Opinion ID: 620041
Heading Depth: 3
Heading Rank: 2

Heading: Mondo's Agency

Text: The Trust's second summary judgment attack builds on its assertion that an enforceable contract was never executed. Here, the Trust argues that the deficiencies in Mondo's agency relationship with the Trust prevented the parties from mutually assenting to the group policies. The Trust finds two faults with Mondo. First, the Trust asserts that Mondo's agency terminated immediately following Mondo's purported purchase of the group policies, but before he delivered the policies to the Trust. Alternatively, the Trust suggests that LINA knew or should have known that Mondo was not authorized to bind the Trust to materially deviating policies. The Trust's first argument is perhaps a nod to the strict duty Illinois law imposes on the insured to review the terms of an issued insurance policy. See Perelman v. Fisher, 298 Ill.App.3d 1007, 233 Ill.Dec. 88, 700 N.E.2d 189, 192 (1998) (stating that Illinois courts have repeatedly held that when an insured sues his or her insurer after failing to note a discrepancy between the policy issued and received and the policy requested or expected, the insured will be bound by the contract terms). In recognition of this duty, the Trust is left to argue that Mondo did not deliver the policy to the Trust. Without proper delivery, the Trust argues that it cannot be expected to have identified the beneficiary provision discrepancy contained in the final policy. In assessing the Trust's first agency argument, we must address the threshold question of whether Mondo qualifies as the Trust's agent. Illinois law distinguishes insurance agents from insurance brokers. See Krause v. Pekin Life Ins. Co., 194 Ill.App.3d 798, 141 Ill.Dec. 402, 551 N.E.2d 395, 399 (1990) (a broker typically solicits insurance business from the public under no employment from any special company while an agent typically has a fixed and permanent relation to the companies he represents). In making this distinction, courts have considered the following factors: (1) who called the intermediary into action; (2) who controls its actions; (3) who pays the intermediary; and (4) whose interests the intermediary represents. Mizuho Corp. Bank (USA) v. Cory & Assocs., Inc., 341 F.3d 644, 654 (7th Cir.2003). If Mondo is the Trust's agent, then his knowledge and dealings with LINA are imputed to the principal, unless the agent's interests are adverse to those of the principal. Lease Resolution Corp. v. Larney, 308 Ill.App.3d 80, 241 Ill.Dec. 304, 719 N.E.2d 165, 170 (1999); see also Pekin Life Ins. Co. v. Schmid Family Irrevocable Trust, 359 Ill.App.3d 674, 295 Ill.Dec. 950, 834 N.E.2d 531, 537 (2005). Thus, the Trust is charged with knowledge of the final policy as long as Mondo knew or should have known of the final policy's contents. Pekin Life Ins. Co., 295 Ill.Dec. 950, 834 N.E.2d at 537. Before Mondo procured the group policy, it is undisputed that he served as the Trust's insurance broker of record. In that position, Mondo prepared RFPs, obtained insurance quotes, gave Trust officers advice, and communicated with insurance providers, all on behalf of and at the direction of the Trust. Importantly, Mondo remained independent of all insurance companies. Although Mondo received compensation from LINA, Illinois courts give this factor very little weight. Royal Maccabees Life Ins. Co. v. Malachinski, 161 F.Supp.2d 847, 852 n. 2 (N.D.Ill.2001); Browder v. Hanley Dawson Cadillac Co., 62 Ill.App.3d 623, 20 Ill.Dec. 138, 379 N.E.2d 1206, 1212 (1978). It is certainly beyond reproach that Mondo served as the Trust's agent prior to its dealings with LINA. The question facing us is whether Mondo's agency terminated immediately after he procured the policies. The Trust's answer in the affirmative is belied by the record. In fact, the Trust does not dispute that Mondo continued to officially serve as its broker of record until 2005. It is also undisputed that Mondo continued to communicate with LINA after he secured the group policies. Specifically, Mondo emailed LINA with details of the Trust's first claim. Mondo also demanded payment from LINA on behalf of the Trust after LINA rejected the Trust's claim to 50% of Knight's death benefit. These two undisputed facts fly in the face of the Trust's argument that Mondo's agency ended at the exact moment the policy was purchased. To bolster its argument that Mondo's agency terminated following the procurement of the group policies, the Trust misleadingly points to a September 4, 2003, letter from LINA to Mondo. The Trust construes the letter as evidence that LINA employees were interested in developing a continuing relationship with Mondo. Such a relationship, the Trust contends, is evidence that Mondo took a position adverse to his principal. Although the letter clearly expresses LINA's desire to build such a relationship with Mondo, LINA's desire is always expressed in the context of Mondo's work for the Trust. In fact, the first full sentence of the letter states, We are excited about partnering with you to build an effective working relationship on the N.P.W.U. account. Even when drawing all inferences in the Trust's favor, this letter and the other two undisputed facts provide enough evidence to conclude at summary judgment that Mondo remained in his position as the Trust's agent/broker at all relevant times in this dispute. Accordingly, we hold as a matter of law that Mondo's knowledge of the final policy (imputed to the Trust) constitutes effective delivery to LINA. The Trust finds a second fault in Mondo's conduct as agent. Without identifying record facts or favorable precedent, the Trust argues that LINA knew or should have known that Mondo's authority did not extend to the procurement of materially deviating policies. But crucially, the Trust ignores the signed group insurance application provision that stated, Payment of the required premium after delivery of policy(ies) acts as acceptance of the terms and conditions of the policy(ies). The Trust's chairman signed this application and the Trust made nine consecutive payments without objecting to the terms of the policy. Even if the Trust could show that LINA knew Mondo had exceeded his authority, the record is undisputed on the point that LINA unequivocally knew the Trust had expressly agreed to the proposed policy. Finally, even if Mondo's agency ended or LINA was not entitled to believe Mondo had authority to bind the Trust, the Trust itself still had access to the policies. In Illinois, an insured is charged with notice of the contents of an insurance policy, despite the fact that he had not received the policy. . . . Schoonover v. Am. Family Ins. Co., 214 Ill.App.3d 33, 157 Ill.Dec. 794, 572 N.E.2d 1258, 1264 (1991); see also Dobosz v. State Farm Fire & Cas. Co., 120 Ill.App.3d 674, 76 Ill.Dec. 211, 458 N.E.2d 611, 616 (1983). This rule is especially true if the policy was available and the insured was not prevented from reading it. Maxton v. Garegnani, 255 Ill. App.3d 291, 194 Ill.Dec. 386, 627 N.E.2d 723, 728 (1994). For example, the insured in Schoonover never requested nor received a final copy of the insurance policy. Schoonover, 157 Ill.Dec. 794, 572 N.E.2d at 1265. Instead, the insured received a letter from the insurer referencing specific sections of the issued insurance policy. Id. 157 Ill.Dec. 794, 572 N.E.2d at 1263. The Court found that the letter put the insured on notice that a policy had been issued and thus, the insured was charged with knowing the particulars of the policy. Id., 157 Ill.Dec. 794, 572 N.E.2d at 1264. Like the insured in Schoonover, the Trust had actual knowledge that LINA had issued a policy. Here, the Trust paid monthly premiums, the chairman of the Trust signed the group insurance application and subscription agreements, and the Trust submitted a claim against the policy following a qualifying event. Had the Trust requested a copy of the policy, even the quickest of glances would have indicated that Death Benefits will be paid to the Insured's named beneficiary, not necessarily to the Trust. Thus, even if Mondo's agency was deficient, we hold as a matter of law that the Trust is charged with knowledge of the policy, because it knew LINA had issued the policies.