CC-Development Group, Inc. v. Evanston Insurance Co.

2025 IL App (1st) 230863-U

• Court: Appellate Court of Illinois
• Decided: January 13, 2025
• Docket: 1-23-0863
• Status: Unpublished

Opinion

2025 IL App (1st) 230863-U No. 1-23-0863

FIRST DIVISION January 13, 2025

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1). ____________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT ____________________________________________________________________________

CC-DEVELOPMENT GROUP, INC.; CC- ) Appeal from the Circuit Court DENVER, INC.; CC-HILTON HEAD, INC.; CC- ) of Cook County, Illinois, NAPLES, INC.; CC-AVENTURA, INC.; CC- ) LAKE, INC.; CC/PDR SCOTTSDALE, L.L.C.;) CC/PDR SILVERSONE, L.L.C.; CC-PALO ) ALTO, INC.; CCW LA JOLLA, L.L.C.; CC-LA ) No. 2022 CH 2164 JOLLA, INC.; MERIDIAN PARK VILLAGE ) LIMITED PARTNERSHIP; CLASSIC ) RESIDENCE MANAGEMENT LIMITED ) PARTNERSHIP; and CLASSIC BENTLEY ) VILLAGE, INC., ) The Honorable ) Celia Gamrath, Plaintiffs-Appellants, ) Judge Presiding. ) ) ) v. ) ) EVANSTON INSURANCE COMPANY and ) LANDMARK AMERICAN INSURANCE ) COMPANY, ) ) Defendants-Appellees, ) ) (AXIS SURPLUS INSURANCE COMPANY; ) CERTAIN UNDERWRITERS AT LLOYD’S ) AND COMPANIES SUBSCRIBING TO POLICY ) NUMBERS PD-10584-05, B080120001U19, ) B080112090U19, B080115732U19; CERTAIN ) UNDERWRITERS AT LLOYD’S, LONDON ) 1-23-0863

SYNDICATE 2987 (BRIT); EVEREST ) INDEMNITY INSURANCE COMPANY; ) HALLMARK SPECIALTY INSURANCE ) COMPANY; HOMELAND INSURANCE ) COMPANY OF NEW YORK; IRONSHORE ) SPECIALTY INSURANCE COMPANY; ) MITSUI SUMITOMO INSURANCE COMPANY ) OF AMERICA; WESTPORT INSURANCE ) CORPORATION; LLOYD’S UNDERWRITER ) SYNDICATE NO. 2001 AML; XL CATLIN ) INSURANCE COMPANY UK LIMITED; ) UNICORN WORLDWIDE PROPERTY ) LIMITED 9417-ARG2121; LLOYD’S ) UNDERWRITER SYNDICATE NO. 1200 AMA; ) LLOYD’S UNDERWRITER SYNDICATE NO. ) 2988 BRIT; LLOYD’S UNDERWRITER ) SYNDICATE NO. 318 CIN; CONVEX ) INSURANCE UK LIMITED; LLOYD’S ) UNDERWRITER SYNDICATE NO. 2015 CHN; ) HOUSTON CASUALTY COMPANY (UK ) BRANCH); CERTAIN UNDERWRITERS AT ) LLOYD’S OF LONDON RENAISSANCE RE ) SYNDICATE 1458; CANOPIUS RE ) SYNDICATE 4444; ENDURANCE ) WORLDWIDE INSURANCE LTD.; AMTRUST ) SYNDICATE 1861; HDI GLOBAL SPECIALTY ) SE; WESTERN WORLD INSURANCE ) COMPANY; NAVIGATORS SPECIALTY ) INSURANCE COMPANY; GENERAL ) SECURITY INDEMNITY COMPANY OF ) ARIZONA; LEXINGTON INSURANCE ) COMPANY; STARR SURPLUS LINE ) INSURANCE COMPANY; INDEPENDENT ) SPECIALTY INSURANCE COMPANY; ) CERTAIN UNDERWRITERS AT LLOYD’S ) (CONSORTIUM #9226); VELOCITY ) PROPERTY CONSORTIUM 9226, ) SUBSCRIBING TO POLICY NUMBER VIS-CN- ) 000681-03; LLOYD’S UNDERWRITERS ) SYNDICATE 2357; LLOYD’S UNDERWRITER ) SYNDICATE 1458; and INTERSTATE FIRE & ) CASUALTY COMPANY, ) ) Defendants.) )

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JUSTICE PUCINSKI delivered the judgment of the court. Presiding Justice Fitzgerald Smith and Justice Lavin concurred in the judgment.

ORDER

¶1 Held: The circuit court properly dismissed plaintiffs’ claims for “Crisis Management” insurance coverage against both Evanston and Landmark because plaintiffs’ claimed losses were excluded by separate endorsements in Evanston and Landmark’s policies. The circuit court also properly dismissed plaintiffs’ claim for “Contaminated Food/Communicable Disease” coverage against Evanston. However, we reverse the dismissal of plaintiffs’ claim for “Contaminated Food/Communicable Disease Coverage” against Landmark. We thus affirm in part but reverse in part.

¶2 In this insurance coverage dispute arising from alleged losses due to the COVID-19

pandemic, plaintiffs-appellants appeal from the circuit court order granting motions to dismiss by

defendants-appellees Evanston Insurance Company (Evanston) and Landmark American

Insurance Company (Landmark). The circuit court concluded that separate exclusions contained

in endorsements in the policies issued by Landmark and Evanston precluded plaintiffs’ claims for

two types of coverage: “Crisis Management” coverage and “Contaminated Food/Communicable

Disease” coverage.

¶3 For the following reasons, we affirm in part but reverse in part. As to Evanston, we

conclude that: (1) the circuit court properly dismissed plaintiffs’ claims for “Crisis Management”

coverage as barred by Evanston’s “Organic Pathogens” exclusion.” We also affirm plaintiffs’

claim against Evanston for “Contaminated Food/Communicable Disease Coverage” as barred by

the same exclusion. Thus, we affirm the dismissal of claims against Evanston.

¶4 As to Landmark, we affirm dismissal of plaintiffs’ claims for “Crisis Management”

coverage, as barred by Landmark’s “Exclusion of Pathogenic or Poisonous or Chemical Materials.

However, we reverse the dismissal of plaintiffs’ claim against Landmark for “Contaminated

Food/Communicable Disease Coverage”, because we agree with plaintiffs that application of

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Landmark’s “Exclusion of Pathogenic or Poisonous or Chemical Materials” would completely

eviscerate that coverage and render it illusory. Thus, plaintiffs may proceed with their claim for

that specific coverage against Landmark. We otherwise affirm the circuit court’s order.

¶5 BACKGROUND

¶6 This dispute arose after numerous insurers, including Evanston and Landmark, denied

plaintiffs’ claims for coverage for alleged losses related to the COVID-19 pandemic.

¶7 Plaintiffs operate a number of continuing care retirement communities, under the brand

“Vi” or “Vi Senior Living.” Plaintiffs’ facilities offer a variety of living arrangements for senior

citizens, including independent living, assisted living, skilled nursing care, Alzheimer’s care, and

memory care. Plaintiffs’ facilities are in six states and have more than 4,000 residents. In 2020,

the facilities were allegedly “inundated with COVID-19 causing significant physical damage,

suspension of operations, clean-up costs and efforts to prevent the further spread” of the disease.

