The Honorable Joseph S. Van Bokkelen, United States District 

Court Judge for the Northern District of Indiana, sitting by

designation.

In the

United States Court of Appeals

For the Seventh Circuit

No. 08-4275

ROGER TWENHAFEL, d/b/a

CONSOLIDATED SERVICES,

Plaintiff-Appellee,

v.

STATE AUTO PROPERTY AND

CASUALTY INSURANCE COMPANY,

Defendant-Appellant.

Appeal from the United States District Court

for the Southern District of Illinois.

No. 08 CV 117—G. Patrick Murphy, Judge.

ARGUED MAY 14, 2009—DECIDED SEPTEMBER 14, 2009

Before ROVNER and EVANS, Circuit Judges, and

VAN BOKKELEN, District Judge. 



VAN BOKKELEN, District Judge. Roger Twenhafel insured

his business property through an “open peril” insurance
2 No. 08-4275

policy issued by State Auto Property and Casualty Insurance Company (“State Auto”). Twenhafel sought

coverage under the policy for loss of his raw wood inventory damaged by rain as a result of a severe storm.

State Auto denied Twenhafel’s claim on the basis that

the loss was excluded from coverage because the

inventory was damaged by rain while it was “in the

open.” Twenhafel filed suit in the Circuit Court of Jackson

County, Illinois, alleging that State Auto breached the

policy. State Auto removed the case to federal court,

where the parties filed cross-motions for summary judgment on the issue of liability. Twenhafel also moved for

summary judgment on the issue of damages. The

district court entered summary judgment in favor of

Twenhafel and awarded damages, prejudgment and

postjudgment interest, and costs. State Auto now appeals.

We affirm the judgment of the district court except on

the issue of prejudgment interest. On that issue we

vacate and remand for further proceedings consistent

with this opinion.

I.

Twenhafel manufactures kitchen and bathroom cabinets. On September 22, 2006, a violent storm blew through

Murphysboro, Illinois, where Twenhafel’s business is

located. Before the storm, Twenhafel had some of the wood

inventory he uses to make cabinets stored outdoors under

an industrial covering or tarp. The tarp was secured with

six-by-six oak beams and large concrete blocks which

weighed about ninety pounds each and had been placed on
No. 08-4275 3

top of the tarp. The storm lifted the tarp, along with the

beams and blocks, and dropped them on the roof of a

building about 150 feet away. As a result of the violent

storm, the wood inventory was damaged by rain. The

storm did not cause any other damage to Twenhafel’s

property, except for some minor damage to the building’s

roof, which was repaired by Twenhafel’s employees.

The insurance policy State Auto issued to Twenhafel

was an “open peril” policy which covers all losses unless

specifically excluded under the terms of the policy.

Twenhafel made a claim under the policy for the loss of

his wood inventory. State Auto denied Twenhafel’s claim,

relying on the following specific policy exclusion:

CAUSES OF LOSS—SPECIAL FORM

B. Exclusions

2. We will not pay for loss or damage caused

by or resulting from any of the following:

. . . . 

j. Rain, snow, ice or sleet to personal property

in the open.

(App. at 10-11.)

Twenhafel filed suit in the Circuit Court of Jackson

County, Illinois, alleging that State Auto breached the

terms of the insurance policy by refusing to pay for

the damage to the wood inventory. After State Auto

removed the case to federal court, the parties filed crossmotions for summary judgment on the issue of liability.

Twenhafel also moved for summary judgment on the
4 No. 08-4275

issue of damages. Twenhafel asserted that the wood

inventory was not “in the open” because it was covered

by an industrial tarp; therefore, he was entitled to

coverage under the policy. State Auto contended that

the loss was not covered under the policy because the

inventory was damaged by rain while it was “in the

open.” The phrase “in the open” was not defined in

the policy.

In considering the meaning of the phrase “in the

open” the district court found the policy contained no

ambiguity and that “in the open” is commonly understood to mean something that is exposed to the elements

with no protection at all. Because Twenhafel’s wood

inventory was covered by an industrial tarp, it was not

exposed to the elements.

The district court therefore granted summary judgment in favor of Twenhafel and against State Auto.

The district court entered judgment in favor of

Twenhafel, in the amount of $81,678.10, and awarded

prejudgment interest at the rate of 6.98% per annum,

postjudgment interest at a rate of .96% per annum, and

costs. State Auto now appeals.

II.

This case is one of first impression in our circuit. It is

before us on appeal from a grant of summary judgment,

which we review de novo, and draw all inferences in

favor of the nonmoving party. Bilthouse v. United States,

553 F.3d 513, 514 (7th Cir. 2009) (citing Breneisen v.
No. 08-4275 5

Motorola, Inc., 512 F.3d 972, 977 (7th Cir. 2008)). Summary

judgment is proper “where there are no genuine issues

of material fact and the moving party is entitled to judgment as a matter of law.” Id. at 514-15 (citing Fed. R. Civ.

P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)).

