Schuchman v. State Auto Property & Casualty Insurance

In the

United States Court of Appeals
For the Seventh Circuit
____________________

No. 12-2751
NORMAN E. SCHUCHMAN AND
GLENNA SCHUCHMAN,
Plaintiffs-Appellants,

v.

STATE AUTO PROPERTY AND
CASUALTY INSURANCE COMPANY,
Defendant-Appellee.
____________________

Appeal from the United States District Court for the
Southern District of Illinois.
No. 10 C 01024 — David R. Herndon, Chief Judge.
____________________

ARGUED DECEMBER 4, 2012 — DECIDED OCTOBER 23, 2013
____________________

Before BAUER and HAMILTON, Circuit Judges, and THARP,
District Judge. ∗

∗
Of the Northern District of Illinois, sitting by designation.
2 No. 12-2751

THARP, District Judge. In September 2000, Norman and
Glenna Schuchman purchased homeowner’s insurance from
State Auto Property and Casualty Insurance Company
(“State Auto”) to insure a residence in Junction City, Illinois.
Almost ten years later, a fire severely damaged the insured
house and the Schuchmans asserted a claim against the
homeowner’s policy State Auto had issued. After a lengthy
investigation, however, State Auto denied the Schuchmans’
claim on the basis that the Schuchmans were not residing on
the “residence premises,” as that term is defined by the
policy, and because the Schuchmans were maintaining a
residence other than at the “residence premises,” in violation
of the policy’s Special Provisions. The Schuchmans argue
that the term “residence premises” is ambiguous and so
should be liberally construed in favor of coverage. We agree
and, accordingly, we reverse the district court’s entry of
summary judgment in favor of State Auto.
I. Background
1. The Schuchman Property
On November 10, 1980, Glenna (née Reed) Schuchman
purchased a parcel of land in Junction City, Illinois. The
parcel was, and is, a contiguous tract of land consisting of
eight lots, Numbers 9 through 16, of Block 45 of Junction
City. The parcel is situated at the corner of West 14th Street
and Madison Avenue. The southern boundary of the parcel,
which runs along West 14th Street, is 150 feet wide. The
parcel extends 400 feet north with Madison Avenue at its
eastern boundary. In all, the property covers less than one
and a half acres.
No. 12-2751 3

When Ms. Schuchman purchased the parcel, a single
house was situated on the southern end of the property
facing West 14th Street and the parcel’s southern boundary.
Ms. Schuchman moved into this house after purchasing the
property. In 1983, she married Norman Schuchman, who
subsequently moved into the house with her. At this time,
the house had the mailing address, “Rural Route #1.”
In the late 1980s and early 1990s, Ms. Schuchman moved
two mobile homes onto the property—one for her mother
and the other for her stepfather. These mobile homes were
together assigned a single mailing address, “Rural Route
#2.” Sometime before 1993, however, the house and mobile
homes were each assigned new mailing, or street, addresses.
The house was assigned the address, “109 West 14th Street.”
One mobile home was assigned “1406 Madison Avenue,”
and the other “1408 Madison Avenue.” So far as the record
reflects, the Schuchmans had nothing to do with the
assignment of these addresses.
The Schuchmans never sold or severed any portion of the
property. No physical barriers divide the lots or structures
on the parcel. The property is not taxed by lot or address; to
the contrary, the entire contiguous tract is identified by a
single Property Index Number and the Schuchmans pay
property tax based on the parcel as a whole. Separate title
searches for 1408 Madison Avenue and 109 West 14th Street
both return the same tract of eight contiguous lots owned by
the Schuchmans.
On September 8, 2000, the Schuchmans submitted an
application for homeowner’s insurance to State Auto
through an insurance broker, Michael Wethington and his
firm Hudson-Gray Insurance Agency, Inc. The application
4 No. 12-2751

