State Bank & Trust y. Consol. Communications, Inc., 660 N.E.2d 863, 867 (1996), Summit
argues that Comdisco cannot state a claim against it for professional negligence or negligent
misrepresentation because, as a matter of law, Summit owed no duty to Comdisco. Crist, against
whom Comdisco alleges only professional negligence, argues that that claim should be dismissed
for the same reason. Because Crist’s argument is perfunctory and not supported by any citations
to relevant case law, the court will only address Summit’s motion.

Summit cites Pacific Tall Ships Co. v. Kuehne & Nagle, Inc., 76 F. Supp. 2d 886 (N.D.
Ill. 1999), in support of its argument that it owed no duty of care to Comdisco. In that case,
plaintiff hired a shipping company to arrange the shipment of a number of model wooden ships.
The shipping company, pursuant to its contract with the plaintiff, utilized its in-house insurance
broker to acquire insurance for the plaintiff's cargo. The cargo was damaged during transit, and
the plaintiff, subsequent to the denial of its claim by the insurance company, sued the insurance
broker, among others, for breach of fiduciary duty and negligence. /d. at 888. The court granted
the insurance broker’s motion for summary judgment, holding that the broker owed no duty of
care to the plaintiff. /d. at 895-96.

According to Summit, Pacific Tall Ships holds that, as a matter of law, an insurance
broker has no duty of professional care to a third party with whom it has no contractual
relationship. (Reply, at 6.) This is incorrect. The court held, rather, that the plaintiff “has not
produced any evidence that it had any sort of relationship” with the broker. Jd. at 895. The
court’s holding turned on the evidence in the record, not on the legal sufficiency of the
complaint. Indeed, the Pacific Tall Ships court had denied the broker’s 12(b)(6) motion to

dismiss the complaint. See Minute Order of Sept. 1, 1998. Because Summit has failed to show

14


Crist is an insurance brokerage service incorporated in the state of California with its
principal place of business in Oakland, California. At all relevant times, Crist was duly licensed
to broker insurance policies in the state of Illinois.

Accordia is an insurance brokerage service incorporated in the state of California with its
principal place of business in San Francisco, California. At all relevant times, Accordia was duly
licensed to broker insurance policies in the state of Illinois.

BACKGROUND

Atall relevant times, Comdisco was in the business of leasing computer equipment,
office furniture, and other office equipment to various venture capital backed “‘dot.com”
companies. According to Comdisco, it entered into separate Master Lease Agreements
(“MLAs”) with numerous lessees to lease computer and other office equipment. Pursuant to the
MLAs, Comdisco retained title and ownership of the equipment and each lessee was responsible
for obtaining insurance for such equipment and adding Comdisco as an additional insured and
loss payee under the policies. Comdisco claims that the lessees instructed and authorized the
broker defendants to procure the required insurance policies and to have Comdisco named as an
additional insured and loss payee under the policies. The Chubb defendants issued insurance
policies allegedly covering Comdisco’s equipment to the following lessees:

iBeam Broadcasting, Inc. (“iBeam”) (Federal policy number 3538-43-88, covering

property located at premises in Arizona, California, Oklahoma, Virginia, and any other

location);

Altium, Inc. (“Altium”) (Federal policy number 3535-92-62, covering property located at
premises in California);

Aristasoft Corporation (“‘Aristasoft”) (Vigilant policy number 3539-08-18, covering
property located at premises in California, Massachusetts, and India);


In the alternative, ABD seeks a more definite statement of Comdisco’s claims pursuant to
Federal Rule of Civil Procedure 12(e). ABD contends that Comdisco should adds statements to
its Complaint explaining how each of the alleged losses to insured property occurred at each of
the lease sites. As Judge Darrah explained in his opinion rejecting this argument in case number
04 C 3605 and 04 C 3791, the information sought by ABD is readily available through discovery
and need not be specifically pled to sufficiently place ABD on notice of the claims brought by
Comdisco, Accordingly, ABD’s Alternative Motion for a More Definite Statement is denied.

CONCLUSION

For the reasons stated above, all of defendants’ motions to dismiss are denied.

