Ella and Ramin LLC v. Travelers Ins. Co., No. 24-cv-07870 (Mar. 31, 2026)

Case details
Full caption
Ella and Ramin LLC v. Travelers Insurance Company
Country
United States
Jurisdiction
Federal
Decided
Mar. 31, 2026
Disposition
Dismissed
Majority
Andrea R. Wood (J.) (unanimous Court)
ELLA AND RAMIN LLC, Plaintiff, v. TRAVELERS INSURANCE..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.12026 WL 891866Only the Westlaw citation is currently available.United States District Court, N.D. Illinois, Eastern Division,EASTERN DIVISION.ELLA AND RAMIN LLC, Plaintiff,v.TRAVELERS INSURANCECOMPANY, et al., Defendants.No. 24-cv-07870|Filed: 03/31/2026Attorneys and Law FirmsElla and Ramin LLC, Studio City, CA, Pro Se.Thomas Berthold Orlando, Foran Glennon Palandech Ponzi& Rudloff PC, Chicago, IL, for Defendant.ORDERAndrea R. Wood United States District Judge*1 Defendants’ motion to dismiss Counts II–V of theamended complaint [20] is granted in part and denied inpart. Counts III and IV are dismissed without prejudice;Count V is dismissed with prejudice. Count II survivesbut will be treated as arising under Section 155 of theIllinois Insurance Code. If he wishes, Plaintiff has until4/21/2026, to file a motion for leave to file a secondamended complaint that remedies the deficiencies in theclaims dismissed without prejudice. Defendants Alan D.Schnitzer and Travelers Insurance Company are dismissed asdefendants with prejudice. Plaintiff's motion for leave to filea sur-reply [25] is granted. The Court understands Plaintiff'smotion for leave to file a sur-reply [25] to be the sur-replybecause it includes the arguments that he seeks to make. To theextent that Plaintiff seeks to file another document, no furthersubmissions are necessary. The Court took the sur-reply [25]and cited authority [50-1], as well as Defendants’ response[52], into account. Plaintiff's motion for Rule 11 sanctions[30] is denied. See the accompanying Statement for details.STATEMENTThe present motions relate to a dispute between PlaintiffRamin Ghayoori, owner of a condo unit in Chicago, and hisinsurer, Defendant TravCo Insurance Company (“TravCo”).After the property was damaged by water leaking fromthe roof, Ghayoori submitted several claims to TravCo. Heinitiated this action because he was dissatisfied with TravCo'sresponse to his claims, denying some and offering whatGhayoori felt was insufficient compensation for others. Inaddition to TravCo, he named Travelers Insurance Company,which he asserts is TravCo's parent company, and AlanSchnitzer, who he asserts is the CEO of that parent company,as Defendants. Now before the Court are Defendants’ partialmotion to dismiss the Amended Complaint for failure to statea claim, pursuant to Federal Rule of Civil Procedure 12(b)(6),as well as Ghayoori's motion for sanctions pursuant to FederalRule of Civil Procedure 11(c).I. BackgroundFor purposes of the motion to dismiss, the Court accepts astrue all well-pleaded facts in the Amended Complaint andviews those facts in the light most favorable to Ghayoorias the non-moving party. Killingsworth v. HSBC Bank Nev.,N.A., 507 F.3d 614, 618 (7th Cir. 2007).The allegations of the Amended Complaint can besummarized quickly. In September 2021, Ghayoori contactedTravCo to report substantial water damage caused byrecurring roof leaks at the Chicago condo he owned. (Am.Compl. 3.3, Dkt. No. 14.) Beginning in September 2021,Ghayoori submitted multiple claims and complied withall TravCo's instructions. (Id. 3.4.) The claims wereaccompanied by detailed evidence of ongoing water damage.(Id.) However, TravCo either denied the claims outright oroffered inadequate compensation. (Id. 3.5.) TravCo issueda judgment remotely and did not initially conduct any in-person inspection of the property. (Id. 3.6.) Moreover,TravCo relied on a report from the condo association that waslater shown to be inaccurate. (Id. 3.7.) Ghayoori allegesthat TravCo ignored clear evidence, which he provided toTravCo, that contradicted the association's report. (Id.) Healso alleges that TravCo failed to reassess his claims. (Id. 3.11.) Meanwhile, Schnitzer, purportedly CEO of TravCo'sparent company, ignored multiple emails from Ghayooriseeking assistance and a fair resolution of his claims. (Id. 3.8.) Ghayoori's property eventually became uninhabitable,causing him significant financial loss and emotional distress.(Id. 3.9.) Finally, in June 2024, TravCo terminated hisinsurance policy. (Id. 3.10.)
