Lytle v. Country Mut. Ins. Co.
| Decision Date | 30 September 2015 |
| Docket Number | No. 1–14–2169.,1–14–2169. |
| Citation | 41 N.E.3d 657 |
| Parties | Robert LYTLE, Plaintiff–Appellant, v. COUNTRY MUTUAL INSURANCE COMPANY, Defendant–Appellee. |
| Court | United States Appellate Court of Illinois |
Lawrence Rosen, Chicago, for appellant.
McKnight, Kitzinger & Pravdic, LLC, Chicago (Kevin Q. Butler, Cornelius E. McKnight, and Nathan P. Karlsgodt, of counsel), for appellee.
¶ 1 Plaintiff Robert Lytle challenges the trial court's dismissal of his second amended complaint alleging breach of contract and seeking costs and penalties against defendant Country Mutual Insurance Company (Country Mutual). The trial court found that there was no genuine issue of material fact and the clear and unambiguous terms of the insurance policy established that Lytle was not entitled to replacement costs because he never made any repairs or replacements. For the reasons that follow, we affirm the judgment of the trial court.
¶ 3 In February 2011, plaintiff Lytle purchased a homeowner's insurance policy from defendant Country Mutual to insure his home in Elmhurst, Illinois. The home was built around 1903. On June 21, 2011, Lytle discovered damage to his home as a result of a severe storm and shortly thereafter made a claim to Country Mutual for insurance proceeds.
¶ 4 The policy contained a depreciation holdback provision, which provided that the insurer would not pay more than actual cash value until the actual repair or replacement was complete. Furthermore, the insured could choose to accept actual cash value instead of replacement cost. If the insured elected to accept actual cash value, he would have one year from the date of the loss to repair or replace the damaged property and request the difference between the actual cash value and the replacement cost.
¶ 5 Lytle hired an insurance adjuster to represent him in the claims process. On August 25, 2011, Country Mutual informed Lytle's adjuster that Country Mutual's adjuster did not have authority to make any verbal agreements or commitments on behalf of Country Mutual, all agreements must be in writing, and Country Mutual would not waive any of the policy requirements concerning the insured's duties.
¶ 6 On August 31, 2011, Country Mutual issued to Lytle an actual cash value payment of $42,911.84. On October 21, 2011, Country Mutual sent Lytle a letter advising him that his claim remained open; Country Mutual was waiting—in accordance with the depreciation holdback provision of the policy—for the work to be completed; and Lytle's one-year date to replace or repair the damaged property and request the difference between actual cash value and replacement cost would expire on June 21, 2012. On January 21, 2012, Country Mutual sent Lytle another letter containing this same information.
¶ 7 Lytle's adjuster negotiated with Country Mutual to increase the amount of the actual cash value payment to include damage to the foundation. The parties reached an agreement on this matter, and, on January 24, 2012, Country Mutual issued Lytle a supplemental actual cash value payment of $16,024.70.
¶ 8 On April 24, 2012, Lytle's adjuster notified Country Mutual that the repair and construction process was at a standstill because the Village of Elmhurst required necessary upgrades under its building code. The adjuster stated that he could not compel the Village to put its upgrade requirements in writing and the Village suggested that the parties meet at the property instead.
¶ 9 On May 15, 2012, Lytle's adjuster wrote Country Mutual and suggested that it contact village representatives and meet them at the jobsite. In a June 18, 2012 letter to Country Mutual, Lytle's adjuster complained that Country Mutual's explanations were not specific. The adjuster also referred to a demand by Lytle in October 2011 for an appraisal and Country Mutual's response that the demand was premature.
¶ 10 On June 11, 2012, Country Mutual wrote Lytle, informing him that it could not grant an extension on his claim and his one year period in which to complete the repairs would expire on June 21, 2012.
¶ 11 In a June 18, 2012 letter to Country Mutual, Lytle's adjuster complained that Country Mutual would not attend meetings with village representatives, explain its prior correspondence, or name an appraiser.
¶ 12 Country Mutual denied Lytle's request for additional payment of the depreciation holdback, and Lytle filed suit. In his second amended complaint, Lytle sought damages, alleging Country Mutual breached the insurance contract by failing to pay the replacement costs and additional living expenses. Lytle also sought attorney fees, costs and penalties pursuant to section 155 of the Illinois Insurance Code (215 ILCS 5/155 (West 2012) ), alleging Country Mutual engaged in acts of bad faith. Lytle did not request an appraisal or any type of equitable relief.
