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09/08/89 720 Rand, Inc., D/B/A v. the Home Indemnity Company

September 8, 1989




APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SIXTH DIVISION

720 RAND, INC., d/b/a Honey Bee Snack Shop, Plaintiff-Appellant, v. THE HOME INDEMNITY COMPANY, Defendant-Appellee

544 N.E.2d 1059, 188 Ill. App. 3d 582, 136 Ill. Dec. 284 1989.IL.1403

Appeal from the Circuit Court of Cook County; the Hon. Myron T. Gomberg, Judge, presiding.

APPELLATE Judges:

PRESIDING JUSTICE EGAN delivered the opinion of the court. McNAMARA and LaPORTA, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE EGAN

The plaintiff first filed a chancery complaint and later a law complaint against its insurer to recover for losses resulting from a fire on November 26, 1985. The circuit court first dismissed the chancery complaint and later the law complaint, which was dismissed pursuant to section 2-619(a)(5) of the Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, par. 2-619(a)(5)) on the ground that the law complaint was not filed within the one-year period after the loss as required by the insurance policy. The dismissal of the law complaint is the basis of this appeal; but, contrary to the defendant's argument, the chancery complaint will be considered here. The defendant has argued at great length that we have no jurisdiction over the chancery complaint. That argument was unnecessary. The plaintiff has never suggested that we do have jurisdiction; and we wish to make it clear that by discussing the chancery complaint, which we believe is very relevant, we are not suggesting we have jurisdiction over that complaint.

The plaintiff submitted a proof of loss to the defendant seeking a total of $181,725.56. Over six months later, the defendant denied coverage on the grounds that the plaintiff had made fraudulent representations and that the plaintiff caused the fire.

The policy required that the insured bring "suit within one year after the date loss occurs." Section 143.1 of the Illinois Insurance Code (Ill. Rev. Stat. 1985, ch. 73, par. 755.1) provides that the one-year period is tolled from the time the insured submits the proof of loss until the insurer informs the insured that the claim has been rejected.

The following is the pertinent sequence of events:

(1) The loss occurred on November 25, 1985, and the insured filed proof of loss on January 21, 1986, thus tolling the limitation.

(2) On July 31, 1986, the defendant denied the claim, thus ending the tolling.

(3) On December 5, 1986, the plaintiff filed a declaratory judgment complaint in the chancery division to recover on the policy. The complaint also prayed for specific performance and punitive damages. It is clear that the complaint was filed within the term required by the policy.

(4) The defendant filed a motion to dismiss the complaint or, alternatively, to transfer the case to the law division. That motion is not part of the record, but from remarks of counsel in the trial court and statements made in oral argument in this court, we know that the motion in part maintained that the plaintiff's claims for declaratory judgment and specific performance were actually for breach of contract, an action at law. Our ...


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