EXHIBIT 1 
IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS

COUNTY DEPARTMENT, LAW DIVISION

Steve Foley Cadillac, Inc. 

d/b/a Steve Foley Cadillac, 

Bentley of Northbrook, Steve 

Foley Rolls Royce, Rolls 

Royce Motor Cars Chicago; 

Napleton’s Auto Werks, Inc., 

d/b/a Napleton’s Audi, 

Napleton’s Honda, Napleton 

Mercedes Benz; Napleton 

6677, Inc. d/b/a Land Rover 

Rockford, Jaguar Rockford; 

and Napleton Motor Corp. 

d/b/a Napleton Porsche, 

Napleton Subaru,

Plaintiffs,

v.

New York Marine and General Insurance Company, 

and Corkill Insurance Agency, Inc.,

Defendants.

No. 20-L-6774

Calendar S

Judge Jerry A. Esrig

ORDER

New York Marine and General Insurance Company (“New 

York Marine”) moves under 735 ILCS 5/2-615 to dismiss, with 

prejudice, the complaint filed by the plaintiffs named above.

For the reasons below, the motion is granted. 

I.

A section 2-615 motion to dismiss attacks the sufficiency of 

a complaint and raises the question of whether a complaint 

states a cause of action upon which relief can be granted. Fox v. 

Seiden, 382 Ill. App. 3d 288, 294 (1st Dist. 2008). All wellpleaded facts must be taken as true and any inferences should 

be drawn in favor of the non-movant. 735 ILCS 5/2-615; Hammond v. S.I. Boo, LLC, 386 Ill. App. 3d 906, 908 (1st Dist. 

2008). Plaintiffs are not required to prove their case at the 
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pleading stage; they are merely required to allege sufficient 

facts to state all elements which are necessary to constitute 

each cause of action in their complaint. Visvardis v. Eric P. 

Ferleger, P.C., 375 Ill. App. 3d 719, 724 (1st Dist. 2007). A 

section 2-615 motion should not be granted unless no set of 

facts could be proved that would entitle the plaintiff to relief. 

Beacham v. Walker, 231 Ill. 2d 51, 58 (2008).

II.

Plaintiffs are Illinois corporations in the business of selling 

and repairing automobiles.1 Defendant New York Marine is a 

New York company in the business of selling commercial property insurance to Illinois businesses such as plaintiffs. Plaintiffs are insured by New York Marine under two policies. The 

first policy was issued to the first four plaintiffs (“Foley plaintiffs”) and the second was issued to the last three plaintiffs 

(“Napleton plaintiffs”). The policies provide identical coverage. 

In support of their complaint, plaintiffs allege the following:

As of March 9, 2020, plaintiffs sustained physical damage to 

insured property and business income losses caused by the 

COVID-19 pandemic and related governmental orders.2 Specifically, after one of plaintiffs’ executive officers, among others,

became infected with, and spread the COVID-19 virus at plaintiffs’ businesses, the presence of COVID-19 virus molecules in 

plaintiffs’ insured properties caused direct physical damage to 

the air quality, surfaces, personnel, services, and interests of 

plaintiffs. Such damage, in conjunction with Governor Pritzker’s Executive Orders, forced plaintiffs to restrict, slowdown, 

or cease ordinary business activities, causing (1) a loss of business income, (2) a substantial amount of plaintiffs’ labor force 

being furloughed, (3) a substantial amount of plaintiffs’ contracts with its labor forces being suspended or cancelled, and 

(4) an increase in expenses to continue business operations. 

Plaintiffs claim they are entitled to coverage for their losses 

pursuant to the policies issued to them by defendant and bring 

three counts for New York Marine’s failure to issue such coverage: Count I (Declaratory Judgment), Count II (Breach of 

1 For the purposes of the motion, the court takes as true the well-pleaded 

allegations of the complaint to the extent they are not contradicted by any 

exhibits attached thereto. Bd. of Managers v. Pasquinelli, Inc., 354 Ill. App. 

3d 749, 759 (1st Dist. 2004). 

2 The court takes judicial notice of the COVID-19 pandemic and related 

governmental orders issued by Governor J.B. Pritzker. 
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Contract), and Count III (Vexatious Misconduct, pursuant to 

215 ILCS 5/155). The court first examines Count II. 

III.