¶8 At the relevant time, plaintiffs had policies from several insurers, both primary insurers

and excess insurers. Although plaintiffs named numerous insurers as defendants, this specific

appeal pertains only to two defendants: Evanston, an excess insurer, and Landmark, a primary

insurers. It is undisputed that the defendant insurers, including Evanston and Landmark, issued

policies to plaintiffs that were in effect from December 31, 2019 to December 31, 2020.

¶9 Relevant Coverage Provisions

¶ 10 As alleged by plaintiffs, all of the defendant insurers’ relevant policies adopted the same

master policy form and contained the same general terms. The policies (including those issued by

Evanston and Landmark) contained a number of identical coverage provisions. Plaintiffs allegedly

suffered losses implicating four of those coverages: (1) “Contaminated Food/Communicable

Disease Coverage”; (2) “Crisis Management” coverage; (3) “Interruption by Communicable

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Disease” coverage; and (4) “Preservation of Property Coverage.” The instant appeal concerns

dismissal of plaintiffs’ claims against Evanston and Landmark for two of those coverages, the

“Contaminated Food/Communicable Disease Coverage” and “Crisis Management” coverage.

¶ 11 As to the first of these coverages, each defendant’s policy stated, under the heading

“CONTAMINATED FOOD/COMMUNICABLE DISEASE COVERAGE”, that: “This policy

will pay for” “direct physical loss or damage to insured property caused by or resulting from a

contaminated food or communicable disease event at an insured location.”

¶ 12 Each defendant’s policy also set forth “Crisis Management” coverage in a provision

entitled “CRISIS MANAGEMENT COVERAGE EXTENSION”, which stated “This policy is

extended to cover additional cost for communication response and actual loss of Gross Earnings

and Extra Expense due to a covered crisis event.” The provision then set forth a number of types

of “Covered crisis event[s].”

¶ 13 Although not directly at issue in the appealed-from order, the plaintiffs also sued the

defendant insurers under two separate coverage provisions. The “Interruption by Communicable

Disease” provision set forth coverage for losses resulting from suspension of business activities

caused by an order of a governmental agency. The defendants’ policies also provided

“PRESERVATION OF PROPERTY” coverage for expenses incurred “for the temporary

protection and preservation of property” when there was “actual or imminent direct physical loss,

damage or destruction by a peril insured by this policy.”

¶ 14 The relevant coverage provisions were identical in the defendant insurers’ policies.

However, Evanston and Landmark included endorsements with exclusions that purported to limit

the scope of coverage. The trial court relied on those exclusions in the appealed-from order.

¶ 15 The Evanston Policy and Its “Organic Pathogens” Exclusion

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¶ 16 Evanston’s policy included language indicating that it was one of a number of excess

insurers providing coverage to plaintiffs and limiting its liability to its “pro-rata” share of coverage

among plaintiffs’ other insurers. The policy specified that Evanston provided coverage at a

percentage of two excess layers: “$5,000,000 (9.090901%) part of $55,000,000 excess of

$25,000,000 PLUS $15,000,000 (8.82353%) part of $170,000,000 excess of $80,000,000.” In

other words, Evanston provided $5 million of $55 million in coverage in excess of $25 million. In

addition, Evanston provided $15 million in coverage for losses in excess of 80 million.

¶ 17 The Evanston policy included a number of endorsements, each of which was prefaced by

the language “THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT

CAREFULLY.” Central to this appeal, Evanston’s policy included an endorsement entitled

“EXCLUSION – ORGANIC PATHOGENS,” (hereinafter the “Organic Pathogens” exclusion”)

which stated: “This endorsement modifies insurance provide under all Property coverage forms

attached to this policy.”

¶ 18 Evanston’s Organic Pathogens exclusion provided:

“The following exclusion is added and is therefore not a Covered

Cause Of Loss:

We will not pay for loss or damage caused directly or indirectly by

any of the following. Such loss or damage is excluded regardless

o[f] any other cause or event that contributes concurrently or in

any sequence to the loss.

Organic Pathogens

Presence, growth, proliferation, spread or any activity of ‘organic

pathogens’.”

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¶ 19 The endorsement defined “Organic pathogen” to mean:

“a. Any organic irritant or contaminant including, but not limited to,

‘fungus,’ wet or dry rot, bacteria, virus or other microorganisms of

any type, and their by-products ***; or

b. Any disease-causing agent as classified by the Environmental

Protection Agency.”

¶ 20 Landmark’s “Exclusion of Pathogenic or Poisonous Biological or Chemical

Materials”

¶ 21 The Landmark policy also contained a number of endorsements that contained the heading:

“This Endorsement Changes the Policy. Please Read It Carefully.” Among these, Landmark’s

policy included an endorsement entitled “EXCLUSION OF PATHOGENIC OR POISONOUS

BIOLOGICAL OR CHEMICAL MATERIALS” that stated that it modified “ALL

COVERAGE PARTS.” That endorsement stated, in relevant part:

“The following exclusion is added:

We will not pay for loss or damage caused directly or indirectly by the discharge, dispersal, seepage, migration, release, escape or application of any pathogenic or poisonous biological or chemical materials. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.”

We refer to this as the “Landmark exclusion” or the “Pathogenic or Poisonous Biological or

Chemical Materials” exclusion.

¶ 22 Commencement of Litigation

¶ 23 In March 2022, plaintiffs filed a “Complaint for Declaratory Judgment, Breach of Contract

and Damages” against numerous insurers including Evanston and Landmark. Plaintiffs alleged

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that the insurers wrongfully denied coverage on plaintiffs’ claims for losses arising from Covid-

19, “including outbreaks of COVID-19 among residents and staff at Vi Senior Living’s continuing

care retirement communities.”

¶ 24 Plaintiffs alleged that in April 2020, “operations were impaired and/or suspended” at their

senior living facilities due to Covid-19, and that they incurred “clean-up costs and effort to prevent

the further spread” of the disease. Plaintiffs alleged that they notified the defendant insurers but

they “simply turned their backs and denied the claims without any material investigations.”

¶ 25 In the complaint, plaintiffs alleged that they had incurred “in excess of $19.7 million in

covered losses.” They pleaded that their losses implicated the four previously referenced

coverages: (1) “Contaminated Food/Communicable Disease Coverage”; (2) “Interruption by

Communicable Disease” coverage; (3) “Crisis Management” coverage; and (4) “Preservation of

Property Coverage.”

¶ 26 Plaintiffs’ complaint included six counts for declaratory judgment and breach of contract.

Count I sought a general declaration that they were “entitled to coverage for each occurrence of

COVID-19 for which it individually suffered loss within the meaning of the Policies.” The ensuing

four counts sought a specific declaration as to Plaintiffs’ right to coverage each of the four

referenced coverages. That is, count II pertained to Crisis Management coverage; count III

pertained to Interruption by Communicable Disease coverage; count IV pertained to

Communicable Disease coverage; and count V pertained to Preservation of Property coverage.

The sixth and final count pleaded breach of contract for the defendants’ denial of plaintiffs’ claims,

which allegedly breached the relevant policies.

¶ 27 Insurers’ Partial Motion to Dismiss

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¶ 28 On August 23, 2022, certain of the insurer defendants filed a partial motion to dismiss, in

which they sought dismissal of all counts, except the “Contaminated

Food/CommunicableDisease” count IV. 1 That is, the partial motion to dismiss urged that plaintiffs

did not allege facts that implicated (1) “Preservation of Property” coverage; (2) “Crisis

Management” coverage, or (3) “Interruption by Communicable Disease” coverage.

