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Standard Mutual Insurance Company v. Rick L. Jones; Ruth F. Jones; Tyler L. Jones

February 3, 2012

STANDARD MUTUAL INSURANCE COMPANY,
PLAINTIFF-APPELLANT,
v.
RICK L. JONES; RUTH F. JONES; TYLER L. JONES,
A MINOR BY HIS FATHER AND NEXT FRIEND, RICK L. JONES; CHRISTINA L. STEPHENSON; AND MICHELLE STEPHENSON, CONNOR STEPHENSON, AND NATHAN STEPHENSON, MINORS BY THEIR MOTHER AND NEXT FRIEND, CHRISTINA L. STEPHENSON,
DEFENDANTS-APPELLEES.



Appeal from Circuit Court of Brown County No.10CH10 Honorable Diane M. Lagoski, Judge Presiding.

The opinion of the court was delivered by: Justice Pope

JUSTICE POPE delivered the judgment of the court, with opinion. Justice Knecht concurred in the judgment and opinion.

Presiding Justice Turner specially concurred, with opinion.

OPINION

¶ 1 In December 2010, plaintiff, Standard Mutual Insurance Company (Standard Mutual), filed a complaint for rescission against the named defendants, Rick L. Jones; Ruth F. Jones; Tyler L. Jones, a minor by his father and next friend, Rick L. Jones; Christina L. Stephenson; and Michelle Stephenson, Connor Stephenson, and Nathan Stephenson, minors by their mother and next friend, Christina L. Stephenson. In February 2011, the Stephensons filed an answer to Standard Mutual's complaint and affirmative defenses. In April 2011, the Stephensons filed a motion for judgment on the pleadings as to count I of Standard Mutual's complaint and as to the Stephensons' first affirmative defense. On June 9, 2011, the trial court entered an order granting the Stephensons' motion for judgment on the pleadings, finding section 154 of the Illinois Insurance Code (Insurance Code) (215 ILCS 5/154 (West 2008)) barred Standard Mutual from rescinding the insurance policy at issue. Standard Mutual appeals, arguing the court erred in granting the Stephensons' motion for judgment on the pleadings. We affirm.

¶ 2 I. BACKGROUND

¶ 3 On January 7, 2010, Rick and Ruth Jones applied for an automobile liability insurance policy. According to Standard Mutual's complaint, "in response to a question on the application to identify and list all residents and dependents (licensed or not), Rick and Ruth did not identify any residents other than themselves." However, Rick and Ruth's two sons, Tyler (16) and Derrick (20), lived with them when the application was made.

¶ 4 On July 16, 2010, while operating his parents' 2005 Ford Freestyle wagon, Tyler Jones was involved in an automobile accident with an automobile operated by Christina Stephenson. Stephenson's three children were passengers in her car at the time. Tyler's parents, Rick and Ruth Jones, had an automobile liability insurance policy with Standard Mutual. On July 19, 2010, Standard Mutual learned of Tyler's presence in the household when Rick and Ruth's agent made a request to add Tyler to Rick and Ruth's automobile policy effective July 15, 2010. The accident was not disclosed to Standard Mutual until later in the day on July 19, 2010. After the accident, Standard Mutual paid the Stephensons $9,416.87 for the total loss of their vehicle and paid $11,361.48 to Rick and Ruth for their vehicle. Christina Stephenson and her three children are potential claimants against Tyler, Rick, and Ruth Jones for bodily injury.

¶ 5 Following the accident, Standard Mutual learned Tyler was and had been a full-time resident of Rick and Ruth's home. Standard Mutual alleged it did not know Tyler was living with Rick and Ruth when their insurance application was submitted or during the time it performed its underwriting determinations prior to issuing the automobile insurance policy. According to the complaint, Standard Mutual would not have issued the insurance policy if it had known that Tyler was a full-time resident of Rick and Ruth's home. Standard Mutual alleged it relied to its detriment on Rick and Ruth's misrepresentations and claimed rescission of the policy was necessary because it would not have issued the automobile policy in question if Rick and Ruth had provided the true facts. Standard Mutual also argued Rick and Ruth had been unjustly enriched because Standard Mutual had paid the Stephensons $9,416.87 for the total loss of their vehicle and paid Rick and Ruth $11,361.48 for the total loss of their vehicle.

¶ 6 In February 2011, Christina Stephenson filed an answer and affirmative defenses on behalf of herself and her three children. The Stephensons' first affirmative defense alleged section 154 of the Insurance Code (215 ILCS 5/154 (West 2010)) barred Standard Mutual from rescinding Rick and Ruth's automobile insurance policy.

¶ 7 In March 2011, Standard Mutual filed a motion for partial summary judgment as to the Stephensons' first affirmative defense. In April 2011, the Stephensons filed a motion for judgment on the pleadings as to count I of Standard Mutual's complaint for rescission and (2) the Stephensons' first affirmative defense.

¶ 8 On June 9, 2011, the trial court entered an order denying Standard Mutual's motion for summary judgment and granting the Stephensons' motion for judgment on the pleadings. The court found Standard Mutual's right to rescind the policy based on the misrepresentation was barred by section 154 of the Insurance Code (215 ILCS 5/154 (West 2010)).

ΒΆ 9 This appeal ...


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