The parties agree that the substantive law of Illinois

governs this diversity action. “Under Illinois law, the

interpretation of an insurance policy is a question of

law that is properly decided by way of summary judgment.” BASF AG v. Great Am. Assurance Co., 522 F.3d

813, 818-19 (7th Cir. 2008). As explained in BASF AG:

A court’s primary objective in construing the

language of an insurance policy is to ascertain and

give effect to the intentions of the parties as

expressed by the language of the policy. In performing

that task, the court must construe the policy as a

whole, taking into account the type of insurance

purchased, the nature of the risks involved, and the

overall purpose of the contract. Where the terms of

an insurance policy are clear and unambiguous,

they must be applied as written; but where ambiguity exists, the terms will be strictly construed

against the drafter. Policy terms are ambiguous if

they are reasonably susceptible to more than one

interpretation, not simply if the parties can suggest

creative possibilities for their meaning, and a court

will not search for ambiguity where there is none.

Id. at 819 (citations and quotation marks omitted). Here,

State Auto must establish that the policy’s exclusion

applies to Twenhafel.
6 No. 08-4275

A.

State Auto asserts that the district court erred in

finding that Twenhafel’s wood inventory loss was not

excluded from coverage under the terms of the policy.

State Auto relies on a New Jersey appellate court’s

decision in Victory Peach Group, Inc. v. Greater N.Y. Mut.

Ins. Co., 707 A.2d 1383 (N.J. Super. Ct. App. Div. 1998).

State Auto contends Victory Peach stands for the proposition that the phrase “in the open” means “outside.”

State Auto, however, misunderstands Victory Peach.

The court in Victory Peach defined the phrase “in the

open” as commonly being understood to mean something that is exposed to the elements. Victory Peach,

707 A.2d at 1385-86. The Victory Peach court equated the

phrase “in the open” with being left outdoors without

protection from the elements: “[T]he phrase ‘in the

open’ would mean to the reasonable insured being left

exposed to the elements. Indeed, the dictionary definition of ‘open’ includes ‘the open air or the outdoors.’ ” Id.

In Victory Peach, the insured stored personal property

in a building which had a damaged roof. The workers

repairing the roof securely nailed three large vinyl tarps

over portions of the damaged roof because the repairs

could not be completed in one day. Subsequently, a

severe rainstorm blew the tarps off the roof, allowing

the water to get into the building and damage the

property stored inside it.

The insured in Victory Peach was covered by a similar

policy exclusion for “loss or damage caused by or
No. 08-4275 7

resulting from ‘rain, snow, ice or sleet to personal

property in the open.’ ” Victory Peach, 707 A.2d at 1385.

The insurer would not cover the insured’s losses

asserting that the loss was excluded from coverage. In

finding for the insured, the court reasoned that because

the property was inside the building, it was not left

exposed to the elements with no protection:

As the damaged property was located in the interior

of the building, it was not left “in the open.” Assuming

that the unfinished repairs left some exposed seams

in the roof, there is nothing in this record, such as it

is, that would reasonably suggest there was a gaping

hole which exposed the interior of the building

openly to the elements. The damage to Victory Peach’s

personal property, then, is covered under the policy. 

Id. at 1386.

Accordingly, we agree with the district court that

Victory Peach does not stand for the proposition that only

property stored inside a building is entitled to coverage.

Instead, coverage applies in those instances where property is protected from exposure to the elements. Therefore,

State Auto’s reliance on this case is without merit.

Next, State Auto cites to North Texas Constr. Co. v. United

States Fire Ins. Co., 485 S.W.2d 389 (Tex. App. 1972), asserting that the facts are very similar to this case. In North

Texas, the court denied coverage under a policy for

damage to sheets of galvanized steel that were to be

used in the construction of a hangar. After the insured’s

workers unwrapped the sheets, they were placed on

boards outdoors and covered with polyethylene and
8 No. 08-4275

weighted down. Subsequently, a storm blew the

coverings from the metal sheets and water got in

between the sheets. The policy at issue contained an

exclusion for “loss or damage to property in the open

caused by rain; or by deterioration; or by rust.” Id. at 390.

The appellate court affirmed the district court’s

findings that the plaintiff’s loss fell within the policy’s

exclusionary terms.

We do not find State Auto’s reliance on North Texas

persuasive because the phrase “in the open” was not

defined in the court’s decision and the policy’s exclusion

is very different from the one at issue here. Therefore,

we agree with the district court that the North Texas

decision does not help State Auto’s position.

“A court’s primary objective in construing the

language of an insurance policy is to ascertain and give

effect to the intentions of the parties as expressed by the

language of the policy.” BASF AG, 522 F.3d at 819 (quoting

Valley Forge Ins. Co. v. Swiderski Elecs., Inc., 860 N.E.2d

307, 314 (Ill. 2006)). The plain language of the policy

shows that the parties intended that all losses were to

be covered unless specifically excluded under the terms

of the policy. One exclusion was for damage that occurred

to personal property while it was “in the open”; however,

that phrase is not defined anywhere in the policy. Here,

the common or ordinary meaning of the phrase controls.