¶ 29 Although Evanston and Landmark joined in the partial motion to dismiss, they also filed

separate motions to dismiss pursuant to section 2-615 of the Code of Civil Procedure (735 ILCS

5/2-615), relying on the language specific to their policies.

¶ 30 Evanston’s Motion to Dismiss

¶ 31 Evanston’s motion asserted two additional independent grounds upon which it was entitled

to dismissal. First, it argued that the “Organic Pathogens” exclusion precluded coverage, as it

stated that Evanston would not pay for loss or damage caused by “organic pathogens” which were

defined to include “any virus.” Evanston argued that this precluded coverage for any of the

plaintiffs’ alleged losses resulting from Covid-19.

¶ 32 As a second basis for dismissal, Evanston independently urged that plaintiffs’ “alleged

losses cannot reach Evanston’s attachment point” of $25 million. Evanston stated that under its

policy, it “cannot have any liability unless Plaintiffs have suffered a per-occurrence loss in excess

of $25 million” but plaintiffs’ complaint alleged only $19.7 million in covered losses. Evanston

claimed that plaintiffs’ claims “c[ould] never reach Evanston’s per-occurrence attachment point

of $25 million.”

¶ 33 Landmark’s Motion to Dismiss

1 The moving insurers included Evanston and Landmark as well as a number of other defendants .

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¶ 34 In a separate filing, Landmark sought dismissal of all claims against it based on its

endorsement containing the “Exclusion of Pathogenic or Poisonous Biological or Chemical

Materials.” Landmark maintained that Covid-19 is a “pathogenic and biological substance” and

thus its “biological or chemical materials exclusion applies to bar coverage for Plaintiffs’ claims.”

¶ 35 Plaintiffs’ Opposition to the Motions

¶ 36 Plaintiffs filed an “Omnibus Opposition to Defendants’ Motions to Dismiss”, which

addressed the various motions filed by defendants. In response to Evanston and Landmark’s

motions, plaintiffs argued that the referenced endorsements could not be interpreted to bar

coverage in this case, as to do so “would render the Communicable Disease Coverages entirely

illusory” and meaningless. Plaintiffs noted the proposition that exclusions that “render coverage

entirely illusory violate public policy.” Plaintiffs posited that if Evanston’s and Landmark’s

exclusions “apply to all loss and harm caused by viruses *** the Communicable Disease

Coverages would be entirely meaningless.” Plaintiffs acknowledged that “COVID-19 is caused by

a virus (which is a pathogenic material).” Nevertheless, plaintiffs argued that the exclusions could

not be construed as broadly as urged by Evanston and Landmark, as this interpretation would

“nullify the Communicable Disease Coverages entirely.”

¶ 37 Citing non-Illinois case law, plaintiffs urged that where there is a conflict between a

coverage provision for communicable disease “and a purported virus exclusion,” courts should

find the policy is “ambiguous, and that the virus exclusion must be narrowly construed in order to

avoid nullifying the communicable disease coverages.” Plaintiffs also argued that the Landmark

and Evanston’s exclusions did not “clearly and unambiguously *** delete the Communicable

Disease Coverages.” Plaintiffs suggested that Evanston and Landmark should have used “clear

and unmistakable language” that if they “wanted to eliminate coverage for communicable disease.”

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¶ 38 Regarding Evanston’s independent claim that plaintiffs could not reach the $25 million

attachment point, plaintiffs noted that their complaint alleged that they had incurred “more than

$19,700,000 in covered losses.” Plaintiffs also stated that they had since determined that their

losses had, in fact, exceeded $25 million.

¶ 39 The Order on the Partial Motion to Dismiss Finds Plaintiffs Did Not Allege “Interruption

by Communicable Disease” or “Preservation of Property” Coverage

¶ 40 On April 10, 2023, the circuit court entered two companion orders, which (1) granted the

moving insurers’ partial motion to dismiss in part as to two of the coverages and (2) granted

Evanston and Landmark’s motions to dismiss on the remaining coverages. Only the second order

is challenged in this appeal, but a review of the first order aids in defining the limited issues on

this appeal.

¶ 41 In the first order, the circuit court granted the partial motion to dismiss with respect to two

of the four asserted coverages. Specifically, the court dismissed plaintiffs’ claim for “Interruption

by Communicable Disease” coverage (count III), because plaintiffs failed to plead that any

governmental order declared their facilities uninhabitable. The court also dismissed the claim for

Preservation of Property coverage (count V), because that coverage required some “direct physical

loss, damage or destruction” but “COVID-19 does not cause or result in direct physical loss or

damage to property. [Citations.]” However, the court declined to dismiss plaintiffs’ count

pertaining to “Crisis Management” coverage (count II). 2 Thus, after the court’s ruling on the partial

motion to dismiss, plaintiffs’ remaining claims pertained to only two of the coverages:

“Contaminated Food/Communicable Disease” and “Crisis Management.” Notably, the propriety

2 In the same order, the circuit court dismissed count I as duplicative of the other declaratory judgment counts. It further determined that the breach of contract count (count V) remained intact “only as to the Contaminated Food/Communicable Disease and Crisis Management Coverages, Counts IV and II.”

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of the dismissal of the claims for Interruption by Communicable Disease and Preservation of

Property coverage are not at issue in this appeal. Rather, the appealed-from order is the separate

order dismissing the remaining claims against Evanston and Landmark.

¶ 42 The Circuit Court Grants Evanston and Landmark’s Motions to Dismiss

¶ 43 On the same date that it ruled on the partial motion to dismiss, the court entered a separate

order (the subject of this appeal) in which it granted both Evanston and Landmark’s motions to

dismiss the claims against them, with prejudice. In that order, the court determined that Evanston’s

“Organic Pathogens” exclusion and Landmark’s “Exclusion of Pathogenic or Poisonous

Biological or Chemical Materials” precluded plaintiffs’ claims for coverage.

¶ 44 The court recognized that, in light of its simultaneous order on the partial motion to dismiss,

“the only viable coverages that remain are the Contaminated Food/Communicable Disease

Coverage and the Crisis Management Coverage.” The court then determined that plaintiffs’ claim

for either of these two coverages was precluded by the exclusions in Evanston and Landmark’s

endorsements.

¶ 45 The circuit court observed that Evanston’s exclusion defined an “organic pathogen” to

include a “virus.” With respect to Landmark’s exclusion, it found “a virus like COVID-19 is a

pathogenic biological material and, thus, is covered under this exclusion.” The circuit court

observed that no Illinois appellate court had yet discussed application of such an exclusion in a

Covid-19 case, but that courts in other states had found “similar pathogen exclusions nearly

identical to those in Landmark’s and Evanston’s policies bar coverage of loss or damage caused

by Covid-19.”

¶ 46 The circuit court also specifically rejected plaintiffs’ argument that the exclusions would

render “illusory” the applicable coverage provisions. The circuit court reasoned that “To be

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illusory, the coverages would have to be ‘swallowed up’ or functionally nonexistent due to the

exclusions.”

¶ 47 The circuit court determined that neither the “Contaminated Food/Communicable Disease

Coverage” or the “Crisis Management” coverage was rendered illusory by the exclusions. With

respect to the “Contaminated Food/Communicable Disease” coverage, the court reasoned: “while

a virus is no longer covered due to the exclusions, this coverage still remains applicable to a

contaminated food event.” The court also found that “Crisis Management” coverage “still

maintains a variety of different scenarios in which coverage would apply” notwithstanding the

exclusions, such as “violent acts, contaminated food, specified felonies, and other crisis incidents.”

