# JKIS Investments LLC v. AmGUARD Insurance Company

> District Court, C.D. Illinois · March 31, 2025

URL: https://www.frixlaw.com/law-library/cases/10836086

## Case

- **Court:** District Court, C.D. Illinois
- **Decided:** March 31, 2025
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10836086

## How later opinions describe it (automated extraction)

- stating that insurance policy notice provisions “are not merely technical requirements but are conditions precedent to an insurer’s contractual duties”

## Opinion text

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
ROCK ISLAND DIVISION

JKIS INVESTMENTS LLC, an Illinois )
limited liability company, )
)
Plaintiff/Counter-Defendant, )
)
v. ) Case No. 4:22-cv-04126-SLD
)
AMGUARD INSURANCE COMPANY, )
)
Defendant/Counter-Plaintiff. )

ORDER
AmGUARD Insurance Company (“AmGUARD”) asserts that certain damage to the roof
and interior of the Quality Inn & Suites Hotel located at 6910 27th Street, Moline, Illinois (“the
Hotel”) is not covered under the Businessowner’s Policy JKBP126353 (“the Policy”) that it
issued to JKIS Investments LLC (“JKIS”). Pending before the Court are AmGUARD’s Motion
for Summary Judgment on its Amended Counterclaim for Declaratory Judgment and on JKIS’[s]
Complaint (“Motion for Summary Judgment”), ECF No. 34, Motion to Strike “Sham”
Declaration of Jonath[a]n Silveri Submitted with Plaintiff’s Resistance to AmGUARD’s Motion
for Summary Judgment (“Motion to Strike”), ECF No. 40, and Motion for Leave to File
Instanter Reply Brief in Further Support of Motion to Strike “Sham” Declaration of Jonath[a]n
Silveri Submitted with Plaintiff’s Resistance to AmGUARD’s Motion for Summary Judgment
(“Motion for Leave to File Reply”), ECF No. 45. For the reasons that follow, the Motion for
Summary Judgment is GRANTED and the remaining motions are MOOT.
BACKGROUND1
The Court recites only the information necessary to resolve the pending motions.2
JKIS—a limited liability company formed in 2017 with three members: Jonathan Silveri
(“Silveri”), the managing member; Iraida Silveri; and Kalyan Vallakati—purchased the Hotel in

2018. JKIS purchased from AmGUARD the Policy, which was in effect from March 4, 2020 to
March 4, 2021. Broadly, the Policy obligated AmGUARD to “pay for direct physical loss of or
damage to Covered Property . . . caused by or resulting from any Covered Cause of Loss,” where
“Covered Causes of Loss” included “[r]isks of direct physical loss,” with certain exclusions and
limits. Policy 0075–76,3 Mot. Summ. J. Ex. B, ECF No. 34-1 at 17–139. Coverage was also
tied to a deductible—the Policy provided that AmGUARD would only pay for loss or damage
“as a result of one occurrence” once “the amount of such loss or damage exceed[ed] the
applicable Deductible.” Id. at 0054. The applicable deductible relevant here is $5,000. See id.
at 0006 (“Property Deductible: $5,000”). In return for AmGUARD’s coverage obligation, the
Policy imposed upon JKIS certain duties, including the duty to provide AmGUARD with

“prompt notice of . . . loss or damage.” Id. at 0095.
On August 10, 2020, the Quad Cities area was affected by a storm of powerful winds
exceeding seventy-five miles per hour (“the Derecho”). At some point in November 2020, JKIS
first observed water leaking from the Hotel’s interior ceilings onto some carpets—JKIS

1 At summary judgment, a court must “constru[e] the record in the light most favorable to the nonmovant.” Payne v.
Pauley, 337 F.3d 767, 770 (7th Cir. 2003). Unless otherwise noted, this factual background is drawn from
AmGUARD’s statement of undisputed material facts, Mot. Summ. J. 2–11, JKIS’s response thereto and its
statement of additional material facts, Resp. Mot. Summ. J. 3–30, ECF No. 37, and AmGUARD’s reply thereto,
Reply Mot. Summ. J. 1–24, ECF No. 46.
2 The parties vigorously dispute many other issues in this case, but as demonstrated below, resolution of those
disputes is unnecessary. For example, the Court need not decide whether Jonathan Silveri, as a matter of law,
intentionally made a material misrepresentation regarding when a white thermoplastic polyolefin membrane was
affixed to the Hotel’s roof, see, e.g., Mot. Summ. J. 12–16, nor decide which expert to believe regarding the cause of
the damage and therefore whether certain exclusions in the Policy preclude coverage, see, e.g., id. at 16–20.
3 Citations to the Policy utilize the numbers affixed to the bottom-right corner of each page.
suspected the leaks were caused by the Derecho because it may have damaged the Hotel’s roof.
JKIS engaged Renee Jiminez, a roofing contractor, to perform minor repairs on the Hotel’s roof.
JKIS did not notify AmGUARD of the loss or damage nor the repairs in November 2020.
Months later, in March 2021, JKIS noticed more interior leaks following some rain. JKIS again

