Excerpts from claimsjournal.com:
A federal appellate court recently ruled that an insurer could be responsible for up to $14 million of a mortgage company’s settlement with the estates of two Chicago firefighters who died while responding to a fire at an abandoned laundry facility. The decision highlights the complex legal issues surrounding property ownership, liability, and insurance coverage.
The case centers on Apex Mortgage Corp. and its dispute with Great Northern Insurance Co. over whether the company was legally considered a "mortgagee in possession" at the time of the incident. A district court had previously dismissed Apex’s claim, citing an exclusion in the excess liability policy issued by a Chubb subsidiary. However, the 7th Circuit Court of Appeals found that there was enough ambiguity about Apex’s actual control over the property to warrant further review.
“The district court determined Apex indisputably possessed the property, but we think the court jumped the gun,†the court stated in its ruling. The case, *Apex Mortgage Corp. v. Great Northern Insurance Co.*, has sparked significant debate over the definition of “possession†in insurance law.
The building in question, located at 1738-1744 E. 75th St., had been in severe disrepair. The City of Chicago had cited the former owners, Chuck and Richard Dai, for 14 code violations, noting that the property was exposed to the elements, trashed, and open to vagrants. The Dais had defaulted on their mortgage, and when Apex threatened foreclosure, they offered to transfer the deed to the company—subject to an inspection.
Apex conducted an inspection, installed new locks, and placed a tarp over the roof. However, it decided not to proceed with foreclosure and returned the deed to the Dais in April 2009, along with a letter urging them to secure the property. The Dais claimed they never received the letter.
On December 22, 2010, a fire broke out at the property. Firefighters Corey Ankum and Edward Stringer were killed when the roof collapsed during their search for homeless individuals inside. Two other firefighters were injured but survived. The estates of the deceased firefighters filed wrongful death lawsuits against Apex, which eventually settled for $15 million.
Great Northern Insurance Co., Apex’s primary liability insurer, paid the $1 million policy limit. However, Apex sought to recover the remaining $14 million from its excess policy with Federal Insurance Co. Federal denied coverage based on the “mortgagee in possession†exclusion. District Court Judge Virginia M. Kendall sided with Federal, granting summary judgment in its favor.
But the 7th Circuit disagreed. The court pointed out that Chuck Dai had ordered a handyman to board up the property after being cited for code violations. Although he failed to complete all required repairs, he was later sentenced to 180 days in jail for his negligence. During the criminal proceedings, he did not contest the city’s claim that he controlled the property.
The court also rejected Federal’s argument that Apex’s settlement with the firefighters’ estates constituted an admission of liability. “Settlement does not create a judicial ruling,†the panel said. “Nor does it vindicate a plaintiff’s theory of liability. Parties can settle for any number of reasons, and the obligation to pay comes from the settlement itself (an agreement), not from one party’s liability.â€
The decision was remanded back to the district court for further proceedings. This case underscores the importance of clear policy language, thorough inspections, and the legal nuances surrounding property ownership and liability. It also serves as a reminder that even when a property is no longer under active mortgage, the responsibilities associated with it can still have far-reaching consequences.
Electric Motorcycle,Electric Ride On Tricycle,Addmotor Electric Tricyclec,Heavy Duty Electric Tricycle
FengXian Enland International Trading Co.,LTD , https://www.jsenland.com