¶ 13 Country Mutual filed its answer and affirmative defenses and thereafter moved for summary judgment pursuant to section 2–1005 of the Code of Civil Procedure (735 ILCS 5/2–1005 (West 2012) ). Country Mutual argued that there was no genuine issue of material fact to be determined because Country Mutual paid Lytle his actual cash value payment; the policy provided that Lytle had one year to complete the property repairs and request the difference between the actual cash value paid and the replacement costs necessary to repair the storm damage; and Lytle did not complete any repairs or replacements within the one year period. Moreover, the additional amounts Lytle sought were excluded building ordinance costs, which Lytle never actually incurred. Attached to the motion were the relevant pleadings, a copy of the policy, evidence of payment of the actual cash value, an affidavit from Country Mutual's claims handler, and correspondence between the parties regarding the necessity of completing the repairs within one year from the date of loss.
¶ 14 In his response, Lytle argued there were issues of fact concerning whether Country Mutual breached its duty of good faith and fair dealing and violated section 155 of the Insurance Code by failing to meet with representatives from the village and not abiding by the appraisal provision of the policy.
¶ 15 On June 11, 2014, the trial court held a hearing on Country Mutual's motion and granted summary judgment in favor of Country Mutual. The court found that Lytle's request for an appraisal related solely to a dispute over coverage, which was not subject to the appraisal provision of the policy. The court also found that Lytle had negotiated a settlement of the actual cash value payment, failed to timely complete repairs or replacements, and did not incur any building code upgrade costs. Lytle timely appealed.
¶ 17 “Summary judgment is appropriate only when the pleadings, depositions, 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.” (Internal quotation marks omitted.) JPMorgan Chase Bank, N.A. v. Earth Foods, Inc., 238 Ill.2d 455, 460–61, 345 Ill.Dec. 644, 939 N.E.2d 487 (2010). We review a grant or denial of a summary judgment de novo. Id. at 461, 345 Ill.Dec. 644, 939 N.E.2d 487. A reviewing court's function in reviewing a trial court's entry of summary judgment is to ensure that no genuine issue of material fact was raised and to determine whether the judgment was correctly entered as a matter of law. Comtrade, Inc. v. First National Bank of Highland Park, 146 Ill.App.3d 1069, 1072–73, 100 Ill.Dec. 549, 497 N.E.2d 527 (1986). A nonmoving party need not prove its case, but must present some factual basis entitling it to judgment. Parker v. House O'Lite Corp., 324 Ill.App.3d 1014, 1019, 258 Ill.Dec. 304, 756 N.E.2d 286 (2001).
¶ 18 The construction of the provisions of an insurance policy is a question of law, subject to de novo review. Illinois Farmers Insurance Co. v. Marchwiany, 222 Ill.2d 472, 476, 305 Ill.Dec. 634, 856 N.E.2d 439 (2006). Insurance policies are subject to the same rules of construction applicable to other types of contracts. See Continental Casualty Co. v. McDowell & Colantoni, Ltd., 282 Ill.App.3d 236, 241, 217 Ill.Dec. 874, 668 N.E.2d 59 (1996). A court's primary objective is to ascertain and give effect to the intention of the parties as expressed in the agreement. Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill.2d 384, 391, 189 Ill.Dec. 756, 620 N.E.2d 1073 (1993). In performing that task, the court must construe the policy as a whole, taking into account the type of insurance purchased, the nature of the risks involved, and the overall purpose of the contract. Travelers Insurance Co. v. Eljer Manufacturing, Inc., 197 Ill.2d 278, 292, 258 Ill.Dec. 792, 757 N.E.2d 481 (2001). The words of a policy should be accorded their plain and ordinary meaning. State Farm Mutual Automobile Insurance Co. v. Villicana, 181 Ill.2d 436, 441, 230 Ill.Dec. 30, 692 N.E.2d 1196 (1998). Where the provisions of a policy are clear and unambiguous, they will be applied as written (United States Fire Insurance Co. v. Schnackenberg, 88 Ill.2d 1, 4, 57 Ill.Dec. 840, 429 N.E.2d 1203 (1981) ) unless doing so would violate public policy (Villicana, 181 Ill.2d at 442, 230 Ill.Dec. 30, 692 N.E.2d 1196 ).
¶ 19 Lytle argues that the loss payable provision of the insurance contract is ambiguous and should be construed most strongly against Country Mutual, the party that prepared the contract. However, we find no ambiguity in the language of the instant policy of insurance. The contract indicates Lytle purchased dwelling coverage subject to Loss Settlement 1, which provides that replacement cost is paid in the following manner and circumstances:
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