engaged Jiminez to perform minor repairs on the Hotel’s roof. Again, no notice was provided to
AmGUARD. That same month, JKIS retained Storm Recovery Roofing and Siding (“SRR”) to
inspect the Hotel’s roof.4 Silveri testified that he did not appreciate the full extent of the
assertedly Derecho-caused damage until SRR’s inspection. JKIS submitted a claim under the
Policy regarding the Hotel’s roof on April 8, 2021—nearly eight months after the Derecho.
AmGUARD’s third-party claim administrator sent a disclaimer letter to JKIS in October
2021, informing it that there was no coverage under the Policy for the Hotel’s roof’s damage.
Although issues of prompt notice were not discussed in the disclaimer letter, the third-party
claim administrator stated that the letter did “not constitute a waiver of any policy provisions or
defenses” and that AmGUARD “reserve[d] their rights to amend, alter or supplement th[e] letter

should information become known in the future that would affect its content.” Oct. 7, 2021
Letter from Raphael & Assocs. to JKIS 5, Mot. Summ. J. Ex. G, ECF No. 34-2 at 1–7.5

4 JKIS disputes that SRR conducted its inspection in March 2021, asserting that the inspection occurred in either
March or April 2021. Resp. Mot. Summ. J. 4. JKIS fails to cite any evidence in support of its disputation of this
fact, so the Court deems this fact to be undisputed. See Civil LR 7.1(D)(2)(b)(6); Kibler v. United States, 46 F.
Supp. 3d 844, 847 (C.D. Ill. 2014) (“A party responding and disputing the movant’s statement of undisputed
material facts must support its own factual allegations with citation to evidence in the record.”).
5 JKIS advances the same evidentiary objection to nearly every document upon which AmGUARD seeks to rely,
arguing that the documents are “inadmissible hearsay and lack[] any authenticating foundation.” See, e.g., Resp.
Mot. Summ. J. 8; see also id. at 8 n.2 (“For purposes of summary judgment ‘[i]f the evidence is inadmissible
hearsay, the courts may not consider it.’” (alteration in original) (quoting Cairel v. Alderden, 821 F.3d 823, 830 (7th
Cir. 2016))). JKIS often fails to develop any argument for these objections—the Court could find that these
undeveloped arguments constitute waiver. See, e.g., M.G. Skinner & Assocs. Ins. Agency, Inc. v. Norman-Spencer
Agency, Inc., 845 F.3d 313, 321 (7th Cir. 2017) (“Perfunctory and undeveloped arguments are waived . . . .”). Here,
finding waiver is unnecessary because JKIS’s evidentiary objection to the disclaimer letter fails on its merits.
Admissibility is based upon whether the evidence would be admissible at trial, not whether the evidence would be
admissible in its current form as a summary judgment exhibit. See, e.g., Cairel, 821 F.3d at 830 (“To be considered
on summary judgment, evidence must be admissible at trial, though the form produced at summary judgment need
JKIS sued AmGUARD in state court on August 9, 2022, asserting that AmGUARD had
breached its contract with JKIS by failing to provide coverage under the Policy and that
AmGUARD had vexatiously denied liability and refused to settle in violation of 215 ILCS
5/155.6 Compl. ¶¶ 1–19, Not. Removal Ex. A, ECF No. 1-1 at 1–5. AmGUARD timely
removed to this Court on September 7, 2022, invoking the Court’s diversity jurisdiction.7

AmGUARD’s Answer asserted many affirmative defenses, including that JKIS’s claims were
barred due to the Policy’s “Duties in the Event of Loss or Damage provision.” Answer &
Countercl. 9, ECF No. 6. AmGUARD also asserted a counterclaim for a declaratory judgment
that it did not owe JKIS coverage under the Policy. Id. at 10–16. AmGUARD was allowed to
file an Amended Counterclaim, premised upon its assertion that it had “recently discovered
evidence that confirm[ed] JKIS committed fraud, intentionally concealed and/or misrepresented
facts in connection with its claim for insurance coverage.” Mot. Leave File Am. Countercl. ¶ 3,
ECF No. 16; see generally Dec. 15, 2023 Order (Hawley, M.J.), ECF No. 20.

