Peyton, filed a five-count complaint against defendants, Sol Holland
    No. 1-21-1367
    Company Inc. (Holland), and Chubb National Insurance Company (Chubb). Counts I and II
    alleged breach of contract and negligent misrepresentation against Holland. Counts III through V
    against Chubb alleged breach of contract, indemnification, and improper claims practice under
    sections 154.6 and 155 of the Illinois Insurance Code (215 ILCS 5/154.6, 5/155 (West 2020)) and
    section 919.50(a) of Title 50 of the Illinois Administrative Code (50 Ill. Adm. Code § 919.50(a)
    (2004)). All five counts pertained to Holland’s failure to procure an insurance policy from Chubb
    covering water damage to property owned by plaintiffs in Geneva, Illinois. The circuit court
    dismissed all five counts based on plaintiffs’ failure to file the complaint within the applicable
    two-year statute of limitations set forth in section 13-214.4 of the Code of Civil Procedure (Code)
    (735 ILCS 5/13-214.4 (West 2020)). Plaintiffs appeal. We reverse and remand.
    ¶3     The pertinent facts are undisputed.
    ¶4     Plaintiffs are the owners of property located at 509 Peyton in Geneva (the Geneva
    property). Holland is a professional insurance firm that places insurance coverage with several
    carriers, including Chubb. Brian Schott is the president of Holland and runs its daily operations.
    ¶5     Chubb has issued numerous insurance policies to plaintiffs dating back to 1992, providing
    both individual and business coverages. A problem arose with plaintiffs’ former Chubb insurance
    agent in 2018. Due to that agent’s mismanagement of plaintiffs’ accounts and insurance coverages,
    the premiums on certain Chubb insurance policies were not properly debited and paid, causing the
    policies to be cancelled. Upon discovering the problem, plaintiffs terminated their former
    insurance agent and retained Holland to obtain new policies from Chubb. Holland subsequently
    procured homeowners’ policies for plaintiffs with Chubb for two of their homes, as well as an
    automobile policy and an excess liability policy.
    -2-
    No. 1-21-1367
    ¶6     Plaintiffs thereafter requested that Holland procure coverage with Chubb for the Geneva
    property. On November 28, 2018, Schott sent an email to John stating that he had received
    approval from his underwriter to issue the insurance policy with Chubb for the Geneva property
    and he asked whether John wanted him to “proceed with binding the coverage effective
    immediately.” John replied, “Yes.” Schott then sent John a second email on November 28, 2018,
    stating “The policy will be issued.”
    ¶7     On December 4, 2018, Chubb advised Schott that the requested policy was denied. Schott
    did not immediately inform plaintiffs that coverage had been declined for the Geneva property.
    ¶8     On January 29, 2019, a pipe burst at the Geneva property causing water damage in excess
    of $150,000. Plaintiffs notified Schott of the loss that same day. Schott indicated that the loss
    might not be covered. John then contacted Chubb directly and demanded coverage. Chubb
    assigned a claim number to the matter.
    ¶9     On February 1, 2019, Schott sent John an email listing plaintiffs’ various houses and
    automobiles insured by Chubb; the Geneva property was not one of the covered properties. Schott
    recommended that John obtain insurance for the Geneva property with another company “while
    Chubb is sorting through things since no coverage is in place at this time.” Schott further stated
    that “Chubb is looking into the matter” and that he would follow up with plaintiffs when he heard
    more information from Chubb.
    ¶ 10   On February 3, 2019, John sent Schott an email referencing a phone conversation in which
    Schott allegedly stated that he and/or Holland would pay for the water damage to the Geneva
    property caused by the burst pipe. Schott responded with an email later that day stating that the
    matter was “under review with Chubb” and that he would “go over next steps once Chubb makes
    -3-
    No. 1-21-1367
    their final determination.” On February 4, 2019, John emailed Schott asking for a written
    commitment to pay the claim from his own funds if necessary.
    ¶ 11   On February 9, 2019, Schott’s attorney, Beth Herrington, sent an email to John informing
    him that coverage on the Geneva property had lapsed prior to the burst pipe but that “Schott is
    working with Chubb to determine what (if anything) Chubb is willing to cover.” She requested
    that John send Schott estimates for repair work performed on the Geneva property so that he could
    submit them to Chubb, and she stated that “Schott will contact you immediately once Chubb
    provides him any feedback on potential coverage.”
