Dix Mut. Ins. Co. v. LaFramboise
| Decision Date | 30 July 1992 |
| Docket Number | No. 72037,72037 |
| Citation | 597 N.E.2d 622,173 Ill.Dec. 648,149 Ill.2d 314 |
| Parties | , 173 Ill.Dec. 648 DIX MUTUAL INSURANCE COMPANY, as Subrogee of Roy Mitchell Estate, Appellee, v. Terrence LaFRAMBOISE, Appellant. |
| Court | Illinois Supreme Court |
John A. Beyer and Steven D. Ziegler, Satter, Beyer & Spires, Pontiac, for appellant.
Monica E. Rackauskas, Mark E. Condon and Peter W. Schoonmaker, Condon & Cook, Chicago, for appellee.
Dix Mutual Insurance Company (insurance company) paid its insured (landlord) $40,579 for a fire loss on certain real property. The insurance company, by way of subrogation, seeks to recover the $40,579 from Terrence LaFramboise (tenant) because he allegedly caused the fire loss due to his negligence. The trial court dismissed the insurance company's first-amended complaint for failure to state a cause of action. The trial court found that the parties did not intend for the tenant to be liable for fire damage to the real property and that the tenant was a co-insured under the insurance company's insurance policy. The appellate court reversed, reinstated the first-amended complaint and remanded the cause for further proceedings, 213 Ill.App.3d 292, 157 Ill.Dec. 140, 571 N.E.2d 1159. We allowed the tenant's petition for leave to appeal, 141 Ill.2d 538, 162 Ill.Dec. 485, 580 N.E.2d 111. (134 Ill.2d R. 315.) We reverse.
The unique facts of this case compel us to include the entire lease, which, in words and figures, is as follows:
"LEASE AGREEMENT
This Lease is made between Terry LaFramboise, tenant and acting landlord, J.S. Ludwig.
The house is leased beginning September 15, 1986 through September 15, 1987 for $325.00 per month. This amount is payable on the 15 [sic ] of the month.
TERMS:
(A) $325.00 deposit has been made and will be considered the last month's rent of the year.
(B) The Tenant is to furnish their [sic ] own utilities.
(C) The Tenant is to mow and keep the yard and area around the house neat at all times and the farm buildings.
(D) The Tenant will not xxxxxxxxxxxx [sic ] in walls, paint, or make any additions to the home that are permanent without approval of the Landlord.
(E) The Tenant will assume their [sic ] own risk for their [sic ] personal property and Landlord, J.S. Ludwig, will not be responsible for fire, wind, or water damage.
DESCRIPTION:
The house is located on the Mitchell Farm in Vermilion County, Pilot township.
TENANT: LANDLORD
s/ Terry LaFramboise s/ J.S. Ludwig
Date: 9"16"86 Date: 9"15"86"
During the term of the lease, the landlord maintained fire insurance coverage on the real property from the insurance company.
During the one-year term, the tenant, with the landlord's approval, attempted to strip the paint from the exterior of the property with a power stripper, which removes paint by heat application. During this process, the house was damaged by fire. The landlord filed a claim with the insurance company and was paid $40,579 for the loss. The insurance company then brought this subrogation action against the tenant to recover the amount it paid to the landlord for the fire loss. In its complaint, the insurance company alleged that the tenant was negligent in his use of the power stripper. The issue before this court is whether the insurance company's first-amended complaint states a cause of action in subrogation.
When the legal sufficiency of a complaint is challenged by a motion to dismiss, all well-pleaded facts in the complaint are to be taken as true. (Burdinie v. Village of Glendale Heights (1990), 139 Ill.2d 501, 505, 152 Ill.Dec. 121, 565 N.E.2d 654.) On review, we must determine whether the well-pleaded allegations of the complaint, when interpreted in the light most favorable to the plaintiff, are sufficient to set forth a cause of action upon which relief may be granted. Burdinie, 139 Ill.2d 501, 152 Ill.Dec. 121, 565 N.E.2d 654.
The doctrine of subrogation is a creature of chancery. It is a method whereby one who has involuntarily paid a debt or claim of another succeeds to the rights of the other with respect to the claim or debt so paid. (34 Ill.L. & Prac. Subrogation § 2 (1958).) The right of subrogation is an equitable right and remedy which rests on the principle that substantial justice should be attained by placing ultimate responsibility for the loss upon the one against whom in good conscience it ought to fall. (34 Ill.L. & Prac. Subrogation § 2 (1958).) Subrogation is allowed to prevent injustice and unjust enrichment but will not be allowed where it would be inequitable to do so. (34 Ill.L. & Prac. Subrogation § 6 (1958).) There is no general rule which can be laid down to determine whether a right of subrogation exists since this right depends upon the equities of each particular case. See 34 Ill.L. & Prac. Subrogation § 6 (1958).
