State Farm Fire & Casualty Co. v. Guevara

2023 IL App (1st) 221425-U

• Court: Appellate Court of Illinois
• Decided: September 28, 2023
• Docket: 1-22-1425
• Status: Unpublished

Opinion

2023 IL App (1st) 221425-U Order filed: September 28, 2023

FIRST DISTRICT FOURTH DIVISION

No. 1-22-1425

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1). ______________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT ______________________________________________________________________________

STATE FARM FIRE & ) Appeal from the CASUALTY COMPANY, ) Circuit Court of ) Cook County. Plaintiff-Appellee, ) v. ) ) No. 21 CH 1363 LUZ MELINA GUEVARA, SONIA ) LILY SOZA, and JORGE ZARKO, ) ) Honorable Defendants ) Allen Price Walker ) Judge, presiding. (Luz Melina Guevara, ) ) Defendant-Appellant). ) ______________________________________________________________________________

PRESIDING JUSTICE ROCHFORD delivered the judgment of the court. Justices Hoffman and Martin concur in the judgment.

ORDER

¶1 Held: Summary judgment in favor of insurer is reversed, and this matter is remanded for further proceedings, where genuine issues of material fact existed with respect to insurer’s duty to defend underlying action.

¶2 Plaintiff-appellee, State Farm Fire & Casualty Company (State Farm), filed a complaint

for declaratory judgment, contending it had no duty to defend or indemnify defendant-appellant,

Luz Melina Guevara, or defendant, Jorge Zarko, under a homeowners insurance policy with

respect to an underlying lawsuit filed against them. State Farm filed a motion for summary No. 1-22-1425

judgment, arguing that it had no duty to defend or indemnify because Guevara did not reside at the

insured premises, the business pursuits exclusion of the policy applied, and Zarko was not an

insured. The circuit court granted summary judgment in favor of State Farm, and for the following

reasons we reverse and remand for further proceedings.

¶3 On April 2, 2020, defendant, Sonia Lily Soza, filed an unverified two-count complaint

against Guevara and Guevara’s brother, Zarko (Soza complaint). Soza alleged that she was injured

on April 30, 2018, when she fell at a residence located at 6820 West 26th Street, Berwyn, Illinois

(the Berwyn property). Count I, directed against Guevara, alleged that Guevara resided at and

owned, maintained, and controlled the Berwyn property. Count I further alleged that Guevara had

actual or constructive notice of the defect on the stairs that caused Soza to fall and be injured.

Count II, directed against Zarko, alleged that Soza was lawfully present at the Berwyn property as

a guest of Zarko, who resided at and owned, maintained, and controlled the Berwyn property.

Count II further alleged that Zarko had actual or constructive notice of the defect. The complaint

sought to recover damages for the alleged negligence of Guevara and Zarko.

¶4 At the time of Soza’s alleged injury, Guevara was the named insured in a homeowners

policy issued by State Farm. Guevara tendered defense of the Soza complaint to State Farm, and

State Farm accepted and defended subject to a reservation of rights.

¶5 Guevara thereafter filed an unverified answer and affirmative defenses to the Soza

complaint. In her answer, Guevara denied the allegation that “At all relevant times, [Guevara]

resided in Berwyn, Cook County, Illinois.” Guevara admitted that she owned the Berwyn property

on April 30, 2018, but denied that she “resided in, maintained and controlled the property” and

referred to Zarko as her tenant “during the month of April, 2018.” In response to an allegation that

Soza was a lawful invitee at the Berwyn property when she fell, Guevara answered: “Defendant

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*** is without sufficient information to admit or deny the allegation contained in Complaint

Paragraph 6, demanding strict proof thereof. Further answering, Defendant *** was not in

possession of nor residing in the Premises on April 30, 2018, and never met Plaintiff nor provided

Plaintiff permission to be on the Premises on April 30, 2018.” In her affirmative defenses, Guevara

alleged that she leased the Berwyn property to Zarko during the months of April and May 2018

and that Soza was Zarko’s guest. Zarko did not file an answer to the Soza complaint.