Under section 2-615, defendant moves to dismiss Count II 

(Breach of Contract) on grounds that (1) plaintiffs failed to 

allege a “direct physical loss of or damage to covered property” 

as required by the policies, and (2) the Virus Exclusion precludes recovery. The court agrees.

A.

To state a cause of action for breach of contract, plaintiffs 

must allege the existence of a valid and enforceable contract, substantial performance by plaintiffs, breach of 

the contract by defendants and resultant injury to plaintiffs.

Oliva v. Amtech Reliable Elevator Co., 366 Ill. App. 3d 148, 152

(2006). Where the contract is one for insurance, the burden is 

on the insured to prove that its claim falls within the scope of 

the insurance policy’s coverage. Addison Ins. Co. v. Fay, 232 Ill. 

2d 446, 453 (2009); St. Michael’s Orthodox Catholic Church v. 

Preferred Risk Mut. Ins. Co., 146 Ill. App. 3d 107, 109 (1st Dist. 

1986) (“[T]he existence of coverage is an essential element of 

the insured’s case, and the insured has the burden of proving 

that his loss falls within the terms of his policy.”). The burden 

is on the insurer, however, to affirmatively prove that an exclusion in an insurance policy applies. United Nat’l Ins. Co. v. 

Faure Bros. Corp., 409 Ill. App. 3d 711, 717 (2011) (citation 

omitted). 

Provisions that limit or exclude coverage to the insured

must be construed liberally in favor of the insured and strongly

against the insurer. United States Fire Ins. Co. v. Aetna Life &

Cas., 291 Ill. App. 3d 991, 997 (1997) (citations omitted). Nonetheless, insurance contracts are subject to the same rules of 

construction as other types of contracts, Int'l Surplus Lines

Ins. Co. v. Pioneer Life Ins. Co., 209 Ill. App. 3d 144, 148 (1990)

(citations omitted). When interpreting such contracts, the court

must not distort the meaning of the policy language to reach a

desired result, nor may the court invent ambiguities where

none exist. Id. Rather, the court must examine the contract as

a whole, give effect to the parties’ intentions, and, if the words

are unambiguous, afford them their plain, ordinary, and popular meaning. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 108 (1992) (citations omitted).
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B.

Section A (Coverage) to the Building and Personal Property 

Coverage Form attached to the policies provides that New York 

Marine will pay for “direct physical loss of or damage to 

Covered Property” resulting from any “Covered Cause of 

Loss.” See, policies attached as Exhibits A and B to the Mot. to 

Dismiss (emphasis added). “Covered Property” includes plaintiffs’ buildings, business personal property, and the personal 

property of others. Id. “Covered Causes of Loss” is defined by 

Section A to the “Causes of Loss Special Form” as “direct 

physical loss unless the loss is excluded or limited in this 

policy.” Id. (emphasis added). 

While the parties agree that to trigger coverage under the 

policies, the insured must allege a “direct physical loss of or 

damage to covered property,” the parties disagree as to what 

constitutes physical loss or damage to property sufficient to 

trigger coverage. At the outset, the Court notes that both parties cite numerous cases from other jurisdictions in their briefs 

in support of their arguments. These cases, while not binding, 

"are persuasive authority” and are “entitled to respect." Kostal

v. Pinkus Dermatopathology Laboratory, P.C., 357 Ill. App. 3d 

381 (2005). Nevertheless, “Illinois courts do not look to the law 

of other states where there is relevant Illinois case law available.” In re Estate of Walsh, 2012 IL App (2d) 110938, ¶ 45.

Plaintiffs’ claim of physical loss or damage rests on the following allegation: 

COVID-19 molecules physically infect surfaces, 

remain on infected surfaces for considerable periods of time, and can remain on infected surfaces 

for up to four weeks in low temperatures.

Complaint at ¶ 52. In other words, the COVID-19 molecules 

rest on a surface and temporarily contaminate it for a finite 

period, during and after which the surface remains unchanged. 

In this respect, the COVID-19 virus is no different than other 

viruses or bacteria which frequently, if not continually, temporarily contaminate virtually all surfaces. Such viruses and 

bacteria present threats of varying degrees to the health of 

those who come into contact with those surfaces, although, 

undoubtedly, the COVID-19 threat is extraordinary because of 

the combination of its lethality and transmissibility. 

As a matter of plain English, such temporary contamination 

does not represent physical loss of or damage to property. 
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“[B]ecause the primary objective in interpreting the provisions 

of an insurance policy is to give effect to the parties' intentions, 

where a policy provision is clear and unambiguous, its language must be taken in its plain, ordinary and popular sense.”

