Court of Appeals of Illinois, First District, Fifth Division
from the Circuit Court of Cook County No. 11 CH 39744,
Honorable Franklin U. Valderrama, Judge Presiding.
JUSTICE delivered the judgment of the court, with opinion.
Presiding Justice Gordon and Justice Lampkin concurred in the
judgment and opinion.
1 Plaintiff Stonegate Insurance Company, a property insurer,
appeals an order of the circuit court of Cook County granting
summary judgment in favor of defendant Ocwen Loan Services,
LLC. Defendant is the mortgagee and named loss payee in an
insurance policy that was issued by plaintiff. On appeal,
plaintiff argues the circuit court erred in granting summary
judgment and allowing defendant to recover under the
insurance policy because (1) the insured owners did not
occupy the property, which was a condition precedent to
coverage, (2) questions of fact exist as to whether the
mortgage clause in the policy provides defendant with
coverage, and (3) the fraud clause in the policy precludes
coverage for the owners of the residential premises and
defendant. For the following reasons, we affirm.
3 On February 20, 2009, Mark Hongsermeier and Rhonda
Hongsermeier (collectively, the owners) executed a mortgage
with GSF Mortgage Corporation for property located at La
Monte Drive, Rockford, Illinois (the property). The owners
resided in the property from November 2004 through November
2010. The mortgage was subsequently assigned to GMAC Bank and
later transferred to GMAC Mortgage, LLC (GMACM).
4 Thereafter, on February 21, 2011, plaintiff issued a hazard
insurance policy (the policy) to the owners for the property
against loss and damage caused to the property by fire, among
other things. In the policy, the insured is defined as the
owners and "residents of your household."
Furthermore, the "insured location" is defined as
the "residence premises, " which is further defined
as "the one family dwelling *** where you reside."
The policy also included a mortgage clause to insure GMACM as
the named loss payee and provided, in pertinent part:
"If a mortgagee is named in this policy, any loss
payable under Coverage A or B will be paid to the mortgagee
and you, as interests appear. *** If we deny your claim, that
denial will not apply to a valid claim of the mortgagee, if
a. Notifies us of any change in ownership, occupancy or
substantial change in risk of which the mortgagee is aware;
b. Pays any premium due under this policy on demand if you
have neglected to pay the premium[;] and
c. Submits a signed, sworn statement of loss within 60 days
after receiving notice from us of your failure to do so.
Policy conditions relating to Appraisal, Suit
Against Us and Loss Payment apply to the mortgagee.
If we decide to cancel or not to renew the policy, the
mortgagee will be notified at least 10 days before the date
cancellation or nonrenewal takes effect."
addition, the policy contained a fraud clause that provided:
"the entire policy will be void, if whether before or
after a loss, an 'insured' has:
a. Intentionally concealed or misrepresented any material
fact or circumstance;
b. Engaged in fraudulent conduct; or
c. Made false statements; relating to this ...