Admiral Indemnity Company v. Otis Elevator Company

CourtDistrict Court, N.D. Illinois
DecidedSeptember 22, 2021
Docket1:20-cv-04597
StatusUnknown

This text of Admiral Indemnity Company v. Otis Elevator Company (Admiral Indemnity Company v. Otis Elevator Company) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Admiral Indemnity Company v. Otis Elevator Company, (N.D. Ill. 2021).

Opinion

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

ADMIRAL INDEMNITY COMPANY, ) as subrogee of INFUSION MANAGEMENT ) GROUP, INC., et al., ) ) Plaintiffs, ) ) No. 20-cv-04597 v. ) ) Judge Andrea R. Wood OTIS ELEVATOR COMPANY, ) ) Defendant. )

MEMORANDUM OPINION AND ORDER Infusion Management Group, Inc. (“Infusion”) owns and operates The Signature Room (“Property”), an upscale restaurant on the 95th floor of a 100-story mixed-use skyscraper located at 875 North Michigan Avenue (“Building”) in Chicago. Defendant Otis Elevator Company (“Otis”) is an elevator installation and maintenance company. Infusion and its insurer, Admiral Indemnity Company (“Admiral,” and collectively with Infusion, “Plaintiffs”), allege that on November 16, 2018, one of the passenger elevators in the Building malfunctioned and crashed, preventing customers from accessing the Property. Plaintiffs contend that Otis was negligent in maintaining the elevators. Now before the Court is Otis’s motion to dismiss Plaintiffs’ Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (Dkt. No. 14.) For the reasons stated below, the motion is granted. BACKGROUND For purposes of deciding motions to dismiss, the Court accepts as true all well-pleaded factual allegations in the complaint and views them in the light most favorable to the plaintiff. See, e.g., Lavalais v. Village of Melrose Park, 734 F.3d 629, 632 (7th Cir. 2013). As set forth in Plaintiffs’ Amended Complaint here, Infusion owns and operates the Property, an upscale restaurant on the 95th floor of the Building. (Am. Compl. ¶ 7, Dkt. No. 12.) The Property’s landlord is the John Mutual Life Insurance Company (“Landlord”). (Id. ¶ 36.) Infusion’s lease requires the Landlord to provide working passenger elevators by which customers access the Property. (Id. ¶ 38.) The Building retained Otis to maintain its passenger elevators. (Id.

¶¶ 9, 11.) Plaintiffs have not alleged that they held any contractual relationship directly with Otis. On November 16, 2018, one of the two passenger elevators servicing the Property malfunctioned and fell suddenly and catastrophically, injuring passengers inside. (Id. ¶ 16.) That same day, both elevators were shut down by the City of Chicago due to safety concerns and to complete repairs. (Id. ¶ 17.) The passenger elevators were not functional for a month, during which time customers were unable to access the Property. (Id. ¶ 18.) As a result, Infusion suffered losses of income, unreimbursed costs, and perishable inventory (i.e., spoiled food). (Id.)1 Admiral, as Infusion’s insurer, reimbursed Infusion for “loss of business income and additional property damage.” (Id. ¶¶ 22–23.) Plaintiffs have now filed this lawsuit to recover damages for lost profits

and the spoiled food. Plaintiffs assert three counts against Otis. Count I asserts a negligence claim based on the allegation that Otis negligently installed, inspected, and maintained the passenger elevators. Count II advances a negligence claim under the heading res ipsa loquitur, claiming that the passenger elevators were in the sole and exclusive care of Otis and that the elevator malfunction would not have occurred in the absence of Otis’s negligence. Finally, Count III asserts a breach of contract

1 Although Plaintiffs’ Amended Complaint does not specify what kind of “perishable inventory” spoiled, their response brief clarifies that they are referring to “spoiled and perishable food.” (Pls.’ Resp. at 11, Dkt. No. 21.) See Help At Home, Inc. v. Med. Cap., L.L.C., 260 F.3d 748, 752–53 (7th Cir. 2001) (explaining that a plaintiff may add facts “by affidavit or brief” in response to motion to dismiss if they are “consistent with the allegations of the complaint.”). claim based on the contention that Plaintiffs are third-party beneficiaries of the Landlord-Otis contract (“Otis Contract”) and that Otis breached the contract. DISCUSSION “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.” Autry v. Nw. Premium Servs., Inc., 144

F.3d 1037, 1039 (7th Cir. 1998). In its exercise of diversity jurisdiction, this Court applies state substantive law—in this case, Illinois law—and federal procedural law to its consideration of Plaintiffs’ claims. Charter Oak Fire Ins. Co. v. Hedeen & Companies, 280 F.3d 730, 735 (7th Cir. 2002). Federal Rule of Civil Procedure 8(a) requires a complaint to contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). To survive a Rule 12(b)(6) motion to dismiss, a complaint must “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although a complaint need not include detailed factual allegations, there “must be enough to raise a right to relief above the speculative level.” Id. at 555. The plaintiff must “plead[] factual content that

allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “Where a complaint pleads facts that are merely consistent with a defendant’s liability, it stops short of the line between possibility and plausibility of entitlement to relief.” Id. (internal quotation marks omitted). I. Breach of Contract The Court turns first to Count III. In that count, Plaintiffs contend that Otis breached its contractual duty to safely maintain the elevators and that Plaintiffs are entitled to damages as third-party beneficiaries under the Otis Contract. Under Illinois law, “there is a strong presumption that parties to a contract intend that the contract’s provisions apply to only them and not to third parties. To overcome that presumption, the implication that the contract applies to third parties must be so strong as to be practically an express declaration.” Ball Corp. v. Bohlin Bldg. Corp., 543 N.E.2d 106, 107 (Ill. App. Ct. 1989). “That the contracting parties know, expect, or even intend that others will benefit from their

agreement is not enough to overcome the presumption.” Martis v. Grinnell Mut. Reinsurance Co., 905 N.E.2d 920, 924 (Ill. App. Ct. 2009). Instead, “[i]t must appear from the language of the contract that the contract was made for the direct, not merely incidental, benefit of the third person.” Id. However, “[i]t is not necessary that a contract for the benefit of a third party identify him by name. The contract may define a third party by description of a class.” Altevogt v. Brinkoetter, 421 N.E.2d 182, 187 (Ill. 1981). Along with its motion to dismiss, Otis has attached a copy of what it contends is the Otis Contract. (Def.’s Mot., Ex. A, Otis Contract, Dkt. No. 14.) Generally, this document could be appropriately considered by the Court, as “[d]ocuments that a defendant attaches to a motion to

dismiss are considered part of the pleadings if they are referred to in the plaintiff’s complaint and are central to her claim.” Venture Assocs. Corp. v.

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