Although oral argument was originally scheduled in this case, 

the parties filed a joint motion to waive oral argument. The

court granted the motion, and this appeal is submitted on

the briefs and records.

In the

United States Court of Appeals

For the Seventh Circuit

____________

No. 07-2826

DEAN OFFICER,

Plaintiff-Appellant,

v.

CHASE INSURANCE LIFE AND ANNUITY COMPANY,

Defendant-Appellee.

____________

Appeal from the United States District Court 

for the Northern District of Indiana, Lafayette Division.

No. 06 C 127—Allen Sharp, Judge.

____________

DATE SU BM ITTED JAN UARY 24, 2008 —DEC ID ED SEPTEMBER 3, 2008 

____________

Before POSNER, RIPPLE, and TINDER, Circuit Judges.

TINDER, Circuit Judge. This case questions the validity

under Indiana law of a suicide exclusion clause in a life
2 No. 07-2826

insurance policy. Dean Officer (“Officer”), as the beneficiary of his wife’s life insurance policy, brought this suit

against Chase Insurance Life & Annuity Company

(“Chase”) to recover the face amount of the policy. The

district court entered judgment in favor of Chase. We

affirm.

I. Background

Chase issued a life insurance policy to Theresa Officer

(“Theresa”) in the amount of one million dollars. Officer

was named as the beneficiary, and the policy became

effective on February 11, 2004. The policy contained a

suicide provision limiting the benefits if the insured

committed suicide within two years of the effective date

of the policy. The Officers paid the premiums due in

2004 and 2005, totaling $540. Sadly, Theresa died of an

apparent self-inflicted gunshot wound on January 4, 2006.

Officer sent a claim to Chase in April 2006 as the beneficiary of Theresa’s life insurance policy. Chase sent Officer

$540, representing the amount the Officers had paid in

premiums. Officer filed suit in August 2006 in Jasper

County, Indiana, to recover the face value of the million

dollar policy. Chase removed the case to the Northern

District of Indiana. Officer filed a motion for summary

judgment, contending that the suicide provision was

ambiguous and constituted an unenforceable forfeiture.

The district court denied Officer’s motion, finding that

as a matter of law the insurance policy was unambiguous,

valid, and enforceable. The parties then stipulated that

Theresa’s death was a suicide and filed an agreed motion
No. 07-2826 3

for entry of final judgment in Chase’s favor, with Officer

reserving the right to appeal the denial of his summary

judgment motion. The court entered final judgment

on the uncontested facts in favor of Chase on July 18,

2007, and Officer now appeals.

II. Analysis

Officer appeals the district court’s determination that

the suicide exclusion clause was unambiguous, valid,

and enforceable as a matter of law; the facts are uncontested since the parties stipulated that Theresa’s death

was a suicide. We review pure questions of law de novo.

Samuel C. Johnson 1988 Trust v. Bayfield County, Wis., 520

F.3d 822, 828 (7th Cir. 2008); Klein v. DePuy, Inc., 506

F.3d 553, 554 (7th Cir. 2007).

A. Insurance Contract Ambiguity

When sitting in diversity, we must apply the substantive law of the state as we believe the highest court of that

state would apply it when faced with the same issue.

Allstate Ins. Co. v. Keca, 368 F.3d 793, 796 (7th Cir. 2004).

Both parties agree that Indiana law applies here. Officer

does not argue that Indiana law prohibits the exclusion

of suicide under life insurance policies; Indiana has

long permitted exclusions of this type. See, e.g., Nw. Mut.

Life Ins. Co. v. Hazelett, 4 N.E. 582 (Ind. 1886) (discussing

a suicide exclusion and noting that “[i]t is neither unlawful, nor against public policy, for a contract of life insurance to stipulate that upon certain conditions or con-
4 No. 07-2826

tingencies the policy shall become void”); Kunse v. Knights

of the Modern Maccabees, 90 N.E. 89, 91 (Ind. App. 1909)

(enforcing a suicide exclusion). Instead, Officer argues

that the provision is ambiguous and should be construed

in his favor. To determine whether Officer is entitled to

receive the face amount of the insurance policy, we refer

to Indiana’s law of contract interpretation. Nat’l Athletic

Sportswear, Inc. v. Westfield Ins. Co., 528 F.3d 508, 512 (7th

Cir. 2008). An insurance contract is subject to the same

rules of interpretation as other contracts under Indiana

law. Morris v. Econ. Fire & Cas. Co., 848 N.E.2d 663, 666

(Ind. 2006). “If the language in the insurance policy is

clear and unambiguous, then it should be given its

plain and ordinary meaning, but if the language is ambiguous, the insurance contract should be strictly construed against the insurance company.” Id. Indiana law

is clear that an ambiguity does not arise merely because

the two parties are able to create different interpretations

of the policy language at issue. USA Life One Ins. Co. of Ind.

v. Nuckolls, 682 N.E.2d 534, 538 (Ind. 1997). “Rather, the

policy is ambiguous only if it is susceptible to more than

one interpretation and reasonably intelligent persons

would differ as to its meaning.” Id. (internal quotation

omitted).