not be admissible.” (quotation marks omitted)). And the Court considers the disclaimer letter solely for purpose of
JKIS’s state of mind—knowledge that AmGUARD was denying coverage under the Policy—not for the truth of
what JKIS assumedly reads the disclaimer letter to assert, namely that coverage under the Policy was indeed
unavailable. See Fed. R. Evid. 803(3) (hearsay exception for then-existing mental condition).
6 215 ILCS 5/155 provides for additional remedies in cases “wherein there is in issue the liability of a company on a
policy or policies of insurance or the amount of the loss payable thereunder, or for an unreasonable delay in settling
a claim, and it appears to the court that such action or delay is vexatious and unreasonable.”
7 “AmGUARD is a Pennsylvania corporation with its principal place of business in Wilkes-Bane, [sic]
Pennsylvania, and therefore is a citizen of the State Pennsylvania.” Answer Am. Countercl. ¶ 12, ECF No. 22; see
also 28 U.S.C. § 1332(c)(1); Hertz Corp. v. Friend, 559 U.S. 77, 92–93 (2010). JKIS initially declined to specify
the citizenship of each of its members. See Answer Am. Countercl. ¶ 15 (JKIS “affirmatively states no member of
JKIS is a citizen of the State of Pennsylvania”). The Court noted that this sort of assertion is insufficient to establish
diversity jurisdiction within the Seventh Circuit. See Feb. 26, 2025 Text Order (“[C]ourts ‘do not blithely accept
assurances along the lines of “no one on our side is a citizen of the opposing litigant’s state.”’” (quoting West v.
Louisville Gas & Elec. Co., 951 F.3d 827, 829 (7th Cir. 2020))). At the Court’s direction, the parties engaged in
limited jurisdictional discovery, see Mar. 7, 2025 Text Order, and AmGUARD filed an Amended Notice of
Removal, ECF No. 48, establishing that, at the time this case was removed to this Court, Silveri was a citizen of
Illinois, Iraida Silveri was a citizen of Illinois, and Kalyan Vallakati was a citizen of Maryland, such that JKIS was a
citizen of Illinois and Maryland, see Answer AmGUARD’s Jurisdictional Interrog., Am. Not. Removal Ex. A, ECF
No. 48-1; Thomas v. Guardsmark, LLC, 487 F.3d 531, 534 (7th Cir. 2007) (“For diversity jurisdiction purposes, the
citizenship of an LLC is the citizenship of each of its members.”). Because the parties are completely diverse and
the amount-in-controversy exceeds $75,000, Am. Not. Removal ¶¶ 5–19, the Court’s diversity jurisdiction is secure,
see 28 U.S.C. § 1332(a)(1).
AmGUARD moved for summary judgment on July 12, 2024. Mot. Summ. J. 1. JKIS’s
response to AmGUARD’s summary judgment motion includes a declaration from Silveri,
wherein he explains why he had previously misstated when a white thermoplastic polyolefin
membrane (“TPO membrane”) was installed on the Hotel’s roof and why, during his Rule

30(b)(6) deposition on JKIS’s behalf, he denied knowledge of any non-routine-maintenance
work that had been performed on the Hotel’s roof after JKIS purchased the Hotel in 2018 but
prior to the August 10, 2020 Derecho, e.g., that the TPO membrane was installed after JKIS
purchased the Hotel. See generally Silveri Decl., Resp. Mot. Summ. J., ECF No. 37-1 at 81–83;
see also Def.’s First Excerpt Silveri Dep. 43:16–23, Mot. Summ. J. Ex. A, ECF No. 34-1 at 1–16
(denying that any roofing work was done on the Hotel’s roof “outside of regular . . . routine
maintenance”). AmGUARD seeks to exclude Silveri’s declaration as a “sham affidavit,” see
generally Mot. Strike, and seeks leave to file a reply in support of the Motion to Strike, see
generally Mot. Leave File Reply. AmGUARD was given leave to include excess pages in its
summary judgment reply to account for issues related to Silveri’s declaration. Oct. 7, 2024 Text

Order.
DISCUSSION
I. Legal Standard
Summary judgment is proper when “the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). The movant in a summary judgment motion bears the initial burden of production; it must
point the court to the materials in the record that “demonstrate the absence of a genuine issue of
material fact” for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the movant
discharges its initial burden, the burden shifts to the nonmovant to “make a showing sufficient to
establish the existence of an element essential to that party’s case.” Id. at 322.
The court must “constru[e] the record in the light most favorable to the nonmovant,”
Payne v. Pauley, 337 F.3d 767, 770 (7th Cir. 2003), “resolving all factual disputes and drawing

all reasonable inferences in favor of [the nonmovant],” Grant v. Trs. of Ind. Univ., 870 F.3d 562,
568 (7th Cir. 2017). The nonmovant “is not entitled to the benefit of inferences that are
supported by only speculation or conjecture.” Nichols v. Mich. City Plant Plan. Dep’t, 755 F.3d
594, 599 (7th Cir. 2014) (quotation marks omitted). “[T]he mere existence of some alleged
factual dispute is insufficient to defeat a motion for summary judgment,” Dawson v. Brown, 803
F.3d 829, 833 (7th Cir. 2015) (quotation marks omitted), as “there must be evidence on which
the jury could reasonably find for the [nonmovant],” Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 252 (1986).
II. Analysis
A. Motion to Strike

AmGUARD moves to strike Silveri’s declaration, submitted as part of JKIS’s summary
judgment response, as a sham affidavit. See generally Mot. Strike. JKIS opposes, arguing that
Silveri’s declaration satisfies exceptions to the sham-affidavit doctrine. See generally Resp.
Mot. Strike, ECF No. 42. AmGUARD seeks to file a reply explaining why the declaration does
not satisfy those exceptions. See generally Mot. Leave File Reply; Reply Br. Mot. Strike, Mot.
Leave File Reply Ex. A, ECF No. 45-1. Generally, motions to strike are disfavored in the
context of summary judgment motion practice. See, e.g., Nuzzi v. St. George Cmty. Consol. Sch.
Dist. No. 258, 688 F. Supp. 2d 815, 830 (C.D. Ill. 2010) (expressing confidence in a court’s
ability to “rely only on admissible evidence and proper and accurate statements of the facts”
when resolving a summary judgment motion). Here, as will be explained below, AmGUARD is
entitled to the entry of summary judgment in its favor even if the factual averments of Silveri’s
declaration are considered, such that the Court need not resolve AmGUARD’s Motion to Strike.
This means that considering AmGUARD’s proposed reply is also unnecessary. Cf. Carnes v.