We find that the phrase “in the open” means being left

exposed to the elements or, in other words, being unprotected from the elements. While State Auto would ask us

to hold that the phrase “in the open” means something
No. 08-4275 9

different than its common or ordinary meaning, we

find that the terms of the policy “must be applied as

written” because they are clear and unambiguous, and

not susceptible to more than one interpretation. Id.

State Auto, as the drafter of the policy, was in the best

position to define what was meant by “in the open” if

it meant something other than the common or ordinary

meaning.

State Auto contends that equating the phrase “in the

open” with “exposed to the elements” would lead to

an absurd result because such an interpretation does not

take into account the adequacy of the protection in question. State Auto argues that, under such an interpretation, a pile of wood covered by newspapers would not

be “in the open” because the wood was not “exposed to

the elements.” We find State Auto’s contention without merit because a reasonable person would not think

that newspapers would protect property from exposure

to the elements. Therefore, the interpretation does not

lend itself to absurdity.

We affirm the district court on the issue of liability. The

loss to Twenhafel’s wood inventory was covered under

the terms of the policy because it did not fall within

the policy’s exclusionary terms. The district court

properly found that Twenhafel’s wood inventory was not

“in the open” when it was damaged because it was securely covered by a tarp and not left exposed to

the elements. Therefore, adequacy of protection is not

at issue.
10 No. 08-4275

B.

State Auto also asserts that the district court erred in

its damage award because there was a genuine issue

of material fact regarding the amount of Twenhafel’s

loss. State Auto contends that Twenhafel testified at his

deposition that he did not know the value of the

inventory loss. However, Twenhafel later submitted an

affidavit stating that the “value of the wood inventory

damaged on September 22, 2006 [was] $81,678.10.” (App.

at 26.)

The district court awarded Twenhafel $81,678.10 in

damages on the basis of his affidavit. As the owner of

the inventory, Twenhafel was in a position to know or

ascertain what the value of the damaged wood was;

the fact that he was unable to quantify the value at his

deposition did not mean that he could never do so. State

Auto did not object to Twenhafel’s affidavit or present

its own evidence of the value of Twenhafel’s inventory

loss. Because State Auto failed to produce evidence

that contradicted Twenhafel’s affidavit, the district court

appropriately relied on his affidavit. See Fed. R. Civ. P.

56(e)(2) (“When a motion for summary judgment is

properly made and supported, an opposing party may

not rely merely on allegations or denials in its own pleading; rather, its response must—by affidavits or as otherwise provided in this rule—set out specific facts

showing a genuine issue for trial. If the opposing party

does not so respond, summary judgment should, if appropriate, be entered against that party.”) Therefore,

we affirm the district court on the issue of damages.
No. 08-4275 11

C.

Finally, State Auto objects to the district court’s award

of prejudgment interest because the extent of

Twenhafel’s damages was not liquidated or subject to

an easy determination at the time of the loss. The

district court awarded Twenhafel prejudgment interest

at the rate of 6.98% per annum, the average prime rate

for the period September 22, 2006 (the date of the loss)

through November 26, 2008 (the date of judgment).

“A district court’s decision to award or deny prejudgment interest will not be disturbed unless that decision

constitutes an abuse of discretion.” Liu v. Price Waterhouse

LLP, 302 F.3d 749, 757 (7th Cir. 2002). The Illinois Interest

Act provides that “[c]reditors shall be allowed to receive

at the rate of five (5) per centum per annum for all

moneys after they become due on any bond, bill, promissory note, or other instrument of writing.” 815 Ill. Comp.

Stat. Ann. 205/2 (West 2009). Under Illinois law, “an

insurance policy is a written instrument covered by [the

Illinois Interest Act].” J.R. Couch v. State Farm Ins. Co.,

666 N.E.2d 24, 27 (Ill. App. Ct. 1996). Prejudgment interest

is appropriate where the sum due or damages are “liquidated or subject to an easy determination by calculation

or computation.” Id. (citing Boyd v. United Farm Mut.

Reinsurance Co., 596 N.E.2d 1344, 1350 (Ill. App. Ct. 1992)).

“Absent some type of bad, vexatious, or unreasonable

conduct prejudgment interest should be awarded at the

statutory rate of 5% on written instruments.” Platinum

Tech., Inc. v. Fed. Ins. Co., 282 F.3d 927, 934 (7th Cir. 2002).

Because the amount of damages was readily determinable, the district court did not abuse its discretion
12 No. 08-4275

in awarding Twenhafel prejudgment interest. However,

nothing in the record supports a rate of interest in excess

of the statutory rate of 5%. There is no mention in the

district court’s opinion that State Auto’s actions

constitute “bad, vexatious, or unreasonable conduct” so

as to justify the higher rate. Twenhafel also does not

allege any such conduct in his complaint and did not

present any evidence to the district court. Accordingly,

the district court abused its discretion in awarding

Twenhafel prejudgment interest at the rate of 6.98%.

Therefore, we vacate that award.

III.

Accordingly, the judgment of the district court is

AFFIRMED except on the issue of prejudgment interest.

On that issue we VACATE and REMAND for further proceedings consistent with this opinion.

AFFIRMED IN PART, VACATED IN PART,

and REMANDED IN PART.

9-14-09