Chase’s suicide provision states:

We will limit the proceeds we pay under this

policy if the insured commits suicide, while sane

or insane:

1. within 2 years from the Date of Issue;

and
No. 07-2826 5

2. after 2 years from the Date of Issue,

but within 2 years from the effective date

of the last reinstatement of this policy.

The limited amount will equal all premiums paid

on this policy.

Although courts in Indiana and other others states

have frequently analyzed suicide clauses in insurance

contracts, no court has construed the exact language at

issue here. See, e.g., Commonwealth Life Ins. Co. v. Jackson,

432 N.E.2d 1382, 1384 (Ind. Ct. App. 1982) (construing

a suicide clause that stated: “the amount payable . . . shall

be limited to the premium or premiums paid hereunder

without interest”); Cont’l Assurance Co. v. Krueger, 66

N.E.2d 133, 134 (Ind. App. 1946) (construing a suicide

clause that stated: “the liability of the company shall

be limited to an amount equal to the premiums actually

paid on this policy”); Aetna Life Ins. Co. v. Doerr, 115 N.E.

700, 701 (Ind. App. 1917) (construing a suicide clause

that stated: “If the insured shall commit suicide within

one year . . . this policy shall be null and void.”).

Officer argues that the exclusion is susceptible to two

meanings. First, the amount payable could equal the

face value minus the premiums paid, or $999,460. Second,

the amount payable could equal the amount of premiums

paid, or $540. Obviously, Officer prefers the first interpretation and Chase prefers the second.

The district court rejected Officer’s interpretation of

the suicide provision and concluded that it was unambiguous as written. The court noted that the plain and

ordinary meaning of the words “proceeds” and “amount”
6 No. 07-2826

are “virtually interchangeable.” Officer v. Chase Ins. Life &

Annuity Co., 478 F. Supp. 2d 1069, 1075 (N.D. Ind. 2007).

Although we can imagine improved ways to write this

exclusion, we, too, conclude that the policy is not ambiguous as written. The first clause of the insurance provision sets out Chase’s exclusion by stating: “We will

limit the proceeds we pay.” It then sets out the circumstances under which it will limit the proceeds. The final

sentence states: “The limited amount will equal all premiums paid on this policy.” None of these terms is defined,

and so “the limited amount” most logically refers back

to the first phrase. Combining those two phrases, the

policy’s meaning is clear: “The limited amount [of proceeds we pay] will equal all premiums paid on this policy.”

Officer’s alternate interpretation—“We will limit the

proceeds, and the amount by which they will be limited

will equal the premiums paid”—is not a reasonable

interpretation. If, as he suggests, the limited amount

were equal to the face value minus the premiums paid,

Chase would be required to pay more money where

an insured committed suicide one day after buying the

policy than it would have to pay one day before the

suicide exclusion expired. Reasonably intelligent persons

would not find that the provision was susceptible to

Officer’s interpretation.

Officer also argues that another portion of the policy uses

clearer language: “The proceeds payable on the death of

the insured are equal to . . . .” He asserts that because

Chase knew how to clearly write “proceeds payable”

elsewhere, the term “limited amount” can reasonably

mean something else in the suicide provision. It is appro-
No. 07-2826 7

priate to look at the insurance contract as a whole in

determining ambiguity, and courts should attempt to

harmonize provisions rather than placing them in conflict. Dunn v. Meridian Mut. Ins. Co., 836 N.E.2d 249,

252 (Ind. 2005). These two provisions are not in conflict,

though. Chase could have used the same language in

both provisions, but the fact that it used different language to express the amount of proceeds payable does

not compel the conclusion that two otherwise unambiguous statements have become ambiguous.

B. Disproportionate Forfeiture

Officer argues that, if the exclusion is not ambiguous,

then Indiana courts would find that it was a disproportionate forfeiture or an illegal penalty. He asserts that there

is no rational relationship between the harm Chase suffered by the breach of the suicide clause and the

$999,460 loss he will suffer by being repaid only the

premiums.

Officer cites several cases in which liquidated damages

clauses were included in the parties’ contracts. Liquidated

damages refers to “a specific sum of money that has been

expressly stipulated by the parties to a contract as the

amount of damages to be recovered by one party for a

breach of the agreement by the other, whether it exceeds

or falls short of actual damages.” Time Warner Entm’t Co. v.

