Appeal from the Circuit Court of Cook County. Nos. 98 CH 7065 & 99 CH 7228. Honorable John K. Madden, Judge Presiding.
The opinion of the court was delivered by: Presiding Justice Reid
The plaintiff, First Midwest Bank, N.A. (First Midwest), appeals from the trial court's orders regarding its second amended complaint that granted Stewart Title Guaranty Company's (Stewart Title): (1) motion for summary judgment with regard to count I, which sought a declaration that Stewart Title is liable to First Midwest with regard to a title insurance policy it issued, and (2) motion under section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 1998)), motion to dismiss count II, which alleged negligent misrepresentation.*fn1
 First Midwest argues that the trial court's decisions were erroneous because: (1) its decision to refinance the initial acquisition loan did not terminate Stewart Title's liability under the title insurance policy it issued, and (2) it stated a cause of action for negligent misrepresentation where Stewart Title was in the business of selling information and issued a title commitment that failed to show that the property in question contained a restrictive covenant that prohibited business and commercial use. For the reasons that follow, we affirm.
In July 1995, John Bergeron and Glenda Bergeron (the Bergerons) entered into a contract to purchase property commonly known as 950 North St. Mary's Road, in Green Oaks, Lake County, Illinois (the premises). Subsequently, the Bergerons applied to First Midwest to provide financing for the initial purchase of the premises. On several occasions during the loan process, the Bergerons expressed to Dave Williams, the senior vice-president at First Midwest, their intention to use the premises for residential purposes and also as a home office for their business, Downeast Design Group, Inc. (DDG), an architectural and interior design firm.
On August 24, 1995, Stewart Title issued a commitment for title insurance to the Bergerons and First Midwest as proposed insureds with respect to the premises in the amount of $300,000. On August 31, 1995, First Midwest's loan committee met and approved the initial $300,000 acquisition loan to the Bergerons, to be guaranteed by DDG for the premises to be used as a home/office subject to the Bergerons receiving a title insurance policy free of any restrictions.
In consideration of the loan that they received, on October 5, 1995, the Bergerons executed a $300,000 promissory note to First Midwest. The Bergerons also executed a mortgage on the premises in the amount of $300,000 with First Midwest Mortgage Corp. On October 18, 1995, Stewart Title issued a lender's insurance policy to First Midwest in the amount of $300,000 insuring the mortgage lien.
On July 3, 1996, First Midwest lent an additional $300,000 to the Bergerons for the purpose of building separate office space on the premises. First Midwest refers to this loan as the construction loan. In connection with the construction loan, defendants, Intercounty National Title Insurance Co. (Intercounty) and Clear Title, Inc. (Clear Title), which was acting as an agent for Intercounty, issued a title commitment, as well as a policy of title insurance to First Midwest in the amount of $300,000, with an effective date of June 19, 1996. Williams testified that First Midwest obtained the Intercounty policy of title insurance in connection with the construction loan because the initial $300,000 policy issued by Stewart Title for purposes of the Bergerons' acquisition of the premises was not enough to cover the additional $300,000 of exposure First Midwest created by the construction loan.
In May 1997, First Midwest approved a $752,000 loan to the Bergerons and DDG. First Midwest categorized this loan as a wraparound loan. First Midwest alleged that this loan wrapped together the two prior loans of $300,000 along with prior loans issued to the Bergerons and DDG. In connection with the wraparound loan, Intercounty and Clear Title issued a title commitment, as well as a policy of title insurance to First Midwest in the amount of $752,000. Williams testified that First Midwest obtained the $752,000 policy of title insurance from Intercounty in connection with the wraparound loan because the $300,000 Stewart Title policy and the $300,000 policy issued by Intercounty in connection with the construction loan was not enough to cover the additional exposure to First Midwest created by the wraparound loan. The $300,000 mortgage insured by the Stewart Title policy was serviced by First Midwest Mortgage Corp., an entity related to First Midwest.
In connection with the funding of the $752,000 wraparound loan, First Midwest Mortgage Corp. prepared and sent to the Bergerons a payoff statement dated June 10, 1997. According to the statement, the payoff figure on loan number 00710004444 through June 15, 1997, was $296,853.28. This is the same loan number that appears on the mortgage and the promissory note. It was Williams' testimony that it was his understanding that the wraparound loan paid off the $300,000 purchase loan and the $300,000 construction loan. A check dated June 13, 1997, shows that First Midwest paid First Midwest Mortgage Corp. $296,853.28.