ELLA AND RAMIN LLC, Plaintiff, v. TRAVELERS INSURANCE..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.2*2 As a result of these events, Ghayoori initiated thepresent action, initially asserting claims against TravelersInsurance Company and Schnitzer, and later amendinghis complaint to include TravCo as a defendant. TheAmended Complaint raises five common law claims inseparate counts. Count I alleges breach of contract, CountII alleges bad faith, Count III alleges negligent infliction ofemotional distress (“NIED”), Count IV alleges intentionalinfliction of emotional distress (“IIED”), and Count V allegesuninhabitable living conditions. Now, TravCo and Schnitzermove to dismiss Counts II–V for failure to state a claim.(Dkt. No. 20.) Moreover, Defendants argue that Schnitzer andTravelers Insurance Company are not proper defendants andmust be dismissed.II. DiscussionTo survive a Rule 12(b)(6) motion to dismiss, “a complaintmust contain sufficient factual matter, accepted as true, to‘state a claim to relief that is plausible on its face.’ ” Ashcroftv. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.Twombly, 550 U.S. 544, 570 (2007)). This pleading standarddoes not necessarily require a complaint to contain detailedfactual allegations. Twombly, 550 U.S. at 555. Rather, “[a]claim has facial plausibility when the plaintiff pleads factualcontent that allows the court to draw the reasonable inferencethat the defendant is liable for the misconduct alleged.”Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir.2014) (quoting Iqbal, 556 U.S. at 678). Defendants here moveto dismiss Counts II–V of the Amended Complaint, that is, allGhayoori's tort claims. They argue that Ghayoori fails to statea claim for any of the asserted torts, and that all Ghayoori'stheories are either preempted by Section 155 of the IllinoisInsurance Code or duplicative of his breach of contract claimin Count I.A. Count II – “Bad Faith”The Court begins with Count II. Defendants contend thatCount II must be dismissed because “bad faith” is notan independent tort in Illinois. That is correct. However,Ghayoori has alleged facts sufficient to state a claim underSection 155 of the Illinois Insurance Code, 215 ILCS 5/155.The Court therefore treats the allegations as raising a claimunder that statute. Section 155 “provides an extracontractualremedy to policyholders whose insurer's refusal to recognizeliability and pay a claim under a policy is vexatious andunreasonable.” Cramer v. Ins. Exch. Agency, 675 N.E.2d897, 900 (Ill. 1996). Plaintiffs may also recover for aninsurer's unreasonable and vexatious delay in payment. Id.at 899. “[S]ection 155 does not preempt a separate andindependent tort action involving insurer misconduct.” Id. at900. However, the Illinois Supreme Court has clearly held“that the tort of bad faith is not a separate and independenttort action that is recognized in Illinois.” Id.Here, Ghayoori alleges that TravCo failed to investigate hisclaims adequately, relied on inaccurate information providedby the condo association, and denied some claims whileundercompensating him for others. In doing so, Ghayoorimerely alleges “bad faith or unreasonable and vexatiousconduct, without more.” Id. at 904. The allegations donot constitute a separate tort. But such allegations areexactly what Section 155 covers. See 2 Lemoyne ParkwayCondo. Ass'n v. Travelers Cas. Ins. Co. of Am., No. 23-CV-2130, 2024 WL 22234, at *3 (N.D. Ill. Jan. 2, 2024)(“For example, if Plaintiff is correct that Travelers did notadequately investigate the claim and failed to objectivelyevaluate the claim, such actions could constitute vexatiousand unreasonable behavior.”). And because pleadings infederal court are not required to allege specific “legaltheories,” so long as they provide fair notice, Hefferman v.Bass, 467 F.3d 596, 600 (7th Cir. 2006), Ghayoori is freeto seek attorneys’ fees or statutory damages for violation ofSection 155 based on the conduct he ascribes to TravCo.B. Counts III and IV – Negligent Infliction of EmotionalDistress and Intentional Infliction of Emotional Distress*3 While NIED and IIED are independent torts that arenot preempted by Section 155, Cramer, 675 N.E.2d at 900,Ghayoori fails to allege facts sufficient to state either typeof claim. Beginning with NIED, Illinois recognizes both“bystander” and “direct victim” claims of NIED. Lewis v.CITGO Petroleum Corp., 561 F.3d 698, 702 (7th Cir. 2009).Ghayoori's claim is necessarily one brought as a directvictim. See id. at 703 (explaining the difference betweenthe two theories of liability). However, Illinois “precedentmakes clear that a direct victim's claims for negligentinfliction of emotional distress must include an allegationof contemporaneous physical injury or impact.” Schweihs v.Chase Home Fin., LLC, 77 N.E.3d 50, 59 (Ill. 2016); see alsoLewis, 561 F.3d at 703 (“Under the impact rule, a direct victimmay not recover for emotional distress suffered as a resultof the defendant's alleged negligence unless the emotionaldistress was accompanied by a contemporaneous physical
ELLA AND RAMIN LLC, Plaintiff, v. TRAVELERS INSURANCE..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.3injury to or impact on the plaintiff.” (internal quotation marksomitted)). Ghayoori does not allege any physical injury orimpact—a deficiency that is fatal to his NIED claim.While an insurer's conduct can form the basis for an IIEDclaim, “the standard required to allege a claim for IIED [inIllinois] is very high.” Evans v. Vocamotive, Inc., No. 11 C8197, 2012 WL 4120476, at *3 (N.D. Ill. Sept. 18, 2012).First, the conduct involved must betruly extreme and outrageous. Second,the actor must either intend thathis conduct inflict severe emotionaldistress or know that there is at least ahigh probability that his conduct willcause severe emotional distress. Third,the conduct must in fact cause severeemotional distress.Schweihs, 77 N.E.3d at 63. A defendant may only be foundliable when “the conduct has been so outrageous in character,and so extreme in degree, as to go beyond all possiblebounds of decency, and to be regarded as atrocious, andutterly intolerable in a civilized community.” Id. (internalquotation marks omitted). Even accepted as true, the conductalleged by Ghayoori does not provide a plausible basisto find that TravCo or Schnitzer acted in an extreme andoutrageous manner. TravCo's denial, or underpayment, ofclaims, alleged failure to investigate, and reliance on allegedlyfalse information does not meaningfully depart from a basicbreach of contract claim. In the Court's view, such allegedconduct does not even reach the level of “mere insults,indignities, threats, annoyances, petty oppressions, or othertrivialities.” Id. And if it did, that still is not enough to supporta claim for IIED. Id.Ghayoori also asserts that TravCo terminated his policy toretaliate against him for seeking compensation. Setting asidethe conclusory nature of this allegation, retaliation (evenunfair retaliation) does not automatically constitute extremeand outrageous conduct. See Ulm v. Mem'l Med. Ctr., 964N.E.2d 632, 643 (Ill. App. Ct. 2012) (holding at the summaryjudgment stage that an employer's retaliation against anemployee who refused to engage in criminal activity was notextreme and outrageous). And Schnitzer's refusal to respondto Ghayoori's emails cannot be called “utterly intolerable ina civilized community.” Schweihs, 77 N.E.3d at 63. WhileGhayoori's allegations are entirely conclusory on the secondand third elements of the tort (intent and severity), his IIEDclaim fails at the first step. Accordingly, both the NIED andIIED claims must be dismissed.C. Count V – Uninhabitable Living ConditionsFinally, Count V purports to be a claim for “uninhabitableliving