ENTER: Pile Ah Keffer,

U/ JOAN HUMPHREY LEFKOW
Dated: June 8, 2005 United States District Judge

18


where the plaintiff acted in reliance upon the defendant's representations; (b) the place where
plaintiff received the representations; (c) the place where the defendant made the representations;
(d) the domicile, residence, nationality, place of incorporation and place of business of the
parties; (e) the place where a tangible thing which is the subject of the transaction between the
parties was situated at the time; and (f) the place where the plaintiff is to render performance
under a contract he has been induced to enter by the false representations of the defendant.
Telular Corp. v. Mentor Graphics Corp., 282 F. Supp. 2d 869, 873 (N.D. Ill. 2003),
RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 148.

The alleged misrepresentations in this case were made in the various states (California,
Pennsylvania, Texas) where the broker defendants prepared and issued the Certificates of
Insurance. Comdisco received these Certificates and acted in reliance upon them in Illinois.
Comdisco is a Delaware corporation with its principal place of business in Illinois. The broker
defendants are incorporated under the laws of. California (Accordia, Crist, ABD), Pennsylvania
(HMK), and Texas (Summit) and each has its principal places of business in its state of
incorporation. As explained above, the insured property-the “tangible thing which is the subject
of the transaction between the parties”—was located in more than one state. Thus, the location of
the insured property is entitled to little weight. The last factor is inapplicable here.

The comments to section 148 of the Restatement provide some assistance in assigning
weight to these various factors. The state where Comdisco received the representations (Illinois)
is as important a contact as the state where broker defendants made them (California,
Pennsylvania, Texas), but neither is as important a contact as the place where Comdisco acted in

reliance (Illinois). See Telular, 282 F. Supp. 2d at 873 (citing RESTATEMENT § 148, cmt g).

10


DISCUSSION
I. Chubb Defendants - Preemption

The Chubb defendants contend that Comdisco’s claim for breach of the covenant of good
faith and fair dealing (Count II) should be dismissed because that cause of action is preempted by
Section 155 of the Illinois Insurance Code, 215 ILCS 5/155. Comdisco argues that its claim is
not preempted because I!linois law does not apply to claims against the Chubb defendants.
Comdisco instead contends that each insurance policy is governed by the law of the state in
which the insured equipment was located.

Federal courts sitting in diversity must look to the choice-of-law rules of the forum state
for applicable law. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). The Seventh
Circuit has not yet ruled on whether this rule applies in the bankruptcy context. However, those
courts that have considered the issue have held that it does. Master Mortgage Inv. Fund, Inc. v.
Am. Nat. Fire Ins. Co., 151 B.R. 513, 518 (W.D. Mo. 1993); In re Merit Dredging Co., Inc., 839
F.2d 203, 205-06 (4" Cir, 1988). The forum state in this case is Illinois; thus, the court applies
Illinois’ conflict-of-law rules. Under Illinois law conflict-of-law rules, when an insurance policy
lacks a choice of law provision, Illinois courts employ a “most significant contacts” test to
determine the governing law for the contract. Jupiter Aluminum Corp. v. Home Ins. Co. et al.,
225 F.3d 868, 873 (7" Cir. 2000). Under this test, “insurance policy provisions are generally
governed by: the location of the subject matter, the place of delivery of the contract, the domicile
of the insured or insurer, the place of the last act giving rise to a valid contract, the place of
performance, or other place bearing a rational relationship to the general contract.” Lapham-

Hickey Steel Corp., v. Protection Mut. Ins. Co., 655 N.E.2d 842, 845 (Ill. 1995) (quotation marks


eCoverage, Inc. (“eCoverage”) (Federal policy number 3538-17-73, covering property at
premises in California and “any other location”);

Naxon Corporation (“Naxon”) (Federal policy number 3539-94-81, covering property
located at premises in California and Michigan);

Christianity.com, Inc. (“Christianity”) (Federal policy number 3576-00-83, covering
property located ay premises in California and Missouri);

New Access Communication a/k/a Centerpoint Broadband (“Centerpoint”) (Federal
policy number 3538-59-75, covering property at premises located in California, Florida,
and the United Kingdom);

Quixi, Inc. (“Quixi”) (Federal policy number 3537-33-59, covering property at premises
located in California, New York, and Texas);

eLaw, Inc. (“eLaw”) (Federal policy number 3575-41-06, covering property at premises
located in Texas and “any other location”);

Vectris Communications a/k/a Vectris Financing, Inc. (“Vectris”) (Federal policy number
3537-35-98, covering property at premises located in Texas and “any other location”);

and

Voter.com, Inc. (“voter”) (Federal policy number 3575-49-57, covering property located
at premises in California, the District of Columbia, and Massachusetts).

Comdisco alleges that the broker defendants issued Certificates of Insurance or Evidence of
Insurance to Comdisco, representing to Comdisco that it had been added as an additional insured
and/or loss payee under policies issued by the Chubb defendants.

Subsequently, all of the lessees went out of business and the leased equipment
disappeared. Comdisco alleges that it sustained $12,117,100.53 in equipment-related losses
during the effective dates of those policies. Comdisco alleges that it notified the Chubb
defendants of the losses and that the Chubb defendants have denied coverage on the grounds that

Comdisco is not named as an additional insured or loss payee under the policies.


delivered to? companies located in California. These policies’ contacts with California, given the
weight assigned them under Illinois law, are more significant than their contacts with any other
state. Thus, California law governs these policies. Likewise, the policies issued to eLaw and
Vectris were prepared by insurance brokers in Texas and purchased by and delivered to
companies located in Texas. Thus, Texas law governs these policies. The policy issued to Voter
was prepared by an insurance broker based in Massachusetts and purchased by and delivered to a
company located in Massachusetts. Thus, Massachusetts law governs this policy. Finally, the
policy issued to Quixi was prepared by an insurance broker based in Pennsylvania and purchased
by and delivered to a company located in New York. Because the last act giving rise to the
contract — the delivery of the policy — occurred in New York, New York law governs the policy.

Because Illinois law does not govern any of the policies at issue in this case’, the Chubb
defendants’ motion to dismiss is denied.
Il. Broker Defendants - Choice of Law

As in contract cases, Illinois courts employ a most significant contacts test to determine
the governing law for tort claims. Jones v. State Farm Mutual Auto. Ins. Co., 682 N.E.2d 238,
249 (Ill. App. 1° Dist. 1997). With respect to fraud and misrepresentation claims, Illinois courts
follow the Restatement (Second) of Conflict of Law in looking to the following six factors to

determine which state has the most significant relationship to the action: (a) the place, or places,

3The court looks to the mailing address of the primary insured identified on the policy itself for the state
where the policy was delivered.

+The court notes that neither of the other Judges who have issued rulings on motions to dismiss in this
family of cases have found that Illinois law governs any of the policies at issue. See Comdisco, Inc. v. Lumbermens
Mutual Casualty Co. et al., 04 C 3605, 04 C 3791 (March 24, 2005) (Darrah, J.); Comdisco, Inc. v. Atlantic Mutual
Ins. Co., 04 C 3573 (April 20, 2005) (Lindberg, J.).


UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

IN RE:
COMDISCO VENTURES, INC.,
et al.,
Debtors.
No. 04 C 2007
No. 04 C 2393
COMDISCO VENTURES, INC. Judge Joan H. Lefkow
Plaintiff,

Bankruptcy No. 01-24795
v. Adv. No. 04400285
FEDERAL INSURANCE COMPANY,
VIGILANT INSURANCE COMPANY,

ABD INSURANCE AND FINANCIAL
SERVICES, HAMPSON MOWRER
KREITZ AGENCY, INC., SUMMIT
GLOBAL PARTNERS OF TEXAS, INC.,
CRIST ELLIOT MACHETTE INSURANCE
SERVICES, and ACCORDIA OF
CALIFORNIA INSURANCE SERVICES,
INC.,

weer rer rw SS SH SS YS Serre

Defendants.
MEMORANDUM OPINION AND ORDER
On February 18, 2004, plaintiff, Comdisco Ventures, Inc. (“‘Comdisco”), filed a fifteen-
count Adversary Complaint in United States Bankruptcy Court for the Northern District of
Illinois (case number 04-A-00285) against defendants, Federal Insurance Company (“Federal”),
Vigilant Insurance Company (“Vigilant”) (together, the “Chubb defendants”), ABD Insurance
and Financial Services (“ABD”), Hampson Mowrer Kreitz Agency, Inc. (“HMK”), Summit

Global Partners of Texas, Inc. (“Summit”), Crist Elliot Machette Insurance Services (“Crist”),


78951, at *4 (N.D. Ill Jan. 12, 2005) (citing Walker v. Thompson, 288 F.3d 1005, 1010 (7 Cir.
2002)).

The existence of a defense based on Illinois’ two-year statute of limitations is not obvious
from the face of Comdisco’s Complaint. Under Illinois law, a cause of action for most torts
accrues when the plaintiff suffers injury. West American Ins. Co. v. Sal E. Lobianco & Son Co.,
370 N.E.2d 804, 807 (1977). Literal application of the statute of limitations, however,
sometimes produced such harsh results that Illinois courts developed the “discovery rule.” The
discovery rule “delays the commencement of the relevant statute of limitations until the plaintiff
knows or reasonably should know that he has been injured and that his injury was wrongfully
caused.” Jackson Jordan, Inc. v. Leydig, Voit & Mayer, 633 N.E.2d 627, 630-31 (1994).
Applying that rule here, Comdisco’s causes of action did not accrue when Comdisco lost its
property but rather when the Chubb defendants denied Comdisco’s claims under the relevant
policies. See, e.g., Broadnax v. Morrow, 762 N.E.2d 1152, 1157 (Ill. App. 4" Dist. 2002)
(holding that an insurance policyholder’s negligence claim against his insurance agents accrued
when insurance company denied policyholder’s claim). These dates do not appear in Comdisco’s
Complaint.

Accordia argues that the court should not allow Comdisco “to defeat dismissal by
intentionally omitting dates in the allegation.” (Accordia’s Reply, at 12.) This argument is
meritless. “A complaint is not required to allege all, or any, of the facts logically entailed by the
claim... . [A] complaint does not fail to state a claim merely because it does not set forth a

complete and convincing picture of the alleged wrongdoing.” American Nurses Ass'n v. State of

12


Further, plaintiff's principal place of business (Illinois) is a contact "of substantial significance"
when the loss is pecuniary in nature, more so than the place of incorporation (Delaware). See Id.
(citing RESTATMENT § 148, cmt i). These status contacts of Comdisco are more important than
similar contacts of broker defendants (California, Pennsylvania, Texas). Jd. Examining the
factors of section 148 and assigning them the respective weights suggested by the comments
leads to the conclusion that Illinois is the state with the most significant relationship to
Comdisco’s claims against the broker defendants.

III. Broker Defendants - Statute of Limitations Defense

Accordia, Summit and Crist move to dismiss Comdisco’s claims against them, arguing
that those claims are barred by Illinois’ two-year statute of limitations on claims concerning the
failure to procure insurance. Under Illinois law, “[a]ll causes of action against insurance
producers, limited insurance representatives, and registered firms concerning the... 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. Comdisco alleges in its Complaint that the loss of its equipment
occurred during the “effective dates” of the relevant policies, which, under each of the policies at
issue, concluded over two years before Comdisco filed its Complaint on February 18, 2004.
Thus, Accordia, Summit and Crist argue that Comdisco’s claims are time-barred.

Ordinarily, affirmative defenses such as statute of limitations are not grounds for
dismissal under Rule 12(b)(6), Fed. R. Civ. P. See U.S. Gypsum Co. v. Indiana Gas Co., 350
F.3d 623, 626 (7" Cir. 2003). Dismissal may be appropriate, however, where “the existence of a
valid affirmative defense is so obvious from the face of the complaint that the suit can be

regarded as frivolous.” Walton Risk Services, Inc. v. Clarendon America Ins. Co., 2005 WL

11


and citation omitted). “While all of these factors must be considered in the choice-of-law
analysis, the location of the insured risk is given special emphasis.” Society of Mount Carmel v.
Ben Franklin Ins, Co. of Ill., 643 N.E.2d 1280, 1287 (Ill. App. 1“ Dist. 1994) (citing
RESTATEMENT (SECOND) OF CONFLICTS OF Laws § 193 (1971)). However, the location of the
insured risk “is entitled to little weight when the subject matter or risk is located in more than
one state.” Employers Ins. of Wasau v. Ehlco Liquidating Trust, 723 N.E.2d 687, 694
(1999)(citing RESTATEMENT § 193). In addition, some Illinois courts have given special
emphasis to the state where the policy was issued or delivered or the place of the last act giving
rise to a valid contract. See, e.g., United States Fire Insurance Co. v. CNA Insurance Cos., 572
N.E.2d 1124 (Ill. App. 1 Dist. 1991); Jadezak v. Modern Service Insurance Co., 503 N.E.2d 794
(Ill. App. 1* Dist. 1987). The last act giving rise to an insurance contract usually occurs in “the
state where the policy is delivered and the premiums are paid.” Emerson Elec. Co. v. Aetna
Casualty & Surety Co., 743 N.E.2d 629, 641 (Ill. App. 1" Dist. 2001).