¶ 48 The circuit court also rejected plaintiffs’ argument that they had a “reasonable expectation

that losses from communicable disease would be covered.” The court reasoned that the “exclusions

in Evanston’s and Landmark’s policies are big, bold, and conspicuous, putting Plaintiffs on notice

that coverage for viruses and pathogens is excluded by the endorsements.” The court also noted

that “The policies also make clear, as does Illinois law, that the endorsement exclusions function

to modify the grant of coverages in the policy.” The court found that the “endorsements

unambiguously exclude coverage for loss or damage caused directly or indirectly by a virus or

pathogen.”

¶ 49 For these reasons, the court dismissed plaintiffs’ complaint with prejudice as to both

Evanston and Landmark. The dismissal order specified that, “Pursuant to Rule 304(a), this is a

final, appealable order, and there is no just reason to delay either enforcement or appeal or both.”

¶ 50 On May 10, 2023, plaintiffs filed a timely notice of appeal from the order dismissing their

claims against Evanston and Landmark.

¶ 51 ANALYSIS

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¶ 52 On appeal, plaintiffs offer a number of reasons why the circuit court erred in dismissing

their claims for “Contaminated Food/Communicable Disease” and “Crisis management” coverage

against Evanston and Landmark. 3

¶ 53 Among these, plaintiffs suggest that dismissal was premature because “issues related to

intent and a policyholder’s reasonable expectation of coverage” should be decided after discovery,

rather than upon a motion to dismiss. Plaintiffs further dispute that the exclusions in either the

Evanston or Landmark endorsements barred plaintiffs’ claims for “Contaminated

Food/Communicable Disease” or “Crisis management” coverage. Under the principle that

exclusions are to be read narrowly, they claim that Evanston and Landmark did not show that their

exclusions “unambiguously deleted” coverage for losses related to Covid-19. Separately, plaintiffs

claim that the exclusions should not be enforced because they impermissibly render one or more

of the coverage provisions illusory.

¶ 54 We have considered plaintiffs’ contentions with respect to Landmark and Evanston,

separately analyzing application of the Evanston and Landmark exclusions to each of the two

coverages at issue. As to Evanston, we affirm the circuit court’s dismissal. That is, we agree with

the circuit court that Evanston’s “Organic Pathogens” exclusion precludes plaintiffs’ claims for

Covid-19 losses under either the “Contaminated Food/Communicable Disease” coverage or

“Crisis management” coverage. In doing so, we find that Evanston’s exclusion did not render

either of those two coverages illusory.

¶ 55 As to Landmark, we affirm dismissal of plaintiffs’ claim for “Crisis Management”

coverage, as such coverage was barred by Landmark’s “Exclusion of Pathogenic or Poisonous

3 Insofar as Plaintiffs’ brief refers to its claim for “Interruption by Communicable Disease” coverage, we emphasize that the circuit court’s dismissal of that coverage was not at issue in the appealed-from order granting Evanston and Landmark’s motions to dismiss, but rather was discussed in the companion order deciding certain insurers’ partial motion to dismiss. Thus, applicability of that particular coverage is not before us.

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Biological or Chemical Materials.” Landmark’s exclusion did not render “Crisis Management”

coverage illusory.

¶ 56 We reach a different conclusion, however, with respect to plaintiffs’ claim for

“Contaminated Food/Communicable Disease” coverage against Landmark. That is, Landmark’s

“Exclusion of Pathogenic or Poisonous Biological or Chemical Materials” was so broad that it

swallowed up the “Contaminated Food/Communicable Disease” coverage and rendered it illusory.

Thus, we do not apply Landmark’s exclusion to this particular claim for coverage. For that reason,

we reverse dismissal of plaintiffs’ claim (count IV) for “Contaminated Food/Communicable

Disease” coverage against Landmark, and we remand for proceedings on that specific claim.

¶ 57 Standard of Review and Insurance Contract Interpretation Principles

¶ 58 Here, the court granted Evanston and Landmark’s motions under section 2-615 of the Code

of Civil Procedure. 735 ILCS 5/2-615 (West 2022). “A section 2-615 motion to dismiss [citation]

challenges the legal sufficiency of a complaint based on defects apparent on its face. [Citation.]

Therefore we review de novo an order granting or denying a section 2-615 motion.” Marshall v.

Burger King Corp., 222 Ill. 2d 422, 429 (2006). Moreover, the construction of the terms of an

insurance policy presents a question of law, which is also reviewed de novo. West Bend Mutual

Insurance Co. v. Krishna Schaumburg Tan, Inc., 2021 125978, ¶ 30.

¶ 59 Our supreme court has set forth the following principles:

“The primary function of this court in construing contracts for

insurance is to ascertain and give effect to the parties’ intent as

expressed in the insurance contract’s language. [Citation.] If the

terms of the insurance contract are clear and unambiguous, the court

will give them their plain and ordinary meaning. [Citations.]

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Conversely, if the terms are susceptible to more than one meaning,

they are considered ambiguous and will be construed strictly against

the insurer who drafted the contract.” Id. ¶ 32.

¶ 60 “Insurance policies are to be liberally construed in favor of coverage ***. [Citation.]

Provisions in an insurance policy that limit or exclude coverage are also construed liberally in

favor of the insured and against the insurer.” (Internal quotation marks omitted.) Pekin Insurance

Company v. AAA-1 Masonry & Tuckpointing, 2017 IL App (1st) 160200, ¶ 23. “ ‘This rule of

construction, however, does not justify construing a contract against an insurer when no real

ambiguity exists.’ ” Firebirds International, LLC v. Zurich American Insurance Co., 2022 IL App

(1st) 210558, ¶ 18 (quoting Western Casualty & Surety Co. v. Brochu, 105 Ill. 2d 486, 495 (1985)).

We will not find a provision ambiguous merely because the parties disagree as to its meaning. Id.

¶ 61 Notably, each of the exclusions at issue in this appeal is contained in an endorsement added

by Evanston or Landmark that follows the main body of the policy. A court must “construe the

policy in its entirety, giving effect to all parts of the policy as is possible, including endorsements.”

(Internal quotation marks omitted.) Pekin Insurance Co. v. Recurrent Training Center, Inc., 409

Ill. App. 3d 114, 120 (2011). “If, however, the provisions of a policy and an attached endorsement

conflict, the terms and conditions of the endorsement control and supersede the conflicting policy

provisions.” Id. at 118; see also IMC Global v. Continental Ins. Co., 378 Ill. App. 3d 797, 807

(2007) (only where an endorsement irreconcilably conflicts with a provision in the body of the

policy, will the terms of the endorsement control). Our Fifth District has similarly stated: “where

the policy and the endorsements conflict, the endorsement prevails, at least where it is clear that

the policyholder understood and accepted the language of the endorsement.” Strowmatt v. Sentry

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Insurance, 2020 IL App (5th) 190537, ¶ 17 (citing Rockford Mutual Ins. Co. v. Economy Fire &

Casualty Co., 217 Ill. App. 3d 181, 186 (1991)).

¶ 62 With these principles in mind, we turn to the substance of plaintiffs’ arguments.