conditions.” Because Ghayoori concedes that there isno such standalone tort and clarifies that he simply seeksconsequential damages arising from Defendants’ breach ofcontract, Count V is dismissed. The issue of what types ofdamages are appropriate is not before the Court at this stage,so the Court need not address it further.D. Claims Against Defendants TravelersInsurance Company and Schnitzer*4 In addition to the tort claims, Defendants seek dismissalof Travelers Insurance Company and Schnitzer as defendants.Travelers Insurance Company was named in Ghayoori'sinitial complaint, and Ghayoori did not remove it when headded TravCo as a defendant in the Amended Complaint.Defendants contend that Travelers Insurance Company doesnot exist. Rather, TravCo is a subsidiary of The TravelersCompanies, Inc., a holding company for multiple insurancecompanies. Despite spending pages on the topic, Ghayooridoes not squarely respond to the argument that TravelersInsurance Company does not exist as a legal entity. In fact, tosome extent, he appears to concede that it might not.1Whether Travelers Insurance Company is or is not a separatelegal entity is ultimately of no consequence. It is clearfrom the attachments to Ghayoori's Amended Complaint thatTravCo was the insurer that issued the policy in question.(Evid. of Prop. Ins., Dkt. No. 14 (listing “Travco InsuranceCompany” as the company that issued the policy); Letterdated Feb. 24, 2023, Dkt. No. 14 (naming “Travco InsuranceCompany” as the insurance company).) Thus, Ghayoori's ownfiling shows that TravCo is the proper corporate defendantin this case. See Main Bank of Chi. v. Baker, 427 N.E.2d94, 101 (Ill. 1981) (“It is a well-established principle that acorporation is separate and distinct as a legal entity from itsshareholders, directors and officers and, generally, from othercorporations with which it may be affiliated.”). None of theallegations in the Amended Complaint suggest a plausiblebasis for maintaining Travelers Insurance Company as a
ELLA AND RAMIN LLC, Plaintiff, v. TRAVELERS INSURANCE..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.4defendant. It did not issue the insurance policy and, basedon the Amended Complaint, the company that issued thepolicy (TravCo) is responsible for the wrongdoing alleged.The Court is unsure why Ghayoori is so intent on keepingTravelers Insurance Company as a named Defendant, giventhat TravCo has appeared, has answered Count I of theAmended Complaint, and can likely provide all requestedrelief. Regardless, Travelers Insurance Company is dismissedas a defendant.Defendant Schnitzer is alleged to be the CEO of TravelersInsurance Company. Assuming that is true, he still must bedismissed as a defendant. Schnitzer is not a party to theinsurance policy and thus cannot be held liable for any breachof contract. La. Firefighters’ Ret. Sys. v. N. Tr. Invs., N.A., No.09 C 7203, 2012 WL 601861, at *4 (N.D. Ill. Feb. 23, 2012)(“It is axiomatic that non-parties to a contract are not liablefor its breach.”). Section 155 also does not apply to Schnitzerbecause the statute “presupposes” a breach of contract “actionon the policy.” Cramer, 675 N.E.2d at 902. And the Court hasdismissed all the tort claims asserted by Ghayoori. As a result,there is no longer a theory under which Schnitzer can be heldliable. Moreover, Ghayoori does not allege, and it is unlikelythat he could allege, facts supporting even the most basicelement of a negligence claim: a duty owed by the defendantto the plaintiff. See Lewis, 561 F.3d at 702 (providing elementsof a negligence claim). Schnitzer is not a proper defendantand must be dismissed.E. Defendants’ Motion for SanctionsAs a final matter, Ghayoori has moved for sanctions againstDefendants’ counsel, pursuant to Federal Rule of CivilProcedure 11(c). (Dkt. No. 30.) The motion is based on asentence in Defendants’ reply brief identifying legal errorsin