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Founders Mutual Casualty Co. v. Mark

AUGUST 3, 1973.

FOUNDERS MUTUAL CASUALTY COMPANY, PLAINTIFF-APPELLANT,

v.

JULIUS MARK ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Cook County; the Hon. EDWARD F. HEALY, Judge, presiding.

MR. PRESIDING JUSTICE DRUCKER DELIVERED THE OPINION OF THE COURT:

Plaintiff appeals from a declaratory judgment finding that defendants Julius and Ada Mark were covered by an Owner's, Landlord and Tenant liability policy for an accident to one Maria Lopez which occurred on February 2, 1969, at 901-909 Wellington Street, Chicago.

Plaintiff contends that the policy covers only the named insured trustee and beneficiaries under the trust; that when the property was removed from the named insured trust, without a consent to assignment of the policy, coverage for accidents on the removed property was extinguished; that the policy was a personal contract between the insurer and insured and did not cover the beneficiaries under a different trust.

On November 30, 1967, plaintiff issued its Owner's, Landlord and Tenant Policy, Number OT2279, in favor of the La Salle National Bank, individually and as trustee under trust number 31386, all beneficiaries thereunder and agents thereof, effective as of November 8, 1967. The beneficiaries, Julius Mark and Ada Mark, held a one-half interest and Norbert Ross and Ilse Ross the other half interest. The trust contained two buildings which will be referred to respectively as the Wellington building (where the accident occurred) and the Rosemont building.

Thereafter certain transactions occurred affecting both the title to the Wellington property and the beneficiaries. On March 14, 1968, the Wellington building was conveyed out of said trust at the direction of all the beneficiaries leaving only the Rosemont property in the trust and vesting in the defendants Julius and Ada Mark and Norbert and Ilse Ross undivided one-half interests in the Wellington property as joint tenants.

Subsequent to March 14, 1968, defendants Julius and Ada Mark transferred all their legal title and interest in the Wellington property to their children, Warren and Esther Mark. The property was then placed in a new trust with the Chicago City Bank and Trust Company as trustee under trust number 8083, with Warren and Esther Mark and the Rosses as beneficiaries. After several further transactions, on September 9, 1968, the defendants Julius and Ada Mark acquired full beneficial ownership of the Wellington property as beneficiaries under this second and different trust. This was accomplished by transfer from Warren and Esther Mark and the Rosses to Marie Costigan and from her to Julius and Ada Mark.

With regard to the La Salle National Bank trust number 31386, defendants Julius and Ada Mark on September 5, 1968, assigned to Norbert and Ilse Ross all their right, title and interest in said trust consisting only of the Rosemont property.

It is claimed by plaintiff, and has not been refuted by the defendants, that no notice of any of the above transfers was given to plaintiff, and that plaintiff's consent to any or all of the above transactions was not obtained, nor was the policy of insurance, number OT2279, ever formally assigned from the La Salle National Bank, as trustee, to the Chicago City Bank and Trust Company, as trustee under trust number 8083, or endorsed by plaintiff to show such assignment.

On February 2, 1969, defendant Maria Lopez allegedly sustained an injury on the premises of the Wellington property and as a result of said injury sued defendants Julius and Ada Mark for damages in the Circuit Court of Cook County. Some time thereafter the Marks made a demand upon the plaintiff to undertake the defense of their lawsuit on the grounds that they had been owners of half of the beneficial interest in the original trust, which was known as La Salle National Bank trust number 31386, and that they were covered by the insurance policy issued to that trust as the beneficiaries thereunder. These events gave rise to this present action seeking to determine the coverage of the policy issued by plaintiff.

Plaintiff made two inspections of the Wellington building, one in 1967 and one in October of 1968, about three months prior to Maria Lopez's alleged injury. It should also be noted that no premium rebates were given for any period prior to and including February 2, 1969, the date of the alleged accident.

Opinion

It is the plaintiff's contention that since paragraph 19 under the title "Conditions" in its policy was not complied with, it owed no duty to defendants who are the beneficiaries under Chicago City Bank and Trust Company trust number 8083 but not under the named insured trust number 31386 of the La Salle National Bank. This provision in the policy reads:

"19. ASSIGNMENT. Assignment of interest under this policy shall not bind the company until its consent is endorsed hereon; if, however, the named insured shall die, this policy shall cover the named insured's legal representative as named insured; provided that notice of cancellation addressed to the insured named in the declarations and mailed to the address shown in this policy shall be sufficient notice to effect cancellation of this policy."

• 1 Endorsement number 1, made a part of policy OT2279, lists the name of the insured as "La Salle National Bank, individually and as trustee under trust number 31386, all beneficiaries thereunder and agents thereof." Due to this endorsement defendants must ...


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