United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
SHARON JOHNSON COLEMAN, District Judge.
The parties' cross-motions for summary judgment are before the Court. Plaintiffs Kathryn and Jonathon Marchetti (collectively the "Marchettis") filed a partial motion for summary judgment against defendants Chicago Title Insurance Company (f/k/a/Ticor Title Insurance Company) and Fidelity National Title Insurance Company (collectively "Chicago Title") asserting that this Court should hold that the calculable loss they suffered under the relevant owner's title insurance policy is the fair-market value of the subject Property as it was on or about October 24, 2008, the claim date. In its own motion for summary judgment, Chicago Title argues that it did not breach the contract of title insurance executed with the Marchettis when it denied their claims for losses because the Marchettis did not suffer an actual loss, as required by the insurance contract. Chicago Title further argues that there is no genuine issue of material fact to support any of the Marchettis' claims in their First Amended Complaint ("Complaint"). For the reasons that follow, the Court grants Chicago Title's motion for summary judgment on all counts and denies as moot the Marchettis' motion for partial summary judgment.
The following facts are undisputed, unless otherwise stated. On May 15, 2008, Chicago Title, through its predecessor Ticor Title Insurance Company, issued a standard 2006 American Land Title Association Owner's Policy of title insurance (No. 2000000605071OC) ("the Policy") to the Marchettis for a house that the Marchettis purchased. Chicago Title also issued a loan title insurance policy to the Marchettis' lender, Peotone Bank & Trust Company (the "Loan Policy"). The Marchettis gave a mortgage to Peotone for $330, 000, covering the $180, 000 purchase price and as well as a construction loan for the renovation of the Property. Mr. Marchetti was the general contractor and it was his company that performed the construction work on the house.
On October 24, 2008, a quiet title action was filed in state court against the Marchettis (Dkt 85.1, Exh. 4), and pursuant to the Policy, Chicago Title defended them in that action. Through discovery, the parties learned that fraud, perpetrated by a third-party, had resulted in the Marchettis acquiring defective title to the property. The state court ultimately found that the Marchettis had no right, title, or interest in the property. Dkt 84, ¶ 17.
Chicago Title also handled the settlement between the Marchettis and their lenders, and in March 2012, it paid $110, 000 on the Marchettis' behalf in exchange for a complete discharge of the Marchettis' construction loan and mortgage. The $110, 000 amount was based on an appraisal valuing the property at $110, 000, as of October 15, 2010. Dkt 85-1, Exh. 2.
Seeking to hold third parties liable for the fraud that resulted in defective title to the house, Chicago Title also instituted counter- and cross-claims on the Marchettis' behalf. However, on May 14, 2012, Chicago Title notified the Marchettis that it would no longer pursue the Marchettis' cross- and third-party claims. Dkt 85-1, Exh. 13. Subsequently, a criminal action based on the fraud was filed in state court and resulted in an order of restitution made payable to Chicago Title for $75, 000. Chicago Title has collected $37, 500 of that judgment. Dkt 88, Exh. Q, Jean McGuire Quinn Deposition at 35:19-24 and 36:1-22.
After they signed the settlement agreement, the Marchettis demanded an additional $73, 460.05 from Chicago Title, claiming that the amount represented reimbursement for two years of rent, special-ordered windows and doors, a security system, storage cots, framing, and overhead. In a letter dated March 27, 2012, Chicago Title asserted that the claimed expenses were not reimbursable under the Policy and instead offered to pay the Marchettis $3, 000 for the earnest money deposit that they made. Dkt 85-1, Exh. 12.
While Chicago Title has paid the Marchettis $110, 000 for claimed losses under the policy, the Marchettis claim that Chicago Title still owes them at least an additional $88, 000 because they have suffered damages exceeding $198, 000, the undisputed policy limit. They filed a nine-count First Amended Complaint to recover those losses. Before the Court is the Marchettis' motion for partial summary judgment and Chicago Title's motion for summary judgment as to all nine counts of the First Amended Complaint.
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Fed.R.Civ.P. 56(c). The party who bears the burden of proof on an issue may not rest on the pleadings or mere speculation, but must affirmatively demonstrate that there is a genuine issue of material fact that requires a trial to resolve. Celotex, 477 U.S. at 324.
I. Chicago Title's Motion for Summary Judgment
Chicago Title seeks summary judgment on all counts of the Marchettis' First Amended Complaint. The Court ...