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First Midwest Bank1/20/2005
The plaintiff, First Midwest Bank, N.A. (First Midwest), appeals from the trial court's orders regarding its second amended complaint that granted Stewart Title Guaranty Company's (Stewart Title): (1) motion for summary judgment with regard to count I, which sought a declaration that Stewart Title is liable to First Midwest with regard to a title insurance policy it issued, and (2) motion under section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 1998)), motion to dismiss count II, which alleged negligent misrepresentation.
First Midwest argues that the trial court's decisions were erroneous because: (1) its decision to refinance the initial acquisition loan did not terminate Stewart Title's liability under the title insurance policy it issued, and (2) it stated a cause of action for negligent misrepresentation where Stewart Title was in the business of selling information and issued a title commitment that failed to show that the property in question contained a restrictive covenant that prohibited business and commercial use. For the reasons that follow, we affirm.
BACKGROUND
In July 1995, John Bergeron and Glenda Bergeron (the Bergerons) entered into a contract to purchase property commonly known as 950 North St. Mary's Road, in Green Oaks, Lake County, Illinois (the premises). Subsequently, the Bergerons applied to First Midwest to provide financing for the initial purchase of the premises. On several occasions during the loan process, the Bergerons expressed to Dave Williams, the senior vice-president at First Midwest, their intention to use the premises for residential purposes and also as a home office for their business, Downeast Design Group, Inc. (DDG), an architectural and interior design firm.
On August 24, 1995, Stewart Title issued a commitment for title insurance to the Bergerons and First Midwest as proposed insureds with respect to the premises in the amount of $300,000. On August 31, 1995, First Midwest's loan committee met and approved the initial $300,000 acquisition loan to the Bergerons, to be guaranteed by DDG for the premises to be used as a home/office subject to the Bergerons receiving a title insurance policy free of any restrictions.
In consideration of the loan that they received, on October 5, 1995, the Bergerons executed a $300,000 promissory note to First Midwest. The Bergerons also executed a mortgage on the premises in the amount of $300,000 with First Midwest Mortgage Corp. On October 18, 1995, Stewart Title issued a lender's insurance policy to First Midwest in the amount of $300,000 insuring the mortgage lien.
On July 3, 1996, First Midwest lent an additional $300,000 to the Bergerons for the purpose of building separate office space on the premises. First Midwest refers to this loan as the construction loan. In connection with the construction loan, defendants, Intercounty National Title Insurance Co. (Intercounty) and Clear Title, Inc. (Clear Title), which was acting as an agent for Intercounty, issued a title commitment, as well as a policy of title insurance to First Midwest in the amount of $300,000, with an effective date of June 19, 1996. Williams testified that First Midwest obtained the Intercounty policy of title insurance in connection with the construction loan because the initial $300,000 policy issued by Stewart Title for purposes of the Bergerons' acquisition of the premises was not enough to cover the additional $300,000 of exposure First Midwest created by the construction loan.
In May 1997, First Midwest approved a $752,000 loan to the Bergerons and DDG. First Midwest categorized this loan as a wraparound loan. First Midwest alleged that this loan wrappe
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