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ACE AMERICAN INSURANCE COMPANY, INC. v. WYKURTZ Complaint

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Case: 1:13-cv-05086 Document #: 1 Filed: 07/16/13 Page 1 of 8 PageID #:1
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION ACE AMERICAN INSURANCE COMPANY, INC. Plaintiff, v. MONICA WYKURTZ, Defendant. ) ) ) ) ) ) ) ) ) )
Case No.: 13-cv-5086
PLAINTIFF’S COMPLAINT FOR DECLARATORY JUDGMENT NOW COMES Plaintiff, ACE AMERICAN INSURANCE COMPANY, INC. (“ACE”), by and through its attorneys, and for its Complaint for Declaratory Judgment, state as follows: I. PARTIES 1. ACE is a Pennsylvania corporation with its principal place of business in
Philadelphia, Pennsylvania. 2. Defendant Monica Wykurtz resides in Glenview, Illinois and is a citizen of the
State of Illinois. II. JURISDICTION AND VENUE 3. This Court has subject matter jurisdiction over this civil action because it involves
admiralty or maritime law pursuant to 28 U.S.C.A. § 1333. 4. Alternatively, this Court has subject matter jurisdiction pursuant to 28 USC §
1332 because Plaintiff and Defendant are citizens of different states and the amount in controversy exceeds $75,000.
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5.
Venue in this district is proper pursuant to 28 U.S.C. § 1391(b) because
Defendant resides in this district and the events giving rise to this action took place in this district. 6. There exists an actual and justiciable controversy regarding the parties’ legal
rights and legal relations, entitling ACE to declaratory judgment pursuant to 28 USC § 2201. III. FACTUAL ALLEGATIONS COMMON TO ALL COUNTS A. 7. 8. History of the Vessel This is an action on a policy of marine insurance issued by ACE to Defendant. The subject matter of the policy of marine insurance is a 2001 56’ Sea Ray 560
Sedan Bridge boat bearing hull identification number SER0750F001 (“Vessel”). 9. 10. 11. In October 2005, the Vessel was located at a harbor in Florida. On or around October 25, 2005, the Vessel sank in Hurricane Wilma. As a result of sinking in Hurricane Wilma, the Vessel incurred extensive damage
to its hull and was declared a total loss. 12. 13. 14. After it sank in Hurricane Wilma, the Vessel was salvaged. The boat was placed for sale through Cooper Capital Specialty Salvage LLC. In February, 2006, Defendant and/or her husband were looking for a boat to
purchase, and focused their search on salvaged boats. 15. auction. 16. Defendant and her husband were aware that the Vessel had been salvaged. In February, 2006, Defendant’s husband found the Vessel listed for sale at
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17. 18.
In February, 2006, Defendant’s husband traveled to Florida to inspect the Vessel. Defendant’s husband was aware that the Vessel had incurred damage to its hull as
a result of Hurricane Wilma. 19. 20. $125,000. 21. Exhibit “A.” 22. 23. Defendant’s husband’s bid was accepted. In March, 2006, Defendant and/or her husband purchased the Vessel for A true and correct copy of the bid to purchase the Vessel is attached hereto as Defendant’s husband was aware that the Vessel had sunk in Hurricane Wilma. On March 1, 2006, Defendant’s husband placed a bid to purchase the Vessel for
$125,000, and placed title in Defendant’s name. 24. Defendant and/or her husband transported the Vessel from Florida to Illinois after
its purchase, docked the Vessel in harbors in Chicago, Illinois, insured the Vessel for use on the “Great Lakes including the St. Lawrence River, not east of Quebec City, and inland lakes, rivers and tributaries of bordering states,” and used the Vessel on the waters of Lake Michigan. B. 25. Insurance Application and the Policy On or around July 15, 2009, Defendant’s husband signed a Marine Insurance
Application (“Application”) seeking to obtain insurance from ACE. 26. Defendant’s husband signed the Application after reading through it with the
Defendant and with his insurance agent.
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27. 28.
A true and correct copy of the Application is attached hereto as Exhibit “B.” Defendant and/or her husband represented in the Application that the purchase
price of the Vessel was $600,000, when, in fact, the actual purchase price of the Vessel was $125,000. 29. Defendant and/or her husband represented in the Application that the Vessel had
not sustained any insurance losses when, in fact, Defendant knew that the Vessel was sunk in Hurricane Wilma sustaining extensive damage. 30. Based on the information contained in the Application, ACE issued Recreational
Marine Yachtsman/Windjammer/Boatsman Insurance Policy No. YKR Y08505652 (“Policy”) to Defendant. 31. 32. A true and correct copy of the Policy is attached hereto as Exhibit “C.” The Policy provided coverage for physical loss or damage to the Vessel, subject
to all terms and conditions set forth in the Policy, for the period of June 9, 2009 to June 9, 2010. 33. Each successive year, the Policy was renewed annually under the same terms and
conditions by issuance of an annual renewal certificate, an example of which is attached hereto as Exhibit “D”. 34. The Policy provided in part:
CONCEALMENT, MISREPRESENTATION OR FRAUD: All coverage provided by us will be voided from the beginning of the Policy Period in any case of fraud by you. It is also void if you conceal or misrepresent any material fact or circumstance relating to this contract of insurance, or the application for such insurance, whether before or after a loss.