HMO La., Inc., No. 4:22-cv-04179-SLD-JEH, 2023 WL 6020534, at *2 (C.D. Ill. June 26, 2023)
(noting that leave to file a reply may be granted if the reply “would be helpful to [the court’s]
disposition of the motion” or if it would further “the interest of completeness” (quotation marks
omitted)), aff’d, 114 F.4th 927 (7th Cir. 2024). Both the Motion to Strike and Motion for Leave
to File Reply are MOOT.
B. Prompt Notice
AmGUARD asserts that it is entitled to summary judgment because JKIS failed to
comply with its duties under the Policy, namely that it failed to give AmGUARD “prompt
notice” that the Hotel had been damaged by the Derecho. Mot. Summ. J. 20–21; Reply Mot.
Summ. J. 34–35, ECF No. 46. JKIS advances two responses: first, AmGUARD should not be

allowed to seek summary judgment on this basis because it is an affirmative defense and
AmGUARD’s summary judgment motion is only timely insofar as it concerns AmGUARD’s
Amended Counterclaim; and second, material disputes of fact preclude the entry of summary
judgment on this basis. Resp. Mot. Summ. J. 39–41, ECF No. 37.
1. Prompt Notice: Timeliness of AmGUARD’s Motion
JKIS’s timeliness argument relies upon the Court’s prior scheduling orders. It asserts that
“November 17, 2023 was the deadline for dispositive motions related to all claims other than
AmG[UARD]’s Am. Counterclaim,” and requests that the Court “strike or otherwise disregard
AmG[UARD]’s [motion for summary judgment] with respect to this affirmative defense.” Id. at
39. JKIS’s argument misstates this case’s procedural history. When the Court granted
AmGUARD leave to file an Amended Counterclaim, it also granted AmGUARD’s Motion to
Extend Deadline to File Dispositive Motions, ECF No. 17. Dec. 15, 2023 Order 1. The Court
did not distinguish between a dispositive motion deadline for the case generally and a dispositive

motion deadline for AmGUARD’s counterclaim. See id. at 8. The parties were also directed to
file “a revised proposed discovery plan appropriately limited in scope.” Id. at 9. That
submission set a deadline for “[d]ispositive motions as to Amended Counterclaim,” but did not
set a different deadline for dispositive motions generally. See Am. Disc. Plan Am. Countercl. 2,
ECF No. 23. This practice—omitting a generally applicable dispositive motion deadline while
proposing a dispositive motion deadline for AmGUARD’s Amended Counterclaim—continued
in subsequent amended discovery plans. See 2d Am. Disc. Plan Am. Countercl. 2, ECF No. 28;
3d Am. Disc. Plan Am. Countercl. 2, ECF No. 32.
When the Court adopted the first Amended Discovery Plan as to AmGUARD’s Amended
Counterclaim it did indeed set a deadline for “Dispositive Motions as to Amended

Counterclaim.” Jan. 2, 2024 Text Order (Hawley, M.J.). However, due to additional disputes,
the deadline for dispositive motions was extended two more times, and those extensions were not
explicitly restricted to AmGUARD’s Amended Counterclaim. See Apr. 2, 2024 Text Order
(Hawley, M.J.) (“Dispositive Motions due by 6/28/2024.”); May 30, 2024 Text Order (Hawley,
M.J.) (“Dispositive Motions due by 7/12/24.”). The Court’s deadline for dispositive motions, as
set forth in its May 30, 2024 Text Order, was not restricted to AmGUARD’s Amended
Counterclaim. AmGUARD’s Motion for Summary Judgment was filed on July 12, 2024. This
filing was timely and satisfied the final dispositive motion deadline of July 12, 2024. See May
30, 2024 Text Order. The Court finds that its scheduling orders do not preclude AmGUARD
from seeking summary judgment on the basis of an affirmative defense.
Even if JKIS’s reading of the Court’s scheduling orders were correct, the Court would
sua sponte consider whether summary judgment was appropriate as to both AmGUARD’s

affirmative defense and JKIS’s Complaint. “While not encouraged, a district court can enter
summary judgment sua sponte, or on its own motion, under certain limited circumstances.”
Golden Years Homestead, Inc. v. Buckland, 557 F.3d 457, 461 (7th Cir. 2009) (quotation marks
omitted). Generally, “the party against whom summary judgment is entered” must have had
“notice and an opportunity to present its evidence.” Id. at 462. JKIS had notice that
AmGUARD was seeking the entry of summary judgment based on this affirmative defense, such
that JKIS presented its evidence and arguments in opposition thereto. See, e.g., Resp. Mot.
Summ. J. 39–42. Therefore, the Court will consider the parties’ arguments on their merits.
2. Prompt Notice: Merits of AmGUARD’s Motion
The Policy required JKIS to give “prompt notice” of loss or damage, specifically stating:

a. You must see that the following are done in the event of loss or damage to
Covered Property:
. . .
(2) Give us prompt notice of the loss or damage. Include a description of the
property involved.
(3) As soon as possible, give us a description of how, when and where the loss
or damage occurred.
(4) Take all reasonable steps to protect the Covered Property from further
damage, and keep a record of your expenses necessary to protect the Covered
Property, for consideration in the settlement of the claim. . . . However, we will
not pay for any subsequent loss or damage resulting from a cause of loss that is
not a Covered Cause of Loss. Also, if feasible, set the damaged property aside
and in the best possible order for examination.
Policy 0095. Under Illinois law,8 a court construing an insurance policy “must ascertain and
give effect to the intentions of the parties, as expressed in the policy language.” W. Am. Ins. Co.
v. Yorkville Nat’l Bank, 939 N.E.2d 288, 293 (Ill. 2010). “Insurance policy notice provisions
impose valid prerequisites to insurance coverage.” Id.; see also Farmers Auto Ins. Ass’n v.

