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Ryding v. Cincinnati Special Underwriters Ins. Co.

2013 IL App (2d) 120833 (Ill. App., 2013)

Words & Phrases

Insurable Interest

Trial Judge

Honorable Bonnie M. Wheaton

Appellate Judge

Justice Spence


Property policy procured by Public Guardian covered property after the ward died and the guardian was discharged.

Fact Summary

Helen Fairchild, a ward of the Public Guardian of Du Page County, owned property in Darien, Illinois.  The Fairchild property was listed on a Commercial Property Premises Schedule attached to the policy and the “Estate Of Helen Fairchild” was listed as a loss payee associated with that property.

After Fairchild died on February 1, 2009, the public guardian was discharged and the public  administrator for Du Page County was appointed as administrator of Fairchild’s estate.  On September 24, 2009, fire destroyed the Darien property.  Cincinnati denied the claim, asserting that the policy covered the public guardian’s insurable interest who, having been previously discharged after Fairchild’s death, no longer had an insurable interest in the property at the time of loss.  Ryding, the administrator of Fairchild’s estate, filed suit seeking a declaratory judgment that Cincinnati’s policy covered the fire damage.  On cross-motions for summary judgment, the trial court granted Ryding’s motion, and Cincinnati appealed.

Cincinnati argued that, under the loss payable provision, both the named insured and loss payee must have an insurable interest and, because only the estate as the loss payee had such an interest, the loss was not covered.  The court found no dispute that the public guardian had an insurable interest because of potential liability for injury to property of a ward’s estate, citing In re Estate of Dyniewicz,  648 N.E.2d 1076 (Ill. App. 1 Dist. 1995), but Cincinnati also argued  that after the public guardian’ s discharge it no longer had an insurable interest so that Fairchild’s estate as a loss payee could not recover, relying on Barwick v. Westchester Fire Co., 266 Ill. App. 574 (1932). 

Citing The Suburban, Inc. v. Cincinnati Ins. Co., 323 Ill. App. 3d 278, 283-84 (2001), the court noted  that the policy agreement to pay is with the party who pays the premium, even if the insurance is in the name of another. Here, the Public Guardian is required to maintain insurance on the ward’s property, with insurance premiums a proper charge against the assets of the ward’s estate. 

It was clear from the face of the policy that the public guardian had obtained coverage, not to protect his own property interests, but to protect the property interests of his wards.  The court thus concluded that Fairchild’s estate and not the guardian was intended to be an insured under the policy, and that the damage to the Darien property was covered.