Northland Insurance has not put forth evidence of facts indicating the existence of a case
or controversy with respect to Counts IT and III. Northland Insurance’s injury is hypothetical.
Northland Insurance’s brief makes clear that reformation and/or rescission may be appropriate in
the future upon the occurrence of a particular event (namely the entry of a court order finding that
Northland Insurance had a duty to defend or indemnify Crane with respect to the Hoffman
litigation), which may or may not ever occur. Specifically, in its brief in support of its motion for
summary judgment on Counts II and III, Northland Insurance states:

e If this Court were to find that the Northland Non-trucking Use Policy

actually provides coverage to the 1998 Transcraft trailer, then Northland
would be entitled to reformation of the policy in order to accurately reflect
the intentions of the parties.
e If this Court finds that the absence of reference to the trailer in the non-
trucking use endorsement is tantamount to full trucker’s insurance for the
trailer, then a mistake was made when the policy was drafted.
e In the event that this Court finds that the Hoffmans’ position has any
support on the record, the Northland Policy must be rescinded because if
Dorlan Crane intended to purchase full truckers’ coverage, he clearly
misrepresented numerous material facts in his application.
(Northland Brief at 6, 7). These statements make clear that, as it stands, Northland Insurance has
suffered no actual injury and none is imminent. Rather, Northland Insurance seeks rescission and
reformation if and only if the Court, at some point in the future, concludes that Northland
Insurance has a duty to indemnify or defend Crane with respect to the Hoffman litigation. The
Court has not reached that conclusion. Nor can it reach that conclusion given that it lacks
jurisdiction over Count I as well. The claims for rescission and reformation are not ripe.
Accordingly, the Court has no jurisdiction over these claims.

Plaintiffs motion for summary judgment as to Counts II and III is denied, and Counts Il

and III are dismissed without prejudice.


actual controversy within its jurisdiction . .. any court of the United States . . . may declare the
rights and other legal relations of any interested party seeking such declaration . . .”) (emphasis
added). Among other things required for a case or controversy, the plaintiff must have suffered
an injury that is “actual or imminent, not ‘conjectural’ or ‘hypothetical.’” Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560 (1992). Northland Insurance bears the burden of establishing
jurisdiction “with the manner and degree of evidence required at the successive stages of the
litigation.” Lujan, 504 U.S. at 561.

Northland Insurance fails to put forth evidence sufficient to establish the existence of a
case or controversy as to Count I. Until an insured either makes a demand for payment under an
insurance policy or threatens to make such a demand, there is no case or controversy over which
the insurance company can seek a declaration of its rights. Atlanta Int’l Ins. Co. v. Atchison,
Topeka and Santa Fe Railway Co., 938 F.2d 81, 83-84 (7th Cir. 1991). Here, Northland
Insurance presents no evidence that Crane has ever demanded or threatened to demand coverage
for the Hoffman litigation under the Crane policy. What Northland Insurance seeks is an
advisory opinion, which this Court will not and cannot provide. Thus, the Court lacks
jurisdiction over Count I.

The Court denies plaintiffs motion for summary judgment with respect to Count land
dismisses Count I without prejudice.

Counts II and I!-Reformation and Rescission

In Count Hl, Northland Insurance seeks reformation of the Crane policy, and in Count III,
Northland Insurance seeks rescission of the Crane policy. The Court concludes that these claims,

like Count I, are not ripe, and, accordingly, the Court lacks jurisdiction over these claims as well.

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TV. Conclusion
For the reasons set forth above, the Court denies plaintiffs motion for summary judgment
and dismisses plaintiff's claims without prejudice.

ENTER:

ay i Wawecl ~

Geor; . Marovich
United States District Judge

DATED: 7 oo a


UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

NORTHLAND INSURANCE COMPANY,
Plaintiff,

02 C 7388

v.