    ¶ 12   On February 9, 2019, John sent an email to Herrington stating that Schott had “promised
    that he would be personally responsible for the damages even if Chubb refused to pay” and that
    “now it seems he has broken his word and hired an attorney. It’s a disgrace that he could make
    promises and then break them so easily. We have attorneys too.”
    ¶ 13   On February 12, 2019, Herrington emailed John and informed him that Schott was a small
    business owner who had not agreed to personally cover their loss, but that he would “work
    diligently with Chubb, to see what Chubb will do on coverage for losses on the Geneva property.”
    Herrington further encouraged John to send her estimates of their losses so that she can submit the
    estimates to Chubb and “hopefully, get this coverage matter behind you.” John sent an email to
    Herrington telling her that Schott had never informed them of any problem with Chubb’s coverage
    and that she was “dealing with a liar on many levels.”
    ¶ 14   On March 2, 2019, Herrington sent an email to John, thanking him for sending her the
    estimates and informing him that she would ensure that Schott submitted them to Chubb. John sent
    Herrington an email that same day stating,
    -4-
    No. 1-21-1367
    “Please ask your client if he indeed promised to pay the claim from his own ‘reserve
    fund’ and claim it under his malpractice policy (errors of omission). If he denies this he is
    not being truthful. We have several witnesses to these conversations and his emails imply
    that if Chubb declined the claim he would discuss ‘next steps’ referring to his numerous
    promises to pay himself and claim it on his malpractice policy. Please confirm that he will
    be honoring his promises.”
    ¶ 15   Chubb ultimately completed its investigation and denied plaintiffs’ claim in a declination
    letter dated March 4, 2019. Chubb stated therein that it was unable to provide coverage for the
    water damage resulting from the burst pipe in the Geneva property because “no policy was in force
    at the time of the loss.” Plaintiffs received the letter on March 11, 2019.
    ¶ 16   On March 8, 2021, plaintiffs filed their five-count complaint against defendants. Count I
    alleged that Holland breached its contract with plaintiffs to provide a homeowners’ policy through
    Chubb for their Geneva property. Count II alleged that Holland negligently misrepresented that it
    procured the homeowners’ policy with Chubb. Count III alleged that Chubb, through its agent
    Holland, breached its contract with plaintiffs to provide a homeowners’ policy for the Geneva
    property. Count IV alleged that Chubb should be obligated to indemnify plaintiffs for the damages
    resulting from the burst pipe in the Geneva property. Count V alleged that Chubb’s failure to
    provide the homeowner’s policy violated sections 154.6 and 155 of the Illinois Insurance Code
    (215 ILCS 5/154.6 and 5/155 (West 2020)) and section 919.50(a) of Title 50 of the Illinois
    Administrative Code (50 Ill. Adm. Code § 919.50(a) (2004)).
    ¶ 17   On April 29, 2021, Holland filed a section 2-619(a)(5) (735 ILCS 5/2-619(a)(5) (West
    2020)) motion to dismiss counts I and II of the complaint against it because those claims were
    untimely under section 13-214.4 of the Code. Section 13-214.4 states:
    -5-
    No. 1-21-1367
    “All causes of action brought by any person or entity under any statute or any legal or
    equitable theory against an insurance producer, registered firm, or limited insurance
    representative concerning the sale, placement, procurement, renewal, cancellation of, or
    failure to procure any policy of insurance shall be brought within 2 years of the date the
    cause of action accrues.” 735 ILCS 5/13-214.4 (West 2020).
    ¶ 18   Holland argued that it is an Illinois insurance producer and that under section 13-214.4,
    plaintiffs had two years from the date their causes of action accrued to bring their claims for breach
    of contract and negligent misrepresentation premised on Holland’s failure to procure the
    homeowners’ policy for the Geneva property. Holland argued that plaintiffs’ causes of action
    accrued sometime between November 28, 2018, the date when plaintiffs directed Holland to
    procure the homeowners’ policy with Chubb, and December 4, 2018, when Chubb declined
    coverage.
    ¶ 19   Holland acknowledged that under the discovery rule, the start of the limitations period is
    tolled until the claimant knows or reasonably should have known of the injury and that the injury
    was wrongfully caused. Holland argued that plaintiffs were on notice of their injury on February
    1, 2019, when Schott explicitly informed them in an email that the damage from the burst pipe
    was not covered. Plaintiffs did not file their complaint until more than two years later on March 8,
    2021, and therefore Holland argued that it is time-barred under section 13-214.4.
