Nationwide Mutual Fire Insurance Company v. T and N Master Builder and Revovators
2011 IL App (2d) 101143
Ill. App. Ct.2011Background
- Nationwide Mutual Fire Insurance, as subrogee of Markowitz, paid owner for fire damage to property rented by defendants.
- Fire occurred while holdover tenants occupied the premises.
- Lease expired; defendants remained in possession as holdover tenants.
- Lease sections include repair duties by lessee and a holdover provision; fire damage exclusion exists.
- Court granted judgment on the pleadings, holding defendants coinsured under the landlord’s policy and not subject to subrogation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Dix coinsured rule applies to commercial holdover leases | Dix does not apply to commercial leases | Dix applies; coinsureds not liable | Dix controls; coinsured rule applies |
| Whether lease provisions show defendants liable for fire damages | Lease silent on coinsurance liability; defendants liable | Lease sections—specific fire exclusion; not liable | Lease language, read as a whole, excludes fire-damage liability for coinsureds |
| Whether Holdover clause renders defendants liable for all damages | Holding-over damages extend to all losses | Forfeiture; clause not controlling; not liable | Issue forfeited; even if considered, clause not controlling over fire exclusion |
| Whether Dix/Cerny-Pickas apply to commercial leases and require lease-as-a-whole construction | Distinction between residential and commercial should prevail | Dix and Cerny-Pickas apply; lease read as whole | Dix/Cerny-Pickas control; lease read as a whole supports coinsurance |
Key Cases Cited
- Dix Mutual Insurance Co. v. LaFramboise, 149 Ill. 2d 314 (1992) (subrogation not allowed against coinsured landlord tenant)
- Chubb Insurance Co. v. DeChambre, 349 Ill. App. 3d 56 (2004) (insurer cannot subrogate against coinsured)
- Cerny-Pickas & Co. v. C.R. Jahn Co., 7 Ill. 2d 393 (1955) (commercial lease support for landlord-tenant insurance considerations)
- Reich v. Tharp, 167 Ill. App. 3d 496 (1987) (subrogation principles to prevent unjust enrichment)
- Jay v. United Defense Industries, Inc., 162 Ill. App. 3d 1071 (1987) (contractual interpretation—lease as a whole)