Burton, 967 N.E.2d 329, 333 (Ill. App. Ct. 2012) (stating that insurance policy notice provisions
“are not merely technical requirements but are conditions precedent to an insurer’s contractual
duties”). “An insured’s breach of a policy’s notice clause will preclude the insured’s right to
recover under the policy.” Breckenridge Apartment Homes, LLC v. Greater N.Y. Mut. Ins. Co.,
No. 16 C 50115, 2019 WL 10248740, at *9 (N.D. Ill. Feb. 19, 2019); see also Country Mut. Ins.
Co. v. Livorsi Marine, Inc., 856 N.E.2d 338, 343 (Ill. 2006) (“Breaching a policy’s notice clause
by failing to give reasonable notice will defeat the right of the insured party to recover under the
policy.”). Whether notice was given within a reasonable time “generally is a question of fact.”
Yorkville Nat’l Bank, 939 N.E.2d at 293. “However, when there is no controversy as to the facts,
the question of what constitutes ‘within a reasonable time’ becomes a question of law.” Berglind

v. Paintball Bus. Ass’n, 930 N.E.2d 1036, 1044 (Ill. App. Ct. 2010) (quoting Olivieri v. Coronet
Ins. Co., 528 N.E.2d 986, 989 (Ill. App. Ct. 1987)); see also Towne Place Condo. Ass’n v. Phila.
Indem. Ins. Co., No. 17 C 1561, 2019 WL 3287837, at *4 (N.D. Ill. July 22, 2019) (“If no
material facts are in dispute, whether a plaintiff satisfied a notice provision is a question of law
that may be resolved on summary judgment.”).
JKIS asserts that “questions of fact exist as to whether, under the circumstances, JKIS
provided prompt notice to AmG[UARD],” pointing to its arguments about Silveri’s lack of
sophistication in insurance matters, JKIS’s stated justification for the delay in providing notice,

8 The parties do not raise any choice-of-law disputes, such that the Court applies Illinois law as the law of the forum
state. See, e.g., Camp v. TNT Logistics Corp., 553 F.3d 502, 505 (7th Cir. 2009).
and an asserted lack of prejudice to AmGUARD. Resp. Mot. Summ. J. 41. However, the
questions identified by JKIS do not concern the facts themselves, but rather the legal significance
of those facts. The facts relevant to the issue of prompt notice—Silveri’s asserted non-
sophistication, the Derecho, the noticing of the leaks, the repairs by Jiminez, JKIS’s submission

of a claim to AmGUARD, JKIS’s explanation for the delay in notice, and facts undergirding a
potential showing of prejudice to AmGUARD—are not in genuine dispute. The Court finds that
the notice issue is amenable to resolution as a matter of law because the relevant facts are
undisputed.
Illinois courts assess the reasonableness of delay in providing notice by analyzing five
factors: “(1) the specific language of the policy’s notice provision; (2) the insured’s
sophistication in commerce and insurance matters; (3) the insured’s awareness of an event that
may trigger insurance coverage; (4) the insured’s diligence in ascertaining whether policy
coverage is available; and (5) prejudice to the insurer.” Yorkville Nat’l Bank, 939 N.E.2d at 293–
94; State Auto Prop. & Cas. Ins. Co. v. Brumit Servs., Inc., 877 F.3d 355, 358 (7th Cir. 2017).

“No one factor trumps the others in this totality-of-the-circumstances analysis.” Brumit Servs.,
877 F.3d at 358 (citing Livorsi Marine, 856 N.E.2d at 346). The Court considers each factor in
turn.
a. Specific Policy Language
Here, the Policy states that an insured “must” provide “prompt notice.” Policy 0095.
Although undefined by the Policy, Illinois courts interpret “prompt notice” to require that the
insured give notice to the insurer “within a reasonable time.” See Huntington Chase Condo.
Ass’n v. Mid-Century Ins. Co., 379 F. Supp. 3d 687, 691 (N.D. Ill. 2019) (citing First Chi. Ins.
Co. v. Molda, 948 N.E.2d 206, 213 (Ill. App. Ct. 2011)); cf. Yorkville Nat’l Bank, 939 N.E.2d at
293 (“A policy provision requiring notice ‘as soon as practicable’ means notice must be given
‘within a reasonable time.’”). Some courts find that “the policy language ‘does not aid in [the]
reasonableness analysis [when] it does not identify a specific time frame for giving notice.’”
E.g., Towne Place Condo. Assoc., 2019 WL 3287837, at *5 (alteration in original) (quoting