INSURANCE COMPANY, NANCY
HOFFMAN and MARK HOFFMAN,
individually and as parent and next friend of
KAREN HOFFMAN, a minor,

)
)
)
)
)
)
DORLAN CRANE, LINCOLN GENERAL ) Judge George M. Marovich
)
)
)
)
)
Defendants. )

MEMORANDUM OPINION AND ORDER

Plaintiff Northland Insurance Company (“Northland Insurance”) filed a three-count
second amended complaint against defendants Dorlan Crane (“Crane”), Lincoln General
Insurance Co. (“Lincoln General”) and Mark Hoffman, Nancy Hoffman and Karen Hoffman
(collectively, the “Hoffmans”). In Count I, Northland Insurance seeks a judgment declaring that
it has no duty to defend or indemnify Crane in litigation brought by the Hoffmans against Crane
(and others). In Counts II and III, Northland Insurance seeks, in the alternative, reformation or
rescission of an insurance policy.

Northland Insurance has filed a motion for summary judgment with respect to its claims.
Although Northland Insurance seeks summary judgment on all of its claims with respect to every
defendant, Northland Insurance has served only the Hoffmans with its motion and supporting
papers. No appearance has been filed in this case on behalf of either Crane or Lincoln General,
and it is unclear whether those parties were ever served notice of this lawsuit. It is clear (from
Northland’s notice of filing and certificate of service) that Northland did not serve either Crane

or Lincoln General with plaintiff's second amended complaint.


For the reasons set out below, the Court denies plaintiff's motion for summary judgment
and dismisses without prejudice plaintiff's claims.
1. Background

Unless otherwise noted, the following facts are undisputed by plaintiff Northland and
defendants the Hoffmans. (As the Court noted above, Crane and Lincoln General were not
served with the motion for summary judgment or the second amended complaint on which it is
based.)

Plaintiff Northland Insurance is a Minnesota corporation with its principal place of
business in St. Paul, Minnesota. Defendant Crane is a citizen of Illinois. The Hoffmans are
citizens of Illinois.

At some point, Northland Insurance issued to Crane an insurance policy (the “Crane
policy”) that was effective April 14, 2002 to April 14, 2003. The Crane policy covered bodily
injury or property damage “caused by an ‘accident’ and resulting from the ownership,
maintenance or use of a covered ‘auto’.” The Crane policy excludes certain auto uses, such as
“to carry property in any business” and use “in the business of anyone to whom the ‘auto’ is
rented.”

The Hoffmans have a lawsuit (the “Hoffman litigation”) pending against Crane (among
others) in the Circuit Court of Cook County. In the Hoffman litigation, the Hoffmans allege that
on June 21, 2002, Crane was operating his semi-tractor trailer on Interstate 80. The Hoffmans
further allege that Nancy Hoffman and Karen Hoffman suffered injuries when the front of
Crane’s vehicle came into contact with the back of a vehicle carrying Nancy and Karen Hoffman.

Absent from the record is any evidence that Crane ever demanded that Northland

Insurance defend or indemnify him with respect to the Hoffman litigation. Nor is there any

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evidence in the record that would suggest Crane has ever indicated that he intends to make a
claim under the Crane policy.
Il. Summary judgment standard

Summary judgment should be granted when “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to judgment as a matter
of law.” Fed. R. Civ. P. 56(c). When making such a determination, the Court must construe the
evidence and make all reasonable inferences in favor of the non-moving party. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). Summary judgment is appropriate, however,
when the non-moving party “fails to make a showing sufficient to establish the existence of an
element essential to the party’s case, and on which that party will bear the burden of proof at
trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
III. Discussion

Count I-Duty to Defend and Duty to Indemnify

In Count I, Northland Insurance seeks a declaration that it has no duty under the Crane
policy either to defend or to indemnify Crane with respect to the Hoffman litigation. Before the
Court considers the merits of the claim, it must satisfy itself that it has jurisdiction over the
claim. Weaver v, Hollywood Casino-Aurora, Inc., 255 F.3d 379, 381 (7th Cir. 2001).

The exercise of the Court’s judicial power under Article III of the Constitution “depends
on the existence of a case or controversy.” United States National Bank of Oregon v.
Independent Ins. Agents of Amer., Inc., 508 U.S. 439, 446 (1993). Federal courts do not have the

power to render advisory opinions. /d. These principles are no less true when a litigant seeks a

declaratory judgment under the Declaratory Judgment Act. 28 U.S.C. § 2201 (“In a case of

3.