In a letter dated July 2, 1997, First Midwest Mortgage Corp. issued a release of the mortgage with regard to the premises as being paid. On July 7, 1997, Shari Thompson of First Midwest Mortgage Corp. wrote a letter to First Midwest, wherein she included a copy of the aforementioned release regarding the premises. In a letter dated July 8, 1997, Thompson informed the Bergerons that the initial $300,000 loan had been paid in full. Furthermore, in another letter dated July 8, 1997, Thompson wrote to the Bergerons informing them that with regard to loan 00710004444, "Our records indicate that your account is paid in full. Therefore, we are refunding your escrow account to you. Enclosed you will find a check in the amount of $2,183.46." In connection with the wraparound loan, the Bergerons executed a disbursement request and authorization, which instructed First Midwest to pay $295,930.22 of principal and $923.06 of interest, which totaled $296,853.28 on loan 00710004444.
On May 13, 1999, First Midwest initiated this action. On September 9, 1999, First Midwest filed a three-count second amended complaint for declaratory judgment and damages. First Midwest alleged that in October 1997 it learned that a restrictive covenant had been recorded against the premises which provided that no part of the premises could be used for business or commercial purposes. First Midwest asserted that it would not have made any of the loans to the Bergerons had it known of the restrictive covenant beforehand.
Count I sought a declaration that Stewart Title is liable to First Midwest on the title insurance policy it issued. First Midwest alleged that Stewart Title and Clear Title, acting as an agent of Stewart Title, issued an initial title insurance commitment and ultimately a policy of title insurance which failed to accurately reflect that a restrictive covenant of record encumbered title to the premises. Count I also sought a declaration that Intercounty is liable to First Midwest on the title policies that Intercounty issued to First Midwest in connection with the $300,000 construction loan and the $752,000 wraparound loan. Finally, count I sought a declaration that Clear Title is liable on all three title policies on the grounds that Clear Title was acting as the agent for Stewart Title and Intercounty in issuing the respective title policies.
Count II attempted to state a cause of action for negligent misrepresentation against Stewart Title, Clear Title and Intercounty on the grounds that each defendant negligently sold information when the Stewart Title and Intercounty title commitments were issued.
Count III attempted to state a cause of action for fraudulent misrepresentation against Stewart Title, Clear Title and Intercounty on the grounds that each of the defendants fraudulently sold inaccurate information when the Stewart Title and Intercounty commitments were issued.
Both Clear Title and Intercounty filed for bankruptcy protection after the commencement of this matter. Consequently, neither is a party to this appeal.
As to count I, Stewart Title filed a motion to dismiss pursuant to section 2-619 of the Illinois Code of Civil Procedure (Code). (735 ILCS 5/2-619 (West 1998)). As to counts II and III, Stewart Title filed a motion to dismiss pursuant to section 2-615. 735 ILCS 5/2-615 (West 1998). On January 28, 2000, the trial court denied both of Stewart Title's motions. In its order, the trial court stated that, with regard to count II and III, Stewart's motion to dismiss was a section 2-619 motion to dismiss. On February 17, 2000, Stewart Title filed a motion to reconsider the trial court's January 28, 2000 order.
On March 3, 2000, the trial court denied Stewart Title's motion to dismiss count I pursuant to section 2-619, and granted with prejudice Stewart Title's motion to dismiss counts II and III pursuant to section 2-615. First Midwest moved the trial court to reconsider its March 3, 2000 order which dismissed counts II and III. First Midwest's motion to reconsider was denied on September 22, 2000.
On January 23, 2003, Stewart Title filed a motion for summary judgment with regard to count I of First Midwest's second amended complaint. The trial court granted Stewart Title's motion for summary judgment on June 13, 2003.
First Midwest filed a motion for the trial court to reconsider its order that granted Stewart Title summary judgment. On September 22, 2003, the trial court issued an order that stated:
"It is hereby ordered that the Plaintiff's motion to reconsider is denied;
It is further ordered that there is no just reason to delay enforcement or appeal of the order dated June 13, 2003 granting summary judgment to Stewart Title as to count I and the order dated March 3, 2000 granting Stewart Title's motion to dismiss counts II and III and the denial of Plaintiff's motion to reconsider dated September 22, 2000." First Midwest filed it notice of appeal on October 21, 2003.
We will first examine whether the trial court erred when it granted summary judgment with regard to count I of First Midwest's second amended complaint.
Summary judgment is appropriately granted where the pleadings, depositions, and admissions on file, when viewed in the light most favorable to the nonmoving party, reveal that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2002); Jinkins v. Lee, 209 Ill. 2d 320, 329 (2004). We review de novo the trial court's grant of summary judgment. Jinkins, 209 Ill. 2d at 329.
The relevant portions of the title insurance policy that Stewart ...