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Lee v. State Farm Fire & Cas. Co.

Lee v. State Farm Fire & Cas. Co.

Appellate Court of Illinois, First District, First Division

March 21, 2022, Decided

No. 1-21-0105

Opinion

JUSTICE COGHLAN delivered the judgment of the court, with opinion.

Presiding Justice Hyman and JusticeWalker concurred in the judgment and opinion.

 [*P1]  As a result of the business closure orders due to the coronavirus disease 2019 (COVID-19), many businesses across the country filed claims for business interruption coverage with their insurance carriers, which were denied. In fact, "[a]s of the week ending June 28, 2021, a total of 1,937 business interruption lawsuits ha[d] been filed." [**2] 1 This is one such lawsuit.

 [*P2]  In this insurance coverage dispute, plaintiff Jaewook Lee, d/b/a Evanston Grill (Evanston Grill), individually and on behalf of similarly situated individuals, appeals the dismissal of its complaint pursuant to section 2-615 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2020)), seeking a declaratory judgment that its business interruption claim was a "covered cause of loss" under the businessowners policy issued by defendant State Farm Fire and Casualty Company (State Farm). Evanston Grill also seeks reversal of the circuit court's dismissal of its breach of contract count and bad faith denial of insurance in violation of section 155 of the Illinois Insurance Code (215 ILCS 5/155 (West 2020)) count, both stemming from the same denial of coverage. We affirm.

 [*P3]  I. BACKGROUND

 [*P4]  Hyun Lee and his father, Jaewook Lee, owned and operated Evanston Grill, which is a restaurant located in Evanston, Illinois. State Farm is an insurance company engaged in the business of insuring properties and "is authorized to write, sell, and issue insurance policies providing property and business income coverage." State Farm sold and issued "property coverage to Evanston Grill" (policy No. 93-KH-H688-5) for the policy period of August 15, [**3]  2019, to August 15, 2020 (policy).

 [*P5]  On March 16, 2020, Illinois Governor J. B. Pritzker issued Executive Order 2020-07 in response to "the ongoing spread of COVID-19 and the danger the virus poses to the public's health and wellness," ordering that "Beginning March 16, 2020 at 9 p.m. through March 30, 2020, all businesses in the State of Illinois that offer food or beverages for on-premises consumption—including restaurants, bars, grocery stores, and food halls—must suspend service for and may not permit on-premises consumption." Exec. Order No. 2020-07, 44 Ill. Reg. 5536 (Mar. 16, 2020), https://www2.illinois.gov/Documents/ExecOrders/2020/ExecutiveOrder-2020-07.pdf [https://perma.cc/6AQN-FBAS]. On March 20, 2020, Governor Pritzker issued Executive Order 2020-10, directing that "Non-essential business and operations must cease" and "all individuals *** are ordered to stay at home or at their place of residence except as allowed in this Executive Order." (Emphasis omitted.) Exec. Order No. 2020-10, 44 Ill. Reg. 5857 (Mar. 20, 2020), https://www2.illinois.gov/Documents/ExecOrders/2020/ExecutiveOrder-2020-10.pdf [https://perma.cc/3GXY-UM64].

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2022 IL App (1st) 210105 *; 2022 Ill. App. LEXIS 130 **

JAEWOOK LEE, d/b/a Evanston Grill, Individually and on Behalf of a Class of Similarly Situated Individuals, Plaintiff-Appellant, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant-Appellee.

Prior History:  [**1] Appeal from the Circuit Court of Cook County, No. 20-CH-04589; the Hon. Allen Price Walker, Judge, presiding.

Lee v. State Farm Fire & Cas. Co., 2021 Ill. Cir. LEXIS 1 (Ill. Cir. Ct., Jan. 13, 2021)

CORE TERMS

coverage, physical loss, virus, business interruption, cause of loss, closure order, losses, circuit court, economic loss, accidental, motion to dismiss, insurance policy, properly dismiss, executive order, policy language, declaratory, triggered, induces, insure

Insurance Law, Marine & Inland Marine Insurance, Coverage, All Risk, Property Insurance, All Risks, Civil Procedure, Appeals, Standards of Review, De Novo Review, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Claim, Contract & Practice Issues, Policy Interpretation, Judicial Review, Ordinary & Usual Meanings, Reasonable Expectations, Reasonable Person, Questions of Fact & Law, Commercial General Liability Insurance, Exclusions, Economic Loss Exclusions