One who asserts a right of subrogation must step into the shoes of, or be substituted for, the one whose claim or debt he has paid and can only enforce those rights which the latter could enforce. (Continental Casualty Co. v. Polk Brothers Inc. (1983), 120 Ill.App.3d 395, 397, 75 Ill.Dec. 712, 457 N.E.2d 1271.) Consequently, in the case at bar, the insurance company may assert a right of subrogation against the tenant for the fire damage if: (1) the landlord could maintain a cause of action against the tenant and (2) it would be equitable to allow the insurance company to enforce a right of subrogation against the tenant.
With these principles in mind, we turn to the case at bar. Although a tenant is generally liable for fire damage caused to the leased premises by his negligence, if the parties intended to exculpate the tenant from negligently caused fire damage, their intent will be enforced. (One Hundred South Wacker Drive, Inc. v. Szabo Food service, Inc. (1975), 60 Ill.2d 312, 326 N.E.2d 400; Stein v. Yarnall-Todd Chevrolet, Inc. (1968), 41 Ill.2d 32, 241 N.E.2d 439; Cerny-Pickas & Co. v. C.R. Jahn Co. (1955), 7 Ill.2d 393, 131 N.E.2d 100.) The lease between the landlord and the tenant must be interpreted as a whole so as to give effect to the intent of the parties. Stein, 41 Ill.2d at 35, 241 N.E.2d 439.
In the instant case, the insurance company contends that the tenant is liable for negligently caused fire damage because the lease does not contain a provision expressly relieving the tenant of this liability. This argument, however, is without merit. In Cerny-Pickas, 7 Ill.2d at 396, 131 N.E.2d 100, this court stated:
(Emphasis added.)
Accordingly, to ascertain the intent of the parties, we must consider the lease "as a whole."
Although the appellate court properly determined that Cerny-Pickas controls the instant case, it nevertheless failed to actually construe the lease "as a whole." Instead, the appellate court concluded that the absence of a "yield-back" provision revealed the parties' intent to place responsibility for negligently caused fire damage on the tenant. The appellate court determined that the tenant could only be relieved of this responsibility by an express provision in the lease. This, however, is not the law in Illinois. In Illinois, courts must look to the lease "as a whole" and the spirit of the agreement between the parties rather than search for an express provision in the lease. (See One Hundred South Wacker Drive, Inc. v. Szabo Food Service, Inc. (1975), 60 Ill.2d 312, 314, 326 N.E.2d 400; Cerny-Pickas, 7 Ill.2d at 396, 131 N.E.2d 100.) In the instant case, even the most cursory examination of the lease "as a whole" leads us to the obvious conclusion that neither the landlord nor the tenant was a sophisticated real estate mogul. It is hardly surprising to us that this particular lease does not contain a "yield-back" clause, as it is quite likely that the parties involved did not even know what a "yield-back" clause is.
The lease "as a whole" indicated that the tenant wanted shelter for one year for which he promised to pay a modest rent, furnish his own utilities, perform certain services on the farm, and assume the risk for his own personal property. The landlord agreed. Although one may be critical of the grammar, punctuation or even the style of the lease, it is difficult to find fault with the spirit of the document. In drafting this document, the landlord expressly placed minor duties on the tenant. "As a whole," the lease does not reflect any intent that, during the course of the one-year term, the tenant would be responsible for any fire damage to the realty and be required to pay an additional $40,579 to the landlord. Such a proposition would probably be beyond the wildest dreams of the parties.
The only paragraph which purportedly addresses the risks borne by either party is paragraph (E) which reads:
"(E) The Tenant will assume their [sic ] own risk for their [sic ] personal property and Landlord, J.S. Ludwig, will not be responsible for fire, wind or water damage."
The insurance company contends that the last clause in this paragraph reveals the parties' intent to place responsibility for fire damage to the real property on the tenant. This argument persuaded the appellate court. However, the appellate court improperly read the last clause in isolation from the beginning part of the sentence. When read as one complete sentence, it is obvious to us that the parties intended to expressly place responsibility for his own personal property on the tenant and to exempt the landlord from liability for damage to the tenant's personal property. See, e.g., Tondre v. Pontiac School District No. 105 (1975), 33 Ill.App.3d 838, 843, 342...
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