Opinion ID: 566300
Heading Depth: 3
Heading Rank: 1

Heading: The 1977 National Union Policy

Text: The 1977 National Union Policy provided: 32 [I]t is understood and agreed that any bodily injury or property damage claim or claims arising out of all asbestosis operations is excluded from the policy. 33 Carey Canada, 708 F.Supp. at 3 (emphasis in original). The District Court considered the evidence and determined that there is no such recognized term as an asbestosis operation. Id. at 5 & n. 12. Indeed, as the court noted, the insureds conceded that the asbestosis exclusion language contained in the 1977 National Union Policy for all asbestosis operations is ambiguous on its face. Id. at 5 & n. 9. See also Appellants' Brief at 9 (the 1977 National Union Policy, unlike the other two policies at issue, contains an ambiguous exclusion which uses 'asbestosis' as an adjective); id. at 23, 31. Accordingly, the court considered extrinsic evidence to ascertain the intent of the parties. Based on the trial evidence, the court resolved that the parties intended to exclude all asbestos-related disease claims from coverage under the 1977 National Union Policy. 34 The insureds, however, maintain that the District Court should have construed the contracts against the defendant insurance carriers, as a matter of law, under the rule of contra proferentum, whereby the court construes ambiguous contract terms against the drafter. Appellants also argue that a special, and particularly stringent, version of the contra proferentum rule applies to insurance contracts. See Appellants' Brief at 32-34. We disagree. 35 Under Illinois law, the contra proferentum rule applies only if the intent of the parties cannot be ascertained from any other source. Contra proferentum is  '[a]t best ... a secondary rule of interpretation, a last resort which may be invoked after all of the ordinary interpretative guides have been exhausted.'  Farwell Constr. Co. v. Ticktin, 84 Ill.App.3d 791, 39 Ill.Dec. 916, 922, 405 N.E.2d 1051, 1057 (1980) (citations omitted). Moreover, contra proferentum is inferior ... to extrinsic proof of the parties' agreement, or to other authority revealing that understanding. Chicago v. Dickey, 146 Ill.App.3d 734, 100 Ill.Dec. 412, 415, 497 N.E.2d 390, 393 (1986). Similarly, Florida law provides that [o]nly when a genuine inconsistency, uncertainty, or ambiguity in meaning remains after resort to the ordinary rules of construction is the rule [of contra proferentum ] apposite. State Farm Mutual Automobile Ins. Co. v. Pridgen, 498 So.2d 1245, 1248 (Fla.1986) (citation omitted). 36 Indeed, the authorities relied upon by appellants establish that the court must consider extrinsic evidence to clarify ambiguous contract terms. See Dora Township v. Indiana Ins. Co., 78 Ill.2d 376, 36 Ill.Dec. 341, 342, 400 N.E.2d 921, 922 (1980) ([i]n order to ascertain the intent of the parties the court should not examine the policy in a vacuum but should look to the circumstances surrounding the issuance of the policy); Stuyvesant Ins. Co. v. Butler, 314 So.2d 567, 569 (Fla.1975) (meaning of the term minor should be determined in the context within which the word is used). With respect to the 1977 National Union Policy, the District Court properly considered extrinsic evidence to determine the scope of the policy exclusion upon finding the term asbestosis operations ambiguous. Carey Canada, 708 F.Supp. at 6. 37