¶6 On March 3, 2021, State Farm filed a three-count declaratory judgment complaint seeking

a declaration that it had no duty to defend or indemnify either Guevara or Zarko with respect to

the Soza complaint. A copy of the policy was attached to State Farm’s complaint.

¶7 The policy defined “You” and “your” mean the “named insured” shown in the

Declarations, and “insured” as Guevara and “[if] residents of your household: (a) Your relatives.”

The policy defined the “insured location” as the “residence premises,” and residence premises was

defined as “the one, two, three or four-family dwelling, other structures, and grounds” or “that part

of any other building; where you reside and which is shown in the Declarations.” The Declarations

of the policy listed the Berwyn property. The policy included certain liability coverage, including

“Coverage L – Personal Liability” which provided:

“If a claim is made or a suit is brought against an insured for damages because of bodily

injury *** to which this coverage applies, caused by an occurrence, we will:

1. Pay up to our limit of liability for which the insured is legally liable; and

2. Provide a defense at our expense by counsel of our choice. We may make an

investigation and settle any claim or suit that we decide is appropriate. Our obligation

to defend any claim or suit ends when the amount we pay for damages, to effect

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settlement or satisfy a judgment resulting from the occurrence, equals our limit of

liability.” (Emphasis in original.)

The policy defines an occurrence as “an accident, including exposure to conditions which first

result in: a. bodily injury; or b. property damage; during the policy period.” (Emphasis in

original.)

¶8 In addition, the policy excluded coverage for bodily injury or property damage “arising out

of business pursuits of any insured or the rental or holding for rental of any part of any premises

by any insured.” This exclusion did not apply to “the rental or holding for rental of a residence of

yours *** on an occasional basis for the exclusive use as a residence.” The policy also excluded

coverage for bodily injury or property damage “arising out of any premises currently owned or

rented to any insured which is not an insured location.” (Emphasis in original.)

¶9 The declaratory judgment complaint alleged that, based on admissions by Guevara in her

answer to the Soza complaint, which State Farm attached as an exhibit, Zarko was not an “insured”

(count 1), the business pursuits exclusion of the policy applied to preclude coverage (count II), and

the Berwyn residence was not an “insured location” (count III).

¶ 10 Guevara filed an answer and affirmative defenses to the declaratory judgment complaint.

Therein, Guevara admitted that she “resided at the Berwyn property until January 2018 at which

time she moved to Aurora, Illinois” and that she did not “live in the property in April 2018.” In

response to State Farm’s allegation that “Guevara leased the Berwyn property to Zarko, her brother

at all times relevant, including April 2018,” Guevara answered that she “admits leasing the

property to her brother on an occasional basis after she moved out of the residence in January 2018

and denies the rest of the allegations in this paragraph.” Guevara admitted that “Zarko was not a

member of Guevara’s household at any time relevant herein, including April 2018.”

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¶ 11 Guevara alleged affirmative defenses of estoppel and unjust enrichment, which State Farm

moved to dismiss as legally insufficient. The circuit court granted the motion to dismiss with leave

to replead. No amended affirmative defenses were filed.

¶ 12 Soza filed her answer to the declaratory judgment complaint, denying that Guevara resided

at the Berwyn property. Soza denied that Guevara leased the Berwyn property to Zarko and denied

that he was not a member of Guevara’s household. Zarko did not file an answer to the declaratory

judgment complaint and an order of default was entered against him on October 7, 2021.

¶ 13 State Farm moved for summary judgment, arguing that the Berwyn residence was not an

“insured location” given that Guevara judicially admitted that she did not reside at the Berwyn

residence in both her answers to the State Farm declaratory complaint and the Soza complaint.

State Farm further argued that, even if the Berwyn property was an “insured location,” the business

pursuits exclusion applied in that Guevara judicially admitted that she moved out of the Berwyn

property in January 2018 and leased it to Zarko. State Farm lastly argued that Zarko was not an

“insured” because he was not a member of Guevara’s household once she moved out of the Berwyn

property in January 2018.

