Opinion ID: 661508
Heading Depth: 2
Heading Rank: 1

Heading: interpretation of the receipt and temporary insurance agreement

Text: 30 Plaintiffs maintain that the district court should have liberally construed the Receipt's language to find that temporary insurance began on September 13, 1991. Such an interpretation, plaintiffs contend, is consistent with the intentions of the parties. 31 For the substantive legal rules applicable to this diversity action, we look to Illinois law. Erie v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938). Illinois law provides that an insurance policy should be applied as written if the words used in the policy can reasonably be given their plain, ordinary, and popular meaning. United States Fidelity & Guaranty Co. v. Wilkin Insulation Co., 144 Ill.2d 64, 74, 161 Ill.Dec. 280, 284, 578 N.E.2d 926, 930 (1991); Garde v. American Family Life Ins. Co., 147 Ill.App.3d 1034, 1037, 101 Ill.Dec. 110, 112, 498 N.E.2d 292, 294 (4th Dist.1986). 4 When interpreting an insurance policy, a court is to construe any ambiguous language strictly against the insurer and in favor of coverage. Insurance Corp. of Ireland, Ltd. v. Board of Trustees of S. Ill. Univ., 937 F.2d 331, 336 (7th Cir.1991); Western Casualty & Surety Co. v. Brochu, 105 Ill.2d 486, 495, 86 Ill.Dec. 493, 497, 475 N.E.2d 872, 876 (1985). Thus the issue presented for our review is whether any of the language contained in the Receipt is ambiguous. 5 32 Determining whether an insurance policy is ambiguous presents a question of law for the court. State Security Ins. Co. v. Burgos, 145 Ill.2d 423, 439, 164 Ill.Dec. 631, 638, 583 N.E.2d 547, 554 (1991); Putzbach v. Allstate Ins. Co., 143 Ill.App.3d 1077, 1080, 98 Ill.Dec. 265, 268, 494 N.E.2d 192, 195 (2d Dist.1986). Policy language is ambiguous if it is subject to more than one reasonable interpretation. State Security Ins., 145 Ill.2d at 439, 164 Ill.Dec. at 638-39, 583 N.E.2d at 554-55. Under this standard plaintiffs suggest that the language of the Receipt is unclear and should be interpreted in favor of the insured and for a finding of coverage. 33 Plaintiffs focus their argument on the use of only one word, initially. Plaintiffs complain that the use of initially in the third full paragraph on page one of the Receipt is ambiguous because it confuses the average person as to when temporary insurance begins. The relevant sentence states: When Temporary Insurance Starts--Coverage starts on the date of this Receipt. But if a medical examination of a person to be insured is initially required by our underwriting rules, coverage on that person will not start until completion of the examination (emphasis added). This term confuses an applicant, plaintiffs argue, because the dictionary defines the term as at the beginning; at first. Webster's New World Dictionary 752 (College ed. 1962). Because Morreale did not mention that Ryan, Sr. would be required to undergo a medical examination on September 13, 1991, the date that the application process began, an applicant could be confused as to when temporary insurance begins. 34 As defendant correctly points out, Illinois law requires that provisions of an insurance agreement be interpreted in the factual context of the case. Putzbach, 143 Ill.App.3d at 1081, 98 Ill.Dec. at 267, 494 N.E.2d at 194 (2d Dist.1986). When read in the context of the entire document, the use of this term is unambiguous. The language used in the Receipt clearly and plainly describes when, and under what circumstances, temporary insurance would take effect. In the very first paragraph, above the sentence containing the word initially, the Receipt refers to the possibility of a medical examination requirement: Please read both sides of this Receipt carefully. The information it contains is important to you.... If a medical examination is required, no coverage [except for accidental death] will be provided. Two paragraphs below on the same page, the Receipt further explains when temporary insurance begins: When Temporary Insurance Starts--Coverage starts on the date of this Receipt. But if a medical examination of a person to be insured is initially required by our underwriting rules, coverage on that person will not start until completion of the examination. These sentences make it sufficiently clear to an applicant that if the company's underwriting rules require a person to obtain a physical, temporary insurance is not in effect beyond coverage for accidental death. As used in this sentence, initially refers to our underwriting rules. This reference indicates to the applicant that there are standards or guidelines that may be applicable to the application which the agent has not mentioned. This sentence does not refer to the agent or the agent's knowledge of underwriting rules. Below the above quoted sentences, for those consumers unfamiliar with underwriting, the Receipt explains how the underwriting and application processes work: The Underwriting Process--... We will evaluate your application to see if you are eligible for insurance coverage. We will first review all of the information contained in your application. We may confirm or add to this information in the ways described in this notice. In the next section entitled Information Collection, Metropolitan specifically warns that they may [a]sk [the applicant] to have a medical examination. These provisions warned Ryan, Sr. that Metropolitan may ask him to complete a medical examination before a life insurance policy would be issued. 35 On September 13, 1991, Morreale handed Ryan, Sr. the Receipt containing the above quoted language. Although there is no evidence that Ryan, Sr. or plaintiffs actually read the Receipt, the Receipt adequately notified them that temporary insurance would not take effect if Ryan, Sr. was required to undergo a medical exam. 36 Because we find that the Receipt's language plainly and sufficiently warned plaintiffs that temporary insurance would not begin until the medical exam was completed, we hold that under the facts of this case, particularly where it was known that a senior citizen had a serious ailment, temporary insurance never began beyond the coverage for accidental death. See Fields v. Franklin Life Ins. Co., 115 Ill.App.3d 954, 71 Ill.Dec. 776, 451 N.E.2d 930 (5th Dist.1983). 37