-4-

Alexander v. City of Chicago, 994 F.2d 333, 336 (7th Cir. 1993);

see also Republic Steel Corp. v. Pennsylvania Eng’qg Corp., 785 F.2d

174, 177 n.2 (7th Cir. 1986) (noting that “[l]Jike the summary
judgment procedure, a motion under Rule 12(c) is directed towards
a final judgment on the merits”). In either of these situations,
the court will not grant a motion for judgment on the pleadings
unless no genuine issues of material fact remain to be resolved and
the moving party is entitled to judgment as a matter of law. See
National Fid. Life Ins. Co. v. Karaganis, 811 F.2d 357, 358 (7th
Cir. 1987).

Fidelity contends that judgment on the pleadings is warranted
because Mr. Payne did not satisfy what Fidelity deems the “good
health upon delivery” condition of the Policy (the underlined
portion of the Policy excerpt quoted supra). According to
Fidelity, because Mr. Payne’s health was not “as stated in thle]
application” upon delivery of the Policy, the insurance never took
effect.

We agree with Fidelity. The plain language of the Policy
required that, in order for the insurance to take effect, the
Policy be delivered to Mr. Payne while his health was “as stated”
in the Application. In the Application, Mr. Payne represented
(truthfully) that he had not been treated for or diagnosed with
cancer. After completing the Application, but before delivery of

the Policy, he was diagnosed with cancer. Therefore, upon



-7-
adequate opportunity to find out. If the Paynes were given a
receipt, and if it had some kind of provision that affected or
modified the “good health upon delivery” condition precedent,
defendant would know it by now and would have brought it to our
attention.

Defendant’s argument that the policy became effective when it
was received by Mr. Andrews’ brokerage firm is also without merit.
The only Illinois case that defendant cites for this proposition,

Massachusetts Mutual Life Insurance Co. v. O’Brien, 841 F. Supp.

861, 863 (C.D. Ill. 1994), noted in dicta that an agent’s
possession of an insurance policy after paying the first premium on
the policy could have amounted to constructive delivery of the
policy under Illinois law. The case is distinguishable for two
reasons: the agent was that of the insurer, not the insured; and
the agent herself had paid the first premium for the insured,
without his knowledge.

Finally, we also reject defendant’s assertion that the Policy
was ambiguous. The fact that the Policy bore a “date of issue” of
September 3, 2001 does not conflict with the “good health upon
delivery” requirement.

B. Attorney’s Fees

In its complaint for declaratory relief and in its motion,

Fidelity requests its costs and attorney’s fees incurred in

bringing this action. Fidelity fails to identify any statutory or



-3-
insurance broker, Bernard Andrews, delivered the Policy to them on
September 29, 2001.

On September 10, 2001, more than two weeks before the Policy
was delivered, Mervyn Payne was diagnosed with esophageal cancer.
On March 26, 2002, Mr. Payne died as a result of his cancer. Debra
Payne then made a claim upon Fidelity for the life insurance
proceeds under the Policy due to Mr. Payne’s death. On October 14,
2002, counsel for Ms. Payne threatened suit against Fidelity should
it refuse to pay the death benefit under the Policy. Subsequently,
Fidelity brought this action for declaratory relief.

Fidelity now moves for judgment on the pleadings.

DISCUSSION

A. Judgment on the Pleadings

In at least two situations, both of which are the case here,
the court reviews a 12(c) motion under the same standard as a
motion for summary judgment. First, as Rule 12 itself makes clear,
when matters outside the pleadings are presented to and not
excluded by the court, a 12(c) motion must be treated as one for
summary judgment under Rule 56. Fed. R. Civ. P. 12(c); Church v.
General Motors Corp., 74 F.3d 795, 796 (7th Cir. 1996). Second, if
a 12(c) motion appears to be aimed at “dispos[ing] of the case on
the basis of the underlying substantive merits,” the appropriate
standard of review “is that applicable to summary judgment, except

that the court may consider only the contents of the pleadings.”


-5-
delivery, his health was not as stated in the Application, and this
condition precedent to the insurance taking effect was not
satisfied.?

Defendant argues that we should deny Fidelity’s motion as
“premature” because “(t]here are several relevant factual issues
that are currently unknown.” (Defendant’s Memorandum at 3-4.)
These issues, defendant asserts, are the following: whether a
receipt was given to the Paynes when they signed the Application;
when Fidelity sent the Policy to the brokerage firm of the agent,
Mr. Andrews, for delivery; and when the Policy was received by Mr.
Andrews or his firm, or when he was notified that the Policy was
ready for delivery.

The questions regarding when Fidelity sent the policy to Mr.
Andrews or notified him that the policy was ready for delivery
would be relevant only if the Policy specified a certain time frame
for delivery. It did not. Defendant argues that an insurance
company is estopped from denying coverage where a delay in delivery
is unreasonable, but fails to cite any Illinois cases applying a

“reasonable time rule.”

¥ Thus, our conclusion is based on the language of the Policy. Plaintiff
relies on Kioutas v. Life Insurance Co. of Virginia, 35 F. Supp. 2d 616 (N.D.
Ill. 1998), in which the district court granted summary judgment for an insurer
because the insured was diagnosed with lung cancer before the policy was
delivered. Kioutas, of course, supports our holding. It does not, however,
“control the outcome of” the instant case as defendant argues; rather, the plain
language of the Policy controls.



-8-
contractual basis for such an award. Its request is therefore
denied.

CONCLUSION

Defendant's motion for judgment on the pleadings is granted.

