the yacht and the failure of Joule to have properly and fairly adjusted the insurance claim, directly
and substantially led to a cash flow crisis in August 2002, that resulted in the loss of all three yacht
lines and caused Yachting Experience to go into liquidation and out of business, with total losses
approaching $1 million (/d. 4 24).

I.

We begin the analysis with Federal’s motion to dismiss Count III of the amended complaint,
which alleges breach of contract. To state a claim for breach of | contract, plaintiff must allege that:
(1) a valid contract existed between the plaintiff and defendant; (2) plaintiff complied with the
contract and performed its obligations; (3) defendant breached the contract; and (4)plaintiffsuffered
damages due to the defendant’s breach. Servpro Industries, Inc. v. Schmidt, 905 F. Supp. 475, 479
(N.D. Il. 1994), Here, Yachting Experience’s claim in Count III flounders on the first element; the
complaint fails to properly allege the existence of a contract between Yachting Experience and
Federal.

Yachting Expericnee asserts that the insurance policy purchased by Joule from Federal was
purchased on behalf of Yachting Experience; thus, it is this policy that plaintiff claims as the
contract. (PI.’s Mem. at 2). Additionally, Yachting Experience argues that it held an insurable
interest because it owned the yacht transported by Joule and it paid the insurance premium, as part
of the freight charges “to insure Yachting Experience against loss during the transport of the yacht.”
(PL’s Mem, at 2-3). However, the insurance policy at issue identifies Joule as the only named
insured. There is nothing in the insurance policy that refers to Yachting Experience as a named
insured, nor is there any reference to Yachting Experience being anamed beneficiary of the policy.

And, Yachting Experience has disavowed any third-party beneficiary theory (PI.’s Mem. at 4). In



retail for profit (Am. Compl. 5, 6). On or about the same date, Silverton made arrangements with
Joule to have Joule pick up the yacht from Silverton’s facility and transport the yacht to Yachting
Experience in Kenosha, Wisconsin (/d. {| 8). Yachting Experience was charged and paid freight
expenses in the amount of $7,891.50. Included in these charges was an amount sufficient to cover
the cost of an insurance premium, which Joule paid to secure insurance from Chubb and Federal to
protect against loss during the transportation of the yacht (/d. | 10). Yachting Experience alleges
that Joule purchased this insurance “on behalf of Yachting Experience,” and the “Yachting
Expericnce held the insurable interest” (/d.). Yachting Experience did not attach to the complaint
a copy of the policy of insurance that it alleges Joule purchased on Yachting Experience’s behalf.

On or about December 6, 2000, while transporting the yacht on Interstate Highway 94 in the
State of Illinois, the transporter of the yacht hil a bridge overpass causing cxtensive damage to the
yacht (Am. Compl. § 11). On or about the same date, timely notice of the accident was made to
Chubb and Federal (/d. 7 12), The yacht was taken to be repaired, and in June 2001, Yachting
Experience was notificd by Joule that all repairs to the Yacht were completed and that the yacht
would be shipped to Yachting Experience by Joule (/d. [ 14). Upon delivery of the yacht, Yachting
Experience had it inspected or surveyed and found the repairs to have been faulty and incomplete
and declared the yacht a total loss due to the extensive damage (/d. 16). Joule, Chubb, and Federal
retained the services of its own surveyor who concurred with Yachting Experience’s surveyor that
the yacht was a total loss (/e. 4] 17).

On October 8, 2002, Joule, Chubb, and Federal refused to purchase and sell the salvage and
instead sold the yacht for the sum of $185,000.00, without the knowledge or consent of Yachting

Experience (Am. Compl. ff 19, 20). According to Yachting Experience, the damage sustained by



the face of what the policy says (and, just as important, what it does not say), the complaint fails to
allege a contract between Yachting Experience and Federal.* Accordingly, Count IL must be
dismissed for failure to state a claim against Federal.

TV.

