Court Opinion

ID: 9709612
Source: CourtListenerOpinion
Date Created: 2023-08-26 03:52:11.769313+00
Date Added: 2024-06-11T18:22:50.528980
License: Public Domain

JUSTICE FREEMAN, concurring: I concur with that portion of the majority opinion which holds that the parties intended that the tenant be exonerated from liability for any fire damage to the premises and that the landlord might look solely to the insurance as compensation for any fire damage to the premises. I write only to express my disagreement with the majority holding that under these facts the tenant attained “the status of a co-insured under the insurance policy” by the payment of rent. 149 Ill. 2d at 323. Firstly, the result obtained by the majority opinion, i.e., that the insurance company’s subrogation action is not maintainable, does not require that we reach the issue of whether the tenant was a co-insured under the landlord’s policy. In Cerny-Pickas & Co. v. C.R. John Co. (1955), 7 Ill. 2d 393, this court held that a landlord’s insurer’s subrogation action was not maintainable against a tenant, without additionally concluding that the tenant was a co-insured under the landlord’s insurance policy. Cerny-Pickas determined that such an action was not maintainable based simply on an examination of the parties’ lease, which indicated that the tenant was to be exonerated from liability for fire loss, and certain “better reasoned decisions,” which supported that result. (Cerny-Pickas, 7 Ill. 2d at 398.) These “better reasoned decisions” did not express the view that tenants gain the status of co-insureds by the payment of rent, but simply noted that tenants, thereby, bear the cost of insurance with their landlords. (See Cerny-Pickas, 7 Ill. 2d at 398.) In the instant case, as in Cerny-Pickas, the majority need only have looked to the parties’ intent, as expressed by their lease, as well as basic subrogation principles, to conclude that the subrogation action was not maintainable. Secondly, but more-importantly, the majority’s holding on this point sweeps too broadly, serving to eviscerate the common law principle that a tenant is responsible for damage to leased premises resulting from his own negligence. (See 49 Am. Jur. 2d Landlord & Tenant §§934, 935 (1970); Annot., 10 A.L.R.2d 1012, 1016 et seq. (1950); Cerny-Pickas, 7 Ill. 2d 393; Fire Insurance Exchange v. Geekie (1989), 179 Ill. App. 3d 679.) Indeed, the majority’s holding, while stated to be limited to “the particular facts of this case” (149 Ill. 2d at 323), serves to elevate the status of every tenant to that of a co-insured under his or her landlord’s insurance policy, unless expressly indicated otherwise. By logical extension, the tenant might then also be considered a co-insured of the landlord with respect to personal property or negligence liability on the premises. It is recognized that a tenant may attain the status of a co-insured where the insured landlord covenants to carry insurance for the benefit of the tenant. (See 16 Couch on Insurance §61:137 (rev. 1983).) Accordingly, our appellate court has approached the issue by looking at the express or implied terms of a lease, as well as surrounding extrinsic evidence, to discern the parties’ agreement concerning the allocation of insurance burdens. (Compare Continental Casualty Co. v. Polk Brothers, Inc. (1983), 120 Ill. App. 3d 395 (terms of lease and extrinsic evidence revealed that parties intended that landlord, rather than tenant, obtain real property insurance, resulting in nonviability of subrogation action); and Reich v. Tharp (1987), 167 Ill. App. 3d 496 (express terms of sale agreement provided that both parties were to be named insureds on insurance policy, with the result that party omitted from policy deemed a co-insured); with Fire Insurance Exchange, 179 Ill. App. 3d 679 (no term in lease concerning obligation to insure premises; hence, tenant not a co-insured).) This approach is not to say, however, that in all instances where a landlord has insurance and a tenant pays rent, the tenant becomes a co-insured. The better reasoned view, rather, requires that we base our decision not on the mere existence of insurance, but on the parties’ agreement as to the allocation of that burden. Notably, Anderson v. Peters (1986), 142 Ill. App. 3d 182, a decision holding that a tenant is considered a co-insured, despite the absence of any indication of the parties’ intent, was expressly overruled by Fire Insurance Exchange, 179 Ill. App. 3d 679. The majority opinion returns us, sub silentio, to Anderson.