Ghayoori's response brief and suggesting that they werecaused by Ghayoori's use of generative artificial intelligence(“AI”). Ghayoori's motion is frivolous and therefore denied.Use of AI is not prohibited by this Court's (or this Circuit's)rules. See Jones v. Kankakee Cnty. Sheriff's Dep't, 164 F.4th967, 970 (7th Cir. 2026) (“[M]indful that before today'sdecision we have not supplied any guidance on the use of AIby pro se litigants, we stop short of imposing any form ofsanction on [the pro se plaintiff].”). However, “all litigants—represented and unrepresented—must read their filings andtake reasonable care to avoid misrepresentations, factual andlegal.” Id.*5 Ghayoori readily admits that he used AI to preparehis filings. But he also asserts that he took care to avoidany legal misrepresentations. Nonetheless, he does repeatedlymisrepresent the law in his briefs and does not explain whyor how those misrepresentations occurred.2 Since Ghayooriis the party that has moved for sanctions, not Defendants,the Court will not spend more time on his use of AI. It isenough to say that Defendants’ counsel plainly had a good-faith basis to call the Court's attention to potential mistakesor misrepresentations of the law. As officers of the Court,attorneys are in fact obligated to raise such mistakes whennecessary. Doing so is certainly not sanctionable. Ghayoori'smotion is therefore denied.III. ConclusionFor the foregoing reasons, Defendants motion to dismissCounts II–V of the Amended Complaint (Dkt. No. 20) isgranted as to Counts III, IV, and V. Counts III and IV aredismissed without prejudice. Count II is not dismissed but willbe treated as asserting cause of action pursuant to Section 155of the Illinois Insurance Code, 215 ILCS 5/155. If Ghayooribelieves he can remedy the deficiencies in the claimsdismissed without prejudice, he may file a motion by April21, 2026, seeking leave to file a second amended complaint.In addition, Defendants Travelers Insurance Company andSchnitzer are dismissed with prejudice, as they are not properparties. Ghayoori's motion for leave to file a sur-reply (Dkt.No. 25) is granted. And Ghayoori's motion for sanctions (Dkt.No. 30) is denied.All CitationsSlip Copy, 2026 WL 891866Footnotes
ELLA AND RAMIN LLC, Plaintiff, v. TRAVELERS INSURANCE..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.51Ghayoori states: “TravCo Insurance Company is wholly owned by Travelers Property Casualty Corp., whichis itself part of the broader Travelers Companies, Inc. corporate family.” (Pl.’s Resp. to Defs.’ Mot. to Dismiss§ II.C, Dkt. No. 21.)2Few of the cases Ghayoori cites support the proposition for which he cites them. In some instances, hecites cases that are completely unrelated to the proposition. For example, he cites Harris v. One HopeUnited, Inc., 28 N.E.3d 804 (Ill. 2015), for the proposition that corporate subsidiaries and their parent entitiesmay be treated as a single legal entity, even though the case considers whether Illinois should recognize anew discovery privilege and has nothing to do with corporate law. A more egregious example is Ghayoori'srepeated citation to Heritage Common Partners v. Village of Summit. The two reporter citations he providesindicate that the case is an Illinois state court opinion from 2009. However, neither of the two parallel citationslead to a case by that name. Indeed, the Court could not identify any Illinois case with that case name.The Court did find two reported federal opinions with the same case name, one from this District and theother from the Seventh Circuit. However, those opinions are from 1990 and 1991 respectively, not 2009. Andneither relates to the proposition for which Ghayoori cites the case or the subject matter of this case.End of Document© 2026 Thomson Reuters. No claim to original U.S. Government Works.
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