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 marks a significant development in the case involving Apex Mortgage Corp. and Great Northern Insurance Co.
The initial ruling by a district court judge had determined that no coverage was due under the excess liability policy issued by a Chubb subsidiary, citing an exclusion for properties held by a "mortgagee in possession." However, the 7th Circuit Court of Appeals disagreed, stating that there were sufficient factual questions about whether Apex actually had control over the property at 1738-1744 E. 75th St.
"The district court concluded that Apex indisputably possessed the property, but we believe it jumped the gun," the court noted in its decision. The case, *Apex Mortgage Corp. v. Great Northern Insurance Co.*, highlights the complex legal issues surrounding property ownership, liability, and insurance coverage.
The property in question had been cited by the City of Chicago for 14 code violations. The court described the building as being in disrepair, exposed to the elements, and vulnerable to trespassers. The original owners, Chuck and Richard Dai, had defaulted on their mortgage. When Apex threatened foreclosure, the Dais offered to transfer the deed to the company—but only after an inspection to ensure the property was marketable.
Apex conducted an inspection, installed new locks and a tarp over the roof, but ultimately decided not to proceed with foreclosure. According to Apex's legal filings, the company returned the deed to the Dais in April 2009, along with a letter reminding them of their ownership and urging them to secure the property. The Dais, however, claim they never received the letter.
On December 22, 2010, a fire broke out at the property, leading to the collapse of the roof just 20 minutes later. Firefighters Corey Ankum and Edward Stringer were killed while searching for homeless individuals inside the building. 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 after Apex filed a lawsuit. Apex then sought to recover the remaining $14 million from its excess policy with Federal Insurance Co., but Federal denied coverage based on the same "mortgagee in possession" exclusion.
District Court Judge Virginia M. Kendall sided with Federal, ruling that Apex was indeed in possession of the property at the time of the fire and granting summary judgment in favor of the insurer. However, the 7th Circuit found that the evidence presented raised enough uncertainty to warrant further review.
The court also noted that Chuck Dai had ordered a handyman to board up the property following city citations. Despite this, he failed to complete the necessary repairs and was later sentenced to 180 days in jail for his negligence. During those criminal proceedings, he did not dispute the city's claim that he still controlled the property.
In addition, the 7th Circuit 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 emphasized. "Nor does it validate a plaintiff’s theory of liability. Parties can settle for various reasons, and the obligation to pay comes from the agreement itself, not from one party’s liability."
The court has now remanded the case back to the district court for further proceedings, leaving the issue of coverage unresolved for now.
Two Wheel Electric Vehicle,Electric Tricycle Trike,Enclosed Electric Tricycle,Street Bike Motorcycle
FengXian Enland International Trading Co.,LTD , https://www.jsenland.com