Yorkville Nat’l Bank, 939 N.E.2d at 294). “Prompt,” if undefined by an insurance policy, sheds
little light standing alone. Yet other courts emphasize the mandatory nature of the word “must,”
finding that the word tends in favor of a finding that sooner is more reasonable than later under a
notice provision. See Cambridge Mut. Fire Ins. Co. v. Shelton, No. 19 C 7065, 2022 WL
3107598, at *3 (N.D. Ill. Aug. 3, 2022) (collecting cases). The Court finds that the mandatorily
phrased Policy language here weighs against finding that JKIS provided prompt notice.
b. Insured’s Sophistication
JKIS asserts that Silveri’s testimony “on behalf of JKIS demonstrates JKIS is not
sophisticated in insurance matters.” Resp. Mot. Summ. J. 41 (citing Def.’s First Excerpt Silveri
Dep. 96:1–6). But the testimony JKIS cites to is Silveri’s statement that he was “not a roofing

expert” and did not know if the damage was “going to be, you know, over our deductible or
under.” Def.’s First Excerpt Silveri Dep. 96:1–6. “Courts assess sophistication as part of a
totality-of-the-circumstances analysis and consider an insured’s sophistication in commercial
matters generally, not just their sophistication in insurance matters specifically.” Breckenridge
Apartment Homes, 2019 WL 10248740, at *10. The Seventh Circuit found that a high school
graduate with some college education was sufficiently sophisticated because he operated his own
business for four years, oversaw two employees, and surely had to renew the multiple insurance
policies that he had purchased over those years. Brumit Servs., 877 F.3d at 359. Conversely,
those who are found to be unsophisticated are individuals like teen drivers who had never
purchased their own insurance policies, Grasso v. Mid-Century Ins. Co., 536 N.E.2d 977, 979–
80 (Ill. App. Ct. 1989), or uneducated and inexperienced business owners who allowed default to
be entered against them before even contacting the insurer, Berglind, 930 N.E.2d at 1045–46; see
also id. at 1045 (noting that the individual “testified that when he receive[d] letters or other

documents in the mail that he d[id] not understand, he thr[e]w[] them away”).
Moreover, JKIS is the insured, not Silveri himself. Business entities like banks and
property-management associations are presumed to be more sophisticated than John Q. Public.
See Yorkville Nat’l Bank, 939 N.E.2d at 294 (“Yorkville is a bank presumed to be sophisticated
in the areas of commerce and insurance.”); Towne Place Condo. Ass’n, 2019 WL 3287837, at *5
(“[A]s a condominium association that managed almost ninety buildings, Towne Place can be
presumed to have dealt extensively with homeowners’ insurance and thus to have had at least
some degree of sophistication in insurance matters.”). Silveri’s testimony about deductibles is
not enough to conclude that JKIS should be classified as commercially unsophisticated. Silveri
is the managing member and general manager of an LLC, he attended franchise trainings and

out-of-state conventions related to the hotel industry over the course of two years, and he was
“fully involved in the day-to-day operations of the Hotel” in early 2020, i.e., by August 2020.
Silveri Decl. ¶¶ 2, 9, 14. While JKIS is not exactly a hotel empire, it is still an insured business
that manages multiple employees and navigates a franchise agreement. See Def.’s Second
Excerpt Silveri Dep. 130:14–135:19, Mot. Strike Ex. B, ECF No. 40-2 (describing duties under
JKIS’s franchise agreement). Silveri does not need to be an insurance or roofing expert for the
Court to find that an LLC which owns and operates a hotel is sufficiently sophisticated in
commercial issues such that it can be expected to understand that “must” and “prompt” mean
notice should be provided sooner rather than later. The Court finds that this factor weighs
against finding that JKIS provided prompt notice.
c. Insured’s Awareness of Coverage-Triggering Event
Under this factor, courts distinguish between when an accident occurred and when the

insured became aware of the damage caused by that accident. See Huntington Chase Condo.
Ass’n, 379 F. Supp. 3d at 692–93 (concluding that the insurance policy’s definition of
“occurrence” meant that the obligation to notify the insurer was triggered by “the loss or
damage—not the incident that caused the loss or damage”). “[T]he ‘awareness’ factor concerns
whether an insured is aware that an event is covered by the policy or not.” Breckenridge
Apartment Homes, 2019 WL 10248740, at *11. Here, the Derecho occurred on August 10, 2020,
JKIS first noticed leaks in November 2020, and JKIS gave AmGUARD notice of the assertedly
Derecho-caused damage in April 2021. Def.’s First Excerpt Silveri Dep. 71:8–11, 148:4–10.
AmGUARD does not argue that JKIS’s duty to provide prompt notice of a potentially coverage-
triggering event was triggered in August 2020, instead arguing that the duty was triggered in

November 2020. See Mot. Summ. J. 21. JKIS implicitly argues that while it was aware of leaks
in November 2020, it was not aware of the damage’s extent and therefore that a potentially
coverage-triggering event had occurred until SRR inspected the Hotel’s roof in March 2021. See
Resp. Mot. Summ. J. 41; see also Def.’s First Excerpt Silveri Dep. 97:21–98:3 (“You know, it
wasn’t until, you know, [SRR inspected the Hotel’s roof] that I found out the severity of the
damage.”).
No evidence in the record suggests that JKIS was aware of the full extent of the damage
in November 2020—that subjective awareness is not established until SRR’s inspection of the
Hotel’s roof in March 2021. Although JKIS knew that the Hotel’s roof was leaking and
attributed that leak to the Derecho, no evidence establishes that, as of November 2020, JKIS
knew that the leaks were significant enough to cause over $5,000 in damage, thereby exceeding
the Policy’s deductible and triggering coverage under the Policy. See Policy 0006 (setting the
“Property Deductible” at $5,000); id. at 0054 (“We will not pay for loss or damage to Covered