listed 1408 Madison Avenue as the Schuchmans’ mailing
address and 109 West 14th Street as the location of the
property to be insured. On the application, the Schuchmans
indicated that the house at 109 West 14th Street was owner-
occupied by marking an “X” in the appropriate box. In
response to a question whether they owned, occupied, or
rented any other residence, the Schuchmans answered by
marking an “X” in the box marked “No.” State Auto issued
an insurance policy to the Schuchmans, and coverage under
that policy was thereafter continued year to year.
Sometime before 2004, the Schuchmans moved two
additional mobile homes onto the property near the mobile
home bearing the 1408 Madison Avenue address; these new
trailers shared the 1408 Madison address. The Schuchmans
then moved from the house at 109 West 14th Street into
these new mobile homes. At this time, Mr. Wethington
informed Ms. Schuchman that the mobile homes would not
be covered by the State Auto policy because State Auto did
not insure mobile homes. The Schuchmans therefore
purchased a separate policy from another company to insure
the trailers. In that same conversation, however, Mr.
Wethington also informed Ms. Schuchman that, so long as
the Schuchmans continued to reside on the property, the
house at 109 West 14th Street would continue to be covered
by the State Auto policy.
At about the time the Schuchmans moved into the new
mobile homes, their son Richard moved into the house,
where he lived until late 2008. After Richard moved out, the
Schuchmans shut off the water and gas service to the house.
Ms. Schuchman would occasionally enter the house to
retrieve items stored there and to generally check on the
No. 12-2751 5

condition of the building, but at no time after 2008 did the
Schuchmans spend the night or cook or eat meals in the 109
West 14th Street house. The Schuchmans’ plans were to stay
in the mobile homes indefinitely; and although the
Schuchmans “kicked” around some ideas of what to do with
the house, including tearing it down or selling it, they never
made any concrete plans.
In the early hours of May 23, 2010, a fire broke out at the
109 West 14th Street house, severely damaging the building
and its contents. The Schuchmans filed a claim with State
Auto under their homeowner’s insurance policy to cover the
damage to the house. After a lengthy investigation, State
Auto agreed to provide coverage for the contents of the
house, as the policy covered personal property “anywhere in
the world.” However, State Auto denied coverage for
damage to the house itself on the basis that “the home at 109
W. 14th Street was not being used as [the Schuchmans’]
‘residence premises,’ as that term is defined in the insurance
policy.” Complaint, Dkt. 2-2, Ex. B at 2. State Auto also
denied coverage for the building on the basis that the
Schuchmans had violated the Special Provisions of the
policy which required that the “residence premises” be the
only premises where the Schuchmans maintained a
residence.
2. The State Auto Homeowner’s Policy
With this background in mind, we turn to the relevant
provisions of the State Auto policy. Under “SECTION I –
PROPERTY COVERAGES,” the policy states that, “1. We
[(State Auto)] cover: a. The dwelling on the ‘residence
premises’ shown in the Declarations, including structures
attached to the dwelling.”
6 No. 12-2751

Under “DEFINITIONS,” Section B.11 defines the term
“residence premises” as:
a. The one family dwelling where you reside;
b. The two, three or four family dwelling
where you reside in at least one of the family
units; or
c. That part of any other building where you
reside;
and which is shown as the “residence
premises” in the Declarations.
“Residence premises” also includes other
structures and grounds at that location.
The Declarations page of the policy, amended June 28, 2010,
states, as follows:
THE PREMISES COVERED BY THIS POLICY
IS LOCATED
109 WEST 14TH ST JUNCTION CITY, IL 62882
RATING INFORMATION – FORM 3, FRAME,
CONSTRUCTED IN 1945, SECURGARD,
PRIMARY RESIDENCE, PROTECTION
CLASS 06, TERRITORY 051, FEET FROM
HYDRANT 1000, FIRE STATION 3 MILES,
$500 SECTION I LOSS DEDUCTIBLE, 1
FAMILY, INSIDE CITY.
The “Special Provisions” of the policy set forth and
require:
(a) The described dwelling is not seasonal; (b)
no business pursuits are conducted on the
No. 12-2751 7

described premises; (c) the residence premises
[emphasis in original] is the only premises
where you maintain a residence other than
business or farm properties; (d) the Insured has
no full time residence employee(s); (e) the
Insured has not [sic] outboard motor(s) or
watercraft otherwise excluded under this
policy for which coverage is desired.
Exception, if any, to (1), (b), (c), (d) or (e)
entered in Special Provisions section on
Declarations. Absence of an entry means “no
exceptions.”
3. Procedural Background
After State Auto denied their claim for damage to the
house, the Schuchmans filed suit in the Circuit Court of
Marion County, Illinois. Their complaint set forth three
counts. Count I was an action for a declaratory judgment,
asking the court to declare that the plaintiffs were entitled to
coverage for the repair and replacement of the 109 West 14th
Street house. Count II was an action for damages, alleging
that State Auto was in breach of the insurance policy and
seeking punitive damages. Count III sought damages from
State Auto pursuant to Section 155 of the Illinois Insurance
Code, 215 ILCS 5/155.
State Auto removed the action to the United States
District Court for the Southern District of Illinois, pursuant
to the court’s diversity jurisdiction under 28 U.S.C. § 1332(a).
The parties filed cross-motions for summary judgment, and
on July 3, 2012, the district court entered summary judgment
in favor of State Auto on all counts and denied the
Schuchmans’ motion for summary judgment. The
8 No. 12-2751