¶ 63 Discovery as to “Reasonable Expectations” Was Not Required Absent any Ambiguity

in the Relevant Policy Language

¶ 64 Before we delve into the specific language of either the Evanston or Landmark policy, we

briefly address plaintiffs’ argument that dismissal was inappropriate at the pleading stage, before

the parties conducted discovery regarding the plaintiffs’ “reasonable expectations” of coverage

under the policies. Plaintiffs rely on the long-settled principle that courts construe policies as a

whole, including with respect to the type of risks insured against. See Crum and Forster Managers

Corp. v. Resolution Trust Corp., 156 Ill. 2d 384, 391 (1993) (“To ascertain the intent of the parties

and the meaning of the words used in the insurance policy, the court must construe the policy as a

whole, taking into account the type of insurance for which the parties have contracted, the risks

undertaken and purchased, the subject matter that is insured and the purposes of the entire

contract.”). Based on this, plaintiffs suggest that the court could not dismiss their coverage claims

before discovery as to plaintiffs’ reasonable expectations of coverage for losses from diseases such

as Covid-19.

¶ 65 The case law simply does not support plaintiffs’ position. There is no reason why a circuit

court cannot dismiss on the basis of unambiguous policy language, without having to consider

extrinsic evidence elicited in discovery. We recognize that in ascertaining the meaning of the

words used in the insurance policy, a court considers the policy as a whole, taking into account its

subject matter and purpose. Id. Yet, this principle of contract interpretation does not mean that

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discovery is always required. Rather, “[i]f the words in the policy are plain and unambiguous, the

court will afford them their plain, ordinary meaning and will apply them as written.” Id.

¶ 66 To the extent plaintiffs invoke the reasonable expectations doctrine, this court has

questioned its viability. Under that doctrine, “the objectively reasonable expectations of all

applicants and intended beneficiaries regarding the terms of insurance contracts will be honored

even though painstaking study of the policy provisions would have negated those expectations.”

Continental Casualty Co. v. Howard Hoffman and Associates, 2011 IL App (1st) 100957, ¶ 76.

However, “[a] number of cases have specifically rejected the notion that the reasonable

expectations doctrine applies in Illinois. [Citations.]” Id., ¶ 77; see also Landmark America Ins.

Co. v. NIP Group Inc., 2011 IL App (1st) 101155, ¶ 26 (remarking that “the status of the

reasonable-expectations doctrine in Illinois is, at best, unclear.”).

¶ 67 This court’s precedent indicates that reasonable expectations can be taken into account only

when there is an ambiguity in the policy language, but the courts are otherwise bound to apply the

unambiguous language of the policy. See Continental Casualty Co., 2011 IL App (1st) 100957, ¶

78 (declining to apply reasonable expectations doctrine where “the plain and unambiguous

language of the policy provides that the claims at issue are related and are subject to the single,

$100,000 policy limit, and we do not believe that the policy language can reasonably be read

otherwise.”). That is, “The reasonable expectations test is used as a tool of construction in assessing

the intent of the parties when a contract is ambiguous. The test is not used when a study of the

policy provisions would have negated those expectations.” State Farm Mutual Auto Insurance Co.

v. Progressive Northern Insurance Co., 2015 IL App (1st) 140447, ¶ 109, n. 7. This is entirely

consistent with the general contract law principle limiting the use of extrinsic evidence: “Where

the terms of a contract are clear and unambiguous, the parties’ intent must be derived solely from

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the document. [Citation.] If the terms of the alleged contract are ambiguous *** parol evidence is

admissible to determine the parties’ intent.” A. Epstein and Sons International, Inc v. Eppstein

Uhen Architects, Inc., 408 Ill. App. 3d 714, 720 (2011).

¶ 68 In short, we reject plaintiffs’ suggestion that its coverage claims could not be dismissed

without conducting discovery as to the parties’ intent or reasonable expectations. Rather, the trial

court was empowered to assess the viability of plaintiffs’ claims under the clear and unambiguous

language of the policies, without resort to extrinsic evidence. We will thus proceed to the plaintiffs’

arguments as to whether the court erred in its interpretation of the policy provisions at issue.

¶ 69 Evanston’s “Organic Pathogens” Exclusion Precluded Coverage for COVID-19 Losses

¶ 70 We turn to plaintiffs’ argument that the circuit court erred in dismissing their claims against

Evanston and Landmark because it applied Evanston’s “Organic Pathogens” and Landmark’s

“Pathogenic or Poisonous Biological or Chemical Materials” exclusions too broadly. Citing the

principle that exclusions should be read narrowly, plaintiffs suggest that the plain language of

either exclusion did not bar coverage for losses from COVID-19. Plaintiffs acknowledge that if

there is a conflict between an endorsement and a prior policy provision, then the endorsement

controls. Yet plaintiffs assert “there was no apparent conflict” between the endorsements and the

coverages for “Contaminated Food/Communicable Disease” and “Crisis Management.” In so

doing, plaintiffs point out that neither endorsement used the phrase “communicable disease”, nor

did they explicitly state they “were deleting or limiting” the “Contaminated Food/Communicable

Disease” or “Crisis Management” coverage provisions.

¶ 71 This argument is flawed as to either Evanston or Landmark. First, as Evanston, we reject

plaintiffs’ suggestion that there is “no apparent conflict” between Evanston’s “Organic Pathogens”

exclusion and the two coverage provisions at issue. We acknowledge the general principle that

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exclusions should be construed “narrowly” and applied “only where [their] terms are clear,

definite, and specific.” Gillen v. State Farm Mut. Automobile Insurance, 215 Ill. 2d 381, 393

(2005). Nevertheless, even read narrowly, the plain language of Evanston’s exclusion clearly limit

(at least in part) both coverages at issue: the “Contaminated Food/Communicable Disease”

coverage, as well as “Crisis Management” coverage.

¶ 72 As the circuit court recognized, the exclusion in Evanston’s endorsement explicitly bars

coverage for a loss or damage caused by “Organic Pathogens,” including any “virus.” That

exclusion clearly conflicts with the Contaminated Food/Communicable Disease” provision, which

indicated coverage for “direct physical loss or damage to insured property caused by or resulting

from a contaminated food or communicable disease event at an insured location.” (Emphasis

added). It is hard to think of any “communicable disease” not involving an organic pathogen. And

there is no dispute that COVID-19 is caused by a “virus,” which is explicitly included in the

Evanston policy’s definition of an “organic pathogen.” Evanston’s exclusion plainly limits the

scope of the “Contaminated Food/Communicable Disease” coverage and bars such coverage for

losses from viruses.

¶ 73 Evanston’s “Organic Pathogens” exclusion also clearly conflicts, at least in part, with the

“Crisis Management” coverage. That coverage provision included subparts that defined several

types of “covered crisis event[s]”; one of these included closures caused by communicable disease,

as follows:

“b. Premises Contamination. Necessary closure of a covered

premises due to any sudden, accidental and unintentional

contamination *** which results in clear, identifiable, internal or

external visible symptoms of bodily injury, illness, or death of any

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person(s). This includes covered premises contaminated by

communicable disease ***.” (Emphasis added).

¶ 74 Evanston’s “Organic Pathogens” exclusion plainly conflicts with the purported coverage

for “communicable disease.” Thus, we agree with the trial court that Evanston’s exclusion

precludes plaintiff’s claims for “Crisis Management” coverage for losses arising from Covid-19.