Whiteman, 802 N.E.2d 886, 893 (Ind. 2004). While liquidated

damages clauses are enforceable, they are treated as

unenforceable penalties where they are “grossly disproportionate to the loss that may result from a breach of con-
8 No. 07-2826

Officer assets that Chase has waived any argument that the 1

exclusion could serve a purpose other than fraud. Chase,

(continued...)

tract.” Id. at 894. To determine whether this clause results

in an unenforceable penalty, Officer contends that we

should “weigh the extent of the forfeiture by the obligee

against the importance to the obligor of the risk from

which he sought to be protected and the degree to which

that protection will be lost if the non-occurrence of the

condition is excused to the extent required to prevent

forfeiture.” Restatement (Second) of Contracts § 229 cmt. b

(1981). Officer asserts that the only purpose of the two-year

suicide provision is to prevent fraud. Here, the fraud

purpose had been 95% fulfilled, since Theresa died thirtyfour days prior to the expiration of the exclusion; therefore, he argues, a forfeiture of $999,460 is grossly disproportionate.

The district court concluded that the exclusion was

enforceable because Chase was seeking to perform the

policy as written; it was not demanding a forfeiture. Officer

is correct that insurance companies often include

suicide provisions in life insurance policies to prevent

fraud by the insured. See Commonwealth Life Ins. Co., 432

N.E.2d at 1391. Preventing fraud is not the only purpose

of such an exclusion, however. See, e.g., Kunse, 90 N.E. at 91

(enforcing a suicide clause and noting that insurers may

choose “not to assume a risk of a certain mode of death,

and presumably the premiums are calculated on the

elimination of that risk”). Regardless of the purpose of

1
No. 07-2826 9

(...continued) 1

however, maintained in its summary judgment brief, summary

judgment oral argument, and appellate brief that insurance

companies define the risks that they insure and determine the

premium rates by the exposure to those risks. Chase has not

waived any argument with respect to the purpose of the

suicide exclusion.

Chase’s suicide limitation, forfeiture and liquidated

damages are not appropriate concepts to apply to a suicide

exclusion in an insurance contract. Officer cites cases

dealing with lending arrangements, health services contracts, and land sale contracts—notably, he does not cite

any cases dealing with insurance contracts. 

Exclusions are generally enforceable in insurance contracts because “[i]nsurance companies are free to limit

their liability in a manner not inconsistent with public

policy as reflected by case or statutory law.” Allstate Ins.

Co. v. Boles, 481 N.E.2d 1096, 1098 (Ind. 1985). The Indiana

Supreme Court has upheld (or, absent issues of fact,

indicated that it would be likely to uphold) insurance

exclusions where the insured injures a member of his

own household, id. at 1101, exclusions for intentional acts,

Allstate Ins. Co. v. Herman, 551 N.E.2d 844, 846 (Ind. 1990),

and exclusions for business activities in a homeowner’s

policy, Frankenmuth Mut. Ins. Co. v. Williams ex rel. Stevens,

690 N.E.2d 675, 680 (Ind. 1997). The court has also approvingly discussed suicide exclusions on many occasions. See,

e.g., Sovereign Camp of Woodmen of the World v. Porch, 110

N.E. 659 (Ind. 1915) (the burden is on the insurer to prove

suicide); Hazelett, 4 N.E. at 587 (suicide clause not applica-
10 No. 07-2826

ble where death was caused by accident). “If a plainly

expressed exception, exclusion or limitation in an insurance policy is not contrary to public policy, it is entitled

to construction and enforcement as expressed.” Boles, 481

N.E.2d at 1098 (emphasis added). Chase is not seeking

to escape its obligations under the policy; it tendered a

check to Officer for the amount it owed. The suicide

exclusion is not an unenforceable penalty and is subject

to enforcement as expressed.

C. Substantial Performance

Officer also argues that the breach of the insurance

contract was immaterial and the doctrine of substantial

performance should prevent Chase from discharging its

obligation to pay. He asserts that the suicide provision

was 95% performed at the time of the breach and its

purpose was effectuated because there was no evidence of

fraud. Substantial performance applies “where performance of a nonessential condition is lacking, so that the

benefits received by a party are far greater than the injury

done to him by the breach of the other party.” Gibson v.