Id. at 303 (2001). Moreover, “the ‘usual and ordinary’ meaning 

of a phrase is 'that meaning which the particular language 

conveys to the popular mind, to most people, to the average, 

ordinary, normal [person], to a reasonable [person], to persons 

with usual and ordinary understanding, to a business [person], or to a layperson.'" Travelers Ins. Co. v. Eljer Mfg., Inc., 

197 Ill. 2d 278, 301 (2001), quoting Outboard Marine Corp., 

154 Ill. 2d 90, 116 (1992). 

In Travelers, the Illinois Supreme Court expressly held that 

“under the plain meaning of the word, a ‘physical’ injury occurs 

when property is altered in appearance, shape, color or in other 

material dimension, and does not take place upon the occurrence of an economic injury, such as diminution in value.” Id.

at 308. Here, plaintiff does not and cannot allege that its property was altered in appearance, shape, color or other material 

dimension. Temporary contamination of a surface by bacteria 

and viruses appearing naturally in the environment does not 

constitute physical damage to that surface within the usual 

and ordinary meaning of that phrase. Instead, plaintiff seeks 

to recover for diminution of value, loss of use and other economic loss as a result of contamination. 

Travelers leaves no doubt that Illinois law requires actual 

physical injury to property. Travelers specifically rejected a 

Seventh Circuit decision which held that “the term ‘physical 

injury’ does not require that the covered property actually be 

‘injured’ in a ‘physical’ sense ... , but only that the claimants suffered any ‘loss that results from physical contact, physical linkage’ with the defective ... systems.” Id at 303, quoting 

Eljer Manufacturing Corp. v. Liberty Mutual Insurance Co.,

972 F.2d 805, 810 (7th Cir. 1982). In Eljer, the Seventh Circuit 

held that physical damage to property occurred when a defective plumbing system was incorporated into a home even 

though the system had not yet actually malfunctioned. Travelers expressly rejected this holding. Thus, where the language of 

an Illinois comprehensive general liability insurance policy 

expressly requires a “physical” injury to trigger coverage, such 

language unambiguously contemplates an “alteration” to the 

covered property. Id. at 311.
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Plaintiffs rely on Illinois asbestos cases, including United 

States Fid. & Guar. Co. v. Wilkin Insulation Co., 144 Ill. 2d 64 

(1991) and Board of Educ. v. International Ins. Co., 308 Ill. 

App. 3d 597 (1997). Both of these cases were decided before 

Travelers. In rejecting Eljer, Travelers addressed Wilkin and 

asbestos as follows:

We held [in Wilkin] that "asbestos fiber contamination constitutes physical injury to tangible

property, i.e., the buildings and their contents." Although, in the Eljer majority's view, the

basis of our holding was unclear, we specifically

explained that the property was "physically" injured as a result of the presence of toxic asbestos

fibers within the structures, as "the buildings and

their contents (e.g., carpets, upholstery, drapes,

etc.) are virtually contaminated or impregnated

with asbestos fibers, the presence of which poses a

serious health hazard to the human occupants." Thus, this court concluded that "the contamination of the buildings and their contents"

due to the continuous release of these toxins constituted "physical injury" under the policies.

197 Ill. 2d at 305-06, quoting Wilkin, 144 Ill. 2d at 75, 77-78.

Clearly, like asbestos, COVID-19 represents a serious

health risk; but, unlike asbestos, the COVID-19 virus is not

“released” from components or systems which are a part of

plaintiff’s property. COVID-19 occurs naturally in the environment. And, unlike asbestos which continues to contaminate

until it is affirmatively removed or abated, COVID-19 dissipates without intervention. See Compl. ¶ 52. Moreover, there

is no legal duty to remove the COVID-19 virus from the premises, as there is with friable asbestos. See Board of Education v.

A, C & S, Inc. 131 Ill. 2d 428, 446 (1989).

To the extent plaintiffs rely on asbestos-related cases, like

Wilkin, to suggest that the Illinois Supreme Court dispensed

with the requirement that a “physical” loss be a tangible alteration to covered property, this is incorrect. First, in Wilkin and 

the other asbestos cases, the Illinois courts hold that asbestos 

contamination satisfied the “physical injury to tangible property” requirement, not that the requirement was eliminated. 