¶ 75 Landmark’s “Exclusion of Pathogen or Poisonous Biological or Chemical Materials” Also

Limits Both Coverages at Issue

¶ 76 Applying the same analysis to Landmark, its “Exclusion of Pathogenic or Poisonous

Biological or Chemical Materials” also clearly conflicts with both coverage provisions at issue. 4

In its exclusion, Landmark stated it would not pay for “loss or damage caused directly or indirectly

*** any pathogenic or poisonous biological or chemical materials,” “regardless of any other cause

or event that contributes concurrently or in any sequence to the loss.”

¶ 77 This exclusion obviously conflicts with the “Contaminated Food/Communicable Disease”

provision, insofar as it provided coverage for a “contaminated food or communicable disease event

at an insured location.” This is because any “communicable disease” necessarily results from some

sort of “pathogenic” material, such as a virus. There is no dispute that Covid-19 is a communicable

disease resulting from such pathogenic material.

¶ 78 For the same reasons, Landmark’s “Exclusion of Pathogenic or Poisonous Biological or

Chemical Materials” conflicts with and limits the “Crisis Management” coverage, insofar as that

coverage provision refers to premises contamination by “communicable disease.” Given

4 It bears repeating that the coverage provisions are identical in the Evanston and Landmark policies, although the exclusions at issue are worded differently.

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Landmark’s exclusion of coverage for losses from any pathogenic materal, plaintiffs cannot seek

“Crisis Management” coverage from Landmark for losses from Covid-19.

¶ 79 We thus reject plaintiffs’ suggestion that there is “no apparent conflict” between the

exclusions and the coverage provisions at issue. The plain language of both exclusions clearly limit

both coverages at issue: the “Contaminated Food/Communicable Disease” coverage, as well as

“Crisis Management” coverage. Moreover, plaintiffs’ suggestion that the coverage provisions

should be construed as “exceptions” to the exclusions in the endorsements is contrary to Illinois

case law, which instructs that the endorsements control. Pekin, 409 Ill. App. 3d at 118 (If *** the

provisions of a policy and an attached endorsement conflict, the term and conditions of the

endorsement control and supersede the conflicting policy provisions.”)

¶ 80 We thus agree with the circuit court that the plain language of the Evanston and Landmark

exclusions barred plaintiffs’ claimed Covid-19 losses, under either the “Contaminated

Food/Communicable Disease” coverage or the “Crisis Management” coverage provision.

¶ 81 This conclusion does not resolve this appeal, however. Plaintiffs alternatively urge that the

Evanston and Landmark exclusions should not be applied because they render one or more of the

coverages “illusory.” We thus turn to that topic.

¶ 82 The Governing Standard as to Whether an Exclusion Renders Coverage Illusory

¶ 83 Under Illinois law, there is a high threshold before a court will find an exclusion

inapplicable on the ground that it renders coverage illusory. An “illusory promise appears to be a

promise, but on closer examination reveals that the promisor has not promised to do anything.”

Motherway & Napleton, LLP v. Sentinel Insurance Company Limited, 631 F. Supp. 3d 496, 501

(N.D. Ill. 2022). However, “coverage is not illusory just because it only covers uncommon

occurrences.” Id.

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¶ 84 Accordingly, an insurance policy will not be deemed illusory, so long as it provides

coverage against at least some potential liabilities. Nicor, Inc. v. Associated Elec. and Gas Ins.

Services Ltd., 362 Ill. App. 3d 745, 754 (2005) (“The policy need not provide coverage against all

possible liabilities; if it provides coverage against some, the policy is not illusory. [Citation.]”);

see also U.S. Specialty Insurance Co. v. Village of Melrose Park, 455 F.Supp.3d 681, 689 (N.D.

Ill. 2020) (“An insurance policy is illusory under Illinois law if ‘there is no possibility under any

set of facts for coverage.’” (quoting Atlantic Specialty Ins. Co. v. AC Chicago, LLC, 272 F. Supp.

3d 1043, 1051 (N.D. Ill. 2017)).

¶ 85 Similarly, an exclusion will not be deemed to render a specific coverage illusory, if it leaves

open at least some possibility for application of the coverage. Our court recently stated: “under

Illinois law, the fact that an exclusion has a ‘broad sweep’ is not, in and of itself, a reason to deem

the coverage ‘illusory.’ It is only when the exclusion has the effect of ‘swallowing’ the coverage

entirely that the exclusion can be deemed illusory.” (Emphasis in original). National Fire

Insurance Company of Hartford and Continental Insurance Co v. Visual Pak Company, Inc., 2023

IL App (1st) 221160, ¶ 84.

¶ 86 In the same decision, this court explained that for an exclusion to render a coverage

illusory, it is not enough that the exclusion “conflicts” with coverage. Id. ¶ 93. This is because

“every exclusion, to some degree, conflicts with the coverage provision. That is the very reason

for the exclusion; it is an exception to the general rule of coverage.” Id. Rather, “[i]f the exclusion

wipes out all coverage, it is deemed illusory” Id. ¶ 96. “But the mere breadth of an exclusion,

alone, does not equate to ambiguity, nor does it render the coverage illusory.” Id. ¶ 97.

¶ 87 National Fire Insurance Company further instructs that “the fact that the exclusion might

‘conflict’ or ‘clash’ with other provisions of the coverage that are not presently at issue in this

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case is not a basis to invalidate the exclusion as applied to this case; our job is not to seek out other

problems and solve them, but rather to adjudicate the controversy presently before us.” (Emphases

in original) Id. ¶ 84.

¶ 88 “Interruption by Communicable Disease” Coverage Is Irrelevant To This Appeal

¶ 89 We briefly address plaintiffs’ claim that the Evanston and Landmark exclusions are invalid

because they render the “Interruption by Communicable Disease” Coverage illusory—

notwithstanding that the circuit court entered a separate order (not the subject of this appeal)

determining that plaintiffs did not state a claim for that coverage. 5 Yet this court’s decision in

National Fire Ins. Company makes clear that plaintiffs cannot stake an “illusory” argument on a

coverage that is not presently at issue. See id. The “Interruption by Communicable Disease”

coverage is not presently at issue in this appeal, and thus the potential impact of the exclusions on

that particular coverage is not relevant to the plaintiffs’ claims on the two separate coverages at

issue: “Contaminated Food/Communicable Disease Coverage” and “Crisis Management”

coverage. The separate order dismissing plaintiffs’ claims for “Interruption by Communicable

Disease” coverage is not at issue in this appeal. As our role is “to adjudicate the controversy

presently before us,” id., we will not address whether the exclusions render the “Interruption by

Communicable Disease” coverage illusory.

¶ 90 We thus proceed to assess whether either of the Evanston and Landmark exclusions render

illusory either of the two coverages that are at issue: “Crisis Management” coverage and

Contaminated Food/Communicable Disease coverage. We will first assess application of the

Evanston “Organic Pathogens” exclusion to the two coverages, before addressing application of

the Landmark exclusion to the same two coverages.