¶ 14 Soza filed a motion, supported by an affidavit executed by her counsel, to pursue discovery

under Illinois Supreme Court Rule 191(b) (eff. Jan 4, 2013), arguing that discovery was necessary

to respond to State Farm’s motion for summary judgment. The circuit court stayed briefing on

State Farm’s motion for summary judgment, entered a briefing schedule, and set a hearing date on

the Rule 191(b) motion. State Farm objected to the Rule 191(b) motion. At the Rule 191(b) motion

hearing, Soza advised the court that she was withdrawing her motion and that her counsel

conducted discovery in the underlying case. The circuit court set a briefing schedule and a hearing

date on the motion for summary judgment.

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¶ 15 Guevara filed a response to State Farm’s motion for summary judgment arguing that the

policy was ambiguous in that the terms “reside” and “residents of your household” were not

defined, creating a material issue of fact as to whether she still resided at the Berwyn property and

whether Zarko was a member of her household on April 30, 2018. Guevara further argued that the

business pursuits exclusion did not apply, as she only “occasionally” rented the Berwyn property.

¶ 16 Guevara supported her response with excerpts of deposition testimony taken in the

underlying case. In her deposition, Guevara testified that she purchased the Berwyn property in

December 2008 and lived there with her daughter, son, and husband. Zarko began living with them

at the Berwyn property in December 2017. In January 2018, Guevara and her daughter, son, and

husband temporarily rented a home in Aurora, Illinois, trying to find a good school district.

Guevara’s name remained on the deed of the Berwyn property and the utilities were in her name.

Guevara also had a key to the residence where she received some mail, kept personal items, and

spent some time.

¶ 17 Soza filed a response, also relying on the deposition testimony from the underlying case

asserting that although Guevara temporarily moved to Aurora, she still maintained the Berwyn

property as her residence in April 2018. Soza advanced similar arguments to Guevara’s regarding

application of the business pursuits exclusion and Zarko’s status as an insured.

¶ 18 State Farm filed a reply contending that Soza and Guevara could not avoid the legal effect

of the judicial admissions made by Guevara. State Farm further argued that the attempts to use the

deposition testimony were problematic in that Guevara potentially violated the Illinois School

Code to the extent that Guevara used her Aurora address as her residence for purposes of accessing

tuition-free education in the Aurora school district. See 105 ILCS 5/10-20.12b (West 2020).

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¶ 19 After a hearing, the circuit court entered a written order in which it concluded that State

Farm had no duty to defend or indemnify under the policy and granted State Farm’s motion for

summary judgment. In its written order, the court found that Guevara’s admissions and statements

in her answers constituted judicial admissions that she did not reside at the Berwyn property and

therefore the Berwyn property was not an insured location. The circuit court further found that

even if the Berwyn property was an insured location, the business pursuits exception applied as

Guevara admitted that she leased the property to Zarko in January 2018, which was not

“occasional” as the deposition testimony indicated that he stayed at the Berwyn property full time

and uninterrupted for eight months until he moved out in August 2018. Further, the circuit court

found that Zarko was not an “insured,” as Guevara admitted that she moved from the property,

Zarko did not live with her in Aurora, and Zarko was not a member of her household, and therefore

Zarko could not be a member of her “household.” Guevara appeals.

¶ 20 The construction of an insurance policy and the determination of rights and obligations

thereunder are questions of law and therefore the issues are appropriately addressed by summary

judgment. Crum & Forster Managers Corp. v. Resolution Trust Corp. 156 Ill. 2d 384, 391 (1993).

Summary judgment is appropriate where the pleadings, depositions, and admissions on file,

together with any affidavits and exhibits, when viewed in the light most favorable to the

nonmoving party, indicate that there is no genuine issue of material fact and the moving party is

entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2022). We review a circuit

court’s decision to grant summary judgment de novo. Outboard Marine Corp. v. Liberty Mutual

Insurance Co., 154 Ill. 2d 90, 102 (1992).