Because all of the policies except one (Altium) insure property located in more than one
state, and because all of the policies provide varying degrees of coverage for property in transit,
property at unscheduled locations, property at “any other location,” and property in an
“exhibition, fair or trade show,” the location of the insured risk is entitled to little weight. The
places where the policies were issued and delivered, however, is entitled to significant weight.
The policies issued to iBeam, Altium, Aristasoft, eCoverage, Naxon, Christiantiy, and

Centerpoint were all prepared by insurance brokers based in California and purchased by and


to operate its business and manage its properties as a reorganized debtor pursuant to 11 U.S.C.
§§ 1107(a) and 1108 of the Bankruptcy Code. Comdisco Ventures, Inc. is a wholly owned
subsidiary of Comdisco, Inc. formed pursuant to the Reorganization Plan. Comdisco Ventures,
Inc. holds all of the assets constituting the former Venture Finance Division of Comdisco, Inc.
For purposes of the pending motions, the parties treat Comdisco Ventures, Inc. as synonymous
with the debtor, Comdisco, Inc., and the court does as well, referring to them collectively as
Comdisco.

Federal is a stock insurance company incorporated in the state of Indiana with its
principal place of business in Warren, New Jersey. At all relevant times, Federal was duly
authorized and licensed to write and issue insurance policies in the state of Illinois.

Vigilant is a stock insurance company incorporated in the state of New York with its
principal place of business in Warren, New Jersey. At all relevant times, Vigilant was duly
authorized and licensed to write and issue insurance policies in the state of Illinois.

ABD is an insurance brokerage service incorporated in the state of California with its
principal place of business in Redwood City, California. At all relevant times, ABD was duly
licensed to broker insurance policies in the state of Illinois.

HMK is an insurance brokerage service incorporated in the state of Pennsylvania with its
principal place of business in Bethlehem, Pennsylvania. At all relevant times, HMK was duly
licensed to broker insurance policies in the state of Illinois.

Summit is an insurance brokerage service incorporated in the state of Texas with its
principal place of business in Dallas, Texas. At all relevant times, Summit was duly licensed to

broker insurance policies in the state of Illinois.


that Comdisco can prove no set of facts in support of its claim that Summit owed Comdisco a
duty of care, Summit’s motion to dismiss on this ground is denied.
VI. Broker Defendants - Reasonable Reliance

To state a claim for either negligent misrepresentation or intentional misrepresentation,
Comdisco must show that its reliance on the alleged misrepresentations of the broker defendants
was reasonable. Bd. of Educ. of City of Chicago v. A, C and S, Inc., 546 N.E.2d 580, 593 (1989).
Summit argues that Comdisco’s reliance on the “Evidence of Property Insurance” was not
reasonable as a matter of law. The court disagrees.

First, the Evidence of Property Insurance issued by Summit to Comdisco states, “This is
evidence that insurance as identified below has been issued, is in force, and conveys all the rights
and privileges under the policy.” The document does not contain a disclaimer of the type
commonly found in certificates of insurance. See, e.g., American Country Ins. Co. v. Kraemer
Bros., Inc., 699 N.E.2d 1056, 1059 (Ill. App. 1* Dist. 1998) ("This certificate is issued as a
matter of information only and confers no rights upon the certificate holder. This certificate does
not amend, extend or alter the coverage afforded by the policies below.”). Ifa certificate of
insurance does not include a disclaimer, the insured may rely on representations made in the
certificate. Jd. at 1060. Thus, Comdisco’s reliance on the Evidence of Property Insurance was
reasonable.

Second, the insurance policy itself may contain a blanket endorsement provision granting
additional loss payee status to any party required to be named as a loss payee under a written
contract. Since Summit failed to attach a complete copy of the underlying eLaw policy to its

motion, the court does not know whether the policy contained such a provision. However, the

