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09/04/96 COMMUNITY BANK GREATER PEORIA AND T.

September 4, 1996

COMMUNITY BANK OF GREATER PEORIA AND T. MILLER, INC., A WISCONSIN CORPORATION QUALIFIED TO DO BUSINESS IN THE STATE OF ILLINOIS UNDER THE NAME OF T.A. MILLER, INC., PLAINTIFFS-APPELLANTS,
v.
LAURA CARTER, UNMARRIED; EXECUTIVE SECURITY DOOR MANUFACTURING CO., INC.; UNKNOWN TENANTS; UNKNOWN OTHERS; NON-RECORD CLAIMANTS; HARRIS INSURANCE SERVICES, INC.; ILLINOIS FAIR PLAN ASSOCIATION; J. I. KISLAK MORTGAGE SERVICE CORP; AND THE CADLE CO., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. Honorable Edwin M. Berman, Judge Presiding.

Released for Publication October 4, 1996.

Presiding Justice Tully delivered the opinion of the court. Cerda and Greiman, JJ., concur.

The opinion of the court was delivered by: Tully

PRESIDING JUSTICE TULLY delivered the opinion of the court:

Community Bank of Greater Peoria (hereinafter Community Bank) brought this action in the circuit court of Cook County against defendants, Laura Carter, Executive Security Door Manufacturing Co., Inc., unknown tenants, unknown others, nonrecord claimants, Harris Insurance Services, Inc. (hereinafter Harris), Illinois Fair Plan Association (hereinafter Illinois Fair Plan), J.I. Kislak Mortgage Service Corp., and the Cadle Co., seeking a judgment of foreclosure and sale. Plaintiff T. Miller, Inc. (hereinafter Miller), the assignee of Community Bank, obtained leave of court to substitute for Community Bank in the foreclosure action and filed an amended complaint requesting injunction relief ordering defendant Carter to endorse an insurance proceeds check. The circuit court denied plaintiff's request for injunctive relief. Following a hearing on cross-motions for summary judgment, the circuit court provisionally granted defendant Carter's motion and denied plaintiff's motion for summary judgment. Plaintiff filed a motion to reconsider and presented the circuit court with additional evidence. The circuit court denied plaintiff's motion to reconsider and dismissed with prejudice the portion of the amended complaint requesting injunctive relief. It is from this order and the denial of its motion for summary judgment that plaintiff now appeals pursuant to Supreme Court Rule 307 (155 Ill. 2d R. 307).

For the reasons which follow, we reverse and remand.

FACTUAL BACKGROUND

Community Bank, the original mortgagee, initiated mortgage foreclosure proceedings on the residential premises located at 6946 South Justine Street in Chicago, against Carter, the mortgagor, in May 1993. On September 20, 1993, Community Bank obtained a default judgment of foreclosure against Carter. The original indebtedness of the mortgagor was $24,291.50; as of September 1993, the principal due was $21,564.87. In November 1993, Community Bank assigned the note and mortgage to Imperial Fund I.L.P. (hereinafter Imperial Fund).

In January 1994, the premises withstood substantial fire damage. At the time of the fire, Carter had in place a fire insurance policy with Illinois Fair Plan; Community Bank was named in the policy as the mortgagee. Subsequent to the fire, Carter filed a claim under the insurance policy through Harris, a public adjuster.

In March 1994, Imperial Fund assigned the note and the mortgage to Miller, who had no knowledge of the fire damage, for $18,000. On March 28, 1994, Miller filed a claim with Illinois Fair Plan for insurance proceeds under Carter's policy. Harris also filed a claim to the insurance proceeds on its own behalf.

On April 12, 1994, Illinois Fair Plan issued a full settlement check in the amount of $53,559.33 made payable to Miller, Harris and Carter. Following a dispute as to the proper division of the check, Miller obtained leave of court to substitute for Community Bank in the foreclosure action against Carter and filed an amended complaint. In its amended complaint, Miller added count II requesting injunctive relief ordering Carter to endorse the insurance check and directing the payment of the proceeds to the various parties. On February 27, 1995, the circuit court granted Miller's motion for summary judgment, an order which the circuit court later vacated. On September 1, 1995, following cross-motions for summary judgment, the circuit court denied Miller's motion and provisionally granted Carter summary judgment. The court continued the matter to allow Miller to provide additional evidence as to the purchase price paid for the assignment of the note and mortgage and Miller's knowledge of the fire damage at the time of the assignment. Miller filed a motion to reconsider along with an affidavit of its president which set forth that Miller had paid $18,000 for the note and mortgage and that plaintiff had no knowledge of the fire damage until after the mortgage had been assigned.

On November 20, 1995, the circuit court granted Carter's motion for summary judgment. Pursuant to Miller's request, the circuit court entered a corrected order reflecting that Miller's request for injunctive relief was denied and that count II of the amended complaint was dismissed with prejudice. On December 5, 1995, Miller filed a timely notice of appeal.

ISSUE PRESENTED FOR REVIEW

The sole issue raised on appeal is whether an assignee of a note and mortgage succeeds to the original mortgagee's rights under a fire insurance policy ...


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