    ¶ 20   On July 7, 2021, Chubb filed a combined motion to dismiss counts III, IV, and V against
    it pursuant to sections 2-615 and 2-619(a)(5) of the Code (735 ILCS 5/2-615 and 5/2-619(a)(5)
    (West 2020)). With respect to the section 2-615 motion, Chubb argued that all of plaintiffs’ claims
    in counts III, IV, and V are premised on allegations that Holland was Chubb’s agent. Chubb
    contended that plaintiffs had failed to plead facts sufficient to establish an agency relationship
    -6-
    No. 1-21-1367
    between Holland and Chubb and therefore that plaintiffs’ claims against Chubb should be
    dismissed for failure to state a cause of action. With respect to the section 2-619 motion, Chubb
    made the same argument as Holland that plaintiffs’ complaint was untimely under section 13-
    214.4.
    ¶ 21     On July 20, 2021, the circuit court granted Holland’s section 2-619(a)(5) motion to dismiss
    counts I and II of the complaint with prejudice, finding that plaintiffs were on inquiry notice of
    their claims against Holland by February 1, 2019, and that their complaint was untimely under
    section 13-214.4 as it was filed more than two years’ later.
    ¶ 22     On September 13, 2021, the circuit court granted Chubb’s section 2-619(a)(5) motion to
    dismiss counts III, IV, and V with prejudice for the same reason, finding that the complaint was
    untimely under section 13-214.4. The court stated that it “does not reach the alternate grounds for
    dismissal” under section 2-615.
    ¶ 23     Meanwhile, on August 5, 2021, plaintiffs filed a motion to reconsider the order dismissing
    counts I and II against Holland. Plaintiffs argued that after Schott told them that he had failed to
    procure a homeowners’ policy from Chubb covering the Geneva property, they had contacted
    Chubb, who issued them a claim number and commenced an investigation as to any potential
    coverage. Plaintiffs contended that the issuance of the Chubb claim number and the concomitant
    investigation into their claim lulled them into a false sense of security that there would be coverage
    and indemnification and, as such, that Holland should be equitably estopped from raising the
    statute of limitations as a defense.
    ¶ 24     In addition, plaintiffs argued that Holland should be equitably estopped from raising the
    statute of limitations because plaintiffs submitted a claim with Holland’s errors and omissions (E
    & O) insurance carrier, Utica National Insurance (Utica), which remains open and unresolved.
    -7-
    No. 1-21-1367
    Plaintiffs attached a series of emails showing that the claim was being investigated by Utica.
    Plaintiffs argued that it would be patently unfair for the court to find that the statute of limitations
    had run on their claim against Holland when an active and unresolved investigation was being
    conducted by its E & O carrier.
    ¶ 25   Alternatively, plaintiffs argued that Chubb and Utica have actively misled them into
    believing that their claims would be considered despite any limitations period, which caused them
    to ignore any filing deadlines. Accordingly, plaintiffs contended that the statute of limitations
    should be equitably tolled during the time-period of the insurers’ investigations.
    ¶ 26   On October 12, 2021, the circuit court entered an order denying plaintiffs’ motion to
    reconsider the dismissal of counts I and II of their complaint against Holland. The order stated that
    “[i]n light of the Court’s prior orders dismissing Plaintiffs’ claims with prejudice, this is a final
    order disposing of the case.” Plaintiffs filed a timely appeal.
    ¶ 27   A section 2-619 motion to dismiss admits the legal sufficiency of the complaint but asserts
    that certain defects, defenses, or other affirmative matters outside the pleadings defeat the claims.
    Austin Highlands Development Co. v. Midwest Insurance Agency, Inc., 
    2020 IL App (1st) 191125
    ,
    ¶ 10. Specifically, under subsection (a)(5), dismissal is appropriate when “the action was not
    commenced within the time limited by law.” 735 ILCS 5/2-619(a)(5) (West 2020). When
    analyzing such a motion, the court accepts all well-pleaded facts in the complaint as true, as well
    as any reasonable inferences from those facts, and construes all pleadings and supporting
    documents in the light most favorable to the nonmoving party. Austin Highlands, 
    2020 IL App (1st) 191125
    , ¶ 10. The critical issue on appeal is “’whether the existence of a genuine issue of
    material fact should have precluded the dismissal or, absent such an issue of fact, whether dismissal
    -8-
    No. 1-21-1367
    is proper as a matter of law.’” 
    Id.
     (quoting Kedzie & 103rd Currency Exchange, Inc. v. Hodge,
    
    156 Ill. 2d 112
    , 116-17 (1993)). Review is de novo. 
    Id.