15


made, when they were made, who made the representations and to whom they were made.”
Wright v. Nissan Motor Corp. U.S.A., 1997 WL 106101, at *2 (N.D. Ill. Feb. 10, 1997). The
broker defendants argue that Comdisco’s intentional misrepresentation claim fails to satisfy this
requirement because it fails to allege (1) when the alleged fraudulent communications occurred,
(2) who transmitted the information that is alleged to be fraudulent and (3) to whom the
information was transmitted. (See, e.g., ABD’s Memo. in Supp. of Mot. to Dismiss, at 7.)
Comdisco’s Complaint must be read in conjunction with all of the exhibits attached to the
Complaint. Fed. R. Civ. P. 10(c). The Complaint makes it clear that the alleged fraud concerns
the broker defendants’ preparation and issuance of the Certificates of Insurance representing to
Comdisco that it had been added as an additional insured and/or loss payee under policies issued
by the Chubb defendants. The Certificates of Insurance at issue are attached to Comdisco’s
Complaint. The Certificate issued by ABD, to take one example, indicates that it was prepared
by ABD Insurance and Financial Services, 301 Island Parkway, Suite 100, Belmont, California.
It indicates that the certificate holder, Comdisco, is located at 611 N. River Road, Rosemont,
Illinois. It bears the signature of an “authorized representative” of ABD and bears the date on
which it was prepared. The Certificates issued by the other broker defendants contain similar
information. These Certificates do not describe the allegedly fraudulent statements made by the
broker defendants; they are the allegedly fraudulent statements and contain all of the information
required by Rule 9(b). It is disingenuous for the broker defendants to claim that they cannot
discern from the Complaint the specific behavior that Comdisco alleges to be fraudulent. Thus,

the motions to dismiss on this ground are denied.

17


would entitle it to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Sanville v. McCaughtry,
266 F.3d 724, 732 (7th Cir. 2001). In ruling on a motion to dismiss, the court accepts as true all
well-pleaded facts alleged in the complaint, and it draws all reasonable inferences from those
facts in the plaintiff's favor. Dixon v. Page, 291 F.3d 485, 486 (7th Cir. 2002).

In addition to the mandates of Rule 12(b)(6), Federal Rule of Civil Procedure 9(b)
requires “all averments of fraud” to be “stated with particularity,” although “{mlJalice, intent,
knowledge, and other condition of mind of a person may be averred generally.” “The rule
requires the plaintiff to state the identity of the person who made the misrepresentation, the time,
place, and content of the misrepresentation, and the method by which the misrepresentation was
communicated to the plaintiff.” Vicom, Inc. v. Harbridge Merch. Servs., Inc., 20 F.3d 771, 777
(7th Cir. 1994); see also DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990) (“Although
states of mind may be pleaded generally [under Rule 9(b)], the ‘circumstances’ must be pleaded
in detail. This means the who, what, when, where, and how: the first paragraph of any
newspaper story.”).

THE PARTIES

Comdisco Ventures, Inc. is a Delaware Corporation with its principal place of business in
Rosemont, Illinois. On July 16, 2001, Comdisco, Inc. filed a Voluntary Bankruptcy petition in
the United States Bankruptcy Court of the Northem District of Illinois (the “Bankruptcy Court”)
for reorganization relief under Chapter 11 of the Bankruptcy Code, 11 U.S.C. § 101 er seq. On
July 30, 2002, the Bankruptcy Court entered an order confirming the First Amended and Joint
Plan of Reorganization of Comdisco, Inc. and its Affiliate Debtors in Possession dated June 13,

2002. The Reorganization Plan became effective on August 12, 2002. Comdisco, Inc. continues


and Accordia of California Insurance Services, Inc. (““Accordia”) (together, the “broker
defendants”). Counts I and II allege breach of contract and breach of the implied covenant of
good faith and fair dealing against the Chubb defendants. The remaining counts allege
professional negligence against Crist (Count XII) and professional negligence, negligent
misrepresentation, and intentional misrepresentation against each of the other broker defendants.
Subsequently, two defendants in case number 04-A-00285 filed motions to withdraw the
reference to bankruptcy court, and their motions were assigned to this court as case numbers 04-
C-2007 and 04-C-2393. On June 18, 2004, this court granted the motions to withdraw the
reference, Before the court are the following motions: the Chubb defendants’ Motion to Dismiss
Count II (breach of the implied covenant of good faith and fair dealing)'; ABD’s Motion to
Dismiss or, in the alternative, for a more particularized statement of plaintiff's fraud claims;
HMK’s Motion to Dismiss Counts VII (negligent misrepresentation) and VIII (intentional
misrepresentation); Summit’s Motion to Dismiss; Crist’s Motion to Dismiss Count XII
(professional negligence)’; and Accordia’s Motion to Dismiss. For the reasons stated below, the
court denies all of the motions.
MOTION TO DISMISS STANDARDS

A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint for
failure to state a claim upon which relief may be granted. General Elec. Capital Corp. v. Lease
Resolution Corp., 128 F.3d 1074, 1080 (7th Cir. 1997). Dismissal is appropriate only if it

appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim that

‘The Chubb Group defendants also join the motion to dismiss filed by ABD.

