Appeal from the Circuit Court of Cook County No. 2009 L 4284 Honorable Bill Taylor, Judge Presiding.
The opinion of the court was delivered by: Justice Palmer
JUSTICE PALMER delivered the judgment of the court, with opinion.
Presiding Justice R. Gordon and Justice Garcia concurred in the judgment and opinion.
¶ 1 Plaintiffs Agnieszka Stendera and Matt Dajewski appeal the trial court's entry of summary judgment in favor of defendant State Farm Fire and Casualty Company. The trial court's ruling was based on its finding that plaintiffs suffered no loss following a fire that damaged their home because defendant had overpaid under its policy and was entitled to a setoff in the amount it had paid to plaintiffs' mortgagee less the amount actually expended to repair the home. We reverse and remand.
¶ 3 Defendant issued plaintiffs a homeowner's insurance policy (Policy) containing three coverages of relevance to this case: "Coverage A--Dwelling" (Dwelling coverage), with a separate limit of $390,000; "Coverage B--Personal Property" (Personal Property coverage), with a separate limit of $292,500; and "Coverage C--Loss of Use," with the amount being the actual loss sustained. "Coverage A--Dwelling" provides:
"1. A1--Replacement Cost Loss Settlement--Similar Construction.
a. We will pay the cost to repair or replace with similar construction and for the same use on the premises shown in the Declarations, the damaged part of the property covered under SECTION 1--COVERAGES, COVERAGE A--DWELLING, except for wood fences, subject to the following:
(1) until actual repair or replacement is completed, we will pay only the actual cash value at the time of the loss of the damaged part of the property up to the applicable limit of liability shown in the Declarations, not to exceed the cost to repair or replace the damaged part of the property;
(2) when the repair or replacement is actually completed, we will pay the covered additional amount you actually and necessarily spend to repair or replace the damaged part of the property, or an amount up to the applicable limit of liability shown in the Declarations, whichever is less[.]"
¶ 4 The Policy also contains a "Mortgage Clause" (Mortgage clause), which states: "If a mortgagee is named in this policy, any loss payable under Coverage A shall be paid to the mortgagee and you, as interests appear." The Mortgage clause further provides that if the insured's claim is denied, "that denial shall not apply to a valid claim of the mortgagee."
¶ 5 A fire subsequently damaged plaintiff's residence located at 1205 Wilmot Road in Deerfield, Illinois (Property). Plaintiffs informed defendant, which issued plaintiffs a check for $5,000 as an advance on their personal property claim. Defendant also issued plaintiffs a check for $3,395 to use as a security deposit for temporary housing. Plaintiffs claimed $123,765.68 in damages to their personal property under the Personal Property coverage of the Policy. Defendant refused to provide plaintiffs with further payments, alleging that plaintiffs had intentionally caused the fire.
¶ 6 On April 9, 2009, plaintiffs filed suit alleging defendants breached the terms of the Policy by ...