Schuchmans then timely filed this appeal, seeking reversal of
the district court’s grant of summary judgment to State
Auto.
II. Analysis
We review de novo the district court’s grant of summary
judgment and construction of the insurance policy. Grinnell
Mut. Reinsurance Co. v. Haight, 697 F.3d 582, 585 (7th Cir.
2012) (citing Auto-Owners Ins. Co. v. Munroe, 614 F.3d 322,
324 (7th Cir. 2010)). The parties agree that Illinois law
governs the interpretation of the policy. As such, “[i]n
construing the policy, our primary objective is to ascertain
and give effect to the parties’ intentions as expressed by the
words of the policy.” Id. (citing Rich v. Principle Life Ins. Co.,
226 Ill. 2d 359, 371, 875 N.E.2d 1082, 1090 (2007)). Like any
contract under Illinois law, “an insurance policy is construed
according to the plain and ordinary meaning of its
unambiguous terms.” Auto-Owners Ins. Co., 614 F.3d at 324
(citing Nicor, Inc. v. Associated Elec. & Gas, 223 Ill. 2d 407, 416,
860 N.E.2d 280, 286 (2006)). We conclude, however, that the
principal term at issue here—“residence premises”—is
ambiguous.
This case turns on whether the Schuchmans resided on
the “residence premises” at the time of the fire. The parties
agree that the Schuchmans had to reside on the “residence
premises” in order for coverage under the policy to be
effective. They also agree that the Schuchmans were not
residing at the 109 West 14th Street house at the time of the
fire, but at the 1408 Madison Avenue mobile homes. The
critical question, then, is whether “residence premises,” as
defined by the policy, encompasses those mobile homes. If
“residence premises” includes the mobile homes, the
No. 12-2751 9

Schuchmans were residing on the “residence premises” at
the time of the fire, and the damage to the house is covered
by the policy. If “residence premises” excludes the mobile
homes, however, the Schuchmans were not only residing
somewhere other than the “residence premises,” but also
maintaining a residence other than at the “residence
premises” in violation of the Special Provisions. In that case,
the policy would not cover the fire damage to the house.
The policy defines “residence premises” as the dwelling
where you reside (whether single family or multi-unit) or
“that part of any other building where you reside … and
which is shown as the ‘residence premises’ in the
Declarations.” It also includes “other structures and grounds
at that location.” Apart from directing us to the policy
Declarations, this definition tells us that “the residence
premises” is not a building, but a “location” on which there
may be multiple buildings, and that the insured may
“reside” in any such building that is included within the
“residence premises” shown in the policy Declarations.
Turning to the Declarations page, we learn that the
“premises” covered by the policy is located at “109 West
14th Street, Junction City, Illinois.” But the Declarations page
does not define the boundaries of that address. The
subsequent description of the insured structure as a frame
construction single-family residence confirms that the house
associated with that mailing address is the covered dwelling.
But because we know (from the policy definition) that
“residence premises” includes “other structures and
grounds at that location,” we know that “residence
premises” is not limited to that house. We can therefore
conclude that the “residence premises” consists of the
10 No. 12-2751

insured frame construction single-family house and any
other structures and grounds located at 109 West 14th Street.
So what other structures and grounds, if any, were
within the location defined by “109 West 14th Street”? The
Schuchmans contend that the address comprises the entirety
of the single undivided and contiguous plot of land that Ms.
Schuchman purchased in 1980, and so includes the mobile
homes. State Auto maintains, and the district court agreed,
that the mobile homes could not have been located on the
premises of 109 West 14th Street because they had a different
mailing address—namely, 1408 Madison Avenue.
If the mailing address in the policy defined a single
building, it would be hard to quarrel with State Auto’s logic.
But as we have already seen, the mailing address “109 West
14th Street,” as used in the policy, was intended to define a
location, not an individual building. And there’s the rub. The
implicit premise of the insurer’s argument is that the
location—that is, the area of land—defined by one mailing
address cannot include within it a structure that has another
mailing address. It offers no authority for the proposition,
however, and the validity of the premise is not self-evident.
Consider office and apartment buildings, for example. They
bear street addresses comprising the entire building but
comprise distinct offices and apartments that frequently bear
individual addresses. Indeed, the policy appears to have
expressly contemplated the possibility of multiple addresses
on the residence premises, in that it was written to cover
either a single or multi-unit dwelling. The Schuchmans
could have converted the house into separate apartments
with distinct addresses (e.g., 109-A, 109-B, and 109-C)
No. 12-2751 11