2Crist also joins the motions to dismiss filed by ABD, Summit, and Accordia.

2


Illinois, 783 F.2d 716, 727 (7th Cir. 1986). Comdisco’s Complaint does not establish on its face
that the claims are time-barred. Thus, the motions to dismiss on this ground are denied.
IV. Broker Defendants - Rule 8(a)

ABD, Accordia, and Crist each argue that Comdisco’s Complaint should be dismissed for
failure to allege sufficient facts to satisfy the pleading requirements of Rule 8(a) of the Federal
Rules of Civil Procedure. First, ABD and Crist argue that Comdisco must allege specific facts
showing that its losses were covered under the relevant policies. While such facts may be
required in a fact-pleading jurisdiction, Rule 8(a) of the Federal Rules of Civil Procedure requires
no such detail. Comdisco clearly alleges ABD and Crist issued Certificates of Insurance to
Comdisco representing that Comdisco was a named insured and loss payee under the relevant
policies, that it sustained losses covered by the policies, and that the Chubb defendants have
denied Comdisco’s requests for indemnification of the losses on the grounds that Comdisco is
not an additional insured or loss payee under the policies. This is all that Rule 8 (a) requires.
ABD and Crist have sufficient notice of the substance of the allegations against them.

Similarly, Accordia argues that Comdisco must allege specific facts demonstrating how
Comdisco derives its specific damage amounts and the dates of any alleged injury. Again,
Comdisco’s Complaint satisfies the requirements of Rule 8(a). It alleges specific damages and
alleges that the damages to the equipment occurred during the effective dates of the Chubb
policies. This is all that Rule 8(a) requires.

V. Broker Defendants - Duty of Care
To state a claim for either professional negligence or negligent misrepresentation,

Comdisco must allege that the broker defendants owed Comdisco a duty of care. See Mt. Zion

13


iBeam policy issued by Federal, one of only two policies provided to Comdisco by the Chubb
defendants, contains just such a provision. (Compl., Ex. A, providing that “[a]ny person or
organization that is required to be named as loss payee under written contract, and such
requirement is evidenced by a certificate of insurance on file with the company, is added as a loss
payee.”) If similar language is included in the eLaw polic, not only was Comdisco’s reliance on
the Evidence of Insurance issued by Summit reasonable, but it may in fact mean that Comdisco is
a loss payee under the eLaw policy, despite not being specifically named in the policy. See West
Amer. Ins. Co. v. J.R. Construction Co., 777 N.E.2d 610, 615 (Ill. App. 1 Dist. 2002) (holding
that defendant was an additional insured under a policy containing a similar blanket endorsement
provision because, among other things, the insurer’s agent issued a certificate of insurance
identifying defendant as an additional insured). Since Summit has not demonstrated that the
eLaw policy did not contain similar language, the court need not consider other arguments that
Comdisco’s reliance on the Certificate of Insurance was unreasonable. Summit’s motion to
dismiss on this ground is denied.
VII. Broker Defendants - Rule 9(b)

ABD, HMK, Accordia, and Summit also argue that Comdisco’s claim for intentional
misrepresentation should be dismissed for failure to satisfy the pleading standards of Rule 9b),
Fed. R. Civ. PS Rule 9(b) requires a party alleging fraud to “at least plead with sufficient

particularity facts establishing the elements of fraud, including what misrepresentations were

SHMK also moves to dismiss Comdisco’s negligent misrepresentation claim against it for failure to satisfy
the pleading standards of Rule 9(b). Unlike intentional misrepresentation, however, negligent misrepresentation is
not subject to the heightened pleading standard of Rule 9(b). Scibetta v. Rehtmeyer, Inc., 2005 WL 331559, at *4
(ND. IIL Feb. 9, 2005); Service Auto Parts, Inc. v. Benjamin & Birkenstein, P.C., 2004 WL 2359233, at *2 (N.D.IH.
Oct.19, 2004).

16