¶ 21 “When construing the language of an insurance policy, a court’s primary objective is to

ascertain and give effect to the intentions of the parties as expressed by the words of the policy.”

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Central Illinois Light Co. v. Home Insurance Co., 213 Ill. 2d 141, 153 (2004). If the policy’s words

are clear and unambiguous, they will be given their plain and ordinary meaning, but if the policy

terms “are reasonably susceptible to more than one meaning, they are ambiguous and will be

strictly construed against the drafter.” Id. “Courts will construe the policy as a whole and consider

the type of insurance purchased, the nature of the risks involved, and the overall purpose of the

contract.” Illinois State Bar Ass’n Mutual Insurance Co., 2018 IL App (4th) 170548, ¶ 40. We

review de novo a trial court's construction of an insurance policy. Id.

¶ 22 The issue raised by the motion for summary judgment was whether State Farm had a duty

to defend or indemnify Guevara and Zarko in the underlying case. “[T]he duty to defend is broader

than the duty to indemnify [and] where there is no duty to defend, there will be no duty to

indemnify.” Crum & Forster, 156 Ill. 2d at 398. An insurer’s duty to defend arises if the facts of

the underlying complaint fall within or potentially fall within the policy’s coverage. Pekin

Insurance Co. v. Wilson, 237 Ill. 2d 446, 455 (2010). Courts first look to the allegations in the

underlying complaint and compare those allegations to the relevant provisions of the insurance

policy. Core Construction Services of Illinois, Inc., v. Zurich American Insurance Co., 2019 IL

App (4th) 180411, ¶ 25. A court may consider other pleadings, evidence, and judicial admissions

to determine whether a duty to defend arises. Id.¶ 26; Konstant Products, Inc. v. Liberty Mutual

Fire Insurance Co., 401 Ill. App. 3d 83, 124-25 (citing State Security Insurance Co. v. Linton, 67

Ill. App. 3d 480 (1978)). However, a court may only do so as long as the court does not determine

a critical issue in the underlying action. Farmers Insurance Exchange, 2022 IL App (4th) 210023,

¶ 14.

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¶ 23 The parties first disagree as to whether there is a genuine issue of material fact that, under

the language of the policy, State Farm had no duty to defend because the Berwyn property was not

an “insured location” because she did not “reside” there.

¶ 24 The policy defined “You” and “your” mean the “named insured” shown in the

Declarations, which in this case was Guevara. The policy defined the “insured location” as the

“residence premises,” which was defined as “a. the one, two, three or four-family dwelling, other

structures, and grounds; or b. that part of any other building; where you reside and which is shown

in the Declarations.” Thus, coverage in this case is predicated on two separate requirements: (1)

the named insured must reside at the insured premises; and (2) the premises must be listed in the

declarations. The policy’s declarations listed Guevara as the named insured and the Berwyn

property as the insured location, therefore the question is whether Guevara resided at the Berwyn

residence on April 30, 2018.

¶ 25 Guevara’s policy does not define “reside,” so it must be given its plain, ordinary, and

popular meaning; i.e., [it] will be construed with reference to the average, ordinary, normal,

reasonable person.” Sproull v. State Farm Fire and Casualty Company, 2021 IL 126446, ¶ 19

(citing Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 115 (1992)). This

court, using the dictionary, has defined “reside” as “ ‘to dwell permanently or for a considerable

time.’ ” See Farmers Insurance Exchange v. Cheekati, 2022 IL App (4th) 210023, ¶ 20 (quoting

Dictionary.com, https://www.dictionary.com/browse/reside (last visited Feb. 2, 2022). Illinois

courts interpreting the term “reside,” as used in homeowners’ policies, have also found that the

term consists of two components: some sort of physical presence and an intent to remain or return.

