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Bessler v. John Hancock Mutual Life Ins.

OPINION FILED AUGUST 18, 1981.

JOHN D. BESSLER, PLAINTIFF-APPELLEE,

v.

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Peoria County; the Hon. ROBERT E. HUNT, Judge, presiding.

MR. PRESIDING JUSTICE SCOTT DELIVERED THE OPINION OF THE COURT:

This litigation was commenced with the filing of a complaint for declaratory judgment in the Circuit Court of Peoria County. The relief sought in the complaint by the plaintiff, John D. Bessler, was an adjudication of his rights under a certain group insurance policy written by the defendant, John Hancock Mutual Life Insurance Company. After a hearing on cross-motions for summary judgment, the circuit court determined that the plaintiff was eligible for insurance coverage under the terms of the disputed policy. John Hancock believes that determination was in error.

For some time prior to June 15, 1978, the plaintiff was employed by Little Giant Products, Inc. Indeed, the plaintiff was in that employ on October 19, 1976, when he became totally and permanently disabled as a result of an industrial accident. He was subsequently awarded a pension for his disability by the Illinois Industrial Commission in accordance with the Workers' Compensation Act (Ill. Rev. Stat. 1979, ch. 48, par. 138.1 et seq.). Then, on the date first mentioned, June 15, 1978, the plaintiff was terminated as an employee of Little Giant.

Employees of Little Giant received as a benefit of their employment insurance coverage under a group health insurance policy issued by the defendant. Also receiving health insurance benefits under the same policy were dependents of Little Giant employees. After his termination but still believing his insurance coverage to be in full force and effect, the plaintiff submitted bills for medical expenses incurred by himself in an incident not related to the industrial accident and also bills for medical expenses incurred by his wife, one of his dependents. According to the complaint filed in the circuit court, John Hancock failed to pay the bills submitted and claimed that no coverage existed under the policy. The plaintiff Bessler sought to have the court declare that he and his dependents continue to be eligible for coverage under the group policy.

In its answer, John Hancock alleged that coverage under the group policy ceased when the plaintiff's employment was terminated. The defendant directed the court's attention to the following language on page I-GP of the insurance certificate:

"The insurance of an employee under all coverages for which he is insured shall be discontinued on the earliest of the following dates: (1) the date of termination of his employment (see paragraph below); * * *

Employment for insurance purposes terminates on the date the employee ceases active work with his Participating Employer, except that, in the circumstances specified below, employment shall be deemed to continue for insurance purposes, for the coverages specified, until the earlier of (a) the expiration of the period specified below, or

(b) the date the employee's Participating Employer, acting in accordance with rules which preclude individual selection, terminates the employee's employment for insurance purposes, by written notice to the employee, or by written notice to the Insurer, or by any other means.

While Employee is Employment May be Deemed to Absent from Work Due to Continue for this Period (i) Sickness or Injury Indefinite For these Coverages All coverages."

Elsewhere in the certificate there is found a provision for terminating dependent coverage:

"The insurance of a dependent under all coverages for which he is insured shall be discontinued on the earliest of the following dates: (1) the date of discontinuance of the employee's insurance under all coverages for which he is insured * * *."

John Hancock argued that since the plaintiff's employment was terminated on June 15, 1978, then all coverages under the group insurance plan were discontinued as of that same date.

The plaintiff responded to the insurer's answer with a motion for summary judgment wherein another provision from the insurance certificate was cited. That provision, found on page 1(b)-GP, allows that:

"If an employee, while insured under the Policy, becomes totally disabled he shall continue to be eligible for Accident and Health Insurance coverages providing reimbursement of expenses for medical services and supplies, and his insured dependents, if any, may continue to be insured for such coverages, during the continuation ...


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