Tn Count LV, Yachting Experience alleges a bad faith claim against Federal on the strength
of two provisions of the Mlinois Insurance Code: 215 ILCS 5/154.6, and 215 ILCS 5/155(1).
Plaintiff's invocation of Section 5/154.6(d) is a non-starter. The plaintiff cannot recover under
Section 5/154,6(d) as that section does not create a private right of action. Bageanis v. American
Bankers Life Assurance Co. of Fl., 783 F. Supp. 1141, 1149 (N.D, Ill. 1992); see also Van Vleck v.
Ohio Cas. Ins, Co., 471 N.E.2d 925, 927 (Ill. App. 3d Dist. 1984).

Yachting Experience’s reliance on Section 5/155(1) fares no better, albeit for a different
reason. To obtain relief under Section 5/155(1), a plaintiff must be an insured party or “an assignee
who succeeds to the same position of the insured.” Garcia v. Lovellette, 639 N.E.2d 935, 937 (ik
App. 2d Dist. 1994). The rights afforded by Section 5/155(1) are “not intended for ‘true’ third
parties.” Jd.; see also Yassin v. Certified Grocers of Mlinois, 551 N.E.2d 1319, 1322 (Ill. 1990) (“[a]s
a general rule, the remedy embodied in Section 155 of the Insurance Code extends only to the party
insured and policy assignecs. Therefore, the remedy embodied in Section 155 of the Insurance Codec
docs not extend to third parties”) (internal citations omitted). An “insured must logically be a person

defined in the policy provision in question here.” Garcia, 639 N.E.2d at 938. But, as we have

‘Vederal has provided the Court with the insurance policy agreement between Joule and Federal, Although
Yachting Experience failed to attach the policy to the complaint, the policy is at the core of its contract claim, we
therefore may consider the insurance policy without converting the motion to dismiss a motion for summary judgment.
. Corp., 987 F.2d 429, 431 (7" Cir. 1993) (“Documents that defendant attaches to

Venture Assoc. Corp. v. Zenith 83

a motion to dismiss are considered part of the pleadings il they are referred to in the plaintiff's complaint and are central
to her claim”).



Minute Order Form (06/97)

United States District Court, Northern District of Ulinois

Name of Assigned Judge Sidney L. Schenkier Sitting Judge if Other
or Magistrate Judge than Assigned Judge
CASE NUMBER 03 C 259 DATE 8/21/2003
CASE Yachting Experience, LLC. vs. Joule Yacht Transport, Inc., et al.
TITLE

[In the following box (a) indicute the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintif?, and (b) state briefly the nature
of the motion being presented.)

MOTION:

DOCKET ENTRY:

(1) QO Filed motion of [ use listing in “Motion” box above.]

(2) Oo Brief in support of motion due

(3) Oo Answer brief to motion due ___- ‘Reply to answer briefdue___

(4) Oo Ruling/Hearing on ssetfor at.

(5) Oo Status hearing[held/continued to] [sct for/re-set for]on___setfor__ at

(6) Oo Pretrial conference|held/continued to] [set for/re-set for]on__—setfor_— at"
(7) o Trial[set for/re-set for]on_— at

(8) o (Bench/Jury trial] [Hearing] held/continued to at

(9) oO This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OrRCP4(m) OLocal Rule 41.1 OFRCP41(a)(1) O FRCP41(a)(2).

(10) «+4 [Other docket entry) ENTER MEMORANDUM OPINION AND ORDER. Federal’s motion
to dismiss Counts II] and IV [doc. # 12] is granted.

(ll) [For further detail see order attached to the original minute order, ]
No notices requiced, advised in open court
No notices required ub a nrsen
of | Notices mailed by judge's staff. AUG 2-5 2003
Notified counsel by telephone. dats docked
Docketing to mail notices. My C
Mail AO 450 form AMNGD LAWLSIG SN | ctype inte
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Copy to judge/magistrate judge. eeaTg
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We q fate mailed notice,
courtroom 8 Hy S¢ Inv eo date ale
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explained above, Yachting Experience is not a named insured on the insurance policy, nor is there
any allegation (hat Joule assigned Yachting Experience any rights against Federal, Thus, the claim
against Federal in Count IV fails.
CONCLUSION
For the foregoing reasons, Federal’s motion to dismiss (doc. # 12) Counts III and TV is
granted.”