    ¶ 28   As discussed earlier in this order, the statute of limitations for an action against an insurance
    producer for the failure to procure an insurance policy is two years from the date the cause of
    action accrues. 735 ILCS 5/13-214.4 (West 2020). Anyone who is required to be licensed to sell,
    solicit, or negotiate insurance, including both agents and brokers, are considered insurance
    producers subject to the two-year limitations period. Austin Highlands, 
    2020 IL App (1st) 191125
    ,
    ¶ 14. In the instant case, all the parties on appeal agree that defendants Holland and Chubb are
    insurance producers and that all five counts of plaintiffs’ complaint concern their allegedly
    negligent failure to procure the homeowner’s policy for the Geneva property. Accordingly, under
    section 13-214.4, plaintiffs’ causes of action against each defendant must be brought within two
    years of the accrual date. The issue on appeal is when plaintiffs’ causes of action against defendants
    accrued.
    ¶ 29   A recent Illinois Supreme Court case, American Family Mutual Insurance Co. v. Krop,
    
    2018 IL 122556
    , is informative. In Krop, the homeowners (the Krops) asked an agent of American
    Family Mutual Insurance Company (American Family) to procure for them a homeowners’
    insurance policy equal to the coverage under their old policy with a different company. Id. ¶ 4.
    Pursuant to their request, American Family issued an insurance policy on March 21, 2012, which
    the Krops renewed each of the next three years. Id.
    ¶ 30   In 2014, the Krops were sued for defamation, invasion of privacy, and intentional infliction
    of emotional distress. Id. ¶ 5. On August 20, 2014, American Family denied coverage and
    thereafter filed a declaratory judgment action, seeking a declaration that the policy did not provide
    coverage for these torts. Id. ¶¶ 5-7.
    -9-
    No. 1-21-1367
    ¶ 31   In September 2015, the Krops filed a counterclaim against American Family and a third-
    party claim against the agent who procured the policy. Id. ¶ 8. They alleged that the agent
    negligently failed to provide them with an insurance policy equal to their old policy, which would
    have covered the claims for defamation, invasion of privacy, and intentional infliction of emotional
    distress. Id. Both American Family and the agent moved to dismiss the Krops’ claims against them
    based on the two-year statute of limitations set forth in section 13-214.4. Id. ¶ 9. The trial court
    granted the motions to dismiss. Id. ¶ 10.
    ¶ 32   On appeal to the supreme court, the pertinent issue was when the two-year statute of
    limitations began to run. In answering that question, the supreme court explained that the negligent
    failure to procure insurance is a tort arising out of a contract and, as such, the cause of action
    accrues on the date of the contractual breach, not the date when the party sustains damages. Id. ¶
    35. Neither party disputed that the breach occurred when the agent delivered the allegedly
    nonconforming policy. Id.
    ¶ 33   The supreme court then addressed the application of the discovery rule, which delays the
    start of the limitations period until the claimant knows or reasonably should have known of the
    injury and that it was wrongfully caused. Id. ¶ 21. The supreme court held that insurance customers
    are injured as soon as the insurance producer procures a policy that does not conform to the
    customers’ request. Id. ¶ 35. The Krops’ alleged injuries included not only their uninsured liability
    in the underlying lawsuit against them but also their lack of coverage between the purchase of the
    policy in 2012 and the lawsuit in 2014. Id. The Krops should have known of their injuries on the
    date the policy was issued, March 21, 2012, because they had a duty to read the policy and discover
    any defects. Id. ¶¶ 36-38. Thus, the two-year limitations period began on March 21, 2012, and
    -10-
    No. 1-21-1367
    ended on March 21, 2014. Id. ¶ 38. Because the Krops brought their claims after March 21, 2014,
    they were untimely. Id.
    ¶ 34   The instant case also involves a claim of negligent failure to procure insurance, which is a
    tort arising out of a contract, and therefore plaintiffs’ causes of action based on that claim accrued
    on the date of the breach. Id. ¶ 35. Unlike Krop, where the date of the breach was easily calculated
    as occurring on the day that the nonconforming policy was issued to the Krops, no homeowners’
    policy for the Geneva property ever was issued. Thus, the breach here was in Schott’s failure on
    November 28, 2018, to comply with his contractual obligation (as evidenced by the exchange of
    emails between John and Schott on that date) to procure a homeowners’ policy for the Geneva
    property from Chubb “effective immediately.” Plaintiffs’ injuries included not only the lack of
    coverage on the date that the pipe burst, January 29, 2019, but also the lack of coverage between
    November 28, 2018, and January 29, 2019.
