APPELLATE COURT OF ILLINOIS, FOURTH DISTRICT
530 N.E.2d 521, 175 Ill. App. 3d 860, 125 Ill. Dec. 363 1988.IL.1544
Appeal from the Circuit Court of Pike County; the Hon. Alfred L. Pezman, Judge, presiding.
JUSTICE KNECHT delivered the opinion of the court. McCULLOUGH and LUND, JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE KNECHT
This appeal arises from an attempt by plaintiff First National Bank of Pittsfield to recover from defendant Country Mutual Insurance Company the unpaid mortgage balance on property destroyed by fire. The issue presented is whether defendant's notice of intent not to renew the policy insuring the premises was sufficient. The circuit court of Pike County ruled it was not. For the reasons that follow, we reverse and remand.
The facts are undisputed. Plaintiff's complaint alleges the following: On November 6, 1981, Burdette and Eloyce Carlton (Carltons) executed a mortgage on their 40 acres and home in plaintiff's favor and agreed to keep the premises insured; on January 10, 1986, defendant issued to the Carltons a "Multi-Purpose Farm Owner Policy" to insure the premises; plaintiff was listed as an additional insured on the declarations of insurance; the declaration form plus section 143.17 of the Illinois Insurance Code (Code) (Ill. Rev. Stat. 1985, ch. 73, par. 755.17) require 10 days' notice for cancellation of a policy for nonpayment of premium; plaintiff did not receive 10 days' notice of any cancellation; defendant refused to allow plaintiff to file a proof of loss following the destruction of the Carltons' home by fire January 23, 1987; defendant failed to respond to plaintiff's demand for payment. Plaintiff requested judgment in the amount of the unpaid principal balance of the mortgage plus accrued interest.
Attached to the complaint were the insurance policy and the declarations of insurance. The non-renewal provisions of the policy state in pertinent part:
"If we decide not to renew this policy, we will mail a written notice to you at least 30 days before the expiration date. . . .
The notice will be sent to your last mailing address known to us. Proof of mailing will be sufficient proof of notice. If you fail to pay the renewal, the policy will lapse on the expiration date."
The "Conditions" portion of the policy does not state membership in the Pike County Farm Bureau (Farm Bureau) is required to purchase this policy. A section in the policy entitled "Mutuality of Policy" indicates the insured, by accepting the policy, becomes a member of Country Mutual Insurance Company with all the rights and privileges of a member as provided in the company's bylaws. No copy of the bylaws appears in the record on appeal. Also attached to the complaint were a copy of the mortgage instrument and the declarations of insurance form listing plaintiff mortgagee as an "additional interest" under the policy.
Defendant's answer, filed November 30, 1987, admitted plaintiff did not receive a notice of the policy cancellation, but stated defendant mailed plaintiff a notice of intent not to renew more than 30 days in advance, in accordance with section 143.17(a) of the Code. Ill. Rev. Stat. 1985, ch. 73, par. 755.17(a).
The parties filed cross-motions for summary judgment pursuant to section 2-619 of the Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, par. 2-619). Defendant's motion, filed November 30, 1987, was accompanied by affidavits of Mary Schlabowske and D. R. Gordon. Schlabowske, defendant's underwriting administration supervisor, stated she supervised processing of files in cases where notice of nonrenewal of Farm Bureau membership has been received. She stated the Carlton policy was a six-month policy effective January 10, 1986, and the policy was renewed July 10, 1986, for another six months. She stated the Carlton policy expired January 10, 1987, at 12:01 a.m. On December 1, 1986, her department mailed a "Notice of Intent not to Renew" to the Carltons and to plaintiff. To her knowledge, the Carltons' Farm Bureau membership was not reinstated.
Schlabowske's December 1, 1986, notice, submitted with the affidavit, shows the heading "Notice of Intent Not to Renew" in capital letters on the upper right-hand side of the page. "Certificate of Mailing" appears immediately below. The notice is addressed to the Carltons and plaintiff. It reads:
"Re: Farm Bureau Membership
Pike County Farm Bureau has notified us that you have not renewed your Farm Bureau membership. That membership is required in order to be insured by Country Mutual Insurance Company.
Therefore, unless you reinstate your Farm Bureau membership, nonrenewal of Farmowner Policy AL0528365 will be necessary, with coverage terminating effective January 10, 1987. If you hold a membership in a county other than Pike, please ...