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40.
The Policy contains a choice of law provision, which provides as follows:
CHOICE OF LAW/CONFORMITY TO STATE LAW: The policy shall be construed in accordance with General Maritime Law or Admiralty Rule. In the absence of relevant General Maritime Law or Admiralty Rule, the laws of the State appearing in your address on the Declarations Page will apply. C. 35. The Insurance Claims On October 18, 2012 a storm allegedly damaged the Vessel’s hull, bridge, and
swim platform (“Storm Loss”) while in harbor in Chicago, Illinois. On or about October 21, 2011, Defendant made a claim to ACE for insurance coverage in the amount of $67,860.00 arising from the Storm Loss. 36. On or around February 11, 2013, Defendant made a separate claim for insurance
coverage in the amount of $15,000 arising from a February, 2013 burglary in which perpetrators allegedly broke the Vessel’s windows and stole electronic equipment (“Theft Loss”) while it was dry-docked in Chicago, Illinois. 37. In the course of investigating Defendant’s insurance claims for the Storm Loss
and the Theft Loss, ACE discovered that Defendant purchased the Vessel for $125,000.00 after it had sunk in Hurricane Wilma and been salvaged. 38. An actual justiciable controversy exists, as Defendant claims that she is entitled to
insurance coverage for the Storm Loss and Theft Loss, while ACE contends that the Policy is void due to Defendant’s fraud and misrepresentation in the Application. COUNT I (Rescission) 39. ACE restates and realleges paragraphs 1 through 44 as if fully set forth herein.
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40.
The Policy provides that it is void in any case of fraud by the insured, or if the
insured conceals or misrepresents any material fact or circumstance relating to the Policy or the Application, whether before or after a loss. 41. Application: (a) (b) (c) (d) 42. the true purchase price of the Vessel; that the Vessel had sustained insurance losses; that the Vessel had previously sunk; that the Vessel had sustained extensive damage to its hull. Defendant concealed or misrepresented material facts by failing to disclose in the
Defendant’s concealment and misrepresentation were material to ACE’s
assessment of the risk, and ACE’s determination of applicable policy limits, premiums, and terms of coverage. 43. As a result of Defendant’s concealment and misrepresentation, the Policy is void
ab initio, or, in the alternative, voidable by ACE. 44. Contemporaneous with filing of this Complaint for Declaratory Judgment, ACE
has issued payment to Defendant in the amount of all premiums paid under the Policy. WHEREFORE, Plaintiff, ACE AMERICAN INSURANCE COMPANY, INC., prays that this honorable Court enter judgment declaring (1) that the Policy is void ab initio, or, in the alternative, voidable by ACE; and (2) that ACE has no obligation under the Policy to provide insurance coverage for the Storm Loss or the Theft Loss. COUNT II (Maritime Doctrine of Ubberimae Fidei) 45. ACE restates and realleges paragraphs 1 through 52 as if fully set forth herein.
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46. 47.
Federal maritime law applies to the Policy. Defendant had an affirmative obligation pursuant to federal maritime law to
disclose to ACE all facts material to the Policy. 48. Defendant had an obligation pursuant to federal maritime law to exercise the
utmost good faith in applying for and obtaining the Policy. 49. disclose: (a) (b) (c) (d) 50. the true purchase price of the Vessel; that the Vessel had sustained insurance losses; that the Vessel had previously sunk; that the Vessel had sustained extensive damage to its hull. Defendant breached its obligation to act with the utmost good by failing to
Defendant’s breach of the duty of utmost good faith induced ACE to issue a
policy of marine insurance for a risk that did not meet its underwriting guidelines and criteria, and/or affected ACE’s determination of applicable policy limits, premiums, and terms of coverage. 51. As a result of Defendant’s breach of the duty of utmost good faith, the Policy is
void ab initio, or, in the alternative, voidable by ACE. 52. Contemporaneous with filing of this Complaint for Declaratory Judgment, ACE
has issued payment to Defendant in the amount of all premiums paid under the Policy.
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WHEREFORE, Plaintiff, ACE AMERICAN INSURANCE COMPANY, INC., prays that this honorable Court enter judgment declaring (1) that the Policy is void ab initio, or, in the alternative, voidable by ACE; and (2) that ACE has no obligation under the Policy to provide insurance coverage for the Storm Loss or the Theft Loss. Respectfully submitted,
Matthew S. Ponzi Matthew S. Ponzi Richard A. Buchanan Brian E. Devilling Foran Glennon Palandech Ponzi & Rudloff PC 222 North LaSalle Street, Suite 1400 Chicago, IL 60601 312.863.5000 mponzi@fgppr.com rbuchanan@fgppr.com bdevilling@fgppr.com
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