Lundquist v. Allstate Ins. Co, 314 Ill. App. 3d 240, 248 (2000); FBS Mortgage Corp. v. State Farm

Fire & Casualty Co., 833 F. Supp. 688, 694 (N.D. Ill. 1993). In considering these components,

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Illinois courts have found that term “reside” as used in homeowners polices is ambiguous as it is

subject to more than one reasonable interpretation. Id. “Where competing reasonable

interpretations of a policy exist, a court is not permitted to choose which interpretation it will

follow. [Citation.] Rather, in such circumstances, the court must construe the policy in favor of the

insured and against the insurer that drafted the policy.” Employers Insurance of Wausau v. Ehlco

Liquidating Trust, 186 Ill. 2d 127, 141 (1999).

¶ 26 State Farm argues that Guevara, in her answers and affirmative defenses, judicially

admitted that she did not reside at the Berwyn property. Guevara argues that her statements were

not judicial admissions, as her statements were not clear and not unequivocal statements of fact.

We agree with Guevara.

¶ 27 A judicial admission is a deliberate, clear, unequivocal statement by a party concerning a

concrete fact within that party’s knowledge. 1550 MP Road LLC v. Teamsters Local Union No.

700, 2019 IL 123046, ¶ 37. “Judicial admissions are formal admissions in the pleadings that have

the effect of withdrawing a fact from issue and dispensing wholly with the need for proof of the

fact.” Konstant Products v. Liberty Mutual Fire Insurance Co., 401 Ill. App. 3d 83, 86 (2010).

Judicial admissions include admissions in unverified pleadings signed by an attorney. Bank of New

York Mellon v. Wojcik, 2019 IL App (1st) 180845, ¶ 23. Judicial admissions are conclusively

binding on a party and may not be contradicted in a motion for summary judgment. 1550 MP

Road, 2019 IL 123046, ¶ 37. However, a party is not bound by admissions regarding conclusions

of law because courts determine the legal effect of the facts adduced. Sperl v. Henry, 2018 IL

123132, ¶ 36.

¶ 28 It is true that Guevara, in response to the Soza complaint, denied the allegation, that “[a]t

all relevant times, [Guevara], resided in Berwyn, Cook County, Illinois.” In Guevara’s affirmative

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defenses to the Soza complaint, she also alleged that she did not “live” at the Berwyn property and

that she leased the property to Zarko. In response to the declaratory judgment complaint, Guevara

admitted that she moved out of the Berwyn property in January 2018 and that she did not “live” at

the Berwyn property in April 2018. Guevara further admitted that “[She] resided at the Berwyn

property until January 2018 at which time she moved to Aurora, Illinois.”

¶ 29 In looking at Guevara’s responses as a whole, it is at least arguable that Guevara judicially

admitted that she did not live at the Berwyn property in April 2018. However, her responses were

not clear and unequivocal statements that she did not “reside” at the Berwyn property, that she had

no physical presence there, or that she had no intent to return to the property. Guevara’s responses

were silent as to whether she continued to have a physical presence or intended to return to the

property, other than her admission that she still owned the property which, if anything, evidences

a possible intent to return to the property. Therefore, we find that Guevara’s answers and

affirmative defenses to the complaints were not clear and not unequivocal judicial admissions that

she did not “reside” at the Berwyn property under the ambiguous language of the policy.

¶ 30 Even if we were to also consider Guevara’s deposition testimony in the underlying case,

we would still find that her answers were not so clear and unequivocal as to constitute judicial

admissions as to her residence. According to Guevara’s testimony, while she and her family moved

into a rental home in Aurora, it was only a temporary move made in an effort to find a good school

district. During this time, Guevara’s name remained on the deed and she still had a key to the

Berwyn property. She paid the utilities there, which were in her name. Guevara also kept personal

property, received mail, and spent some time at the Berwyn property. Even considering this

testimony, there is still a genuine issue of material fact as to whether Guevara continued to have a

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sufficient physical presence at the Berwyn property and whether she intended to return such that

the Berwyn property could qualify as Guevara’s residence under the policy.

¶ 31 Therefore, we find that although it could be argued that Guevara admitted that she did not

live at the Berwyn property in April 2018, her admissions did not clearly and unequivocally show

that she had no physical presence at the Berwyn property and had no intent to return. Summary

judgment in favor of State Farm on the basis that the Berwyn property was not an “insured

location” was therefore improper.

