Michael Carey and James Fann owned a mixed-use building (residential and dental office) in Chicago, Illinois. The building was substantially damaged in a fire. Carey and Fann made a claim to their insurer, American Family Insurance, but the company denied coverage. Carey and Fann sued American Family. After a bench trial, Carey and Fann were awarded more than $427,000.
American Family appealed. At trial, Carey’s and Fann’s damages expert neglected to put in evidence of depreciation of the building, a required element under Illinois law. Carey and Fann argued that American Family waived the argument that the damages evidence was deficient. Their argument relied on the “invited error” doctrine − American Family’s acceptance of the damages calculation and the company’s failure to put in its own evidence of depreciation.
The First District Illinois Appellate Court rejected Carey’s and Fann’s position. The court ruled there had been no “invited error” or waiver: American Family sufficiently reserved the right to dispute damages and it was not the insurer’s responsibility to assure the building owners’ damages evidence was appropriate. Here is the court’s rationale: