APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIFTH DIVISION
Stover et al., Defendants and
512 N.E.2d 9, 159 Ill. App. 3d 22, 111 Ill. Dec. 105 1987.IL.1006
Appeal from the Circuit Court of Cook County; the Hon. Richard L. Curry, Judge, presiding.
PRESIDING JUSTICE SULLIVAN delivered the opinion of the court. LORENZ and MURRAY, JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE SULLIVAN
This is an appeal from orders entered in an interpleader action brought by an insurer of property damaged in a fire to determine whether the mortgagors or the assignees of the mortgagee's interest in the insurance proceeds were entitled to those proceeds where the fire occurred after a judgment of foreclosure and sale was entered but before the property was sold at a sheriff's sale to the assignees whose bid extinguished the mortgage. The circuit court granted the mortgagors' motion for summary judgment, denied the assignees' motion for summary judgment and entered judgment on the pleadings in favor of the mortgagors and against the insurer in the amount of $60,653.
The facts are uncontroverted. Western Employers Insurance Company (Western Employers) issued a fire insurance policy covering an apartment building located at 4448-58 North Malden, Chicago, Illinois. The policy contained a standard mortgage clause, providing for payment for loss to the premises to be made to the named mortgagee, Uptown Federal Savings & Loan Association (Uptown Federal). The policy listed as the named insured the Bank of Ravenswood (Ravenswood), the trustee under a land trust, and Joseph L. Doane (Doane), the sole beneficiary thereof.
The building was substantially damaged by a fire which occurred on September 23, 1985. Prior to that date, on July 22, 1985, Uptown Federal, as mortgagee, obtained a judgment of foreclosure and sale against Ravenswood/Doane, the mortgagors. Following the fire, Uptown Federal entered into negotiations with Phillip J. Stover and Annette A. Stover (the Stovers) concerning the purchase of the firedamaged premises at the sheriff's sale.
Uptown Federal represented to the Stovers that it had the right to the insurance proceeds, which were worth in excess of $60,000. Based on that representation, the Stovers offered to bid $151,932 at the sheriff's sale for both the damaged premises and an assignment from Uptown Federal of its right to the insurance proceeds if they made the highest bid. On December 10, 1985, Uptown Federal accepted their offer and the Stovers made the agreed bid, which was the high bid. The Stovers received a deed to the premises and an executed assignment from Uptown Federal of its right to the insurance proceeds. *fn1
Western Employers thereafter brought a complaint for interpleader when both the Stovers and Ravenswood/Doane demanded payment of the insurance proceeds. Named as defendants were the Stovers, Ravenswood/Doane and Uptown Federal. The Stovers and Ravenswood/Doane filed answers claiming the fire loss proceeds; Uptown Federal disclaimed any interest in the proceeds. The Stovers also filed a counterclaim against Uptown Federal seeking to recover a portion of their bid at the sheriff's sale in the event Ravenswood/Doane prevailed in the interpleader action. Both the Stovers and Ravenswood/Doane moved for summary judgment.
On September 26, 1986, the circuit court granted Ravenswood/Doane's motion and denied the Stovers' motion. Ravenswood/Doane thereafter moved for judgment on the pleadings against Western Employers in the amount of $60,653, plus prejudgment interest. On October 23, 1986, the court entered judgment in favor of Ravenswood/Doane and against Western Employers in that amount. It also ordered the insurance company to deposit this sum with the clerk of the circuit court in satisfaction of the judgment and dismissed it from the action. On the Stovers' motion, the order of October 23, 1986, was modified to permit the sum of $60,653 to be placed in an interest bearing escrow account. This appeal follows.
The Stovers contend that they were entitled to the insurance proceeds on the fire-damaged property because Uptown Federal entered into a contract to assign its interest in the proceeds to them prior to the repayment of the mortgage debt and extinguishment of the mortgage. The issue in this case, however, is not whether Uptown Federal had an insurable interest at the time of the fire or when it agreed to assign its interest in the insurance proceeds to the Stovers, but whether Uptown Federal, as ...