Appeal from the Circuit Court of Cook County No. 09 CH 32135 Honorable Martin S. Agran, Judge Presiding.
The opinion of the court was delivered by: Justice Palmer
JUSTICE PALMER delivered the judgment of the court, with opinion. Justices Garcia and Gordon concurred in the judgment and opinion.
¶ 1 Plaintiff Ollia Burress-Taylor appeals the dismissal of her complaint against defendant American Security Insurance Company. We reverse.
¶ 2 After a fire damaged plaintiff's home, plaintiff brought this action for breach of contract, deceptive conduct in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 2008)) and a declaratory judgment against defendant, seeking to recover insurance proceeds under her claim. The trial court granted defendant's motion to dismiss plaintiff's complaint pursuant to section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2008)).
¶ 3 The facts as alleged in plaintiff's complaint are as follows. Plaintiff's home was secured by a mortgage from Homecomings Financial, LLC (Homecomings). Plaintiff had a "force-placed" residential insurance policy included in her mortgage. A "force-placed" insurance policy is a policy procured by the lender, in this case Homecomings. The policy was underwritten by defendant and provided for $124,000 in dwelling coverage. The policy contained an "Other Insurance" provision. The provision states that "[i]f there is any other valid or collectible insurance which would attach if the insurance under this policy had not been effected, this insurance shall apply only as excess and in no event as contributing insurance and then only after all other insurance has been exhausted." The policy also contained an "Illinois Amendatory Endorsement" (endorsement) that states, in part:
"No action shall be brought unless there has been compliance with the policy provisions and the action is started within one year after the loss.
This one year period will be extended by the number of days between the date the Proof of Loss was filed and the date the claim is denied in whole or in part."
¶ 4 Plaintiff's home was also insured by a policy that she procured from Hanover Fire Casualty Insurance Company (Hanover). The Hanover policy provided for $100,000 in dwelling coverage and $15,000 in contents coverage. Hanover's policy contained a "Pro Rata Liability" clause. The clause states that Hanover "shall not be liable for a greater proportion of any loss than the amount hereby insured shall bear to the whole insurance covering the property against the peril involved, whether collectible or not." Both policies, defendant's and Hanover's, covered losses to plaintiff's home caused by a fire.
¶ 5 In August 2006, plaintiff's home was damaged by a fire. Sometime before November 30, 2006, plaintiff submitted her claims to defendant and Hanover. On that date, a Hanover claims adjuster estimated the property damage to plaintiff's home to be $142,573.15 less $14,666.19 in depreciation, for a total loss of $127,906.96. The claims adjuster informed plaintiff that Hanover's ratio of coverage for the loss was 44.45% , i.e., $56,854.64, while defendant's ratio of coverage was the remaining 55.55% or $71,052.32. This ratio was based on combining defendant's and Hanover's coverage and allocating to Hanover its pro rata share of the total coverage provided by the insurance companies. Hanover issued a check in the amount of $56,854.64 for dwelling coverage to plaintiff and Homecomings.
¶ 6 Homecomings took possession of the Hanover check and on January 11, 2007, disbursed $18,951.55 to plaintiff. The mortgage agreement between plaintiff and Homecomings provides that Homecomings has the right to "disburse [insurance] proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed." Homecomings did not make further disbursements of the Hanover proceeds.
¶ 7 In a letter dated November 30, 2006, Hanover denied plaintiff's request to disburse more funds because "the shared liability" of Hanover and defendant was in dispute. In the letter, Hanover said that it would "inform [plaintiff] immediately following the resolution of that issue between the insurance companies."
¶ 8 On March 28, 2007, defendant sent plaintiff a letter that read:
"This letter is to follow up on our conversation that communicated that our policy applies as excess to any other insurance. We have required an additional copy of the policy that will be sent under separate cover. Our policy will not respond until all other insurance has been paid. A summary of the adjustment based on our policy language is below."
In the letter, defendant explained that Hanover would need to "pay up to $100,000 [under its policy] before [defendant] would pay" and that the "final due" amount payable under defendant's policy was $23,709.56 after subtracting the $500 deductible. The $23,709.56 "final due" amount was calculated based on defendant's assertion that Hanover was liable for $100,000 in dwelling coverage. The record does not show that plaintiff was subsequently informed of a resolution of the dispute between defendant and Hanover.
¶ 9 Sometime before August 15, 2007, plaintiff submitted a claim to the Illinois Department of Financial and Professional Regulation (Department) for amounts outstanding on her insurance claims allegedly due from defendant and Hanover. On February 22, 2008, defendant sent a letter to the Department, stating that defendant's policy is "lender placed coverage that is excess over any other collectible insurance and does not respond unless the coverage limit is exhausted."
¶ 10 Plaintiff filed a five-count "Class Action Complaint" against defendant, Homecomings and Hanover on September 4, 2009. The claims directed against defendant were for breach of contract, deceptive conduct in violation of the Consumer Fraud Act and a declaratory judgment.
¶ 11 Defendant filed a motion to dismiss plaintiff's complaint pursuant to section 2-619(a)(5) of the Code (735 ILCS 5/2-619(a)(5) (West 2008)). In the motion, defendant argued that plaintiff's complaint was time-barred by the one-year contractual time limitation for filing suit contained in the endorsement to defendant's policy. Defendant also argued that plaintiff's consumer fraud claim was not actionable under the Consumer Fraud Act and was preempted by section 155 of the Illinois Insurance Code (Insurance Code) (215 ILCS 5/155 (West 2008)). The trial court granted defendant's motion and dismissed plaintiff's complaint without prejudice on May 20, 2010. Plaintiff filed a motion ...