    ¶ 35   Under the discovery rule, plaintiffs should have known of their injuries on January 29,
    2019, when Schott informed them in a telephone call of a possible coverage issue, prompting them
    to call Chubb. To the extent that there is a question as to what Schott specifically told plaintiffs on
    January 29, 2019, plaintiffs still should have known of their injuries no later than February 1, 2019,
    when Schott sent John an email listing the properties owned by John that were insured by Chubb,
    none of which included the Geneva property. Schott further informed John in the February 1 email
    that he should procure insurance for the Geneva property with another company because “no
    coverage is in place at this time.” Ordinarily, then, the two-year limitations period set forth in
    section 13-214.4 would begin to run no later than February 1, 2019, ending on February 1, 2021,
    rendering plaintiffs’ complaint filed on March 8, 2021, as untimely.
    -11-
    No. 1-21-1367
    ¶ 36    However, plaintiffs argue that defendants should be equitably estopped from employing
    the limitations defense. Equitable estoppel prevents defendants from asserting the statute of
    limitations as a defense when plaintiffs reasonably relied on defendants’ words or conduct in
    delaying their complaint and plaintiffs suffered injury as a result. Swan & Weiskopf, Ltd. v. Meed
    Associates, Inc., 
    304 Ill. App. 3d 970
    , 977 (1999). Defendants’ words or conduct need not be
    intentionally deceptive, fraudulent or misleading. 
    Id.
     Instead, “this court must rely on less legal,
    more equitable concepts of ‘conscience and duty of honest dealing’ in determining if the
    defendant’s words or conduct should deny it the right to assert a limitations period defense.” 
    Id.
    ¶ 37    Cases where an insurer’s conduct was found to have amounted to an estoppel typically
    involve a concession of liability by the insurer, advance payments by the insurer to plaintiff in
    contemplation of eventual settlement, and statements by the insurer encouraging plaintiff to delay
    filing his action. Sweis v. Founders Insurance Co., 
    2017 IL App (1st) 163157
    , ¶ 52. However, the
    mere pendency of negotiations conducted in good faith, in the absence of any such concession of
    liability, advance payments in contemplation of settlement, or statements encouraging the insured
    to delay filing suit, is insufficient to give rise to estoppel. 
    Id.
    ¶ 38    Defendants argue here that they made no concessions of liability or advance payments to
    plaintiffs in contemplation of settlement that would amount to an estoppel of their right to assert
    the two-year statute of limitations. Defendants further contend that they made no statements
    encouraging plaintiffs to delay filing suit; rather, defendants argue that the February 1, 2019, email
    in which Schott admitted to John that “no coverage is in place at this time” for the Geneva property
    effectively notified plaintiffs that they should consider litigation, thereby triggering the two-year
    limitations period.
    -12-
    No. 1-21-1367
    ¶ 39   However, plaintiffs argue that Schott also stated in the February 1, 2019, email that Chubb
    was “looking into the matter” and that he would contact plaintiffs when he “hear[s] more
    information from Chubb,” which encouraged plaintiffs to delay filing suit.
    ¶ 40   Plaintiffs further contend that the February 1, 2019, email “should not be considered in a
    vacuum” as there was a course of conduct between plaintiffs and Chubb and several other email
    exchanges between John, Schott and Herrington that arguably worked an estoppel against
    defendants’ limitations defense. Specifically, after being informed by Schott on January 29, 2019,
    that Chubb might not cover the water damage to the Geneva property, plaintiffs contacted Chubb
    directly, demanding coverage, and Chubb responded by assigning them a claim number and
    commencing an investigation into the facts of the case and any potential coverage. On February 3
    and February 4, 2019, John emailed Schott referencing his understanding that Schott had
    committed to personally paying for their losses in the event that Chubb denied coverage. Schott
    responded with an email stating that the coverage issue was “under review with Chubb” and that
    he “will go over next steps once Chubb makes their final determination.”
    ¶ 41   In a February 9, 2019, email, Schott’s attorney, Herrington, informed John that Schott had
    not agreed to personally cover their loss, but that “Schott is working with Chubb to determine what
    (if anything) Chubb is willing to cover.” John sent Herrington an email that day informing her of
    Schott’s promise to personally pay their damages in the event that Chubb denied coverage. In a
    February 12, 2019, email, Herrington asked John to send her estimates of the losses to the Geneva
    property so that Schott “can advance the process,” and “get the estimates submitted to Chubb ***
    and hopefully, get this coverage matter behind you.” John sent the estimates to Herrington and
    informed her in an email sent on March 2, 2019, of Schott’s stated commitment to pay for their
    damages from his own reserve fund if Chubb’s investigation resulted in the denial of coverage.