without compromising their policy coverage, 1 so it is
difficult to understand why moving into a mobile home near
the house would do so.
State Auto concedes that “Plaintiff may have an
argument if the 1408 Madison address had been a part of the
109 West 14th Street lot in September 2000, when the policy
was issued.” Resp. Br. at 17. But, it insists, by that time 109
West 14th Street and 1408 Madison Avenue “were two
distinct properties.” That assertion is difficult to square with
the fact (undisputed by State Auto) that a title search for
either address—109 West 14th Street or 1408 Madison
Avenue—returns the entire contiguous tract of land owned
by the Schuchmans. So far as the record reveals, both
mailing addresses, while assigned to specific structures on
the property, still refer to the same “grounds” or “location”;
the assignment of multiple postal addresses to structures on
the property did not, and could not, divide the parcel into
separate lots as State Auto maintains.
Not surprisingly, then, State Auto doesn’t tell us where
the grounds associated with “109 West 14th Street” end, and
those associated with 1408 Madison Avenue begin. It can’t.
The insurer has created a circular ambiguity by using a
mailing address for a purpose it was never intended to
serve—namely, for defining the metes and bounds of a piece
of property. Here is what the policy tells us: (1) the
“residence premises” is located at 109 West 14th Street; (2)
109 West 14th Street is the “residence premises.”

1
We ignore as irrelevant to this point any complications that rental or
commercial use of the property might introduce to the question of
coverage under the policy.
12 No. 12-2751

As this case illustrates, a mailing address is ill-suited to
the role of defining property lines. Consider two neighbors
who have mailing addresses of 101 and 103 Oak Street,
respectively. The postal carrier knows at which structure to
leave mail using these respective addresses, but standing
alone, those addresses would not tell a utility worker
through what property to run a new line when responding
to a service request at one of the homes. Perhaps there
would be a fence around the perimeter of the property, or a
survey of the lot on which the house is located, or other
information that would reveal the boundaries of the
respective properties, but the point is that the mailing
address alone would not provide sufficient guidance. It does
not suffice here, either.
State Auto also contends that because the policy
distinctly identifies the insured premises as a “frame”
construction dwelling at 109 West 14th Street, the policy
cannot reasonably be interpreted to include mobile homes
with a different mailing address. This argument misses the
mark entirely. There is no question that the insured dwelling
was the house bearing the mailing address 109 West 14th
Street; that was, as reflected on the Declarations page, a
frame-construction, single-family home. This is not a dispute
about whether there was coverage under the policy for the
mobile homes in which the Schuchmans were living; the
issue here is not the identity of the insured dwelling but
whether the Schuchmans were residing elsewhere on the
“residence premises,” which is a condition to the policy’s
coverage of the house.
State Auto’s misplaced reliance on Howard Foundry Co. v.
Hartford Fire Ins. Co., 222 F.2d 767 (7th Cir. 1955) serves only
No. 12-2751 13

to highlight the reason that the policy in this case is
ambiguous. In Howard Foundry, the “core question” before
the court was “whether plaintiff was insured against the loss
of structures in Section 22 [Twp. 45 N. Range 8, E. 3rd P.M.,
situated on the “Schaefer-Bohr” farm],” even though the
insurance policy at issue described the insured premises
only as the “acreage and buildings … located in Section 15
[Twp. 48, N.R. 8 East of the 3rd P.M., situated on the
“Justen” farm].” Id. at 769. Buildings situated in Section 22
had been damaged by fire, while the structures in Section 15
had not. But because acreage of the Schaefer-Bohr and Justen
farms extended into both Sections 15 and 22, the plaintiff
argued that the Hartford policy “sufficiently identified the
Schaefer-Bohr farm, so that buildings situated on it were
covered when the loss occurred.” Id. The Seventh Circuit
concluded, however, that the plaintiff’s argument would
require the court to “ignore the clear recital of acreage and
section number in the policy.” Id. at 770. Unlike the State
Auto policy at issue here, the policy in Howard Foundry
clearly and unambiguously identified the insured premises
with a legal description of its boundaries, rather than a
mailing address that did not. Had the State Auto policy
defined the premises by reference to a specific lot, as in
Howard Foundry, this ambiguity could have been avoided.
The policy language here is more akin to that considered
by the Illinois Appellate Court in General Casualty Co. of
Illinois v. Olsen, 372 N.E.2d 846 (2d Dist. 1977). There, the
court confronted a policy definition of the term “residence
premises” that, like the definition in State Auto’s policy, did
not use a legal description of the property covered that
clearly described the metes and bounds of the residence
premises. Consequently, when required to consider whether
14 No. 12-2751