ENTER:

United States Magistrate Judge

Dated: August 21, 2003

3in light of this ruling, thc Court does not address Federal’s alternative grounds for dismissa) based on public
policy.


IN THE UNITED STATES DISTRICT COURT -
FOR THE NORTHERN DISTRICT OF ILLINOIS <

EASTERN DIVISION
Woe
YACHTING EXPERIENCE, LLC

d/b/a CAPT. JIM’S YACHT SALES,

Plaintiff,
No. 03 C 0259
vs.
Magistrate Judge Schenkier
JOHN DOE, Individually and as the agent
for JOULE YACHT TRANSPORT, INC.,
JOULE YACHT TRANSPORT, INC.,
CHUBB & SONS, INC., and FEDERAL
INSURANCE COMPANY,

wee ye eee Se HS ee

Defendants.

MEMORANDUM OPINION AND ORDER

The plaintiff, Yachting Experience, L.L.C. W/b/a Capt. Jim’s Yacht Sales (“Yachting
Experience”), has brought a four-count amended complaint against John Doe, (individually and as
the agent for Joule Yacht Transport, Inc.), Joule Yacht Transport, Inc. (“Joule’}, Chubb and Sons,
Inc. (“Chubb”), and Federal Insurance Company (“Federal”), in connection with alleged damage to
a yacht owned by Yachting Expericnce and transported by Joule. In Counts I and I, Yachting
Experience alleges negligence claims against John Doe and Joule, respectively, in connection with
damage to the yacht that allegedly occurred during its transport. In Counts Ill and IV, Yachting
Experience alleges claims against Federal and Chubb for breach of contract and bad faith denial of

coverage pursuant to the Illinois Insurance Code, 215 ILCS 5/154.6(d) and 215 ILCS 5/155(1).



Since filing the amended complaint, Yachting Experience has dismissed its claim against the Doe
defendant (doc. #23), and has also dismissed all claims against Chubb (doc. # 18).'

Joule has answered the complaint (doc, # 10). Presently beforc the Court is Federal’s motion,
pursuant to Fed. R. Civ. P. 12(b)(6), to dismiss Counts III and IV in their entirety (doc. # 12). For
the reasons that follow, Federal’s motion to dismiss is granted.

L

The purpose of a motion to dismiss under Fed. R. Civ. Rule 12(b)(6) is to test the sufficiency
of the complaint, and not to decide the case on the merits. See Weiler v. Household Fin. Corp., 101
F.3d 519, 524 n.1 (7" Cir. 1996), For purposes of reviewing the motion, we must take all the
plaintiff's well pled allegations as true. Lucien v. Preiner, 967 F.2d 1166, 1168 (7" Cir, 1992). The
Court must also view the plaintiff's allegation in the light most favorable to the plaintiff, and the
plaintiff is entitled to all reasonable inferences that can be drawn therefrom. Ellsworth v. Racine
774 F.2d 182, 184 (7" Cir. 1985), cert. denied, 475 U.S. 1047 (1986). “The issue is not whether the
plaintiff will ultimately prevail, but whether the claimant is entilled to offer evidence to support the
claims.” Triad Assoes. v. Chicago Housing Auth., 892 F.2d 583, 586 (7" Cir. 1990), The relevant
allegations of the complaint, which we will take as true for purposes of ruling on this motion, are as
follows:

I.
On or about November 27, 2002, Yachting Experience purchased a 2001 Silverton 410 Sport

Bridge yacht {rom Silverton Main Corporation (“Silverton”), located in Millville, New Jersey, to sell

‘Pursuant to the consent of the remaining parties in the case (Yachting Experience, Joule, and Federal) and 28
U.S.C. § 636(c), the case has been assigned to this Court for all proceedings, including entry of final judgment (doc. i!
25-28),

2