Second, Travelers was decided after Wilkin and reiterates the 

requirement of an actual physical injury. 
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Finally, in Board of Education, 131 Ill. 2d 428 (1989), the 

court cautioned that its holding “should not be construed as an 

invitation to bring economic loss contract actions within the 

sphere of tort law through the use of some fictional property 

damage.” 131 Ill. 2d 428, 445 (1989). In Illinois, the asbestos 

holdings have not been extended to cover temporary contamination from bacteria and viruses. To do so would open the door 

to an almost infinite array of contamination cases involving 

viruses and bacteria. The test for physical injury would no 

longer be a tangible impact on property, but rather the degree 

of harm to others caused by the contaminant. As a practical 

matter, this approach would dispense with a physical injury 

requirement in favor of an economic loss approach. This is 

precisely contrary to the Supreme Court’s warning in Board of 

Education. 

Plaintiffs also cite Posing v. Merit Ins Co., 258 Ill. App. 3d 

827, 824 (3rd Dist. 1994), but this case offers no support to 

plaintiffs. In Posing, plaintiff, an exterminator, obtained a 

declaration that it was entitled to a defense and indemnification from its insurer for claims brought by disgruntled customers, each of whom alleged they were required to repair their 

property as a result of termite infestations which the exterminator had failed to control. The appellate court affirmed as to 

the exterminator’s entitlement to a defense, but reversed as to 

the insurer’s duty to indemnify, finding the trial court’s determination to be premature. The insurer argued that the exterminator had not suffered any physical damage to its property, 

but the court focused on the underlying complaints, finding 

that “[f]actually, each of the underlying complaints alleges 

‘property damage’ in that the subject real estate was partially 

destroyed by pest infestation allegedly resulting from Posing's 

faulty inspection or treatment.” Id. at 834. In the case at bar,

there is no such destruction of property.

To the extent plaintiff relies on the Business Income and 

Extra Expenses Coverage Form and the Equipment Breakdown Form, its claim fails for the same reason. Each of these 

coverages requires physical damage to property. 

The Business Income Form offers coverage for the “actual 

loss of Business Income [the insured] sustain[s] due to the 

necessary ‘suspension’ of [its] ‘operations’ during the ‘period of 

restoration,’” but only where such suspension is “caused by a 

direct physical loss of or damage to property at premises.” See, 
8

Exs. A and B. For the reasons stated above, such loss or damage has not been and cannot be alleged. 

Nor do plaintiffs qualify for additional coverage as provided 

under Section 5(a) of the Business Income Form (“Civil Authority Provision) which provides as follows: 

When a Covered Cause of Loss causes damage 

to property other than property at the described 

premises, we will pay for the actual loss of Business Income you sustain and necessary Extra Expense caused by action of civil authority that 

prohibits access to the described premises, provided that both of the following apply:

(1) Access to the area immediately surrounding 

the damaged property is prohibited by civil authority as a result of the damage, and the described premises are within that area but are not 

more than one mile from the damaged property; 

and

(2) The action of civil authority is taken in response to dangerous physical conditions resulting from the damage or continuation of the 

Covered Cause of Loss that caused the damage...

Id. (emphasis added). Since a “covered cause of loss” requires 

“direct physical loss,” as discussed above, plaintiffs fail to meet 

this requirement. Moreover, plaintiffs fail to allege a damage 

to property other than at the insured premises or that the Civil 

Authority limited access to the covered premises as a result of 

damage to such other property. Here, to the extent that there 

is any limitation on access to the insured premises, it results 

from the contamination at the insured premises, not at another 

location. 

The Equipment Breakdown Coverage provides that the insured “will pay for direct physical damage to Covered Property that is the direct result of an ‘accident.’” Id. As used in 

this Additional Coverage, ‘accident’ means a fortuitous event 

that causes direct physical damage to ‘covered equipment.’”

Id. For the reasons stated above, plaintiffs have not and cannot allege direct physical damage. 

C. 

Finally, defendants argue that even if the plaintiffs alleged 

a “direct physical loss of or damage to Covered Property,” the 
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Exclusion of Loss due to Virus or Bacteria Endorsement (“Virus Exclusion”) bars recovery for the losses claimed. As stated 

above, the burden is on the insurer to affirmatively prove that 

an exclusion in an insurance policy applies. United Nat’l Ins. 

Co., 409 Ill. App. 3d 711, 717 (2011) (citation omitted). 