an accident had occurred “away from” the residence
premises, the court found the term ambiguous and
construed the term in favor of coverage. Id. at 850. State
Auto’s attempt to distinguish Olsen by arguing that the
description of the residence premises there was less specific
than in this case is entirely unconvincing; in both cases, the
critical ambiguity arose from the policy’s failure to delineate
clearly the boundaries of the residence premises and to rely
instead on an ambiguous reference to the “grounds”
surrounding a specific house.
We conclude, then, that the meaning of “residence
premises” is ambiguous. As a fallback position, State Auto
argues that any textual ambiguity as to the meaning of that
term can be clarified by reference to evidence of “the intent
of the parties … with due regard to the risk undertaken, the
subject matter that is insured, and the purposes of the entire
contract.” Indiana Ins. Co. v. Pana Comm. Unit School Dist. No.
8, 314 F.3d 895, 900 (7th Cir. 2002). And while it is true that
ambiguous language in an insurance contract is construed
against the insurer, that rule applies “only if the language of
the policy is ambiguous after application of other principles
or canons of interpretation … and only if the ambiguity
cannot otherwise be resolved. In other words, the rule of
liberal construction in favor of the insured is a rule of last
resort which must not be permitted to frustrate the intention
the parties have expressed, if that can otherwise be
ascertained." 16 WILLISTON ON CONTRACTS 49:16 (4th ed.); see
also, e.g., CAN Casualty of California v. E.C. Fackler, Inc., 836
N.E.2d 732, 736 (Ill. App. Ct. 2005) (if court finds ambiguity
in insurance contract, “we may consider parol evidence to
resolve the ambiguity. Any unresolved ambiguity will be
construed against the insurer.”).
No. 12-2751 15

Unfortunately for State Auto, resort to parol evidence
concerning the parties’ intentions confirms, rather than
resolves, the ambiguity in the meaning of “residence
premises” under the policy. For starters, when the
Schuchmans first applied for homeowner’s insurance with
State Auto, they used 1408 Madison Avenue as their mailing
address, even though they did not at that time reside in the
trailer to which that address had been assigned, suggesting
that they did not view that address as defining a distinct
piece of property. State Auto counters the Schuchmans
indicated on their application that the 109 West 14th Street
house would be owner-occupied and that they did not own,
occupy, or rent any other residence; therefore, the insurer
argues, it was clearly the intent of the parties that State Auto
would only cover the occupied dwelling at 109 West 14th
Street. But—again—the question is not which dwelling was
covered by the policy, but whether the assignment of a
distinct mailing address to the mobile homes on the
property placed them outside the boundaries of the
“residence premises.” And it would have made little sense
for the Schuchmans to list a separate mailing address while
also indicating that they did not own another residence,
unless they considered both mailing addresses to be
assigned to a single property.
Further, when the Schuchmans moved out of the 109
West 14th Street house and into the 1408 Madison Avenue
mobile homes, Mr. Wethington, their insurance broker,
informed the Schuchmans that so long as they resided on the
“property,” the house at 109 West 14th Street would be
covered under the State Auto policy. In devoting almost
three pages of their brief to establishing that Wethington
was not its agent, State Auto misapprehends the import of
16 No. 12-2751