Property caused by or resulting from a Covered Cause of Loss as a result of one occurrence until
the amount of such loss or damage exceeds the applicable Deductible shown in the Declarations
or as set forth below.”). Perhaps the average hotelier would have had reason to believe that a
claim under the Policy was warranted based on the Derecho and leak alone. But viewing the
facts in JKIS’s favor and this factor in isolation, it weighs slightly in favor of finding that JKIS
provided prompt notice because it was not aware of the damage’s extent until March 2021.
However, as explained below, JKIS’s lack of diligence in investigating the loss or damage
reduces this factor’s value in the totality-of-the-circumstances analysis.
d. Insured’s Diligence in Ascertaining Coverage Availability
“With regard to the insured’s diligence in ascertaining whether coverage is available, a

lengthy delay in providing notice is not an absolute bar to coverage provided the insured’s reason
for the delay is justifiable under the circumstances.” Yorkville Nat’l Bank, 939 N.E.2d at 294.
For example, the Illinois Supreme Court found that a delay was justifiable where the insured’s
agent erroneously informed it that the insurance policy afforded no coverage for the occurrence.
Id. at 295. Conversely, “[i]nsureds are not diligent when, without justification or excuse, they
delay in undertaking an investigation necessary to comply with a notice provision.” Towne
Place Condo. Ass’n, 2019 WL 3287837, at *6. “To operate as an effective excuse for delay . . .
lack of knowledge must be without negligence or fault on the part of the person seeking to be
excused.” Int’l Harvester Co. v. Cont’l Cas. Co., 179 N.E.2d 833, 835 (Ill. App. Ct. 1962). In
Towne Place, once the insured knew enough to determine that the property’s roof had been
damaged and that a storm from a few months earlier may have been the cause, the insured’s
failure to further investigate for many more months tended in favor of finding that the delay in
providing notice was unreasonable. Towne Place Condo. Ass’n, 2019 WL 3287837, at *6. Here,

by November 2020, JKIS was in the Towne Place insured’s position—it knew that the Hotel’s
roof had been damaged, and it attributed that damage to the Derecho. Def.’s First Excerpt
Silveri Dep. 71:8–11. JKIS similarly did not inform the insurer of the occurrence until many
months later; here, four or five months later.
JKIS does not have a sufficient justification or excuse for its failure to give AmGUARD
notice in November 2020—JKIS was not “without negligence or fault” in November 2020
because it failed to investigate the extent of the assertedly Derecho-caused damage. See Int’l
Harvester Co., 179 N.E.2d at 835. Silveri described in detail his recollection of the Derecho,
noting both that the Quad Cities lost power and that the winds were so strong that a guest’s new
camper was blown over and damaged that night. Def.’s First Excerpt Silveri Dep. 61:5–23. In

other words, this was a memorably severe weather event. The damage was severe enough to
require JKIS to enlist a roofing contractor, Jiminez, to come out and perform repairs in
November 2020. See Answer Am. Countercl. ¶ 26, ECF No. 22. The record contains no
evidence that JKIS took any further steps to ascertain the damage’s full extent at that time; for
example, it did not seek any quotes regarding what it would cost to fully repair the damage.
JKIS instead chose to not investigate the full extent of the damage. See, e.g., Def.’s First Excerpt
Silveri Dep. 103:6–8 (“So I waited until spring to, you know, have someone show me the
severity of what was really going on.”). Silveri asserts that JKIS decided to delay investigating
the damage’s full extent because contractors would be available in spring and because the hotel
business was struggling due to COVID-19-related travel restrictions in November 2020. Id. at
102:12–103:8; Pl.’s Excerpt Silveri Dep. 153:14–154:3, Resp. Mot. Summ. J., ECF No. 37-1 at
5–11. If fixing the Hotel’s roof was going to be a big expense, Silveri wanted to delay.
These subjective business considerations might make some sense if one considered the

cost of repairs solely from the perspective of JKIS’s ledger. But JKIS wants AmGUARD to
perform its contractual obligation by covering damage assertedly caused by an uncontrollable
weather event. See Policy 0118 (defining “occurrence” as an “accident”). AmGUARD accepted
the coverage obligation in return for JKIS’s reciprocal obligation to promptly inform
AmGUARD when it became aware of a coverage-triggering event. Rather than act diligently,
JKIS chose to not investigate the Hotel’s leaky roof for many months. The culpability attendant
to JKIS’s actions must be viewed in the context of the contract which JKIS seeks to enforce, not
seasonal availability of contractors or the sluggish COVID-19 economy. Choosing to remain
ignorant was not a reasonable course of action under the terms of the Policy, which required
prompt notice and descriptions of damage. Id. at 0095.