Section B to the Exclusion of Loss due to Virus or Bacteria 

Endorsement (“Virus Exclusion”) states that if the insured 

claims a loss due to “any virus... that induces or is capable of 

inducing physical distress, illness or disease,” New York Marine will not pay for any loss or damage caused by such virus. 

Id. (emphasis added). 

Section A provides:

The exclusion set forth in Paragraph B. applies to all coverage under all forms and endorsements that comprise this Coverage Part or 

Policy, including but not limited to forms or endorsements that cover property damage to buildings or personal property and forms or endorsements that cover business income, extra expense or action of civil authority.

Id. (emphasis added). Given the plain language of Sections A 

and B, plaintiffs are precluded from recovering for any losses or 

damages, tangible or intangible, alleged to be caused by the 

presence or harmful effects of a virus. This is true regardless of

the particular policy provision under which the insured proceeds to obtain coverage. Section E to the exclusion makes this 

explicit by stating that the terms of Section B, “or the inapplicability of this exclusion to a particular loss, do not serve to 

create coverage for any loss that would otherwise be excluded 

under this Coverage Part or Policy.” Id. 

First, despite this plain language, plaintiffs argue that the

policies are ambiguous with respect to whether the Virus Exclusion applies to plaintiffs’ damages. The court finds no such 

ambiguity. At the risk of repetition, the Virus Exclusion applies to “all coverage under all forms and endorsements.” 

There is nothing remotely ambiguous about this language. 

Second, plaintiffs argue that the Virus Exclusion is not relevant where plaintiffs have alleged, in the alternative, that 

their buildings were rendered unusable due to the Executive 

Orders which suspended their operations. First, this argument 

ignores the obvious fact that the Executive Orders were issued 

in response to the virus. Second, plaintiffs fail to identify any 
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provision of the policy which affords coverage for any losses 

arising out of actions taken by the government absent physical 

damage to property. 

IV.

Under section 2-615, New York Marine moves to dismiss 

Count I (Declaratory Judgment). The essential requirements 

of a declaratory judgment action are: (1) a plaintiff with a legal

tangible interest; (2) a defendant having an opposing interest; 

and (3) an actual controversy between the parties concerning 

such interests. Beahringer v. Page, 204 Ill. 2d 363, 372 (2003)

(emphasis added). In light of the court’s ruling with respect to 

Count II (Breach of Contract), plaintiffs do not state a claim for 

a declaratory judgment action, as there is not an actual controversy between the parties. The motion is granted. 

V.

Under section 2-615, New York Marine moves to dismiss 

Count III (Vexatious Conduct, pursuant to 215 ILCS 5/155) on 

grounds that where a bona fide dispute concerning the scope 

and application coverage exists, or where the underlying claim 

is dismissed, sanctions pursuant to section 155 are inappropriate. The court agrees. 

Under 215 ILCS 5/155, a party may recover attorneys’ fees, 

costs and sanctions where an insurer has unreasonably delayed settling a claim and where that delay is “vexatious and 

unreasonable.” Where a bona fide dispute concerning coverage

exists, costs and sanctions pursuant to section 155 are inappropriate. Cook v. AAA Life Ins. Co., 2014 IL App (1st) 123700,

¶ 49, citing State Farm Mutual Automobile Insurance Co. v.

Smith, 197 Ill. 2d 369, 380 (2001). Further, where no coverage 

is owed under a policy, there can be no finding that the insurer 

acted vexatiously or unreasonably with respect to the claim. 

Joseph T. Ryerson & Son, Inc. v. Travelers Indem. Co. of Am., 

2020 IL App (1st) 182491, ¶ 48 (citations omitted).

Where, as here, the court finds that plaintiffs are not entitled to property coverage under the policies on the grounds

alleged, section 155 sanctions are inappropriate. In light of this 

court’s above ruling related to Count II (Breach of Contract), 

then, the court likewise grants the motion to dismiss Count III. 
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* * * *

Based on the foregoing,

(1) The section 2-615 motion to dismiss is granted, and 

Counts I, II, and III against New York Marine are 

dismissed with prejudice;

(2) The case-management conference set for March 5, 

2021 at 9:00 shall stand as to the pending motion of 

Corkill Insurance Agency, Inc. No appearance is 

necessary. 

Failure to comply may result in dismissal for want of prosecution or entry of a default order.

 

ENTERED:

_______________________________ 

Honorable Jerry A. Esrig

Circuit Judge, Law Division

Dated: February 19, 2021