5 Plaintiffs’ briefing states that they have reserved their right to ultimately appeal that conclusion.

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¶ 91 Evanston’s Exclusion Does Not Render “Crisis Management” Coverage Illusory

¶ 92 We first agree with the circuit court that Evanston’s exclusion did not render the “Crisis

Management” coverage illusory. Evanston’s “Organic Pathogens” exclusion provided:

“The following exclusion is added and is therefore not a Covered

We will not pay for loss or damage caused directly or indirectly by

any of the following. Such loss or damage is excluded regardless

o[f] any other cause or event that contributes concurrently or in

Presence, growth, proliferation, spread or any activity of ‘organic

¶ 93 The exclusion defined “Organic pathogen” to mean:

“a. Any organic irritant or contaminant including, but not limited to,

‘fungus,’ wet or dry rot, bacteria, virus or other microorganisms of

b. Any disease-causing agent as classified by the Environmental

¶ 94 We compare this to the “Crisis Management” coverage provision, which stated: “This

policy is extended to cover additional cost for communication response and actual loss of Gross

Earnings and Extra Expense due to a covered crisis event.” Importantly, that provision set forth

several categories of a “covered crisis event.” Those categories include: (a) certain “Violent acts”

resulting in personal injury or death; (b) “Premises contamination”; (c) discovery or suspicion of

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“Contaminated Food”; (d) “[S]pecified felonies” committed on insured premises; and “Other

Crisis incidents.” Such “Other Crisis incidents” were defined to include “explosion,” “fire”,

“construction accident”, “[e]quipment failure” or “workplace accident” that “results in regional or

national news media coverage.”

¶ 95 Keeping in mind that a coverage will be rendered illusory only if it is completely “wipe[d]

out” by an exclusion, National Fire Insurance Co., 2023 IL App (1st) 221160, ¶ 96, it is plain that

the Crisis Management coverage is not rendered illusory by Evanston’s “Organic Pathogens”

exclusion. That is, Evanston’s exclusion does not swallow the coverage entirely. See id. ¶ 84 ( It

is only when an exclusion has “the effect of ‘swallowing’ the coverage entirely that the exclusion

can be deemed illusory.” (Emphasis in original).

¶ 96 Certainly, the scope of the “Crisis Management” coverage is limited by Evanston’s

“Organic Pathogens” exclusion. For instance, that exclusion clearly conflicts with subsection (b)

of the Crisis Management coverage, “Premises contamination,” which references “communicable

disease.” Nevertheless, notwithstanding Evanston’s exclusion, the “Crisis Management” coverage

plainly could still apply to a number of other events at the insured premises that have nothing to

do with organic pathogens, such as violent acts, fires, explosions, or construction accidents.

Clearly, such covered events would not implicate Evanston’s “Organic Pathogens” exclusion. In

other words, the Crisis Management coverage is not “wiped out” by Evanston’s exclusion. Thus,

we cannot say that Evanston’s exclusion renders the Crisis Management coverage illusory.

¶ 97 “Evanston’s “Organic Pathogens” Exclusion Does Not Render “Contaminated

Food/Communicable Disease” Coverage Illusory

¶ 98 We turn to address whether Evanston’s exclusion renders the “Contaminated

Food/Communicable Disease” coverage illusory. This question is much closer than that with

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respect to “Crisis Management” coverage. Nonetheless, we find that there is at least some

remaining coverage under the “Contaminated Food/Communicable Disease” provision

notwithstanding Evanston’s “Organic Pathogens” exclusion, such that this coverage is also not

rendered illusory.

¶ 99 We restate the relevant language of the “Contaminated Food/Communicable Disease”

coverage provision:

“This policy will pay for:

a. direct physical loss or damage to insured property caused by or

resulting from a contaminated food or communicable disease event

at an insured location;

b. equipment cleaning and replacement of consumable goods

declared contaminated by a public health authority;

(c) costs to test, monitor, contain, treat, detoxify, disinfect,

neutralize, cleanup including debris removal on insured property.”

The policy did not define what constitutes a “contaminated food or communicable disease event.”

Indeed, it did not define either “contaminated food” or “communicable disease.”

¶ 100 As previously discussed, we think it is plain that Evanston’s exclusion for losses caused by

“organic pathogens” excludes coverage for losses from “communicable disease.” It is difficult to

see how any “communicable disease” would not fall within the scope of the “Organic Pathogens”

exclusion. Yet that alone does not render the “Contaminated Food/Communicable Disease”

coverage illusory, since it also provides coverage for certain losses or damages caused by a

“contaminated food” event. That is, for the entire coverage provision to be rendered illusory, we

would have to determine that Evanston’s exclusion bars coverage for any “contaminated food”

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event, i.e., that it entirely “swallows” any food contamination coverage. See National Fire

Insurance Co., 2023 IL App (1st) 221160, ¶ 84.

¶ 101 We cannot say this is so, and thus we cannot find that the “Contaminated

Food/Communicable Disease” coverage is rendered illusory by Evanston’s “Organic pathogens”

exclusion. This is especially so, because the coverage provision does not limit what may cause a

“contaminated food” event. We recognize that food contamination is often caused by bacteria or

viruses, which are undeniably organic pathogens. See ask.usda.gov/s/article/What-is-food-

contamination (“Pathogenic (disease-causing organism) contamination – such as bacteria ,viruses

and parasites – can be on food that if not handled or cooked safely, can cause illness.”) That is,

coverage for that sort of contamination would be barred by Evanston’s “organic pathogens”

exclusion. However, the policy does not purport to limit the scope of a covered “contaminated

food” event to contamination from organic sources. That is, food contamination could also refer

to contamination with inorganic substances, such as chemical compounds, or metals such as lead.

See id. (“Food can also be contaminated (made impure) by chemicals such as pesticides *** certain

cleaning compounds, and sometimes by use of improper containers (pots) used for cooking or

storing food.”)

¶ 102 The United States Food and (FDA) Drug Administration recognizes numerous food

contaminants that are not organic; these include metals that may occur naturally such as arsenic,

lead, mercury, cadmium, as well as “Human-made chemicals formed from or used in

manufacturing industrial and consumer products including: Benzene, Dioxins and PCBs, and Per-

and Polyfluoroalkyl Substances (PFAS).” “Chemical Contaminants & Pesticides”, available at

https://www.fda.gov/food/chemical-contaminants-pesticides; see also “List of Select Chemicals in

the Food Supply Under FDA Review”, available at https://www.fda.gov/food/food-chemical-

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safety/list-select-chemicals-food-supply-under-fda-review. The FDA has also identified a number

of potentially toxic chemical “process contaminants” that can form during food processing and

cooking. See “Process Contaminants in Food”, available at https://www.fda.gov/food/chemical-

contaminants-pesticides/process-contaminants-food. In addition, chemicals in food packaging

could be a source of non-organic contamination. “A review study [in 2022] came out showing

thousands of potentially harmful chemicals detected in food packaging that could leave trace

contaminants or residues on the food product.” Elisabeth Anderson & Joe Zagorski, “What’s The

Risk? Food Packaging”, Michigan State University, Center for Research on Ingredient Safety,

(June 6, 2022) (available at https://www.canr.msu.edu/news/what-s-the-risk-food-packaging). A

separate 2024 study found there were “3,600 chemicals found in both food packaging and in

humans,” of which 80 chemicals were “known to have ‘hazard properties’ of high concern’ to

human health.” Pien Huang, “Hazardous chemicals in food packaging can also be found in

people,” National Public Radio (Sep. 21, 2024), available at https://www.npr.org/sections/shots-

health-news/2024/09/20/g-s1-23909/food-packaging-chemicals-health-hazard.

¶ 103 Since food contamination may result from causes other than organic pathogens, there is

potential “Contaminated Food/Communicable Disease Coverage” coverage under Evanston’s

policy, notwithstanding its “Organic Pathogens” exclusion. In turn, we cannot say that this

exclusion renders the “Contaminated Food/Communicable Disease” coverage” illusory.