¶ 32 The next question is whether the business pursuits exclusion applied to preclude coverage

for Guevara.

¶ 33 An insurer “ ‘may properly challenge the existence of such a duty by offering evidence to

prove that the insured’s actions fell within the limitations of one of the policy’s exclusions.’ ’ Pekin

Insurance Co. v. Wilson, 237 Ill. 2d at 461 (quoting Fidelity & Casualty Co. of New York v.

Envirodyne Engineers, Inc., 122 Ill. App. 3d 301, 304 (1983)). “If an insurer relies on an

exclusionary clause to deny coverage” and refuses its duty to defend its insured, then “it must be

clear and free from doubt that the exclusionary clause applies.” Illinois State Bar Ass’n Mutual

Insurance Co., 2018 IL App (4th) 170548, ¶ 37. When an insurer invokes an exclusionary clause

to deny coverage and its duty to defend, it bears the burden of proving the exclusion applies. Id.

Insureds have the burden of proving that an exception to a policy exclusion applies. Wells v. State

Farm Fire & Casualty Insurance Co., 2021 IL App (5th) 190460, ¶ 29.

¶ 34 Here, the policy excluded coverage for “bodily injury or property damage arising out of

business pursuits of any insured or the rental or holding for rental of any part of any premises by

any insured”. This exclusion did not apply to “the rental or holding for rental of a residence of

yours” which is used “on an occasional basis for the exclusive use as a residence.”

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¶ 35 Although, the policy does not define “occasional basis,” this court has defined “occasional”

as “ ‘occurring or appearing at irregular or infrequent intervals.’ ” State Farm v Wonnell, 178 Ill.

App. 3d 823, 825 (1989) (citing Webster's New Collegiate Dictionary, 787 (1981)). In Wonnell,

the court found that a seven-month lease of the insured property was not “irregular” or “infrequent”

where the property had been put up for sale and there was no evidence of an intention to return.

Wonnell, 178 Ill. App. 3d at 825. As the court explained. The “purpose behind the ‘occasional’

rental exception was to allow the insured to rent his or her residence while living elsewhere

temporarily, but with the intention to return there to live.” Id. at 826.

¶ 36 Here, Guevara admitted in her answers that Zarko began living with her family in

December 2017. She further referred to Zarko as her tenant and admitted that she leased the

Berwyn property to Zarko in January 2018. In her affirmative defenses, Guevara alleged that she

also leased the Berwyn property to Zarko in April and May 2018. This case is therefore

distinguishable from Wonnell, where Guevara only admitted in the pleadings that she leased the

Berwyn property for four months as opposed to the seven-month lease in Wonnell. While the

circuit court noted that deposition testimony indicated Zarko lived at the Berwyn property until

August 2018, the injury to Soza allegedly occurred in April 2018 and in insurance law the time of

the occurrence is used to determine when the operative terms of the policy provide coverage. St.

Paul Fire & Marine Ins. Co. v. City of Waukegan, 2017 IL App (2d) 160381, ¶ 48.

¶ 37 Further, unlike in Wonnell, and as discussed above, here there is also evidence that

Guevara’s move to Aurora was temporary and of Guevara’s possible intent to return to the Berwyn

property. Thus, there is a genuine issue of material fact as to whether Guevara leased the Berwyn

property on an “occasional basis” such that the business pursuits exclusion applied. Therefore,

granting summary judgment in favor of State Farm on this basis was improper.

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¶ 38 Lastly, we consider whether there is a material issue of fact as to whether Zarko is an

“insured” under the policy, such that State Farm owed him no duty to defend him. While Zarko

has not filed an appeal with respect to this issue, Guevara has done so. As the named insured and

as a codefendant in the underlying action Guevara would appear to have an interest in the

determination of Zarko’s coverage under the policy and an interest in insuring indemnification for

the underlying lawsuit. In any case, State Farm has not raised an issue as to Guevara’s standing to

raise this issue on appeal, and has therefore forfeited any issue as to her standing. Ill. S. Ct. R.

