Jury Returns a $467,000 Jury Verdict Blaming Broker for Insurer’s Denial of Coverage

James Werner, who was also the defendant in this case, was the insurer producer for Office Furnishings Ltd. and Brathan Property LLC. Brathan Property owned a commercial building at 725 S. 25th Avenue in Bellwood, Ill., where Office Furnishings maintained a warehouse for its office furniture business.  Werner obtained insurance coverage for Office Furnishings and Brathan Property with American Family Insurance.

American Family required its own application to be signed by the insureds, in this case Office Furnishings and Brathan Property, which was done in a meeting on Dec. 17, 2002.

On Jan. 31, 2003, the roof of the warehouse shattered due to extreme cold weather and high winds, which caused serious property damage to the building and its contents. Office Furnishings and Brathan Property submitted a claim for their losses, including $1,349,872 in estimated roof replacement costs, $729,295 for inventory damage and $88,074, which represented the cost of a temporary roof.

American Family denied coverage for both plaintiffs’ losses based upon claimed misrepresentations in the application.  The plaintiffs brought a breach of contract lawsuit against American Family.  The case went to trial in 2009 with a verdict of $958,369 in favor of the plaintiffs, but the verdict was vacated and judgment was entered for American Family due to what was determined to be material misrepresentations in the application.

A separate lawsuit contended that the defendants A.F. Crissie & Co. and James T. Werner negligently procured the insurance policy and incorrectly represented that the roof was 5 years old.  The defendants argued that they complied with the standard of care for insurance producers and that the claim was denied because of plaintiffs’ misrepresentations during the application process and because the roof’s failure was not a “fortuitous event” under the policy. 

The jury’s verdict of $467,722 in favor of Office Furnishings Ltd. and against both defendants A.F. Crissie & Co. Ltd. and James T. Werner was made up of the following damages:

  • $379,648 for damage to inventory;
  • $88,074 for damage to its real property.

The jury found against Brathan Property LLC and in favor of the defendants for that part of that lawsuit.

The attorney representing the plaintiffs was John F. Hedrich. 

The demand to settle the case before trial was $300,000.  The offer to settle made by the defendants together was $100,000.

Office Furnishings, Ltd., Brathan Property, LLC v. A.F. Crissie & Co., Ltd., et al., No. 08 L 12796 (Cook County, Illinois).

Kreisman Law Offices has been successfully handling commercial litigation, breach of contract cases and  business litigation for individuals and businesses for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Wheaton, Hinsdale, Western Springs, Skokie, Glencoe, Northbrook, Deerfield, Harwood Heights, Bellwood, Countryside, Hickory Hills, Evergreen Park, Chicago (Marquette Park, Canaryville, Washington Heights, Lake Calumet, South Shore, Hyde Park), Forest Park, Oak Forest and Melrose Park, Ill.

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