JKIS, by failing to diligently investigate the extent of the damage in November 2020,
formed an erroneous subjective belief that the Derecho had not sufficiently damaged the Hotel’s
roof to trigger coverage under the Policy. “[A]n insured’s subjective beliefs must give way to an
objective standard of reasonableness based on all the circumstances.” Brumit Servs., 877 F.3d at
361 (quoting Kerr v. Ill. Cent. R.R. Co., 670 N.E.2d 759, 768 (Ill. App. Ct. 1996)). Here, the
reasonable insured, knowing that a severe weather event had occurred and suspecting that the
weather event had damaged its property’s roof to the extent that at least minor repairs were
needed, would either: (1) investigate the extent of damage and receive estimates for fully
repairing that damage; or (2) perform under its insurance policy by informing the insurer and
allowing it to exercise its own rights under the same. JKIS did neither, such that its lack of
diligence was objectively unreasonable, and this factor weighs heavily against finding that JKIS
provided prompt notice.
e. Prejudice to Insurer

JKIS perfunctorily asserts that AmGUARD was not prejudiced by not receiving notice in
November 2020. Resp. Mot. Summ. J. 41. AmGUARD responds that it was prejudiced because
Jiminez twice performed repairs on the Hotel’s roof, implicitly arguing that those repairs altered
the roof’s condition and frustrated a causal investigation, and because JKIS failed to mitigate its
losses by allowing water to continue to leak into the Hotel. Reply Mot. Summ. J. 35.
AmGUARD was plainly prejudiced by JKIS’s delay in providing notice. “[A] notice
provision ‘affords the insurer an opportunity to make a timely and thorough investigation and to
gather and preserve possible evidence.’” Brumit Servs., 877 F.3d at 361 (quoting Barrington
Consol. High Sch. v. Am. Ins. Co., 319 N.E.2d 25, 27 (Ill. 1974)). “When the goods or property
at issue are replaced, destroyed, or otherwise manipulated before the insurer has an opportunity

to inspect them, the insurer has been prejudiced.” Huntington Chase Condo. Ass’n, 379 F. Supp.
3d at 694. After JKIS noticed assertedly Derecho-caused leaks in November 2020, JKIS
engaged a contractor to alter the Hotel’s roof on two separate occasions, and AmGUARD was
not able to even begin investigating JKIS’s claim until many months later in April 2021. The
delay and repairs altered the Hotel’s roof’s condition, frustrating the ability to determine whether
the leaks were due to shoddy workmanship or the Derecho or even some other unidentified
cause. This “significant uncertainty . . . deprived [AmGUARD] of the benefit it expected to
receive from the notice provision,” including the ability to effectively investigate the claim. See
Brumit Servs., 877 F.3d at 362. Further, the Hotel’s roof continued to be in a damaged
condition, as evidenced by the recurring leaks in March 2021. The continued leaks undoubtedly
increased the costs of repair, also prejudicing AmGUARD. This factor weighs heavily against
finding that JKIS provided prompt notice.
In sum, only one Yorkville factor conceivably weighs in favor of finding that JKIS

provided prompt notice, but only if one ignores JKIS’s inexcusable lack of diligence in
investigating whether coverage under the Policy was available. The remaining factors all favor
finding that JKIS failed to provide prompt notice as a matter of law. A reasonable insured would
have further investigated the assertedly Derecho-caused damage—JKIS did not do so, and
therefore its failure to give AmGUARD prompt notice precludes it from forcing AmGUARD to
foot the bill for repairing the Hotel’s roof. AmGUARD is entitled to summary judgment as to
JKIS’s Count I for breach of contract.
C. Remaining Claims
Finding that AmGUARD did not breach its contract with JKIS moots consideration of
AmGUARD’s Amended Counterclaim, which sought a declaration that it did not owe JKIS

coverage under the Policy either because JKIS intentionally misrepresented when the TPO
membrane was installed or because the damage was not caused by a covered cause of loss. Am.
Countercl. ¶¶ 42–70, ECF No. 21. Count II of JKIS’s Complaint asserts that AmGUARD
vexatiously refused to settle, in violation of 215 ILCS 5/155. See Compl. ¶¶ 14–19. In the
absence of a valid claim for coverage under the Policy, JKIS’s section 155 claim necessarily
fails. See, e.g., Mashallah, Inc. v. W. Bend Mut. Ins. Co., 20 F.4th 311, 322 (7th Cir. 2021)
(“[W]here no benefits are owed under the terms of an insurance policy, a claim of bad-faith
denial under 215 ILCS 5/155 necessarily fails.”). AmGUARD is entitled to summary judgment
in its favor on JKIS’s Count II for vexatious refusal to settle as well.
CONCLUSION
Accordingly, AmGUARD’s Motion for Summary Judgment on its Amended
Counterclaim for Declaratory Judgment and on JKIS’[s] Complaint, ECF No. 34, is GRANTED,
AmGUARD’s Motion to Strike “Sham” Declaration of Jonath[a]n Silveri Submitted with

Plaintiff’s Resistance to AmGUARD’s Motion for Summary Judgment, ECF No. 40, is MOOT,
and AmGUARD’s Motion for Leave to File Instanter Reply Brief in Further Support of Motion
to Strike “Sham” Declaration of Jonath[a]n Silveri Submitted with Plaintiff’s Resistance to
AmGUARD’s Motion for Summary Judgment, ECF No. 45, is MOOT. The Clerk is directed to
enter judgment and close the case.

Entered this 31st day of March, 2025.
s/ Sara Darrow
SARA DARROW
CHIEF UNITED STATES DISTRICT JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10836086. Public record. Not legal advice.