The opinion of the court was delivered by: Marovitz, District Judge.
Motions for Summary Judgment and Judgment on the Pleadings
This is a contract action alleging, alternatively, a breach of
each defendant's contract of insurance with plaintiff.
Jurisdiction is based on diversity of citizenship since plaintiff
Ashland Savings & Loan Association (Ashland) is an Illinois
corporation and defendants Aetna Insurance Company (Aetna) and
Insurance Company of North America (INA) are corporations of
Connecticut and Pennsylvania, respectively.
As amended and supplemented, the Complaint essentially alleges
that INA insured Ashland against loss and damage by fire to a
certain building and that Aetna insured Ashland against loss and
damage resulting from the insured's failure to effectively cover
the building with insurance. The Complaint further alleges that
plaintiff suffered loss and damage as a result of a fire in the
building and that one of the defendants is liable for damages.
Aetna has moved for summary judgment asserting that an
applicable fire insurance of INA was in force at the time of the
alleged loss. INA has also moved for summary judgment, asserting
that its policy with plaintiff had expired before the alleged
loss was incurred. Ashland has moved for a judgment on the
pleadings, asserting that it is entitled to judgment as to
liability against whichever company is found to have insured
plaintiff's building at the time of the alleged incident.
The factual circumstances are not complex. During all relevant
times, Ashland owned and operated an apartment building at
5054-58 N. Winthrop Ave., Chicago, Illinois. On or about October
21, 1966, Ashland and INA entered into an insurance contract,
numbered AOP 6-07-80, which, among other things, provided
protection against fire loss. Among the provisions in the
contract were the following (at pp. 1, 5):
"This Policy covers from October 21, 1966 to until
canceled noon, Standard Time, at Insured's Address."
On October 2, 1969, INA sent Ashland a notice of cancellation to
be effective October 21, 1969. Subsequent to this notice, no
premium was charged to or paid by Ashland.
Plaintiff had also entered into a contract of insurance with
Aetna, effective February 1, 1967. This special multiperil
policy, numbered MP 14 51 24, insured plaintiff against all
direct loss and damage under an "Errors and Omissions Form,"
which, among other things, provided (at p. 3):
"A. COVERAGE-MORTGAGEE INTEREST: * * * this company
agrees to indemnify the insured for loss to the
insured's mortgagee interest * * * in real property
and in personal property mortgaged in connection
therewith, when such loss occurs through error or
accidental omission on the part of the insured (or
those representing the insured) in the operation of
the Insured's customary procedure in requiring,
procuring and maintaining valid policies or other
evidences of insurance against the perils described
below, * * *
(2) on such property during and after foreclosure
by the Insured or when sold under a conditional
sales agreement or other instrument ...