DATE: September 10, 2003

John F. /Grady, United States District ge



Minute Order Form (06/97)

United States District Court, Northern District of Illinois

Name of Assigned Jud; Sitting Judge if Other
° or Magistrate Judge John F. Grady ‘han Astiened Judge
CASE NUMBER 02 C 8605 DATE September 15, 2003
CASE Fidelity & Guaranty Life v. Debra Payne
TITLE

[ln the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the
nature of the motion being presented.]

MOTION:

DOCKET ENTRY:

qd) ia Filed motion of [ use listing in “Motion” box above.]
(2) o Brief in support of motion due
(3) a Answer brief to motion due___._ Reply to answer brief due___
(4) a Ruling/Hearing ons set for sat
(5) a Status hearing[held/continued to] [set for/re-set for]on_—setfor at.
(6) o Pretrial conference{held/continued to] [set for/re-set for]on__—_—setfor_— at
7) a Trial[set for/re-set for] on __—__aat
(8) a {Bench/Jury trial] [Hearing] held/continued toa
(9) a This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
CQ FRCP4(m) O General Rule21 O FRCP41(a)(1) © FRCP41(a)(2).
(10) a {Other docket entry] Plaintiff's motion for judgment on the pleadings [6-1] is granted. ENTER
MEMORANDUM OPINION.
ql) sx (For further detail see order (on reverse side of/attached to) the original minute order.]
No notices required, advised in open court. "Document
No notices required. amber otrasice _ ig Number
X_ | Notices MAILED by judge’s staff. Sk

Notified counsel by telephone.

Docketing to mail notices.

Mai! AO 450 form. 4uNod Lay isia SN
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(Reserved for use by the Court)



-6-

The issues regarding the timing of the delivery of the Policy
to Mr. Andrews and then to the Paynes are not relevant. Any delay
in delivery caused by Mr. Andrews cannot be attributed to Fidelity
because he was the Paynes’ agent, not Fidelity’s agent. This is
clear from both the affidavits of Mr. Andrews and Mrs. Payne. Mr.
Andrews is an independent insurance agent; the Paynes initiated
contact with him by responding to a mail solicitation from him; and
the Paynes selected Fidelity’s policy after considering a variety
of other companies’ life insurance products. (Defendant's
Memorandum, Ex. A, Affidavit of Debra Payne, WII 2-3; Ex. B,

Affidavit of Bernard Andrews, I9 1-4.) See Kioutas v. Life Ins.

Co. of Virginia, 35 F. Supp. 2d 616, 620-21 (N.D. Ill. 1998)
(broker was agent for insured where he was an independent broker,
the insured had initiated contact with him, and he assisted the
insured in obtaining the best available policy from a number of
companies). Because Mr. Andrews was not Fidelity’s agent,
defendant’s argument that he had a legal duty to inquire about Mr.
Payne’s health upon delivery of the Policy is without merit.

We reject defendant’s contention that additional discovery is
required to determine whether the Paynes were given a receipt when
they signed the Application. This is a fact within defendant’s
knowledge, not Fidelity’s, and it is not necessary for defendant to
conduct discovery to obtain the answer to this question. Given

that the complaint was filed in November 2002, defendant has had an



02-8605.031-JCD September 10, 2003

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

FIDELITY AND GUARANTY LIFE

INSURANCE COMPANY,
Plaintiff,

No. 02 C 8605

Vv.

DEBRA PAYNE,

Defendant.

MEMORANDUM OPINION af * Lon

Before the court is plaintiff’s motion for judgment on the
pleadings pursuant to Federal Rule of Civil Procedure 12(c). For
the reasons stated below, the motion is granted.

BACKGROUND

Plaintiff Fidelity and Guaranty Life Insurance Company
(“Fidelity”) brought this declaratory judgment suit concerning a
life insurance policy for defendant Debra Payne and her late
husband, Mervyn Payne. In the First Amended Complaint (the
‘“Complaint”), Fidelity seeks a declaration that the life insurance
policy failed to take effect and that, accordingly, defendant is
not entitled to payment of the death benefit under the policy.

The complaint alleges the following facts, which defendant has
admitted in her answer. On August 24, 2001, Debra and Mervyn Payne

completed and signed a Group Life Insurance Application (Short


-~2-
Form) (the “Application”) for a “HomeCertain” life insurance policy
from Fidelity. The Application included a medical questionnaire,
which specifically inquired about applicants’ health status
vegarding cancer: “Within the past 10 years, has any person

proposed to be insured been treated for or diagnosed by a physician

or other health care professional as having: . .. [c]ancer, cyst
or tumor?” (Complaint, Ex. A, Application, Question 7(b).) The
Paynes answered this question by marking the “No” circle. The

Application also contained the following relevant language:

I have read the questions and answers on this
application. The statements made in this application
are: complete; true; and correctly recorded. I agree
that: a copy of this application will form a part of any
certificate issued under the Group Policy; and that no
agent can pass on insurability or modify any certificate
issued by the Company. I_also agree that, except as
provided in this application's Receipt, if issued, no
insurance will take effect unless and until both of the
following conditions are satisfied during each proposed
insured’s lifetime and while each proposed insured’s
health is as stated in this application: 1 this
certificate is delivered to and accepted by the Owner;
and (2) the full initial premium for the mode of payment
chosen is paid at our Home Office.

(Complaint, Ex. A, Application, Authorization (emphasis added) .)
Fidelity issued a life insurance policy (the “Policy”) to
Mervyn Payne. The certificate indicates that the date of issue was
September 3, 2001. (Complaint, Ex. B, Policy, at 3.) The Policy
specifically incorporates the Application submitted by the Paynes

as part of the contract of insurance, (Id. at 6.) The Paynes’