Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Phelps v. Great American Insurance

United States District Court, C.D. Illinois, Springfield Division

January 2, 2018

BETTY PHELPS, Plaintiff,
v.
GREAT AMERICAN INSURANCE, Defendant.

          OPINION

          Richard Mills, United States District Judge

         This is an action for breach of an insurance contract.

         Pending is the Defendant's motion to dismiss. Pending also is the Plaintiff's motion for leave to file an amended complaint instanter.

         United States Magistrate Judge Tom Schanzle-Haskins has filed a report and recommendation, wherein he recommends denying the Plaintiff's motion for leave to file an amended complaint instanter. Judge Schanzle-Haskins also directed the Plaintiff to file a response to the Defendant's motion to dismiss.

         Both parties have filed objections to the report and recommendation.

         I.

         The factual background of the case is recounted in the Report and Recommendation. The Plaintiff acknowledges the facts are accurately stated. Federal Rule of Civil Procedure 15(a)(2) provides that leave to amend should be “freely” given when justice so requires. “Unless it is certain from the face of the complaint that any amendment would be futile or otherwise unwarranted, the district court should grant leave to amend after granting a motion to dismiss.” Runnion ex rel. Runnion v. Girl Scouts of Greater Chicago and Northwest Indiana, 786 F.3d 510, 519-520 (7th Cir. 2015).

         Plaintiff Betty Phelps alleges the proposed amendment of the complaint would not be futile because she alleges facts in paragraphs 13 through 18 that would establish she is a third-party beneficiary of a “forced” insurance coverage policy between United Community Bank of Bunker Hill (“the Bank) and Defendant Great American Insurance Group (“Great American”).[1] The Plaintiff owned a commercial building in Bunker Hill, Macoupin County, Illinois (“the Property”), where she ran a fitness center. The Bank held a mortgage on the Property to secure its loan to the Plaintiff.

         The Bank was the Named Insured on the Policy, which was issued after the Plaintiff's casualty insurance was canceled and she was unable to obtain additional insurance. In her proposed Amended Complaint, the Plaintiff alleges that upon advising representatives of the Bank of her inability to obtain substitute casualty insurance coverage, a representative told her that the Bank would place her property on its “forced” insurance coverage and the Property “would [] be insured for her benefit on the bank's insurance.” See Doc. No. 6-1 ¶ 11. The Plaintiff was required to pay the premium for the insurance.

         The Declarations page of the Policy contained the following statement in red ink:

Unless indicated otherwise by endorsement, this policy does not provide coverage . . . for the interest or equity of the mortgagor. This is creditor placed insurance, protecting your mortgagee interest, subject to policy terms and conditions. Please read your policy for specific terms and conditions of coverage.

Policy, at 1, Declarations.

         The words “you” and “your” in the Policy referred to the Bank as the Named Insured. The words “we” and “us” referred to Great American. Policy, at 2. The Definitions in the Policy include the following:

A. Named Insured means the creditor, lending institution, company, or person holding or servicing the mortgagee interest on the described location.
B. Mortgagor is the purchaser of the described location for whom you have financed property or which you are servicing for others under the terms of a written agreement. The mortgagor ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.