¶ 104 Thus, plaintiffs’ illusory coverage argument fails with respect to Evanston as to either

coverage at issue. Rather, we agree with the circuit court that Evanston’s “Organic Pathogens”

exclusion was enforceable and precluded plaintiffs’ claims for coverage for alleged COVID-19

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losses under either the “Crisis Management” or “Contaminated Food/Communicable Disease”

coverage provisions. 6 Accordingly, we affirm the dismissal of plaintiffs’ claims against Evanston.

¶ 105 Landmark’s Exclusion Does Not Render “Crisis Management” Coverage Illusory

¶ 106 We turn to assess whether Landmark’s “Exclusion of Pathogenic or Poisonous Biological

or Chemical Materials” rendered either of the two relevant coverage provisions illusory. We reach

different conclusions with respect to the two coverages at issue.

¶ 107 We review the language of Landmark’s exclusion, which stated in part:

We will not pay for loss or damage caused directly or indirectly by the discharge, dispersal, seepage, migration, release, escape or application of any pathogenic or poisonous biological or chemical materials. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.”

¶ 108 We first find that this exclusion does not render the “Crisis Management” coverage

illusory, as it does not completely eliminate that coverage. As discussed, the “Crisis Management”

provision set forth several categories of a “covered crisis event.” Such covered events included

certain violent acts or specified felonies, “premises contamination” due to “communicable

disease,” and “Other Crisis incidents” including “[e]xplosion,” “[f]ire”, “[c]onstruction accident,”

“[e]quipment failure” or “[w]orkplace accident.”

¶ 109 Certainly, coverage for some of these events is limited by Landmark’s exclusion for losses

from “pathogenic or poisonous biological or chemical materials.” As noted, Landmark’s exclusion

6 As we affirm the dismissal of the coverage claims against Evanston based on application of the “Organic Pathogens” exclusion, we need not consider Evanston’s alternative argument that dismissal was otherwise warranted because plaintiffs’ alleged losses could not reach the $25 million attachment point to trigger coverage under Evanston’s policy.

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clearly bars a claim for “Crisis Management” coverage due to “communicable disease,” since

“communicable disease” necessarily involves “pathogenic” biological material such as a virus.

¶ 110 Nevertheless, Landmark’s exclusion does not swallow the “Crisis Management” coverage

entirely. As the circuit court found, there are undoubtedly “covered crisis event[s]” under that

provision that do not involve “pathogenic or poisonous biological or chemical materials.” For

example, there could be covered acts of violence, fire, or workplace accidents that have nothing to

do with any pathogenic or poisonous materials that would implicate the exclusion. As the potential

for Crisis Management coverage is not wiped out by Landmark’s exclusion, that coverage is not

rendered illusory. In turn, we reject plaintiffs’ challenges to application of Landmark’s exclusion

to its claim for Crisis Management coverage (count II). We will thus affirm the circuit court’s

dismissal of count II against Landmark.

¶ 111 Landmark’s Exclusion Renders the “Contaminated Food/Communicable Disease”

Coverage Illusory

¶ 112 We reach a different conclusion when applying Landmark’s broad “Exclusion of

Pathogenic or Poisonous Biological or Chemical Materials” to the “Contaminated

Food/Communicable Disease” coverage. We find the exclusion is so broad that it effectively

eviscerates and precludes any coverage for “Contaminated Food/Communicable Disease.” Thus

we agree that this particular provision is rendered illusory by Landmark’s exclusion. In turn,

Landmark’s exclusion is not enforceable as to this specific coverage.

¶ 113 Significantly, in contrast to Evanston’s exclusion discussed supra, Landmark’s exclusion

is not limited to organic pathogens. Landmark’s exclusion is entitled “EXCLUSION OF

PATHOGENIC OR POISONOUS OR CHEMICAL MATERIALS.” In it, Landmark stated that

it would not pay for “loss or damage caused directly or indirectly by the discharge, dispersal,

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seepage, migration, release, escape or application of any pathogenic or poisonous biological or

chemical materials.” This exclusion is clearly broader than Evanston’s “Organic Pathogens”

exclusion, insofar as Landmark disclaimed coverage for losses from not only “pathogenic” but

also “poisonous biological or chemical materials.”

¶ 114 Given the breadth of Landmark’s exclusion, we do not see how any coverage remains intact

under the “Contaminated Food/Communicable Disease Coverage” provision. There is no dispute

that any losses from communicable disease are excluded as resulting from “pathogenic” materials.

Further, (in contrast to our analysis of the Evanston exclusion), we fail to see how any coverage

for a “contaminated food” event survives the Landmark exclusion, since Landmark’s exclusion

encompasses “poisonous biological or chemical materials.” It is difficult to imagine how food

contamination could not involve some pathogenic or poisonous biological or chemical materials.

In effect, Landmark excluded from coverage all potential food contamination, whether organic or

chemical in origin. The same exclusion barred coverage for losses from any communicable

disease. In turn, we conclude that Landmark’s “Exclusion of Pathogenic or Poisonous Biological

or Chemical Materials” completely swallows the “Contaminated Food/Communicable Disease”

coverage, making it illusory. National Fire Ins., 2023 IL App (1st) 21160, ¶ 84 (“It is only when

the exclusion has the effect of ‘swallowing’ the coverage entirely that the exclusion can be deemed

illusory.”).

¶ 115 As we conclude that Landmark’s exclusion renders the “Contaminated

Food/Communicable Disease” coverage illusory, we find that the exclusion is unenforceable as a

defense to plaintiffs’ claim against Landmark for that specific coverage. On this basis, we reverse

only the portion of the circuit court’s order that granted Landmark’s motion to dismiss plaintiffs’

claim under the “Contaminated Food/Communicable Disease” coverage provision (count IV).

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That is, plaintiffs’ claim for that coverage may proceed against Landmark. We thus remand for

proceedings on that claim against Landmark. We note that this decision does not bar Landmark

from raising any other potential defenses to plaintiffs’ claim for this coverage in subsequent

proceedings.

¶ 116 In summary, we affirm in part but reverse in part the circuit court’s order granting Evanston

and Landmark’s motions to dismiss. We conclude that: (1) the circuit court properly dismissed

plaintiffs’ claim for “Crisis Management” coverage (count II) against both Evanston and

Landmark, as plaintiffs’ claimed COVID-19 losses were excluded under Evanston’s “Organic

Pathogens” Exclusion as well as Landmark’s “Exclusion of Pathogenic or Poisonous or Chemical

Materials.” The circuit court also correctly dismissed plaintiffs’ claim for “Contaminated

Food/Communicable Disease Coverage” (count II) against Evanston, as barred by Evanston’s

“Organic Pathogens” exclusion. However, we conclude that Landmark’s “Exclusion of Pathogenic

or Poisonous Biological or Chemical Materials” is not enforceable with respect to plaintiffs’ claim

for “Contaminated Food/Communicable Disease” coverage, as it would completely wipe out that

coverage and render it illusory. Thus, we reverse only the portion of the appealed-from order that

dismissed plaintiffs’ claim for “Contaminated Food/Communicable Disease” coverage (count II)

against Landmark, and we remand for further proceedings on that claim. We otherwise affirm the

appealed-from order.

¶ 117 We thus affirm in part, reverse in part, and remand for further proceedings.

¶ 118 CONCLUSION

¶ 119 For the foregoing reasons, the judgment of the Circuit Court of Cook County is affirmed

in part and reversed in part. We remand for further proceedings consistent with this order.

¶ 120 Affirmed in part and reversed in part.

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¶ 121 Cause remanded.

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