Neu, 867 N.E.2d 188, 195 (Ind. Ct. App. 2007) (internal

quotation omitted). Officer would like us to consider

several factors to determine whether the breach was

material enough to excuse Chase from paying the face

amount of the policy. See, e.g., Collins v. McKinney, 871

N.E.2d 363, 375 (Ind. Ct. App. 2007) (applying Restatement

(Second) of Contracts § 241 to determine the materiality

of the breach); Frazier v. Mellowitz, 804 N.E.2d 796, 803

(Ind. Ct. App. 2004) (same).
No. 07-2826 11

The district court concluded that the doctrine of substantial performance was inapplicable to a suicide exclusion. Officer complains that the district court relied upon

a single irrelevant case, Dove v. Rose Acre Farms, Inc., 434

N.E.2d 931 (Ind. Ct. App. 1982). The district court, however, only cited that case for the definition of substantial

performance; instead, the court based its reasoning

upon Officer’s inability to cite (and its own inability to

find) any cases where the doctrine of substantial performance was applied in the way that Officer suggested. On

appeal, Officer again primarily cites cases dealing with

land sale contracts and services contracts, but this time

he also cites one insurance case, which we will discuss.

In Miller v. Dilts, 463 N.E.2d 257, 260 (Ind. 1984), the

Indiana Supreme Court considered the issue of whether

an insurance company must show actual prejudice to

avoid coverage under a policy where an insured failed to

give the company prompt notice of a claim. The court

recognized that the duty to notify is a “condition[] precedent to the insurance company’s liability to its insured.” Id.

at 260-61. The court held that prejudice can be presumed

by an unreasonable delay in notifying the company about

an accident or lawsuit, but the insured can rebut that

presumption by showing evidence that the insurance

company was not actually prejudiced. Id. at 265-66. Officer

seizes upon the court’s discussion of how an insured

could rebut the presumption, and he argues that it “forecloses Chase’s simplistic argument that a two-year provision is a two-year provision” because the court did not

say the same thing about notice: “Notice was either timely

or it was not.” This is illogical. The notice provision in
12 No. 07-2826

Miller did not contain a specific deadline; it required the

insured “promptly notify” the insurer of the claim. Id. at

260. Timeliness under that provision is measured by prejudice—if the insurance company is prejudiced, the notice

is not timely. Additionally, prompt notice serves

an important purpose, in that it allows the insurance

company to begin to investigate and defend a claim;

using prejudice as the measure of timeliness serves that

purpose. Here, the measure of time for the exclusion is

the period assigned by the policy, two years. The important purpose served (whether the provision was

included to prevent fraud or for any other reason) is to

exclude from coverage a specified risk for a specified

amount of time. Allowing Officer to recover would thwart

the purpose of the exclusion. In any event, the doctrine

of substantial performance is simply inapplicable here;

an insured is not “performing” a life insurance contract

by not committing suicide. We reiterate that “[i]f a plainly

expressed exception, exclusion or limitation in an insurance policy is not contrary to public policy, it is entitled

to construction and enforcement as expressed.” Boles, 481

N.E.2d at 1098 (emphasis added). Officer is entitled only

to the amount of premiums paid.

D. Motion for Certification

Officer moved that we certify two questions to the

Indiana Supreme Court pursuant to our Circuit Rule 52:

whether the doctrines of illegal forfeiture and substantial performance apply to this insurance contract. “A

case is appropriate for certification where it concerns a
No. 07-2826 13

matter of vital public concern, where the issue will likely

recur in other cases, where resolution of the question to

be certified is outcome determinative of the case, and

where the state supreme court has yet to have an opportunity [to] illuminate a clear path on the issue.” Plastics

Eng’g Co. v. Liberty Mut. Ins. Co., 514 F.3d 651, 659 (7th Cir.

2008) (internal quotation omitted). The Indiana Supreme

Court permits a federal court to certify a question when

it appears that “a proceeding presents an issue of state

law that is determinative of the case and on which there

is no clear controlling Indiana precedent.” Ind. R. App. P.

64(a). We believe that the Indiana Supreme Court has

“illuminate[d] a clear path,” Plastics Eng’g Co., 514 F.3d at

659, for us to confidently resolve Officer’s claim under

Indiana law. As such, we decline to certify the questions.

Compare McWaters v. Parker, 995 F.2d 1366, 1371 n.4

(7th Cir. 1993) (denying a motion to certify a question,

noting that “[u]nderlying the foregoing analysis is our

belief that the Indiana Supreme Court’s position on

mutual mistake in this type of case is discernable”) with

Brownsburg Area Patrons Affecting Change v. Baldwin, 137

F.3d 503, 509-10 (7th Cir. 1998) (certifying a question to

the Indiana Supreme Court on the Indiana Code’s definition of Political Action Committee “due to the breadth of

impact of the issue at bar and the important concerns

of federalism apparent when a federal court is asked to

interpret a state statute”).

III. Conclusion

The district court properly concluded that the suicide

limitation was valid and enforceable. We AFFIRM the
14 No. 07-2826

district court’s judgment and DENY Officer’s motion for

certification of questions to the Indiana Supreme Court.

9-3-08