No. 1-99-1387

JUSTICE THEIS delivered the opinion of the court:

Joseph Butera and Paul Butera (the Buteras) filed an action for declaratoryjudgment, seeking a binding declaration that the Buteras were "insureds"under the title insurance policy issued by the Attorneys' Title Guaranty Fund,Inc. (ATG), and to hold ATG liable for the back property taxes on the propertyat issue. On cross-motions for summary judgment, the circuit court grantedjudgment in favor of ATG.

On appeal, the Buteras raise two issues: (1) whether the Buteras, asbeneficiaries of a land trust that is covered by an owner title insurance policynaming the trustee of the trust as the insured, are also insured under thelanguage of the policy after conveying the property to a corporation for noconsideration and then again conveying the property to the corporation's soleshareholders, the beneficiaries individually, for no consideration; and (2) whether thebeneficiaries under a land trust "retain an estate or interest inland" for continued policy coverage after the two conveyances of theproperty. After careful review, we affirm.

On March 11, 1968, Joseph Butera, Paul Butera and Giovanni Butera executed atrust agreement with the Chicago Title and Trust Company, trust No. 51843(Trust), in connection with the ownership of certain real estate. Pursuant tothe trust agreement, Joseph, Paul and Giovanni Butera were the beneficiariesunder the Trust. Giovanni Butera assigned his interest to Paul and Joseph Buteraon February 1, 1974, and is now deceased. On July 1, 1986, pursuant to atrustee's deed, the Trust became the legal titleholder of property commonlyknown as 4716 North Nagle Avenue, Harwood Heights, Illinois (Harwood Heightsproperty). On July 11, 1986, ATG issued an owner title insurance policy, policyNo. 2029762 (the Policy), covering the property at issue in Harwood Heights inthe amount of $937,500. The policy named the trustee of the Trust, "ChicagoTitle and Trust Co.," as the insured.

On December 23, 1993, the trustee conveyed the property in Harwood Heights bytrustee's deed to Joe and Paul, Inc. On November 30, 1995, Joe and Paul, Inc.,conveyed by warranty deed the Harwood Heights property to the Buteras. Accordingto Paul Butera's affidavit, Paul and Joseph Butera were the only shareholders ofJoe and Paul, Inc. Joe and Paul, Inc., dissolved after that conveyance onJanuary 2, 1996. Each of these conveyances stated that it was accompanied byconsideration in the amount of $10 and "other good and valuableconsiderations."

On November 21, 1997, First American Title Insurance Company informed theButeras that there was a lien on the Harwood Heights property from 1978 in theamount of $14,378 plus penalties. In the policy, ATG only listed as an exceptionthe lien of taxes for the year 1985 and thereafter. ATG did not except anyunpaid real estate taxes prior to 1985 on the Harwood Heights property. TheButeras contend that ATG is liable for these unpaid real estate taxes.

Summary judgment is appropriate when all of the pleadings, depositions,admissions and affidavits demonstrate that there is no genuine issue of materialfact and the moving party is entitled to judgment as a matter of law. 735 ILCS5/2-1005(c) (West 1998); Wagemann Oil Co. v. Marathon Oil Co., 306 Ill.App. 3d 562, 566-67, 714 N.E.2d 107, 110 (1999). The appropriate standard ofreview of a granting of summary judgment is de novo. Outboard MarineCorp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102, 607 N.E.2d 1204,1209 (1992). Additionally, the construction of an insurance policy is a questionof law subject to de novo review. State Farm Mutual AutomobileInsurance Co. v. Villicana, 181 Ill. 2d 436, 441, 692 N.E.2d 1196, 1199(1998).

At issue here is the interpretation of the title insurance policy terms. ThePolicy contains the following definition of "insured":

"(a) 'insured': the insured named in Schedule A, and, subject to any rights or defenses The Fund may have had against the named insured, those who succeed to the interest of such insured by operation of law as distinguished from purchase including, but not limited to, heirs, distributees, devisees, survivors, personal representatives, next of kin, or corporate or fiduciary successors."

The insured named in schedule A is "Chicago Title and Trust Co.,"the trustee. None of these terms are defined within the Policy.

Title insurance policies are subject to the same rules of construction asother insurance policies. 9 J. Appleman & J. Appleman, Insurance Law &Practice