this evidence: Wethington’s statements are not significant
because they bind State Auto, but because they show that
the Schuchmans understood the residence premises to
include the entire contiguous parcel. What is more, they
highlight the term’s susceptibility to more than one
reasonable interpretation; Wethington, an experienced
insurance broker, viewed the policy’s residence requirement
in the same way that the Schuchmans did.
State Auto counters that, because the Schuchmans were
specifically informed by Mr. Wethington that they would
need to take out a separate policy to insure the 1408 Madison
Avenue mobile homes, it would have been unreasonable for
the Schuchmans to assume that State Auto intended the 1408
Madison Avenue mobile homes to be part of the “residence
premises.” This argument falls short for several reasons.
First, Wethington explained to the Schuchmans that the
mobile homes needed a separate policy not because they
were not part of the residence premises but because State
Auto does not insure mobile homes. Second, and relatedly,
State Auto again confuses the issues of coverage under the
policy and residency. The Schuchmans do not argue that the
mobile homes are covered by the policy; their argument is
that when they moved to the mobile homes, they continued
to reside in structures within the insured “residence
premises” and therefore the coverage they purchased and
paid premiums on for a decade remained in force.
Which brings us to the most telling evidence of the
Schuchmans’ understanding of the policy: they continued to
pay premiums on the policy for some six years after they
moved out of the house and into the mobile homes parked
nearby. To hear State Auto tell it, the Schuchmans were
No. 12-2751 17

throwing their money down the drain by doing so, but we
doubt very much that was the Schuchmans’ understanding.
We don’t agree with the Schuchmans’ argument that State
Auto had affirmative duties to investigate their residency on
the premises in view of their use of a different mailing
address, but whatever State Auto’s knowledge or
understanding of the Schuchmans’ residency and the policy
language, it is clear that it never gave the Schuchmans any
inkling that the existence of other mailing addresses on the
property had any potential to compromise their coverage of
the house under the policy. It is plain that the Schuchmans
always viewed the property as a single unit. That view was
not unreasonable—indeed, it is consistent with the legal
specifications defining the property. And there is no
countervailing evidence to suggest that State Auto ever
regarded the property as separate parcels.
As its last hurrah, State Auto argues that construing the
policy to provide coverage would “lead to absurd results”
by allowing property owners to subdivide their property but
insure it in its entirety through a single policy. The short
answer to this unlikely scenario is that State Auto and other
insurers can easily prevent it simply by defining the insured
premises with adequate precision. That should not be
difficult; legal descriptions of properties are readily
available. Moreover, a legal description is not required; the
policy merely needs to define the boundaries of the premises
by terms that can be readily understood and applied.
Defining the “residence premises” solely by reference to a
postal address where the insured dwelling sits on an
undivided parcel of land that has multiple postal addresses
associated with it, however, falls short of this mark.
18 No. 12-2751

“[T]he insurer has the capacity to draft intelligible
contracts.” Gillen v. State Farm Mutual Auto Ins. Co., 830
N.E.2d 575, 583 (Ill. 2005). With respect to the “residence
premises,” State Auto failed to do so and none of the
evidence they point to resolves the ambiguity inherent in
using a mailing address to define the boundaries of a piece
of property. “Where ambiguity … exist[s], the policy will be
construed strictly against the insurer, who drafted the
policy,” Nicor, Inc., 223 Ill. 2d at 417, 860 N.E.2d at 286 (citing
Travelers Insurance Co. v. Eljer Manufacturing, Inc., 197 Ill. 2d
278, 293, 757 N.E.2d 481, 491 (2001)), “and liberally in favor
of coverage for the insured.” Id. (citing Hobbs v. Hartford
Insurance Co. of the Midwest, 214 Ill. 2d 11, 17, 823 N.E.2d 561,
564 (2005)). Accordingly, pursuant to Illinois law, we
liberally construe the term “residence premises” in favor of
the insureds to encompass the 1408 Madison Avenue homes
in which the Schuchmans were residing at the time of the
fire.
Further, because “residence premises” is susceptible to
more than one reasonable interpretation, Auto-Owners Ins.
Co., 614 F.3d at 324 (citing Nicor, Inc., 223 Ill.2d at 416, 860
N.E.2d at 286), the Schuchmans cannot have violated the
Special Provisions of the policy by residing in the 1408
Madison Avenue mobile homes. Subsection (c) of the Special
Provisions expressly refers to “residence premises,” which
construed liberally in favor of the insureds, encompasses the
mobile homes in which the Schuchmans were residing.
Therefore, because “residence premises” includes the 1408
Madison Avenue mobile homes, the Schuchmans were not
maintaining a residence other than at the “residence
premises” and were not violating the Special Provisions.
No. 12-2751 19

Therefore, the Schuchmans are entitled to coverage for
the fire damage to the 109 West 14th Street house that
occurred on May 23, 2010 under the State Auto policy at
issue.
III. Conclusion
For the foregoing reasons, we reverse the grant of
summary judgment in State Auto’s favor. We remand the
case to the District Court for entry of judgment in the
Schuchmans’ favor on Count I and for further proceedings
consistent with this opinion with respect to the remaining
counts.