    -13-
    No. 1-21-1367
    ¶ 42   Thus, the evidence shows that Chubb undertook a formal investigation of plaintiffs’ claim
    in February 2019, and in that same month, Schott and Herrington repeatedly informed plaintiffs
    that the claim was open and unresolved, that a “final determination” had yet to be issued pending
    receipt of the estimates and the completion of the investigation, and that Herrington was “hopeful”
    of a favorable determination. During this time-period, plaintiffs also claim that Schott gave oral
    assurances that he would personally reimburse them for their losses if Chubb’s investigation
    resulted in the final denial of coverage, and that he gave implicit assurances in writing, as
    evidenced by the reference in his February 3 email to discussing “next steps” with them.
    ¶ 43   A question of fact exists as to whether all these communications in February and March
    2019 caused plaintiffs to believe that either Chubb or Holland/Schott might cover the water
    damage in the Geneva property once Chubb completed its investigation, lulling plaintiffs into
    delaying suit until receipt of the declination letter on March 11, 2019 (thereby giving them two
    years until March 11, 2021, to file their cause of action).
    ¶ 44   Because plaintiffs’ estoppel argument presented a question of fact as to whether plaintiffs’
    complaint filed on March 8, 2021, was timely, the court erred by disposing of the issue as a matter
    of law and granting the dismissal motion on limitations grounds. See e.g., Lombard Co. v. Chicago
    Housing Authority, 
    221 Ill. App. 3d 730
    , 736-37 (1991) (reversing the trial court’s section 2-619
    dismissal on limitations grounds and remanding because there was a question of fact regarding
    whether defendant was equitably estopped from asserting the statute of limitations).
    ¶ 45   Defendants argue that plaintiffs forfeited review of the equitable estoppel issue by raising
    it for the first time in the motion to reconsider the dismissal order and by failing to include in the
    appellate record a transcript of the hearing on the motion to reconsider. See American Chartered
    Bank v. USMDS, Inc., 
    2013 IL App (3d) 120397
    , ¶ 13 (“Issues cannot be raised for the first time
    -14-
    No. 1-21-1367
    in the trial court in a motion to reconsider and issues raised for the first time in a motion to
    reconsider cannot be raised on appeal.”); Webster v. Hartman, 
    195 Ill. 2d 426
    , 432 (2001) (the
    appellant has the burden to provide a complete record and “Where the issue on appeal relates to
    the conduct of a hearing or proceeding, this issue is not subject to review absent a report or record
    of the proceeding.”). Review of the record indicates, though, that plaintiffs did not wait to raise
    the issue of equitable estoppel for the first time in the motion to reconsider, but rather raised the
    elements thereof earlier, in their response to Holland’s motion to dismiss. Specifically, in its
    response to the dismissal motion, plaintiffs specifically drew the court’s attention to Chubb’s
    issuance of a claim number and to the February email exchange between Schott and John, all of
    which lulled plaintiffs into thinking that the coverage issue remained open and unresolved and
    contributed to their decision to delay filing suit. As such, the equitable estoppel issue was timely
    raised in front of the circuit court prior to the motion to reconsider. The record on appeal
    (containing all of the relevant email communications) is sufficient for us to address the issue.
    ¶ 46   Defendants also argue that plaintiffs improperly submitted new evidence (emails between
    Holland’s E & O insurance carrier and John) in support of its motion to reconsider the dismissal
    orders, without any explanation as to why that evidence was not submitted earlier when the court
    was first considering the dismissal motions. Defendants cite Delgatto v. Brandon Associates, Ltd.,
    
    131 Ill. 2d 183
    , 195 (1989), which held that submission of new material in a motion for
    reconsideration should not be allowed absent a reasonable explanation for why it was not available
    at the time of the original hearing. We need not address whether plaintiffs’ submission of the new
    evidence in support of their motion to reconsider was improper, as our order reversing the dismissal
    orders is not based in any way on the new evidence.
    -15-
    No. 1-21-1367
    ¶ 47   For all the foregoing reasons, we reverse the dismissal orders and remand for further
    proceedings.
    ¶ 48   Reversed and remanded.
    -16-
    

Document Info

Docket Number: 1-21-1367

Citation Numbers: 2023 IL App (1st) 211367-U

Filed Date: 2/2/2023

Precedential Status: Non-Precedential

Modified Date: 2/2/2023