341(h)(7) (eff. Oct. 1, 2020) (“Points not argued are forfeited and shall not be raised in the reply

brief, in oral argument, or on petition for rehearing.”); Greer v. Illinois Housing Development

Authority, 122 Ill. 2d 462, 508 (1988) (The lack of standing is an affirmative defense and is

forfeited unless timely raised.)

¶ 39 The policy defined “insured” as Guevara and “[if] residents of your household: (a) Your

relatives.” Courts have generally concluded that, in relation to insurance policies, the term

“household” is ambiguous with no fixed meaning. State Farm Fire & Cas. Co. v. Martinez, 384

Ill. App. 3d 494, 499 (2008) Additionally, the “phrase ‘resident of the household’ has no fixed

meaning. [Citation.] Interpretation of the phrase requires a case-specific analysis of intent, physical

presence, and permanency of abode. [Citation.]. The controlling factor, however, is the intent of

the party whose residency is in question as evinced by that party's actions. [Citation.]” Id. at 499-

500.

¶ 40 Applying these factors here, there is a genuine issue of material fact as to whether Zarko

was a resident of Guevara’s household in April 2018. While it is true that Guevara admitted that

Zarko was not a “member” of her household, that is not the relevant question where the policy

refers to “residents of your household.” Thus, this was not a judicial admission with respect to the

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relevant language of the policy. Furthermore, there is no dispute that Zarko is Guevara’s brother,

and as such is a relative. Furthermore, there is no dispute that Zarko lived at the Berwyn property

with Guevara and the rest of her family in December 2017 until Guevara moved to Aurora in

January 2018. In the light most favorable to Zarko, this is evidence that he was a member of

Guevara’s household at that time. Moreover, as discussed above, there are genuine issues of

material fact with respect to Guevara’s intent, physical presence, and permanency of abode in April

2018. In fact, the genuine issues of material fact with respect to Guevara’s own residence are linked

to the question of whether Zarko was a resident of her household.

¶ 41 Thus, we find that there is a genuine issue of material fact as to whether Zarko was an

“insured” and the circuit court erred in granting summary judgment in State Farm’s favor on that

basis.

¶ 42 We make two final observation. First, State Farm contends that Guevara’s testimony that

she moved to Aurora to try out the school district illustrated an intent to permanently live there

and to the extent she did not so intend she violated the Illinois School Code. However, “the

meaning [of resident] varies with the content and the subject matter of the case.” Webb v. Morgan,

176 Ill. App. 3d 378, 386 (1988). We find that the School Code’s residency requirements are

simply irrelevant to the questions at issue here, and do not further consider this argument.

¶ 43 Second, and while neither party has raised the issue, under the rule in Maryland Casualty

Co. v. Peppers, 64 Ill. 2d 187, 196 (1976), it is “ ‘generally inappropriate for a court considering

a declaratory judgment action to decide issues of ultimate fact that could bind the parties to the

underlying litigation.’ ” (Internal quotation marks omitted.) Sentry Insurance v. Continental

Casualty Co., 2017 IL App (1st) 161785, ¶ 43 (quoting Landmark American Insurance Co. v. NIP

Group, Inc., 2011 IL App (1st) 101155, ¶ 59). “This proscription specifically precludes

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determination of any ultimate facts upon which liability or recovery might be predicated in the

underlying case.” NIP Group, 2011 IL App (1st) 101155, ¶ 59. Considering our discussion above,

we question whether the determination of State Farm’s duty to defend in this matter raises issues

of ultimate fact that should first be resolved in the underlying litigation. While we make no such

potentially improper findings here in concluding that certain genuine issues of material fact exist

and in reversing the circuit court’s ruling on the State Farm’s motion for summary judgment, we

suggest that the parties and the circuit court consider this issue on remand.

¶ 44 For the foregoing reasons, we reverse the judgment of the circuit court and remand for

further proceedings.

¶ 45 Reversed and remanded.

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