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King v. Equitable Life Assur. Soc.

OPINION FILED JULY 6, 1984.

LORRAINE M. KING, PLAINTIFF-APPELLEE AND CROSS-APPELLANT,

v.

THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, DEFENDANT-APPELLANT AND CROSS-APPELLEE.



Appeal from the Circuit Court of Peoria County; the Hon. Calvin R. Stone, Judge, presiding.

JUSTICE BARRY DELIVERED THE OPINION OF THE COURT:

This is an appeal from a directed verdict in favor of plaintiff Lorraine M. King entered in the circuit court of Peoria County in a cause to recover life insurance benefits under a group policy issued by defendant Equitable Life Assurance Society to cover employees of the city of Peoria.

Plaintiff's husband, Gerald King, was a Peoria police captain in charge of the traffic division who was injured in a fall occurring while he was on duty on January 4, 1979. King's injuries, which included a broken neck, required that he be hospitalized in traction for a time and further greatly hampered his mobility after he was discharged from the hospital. He was placed on "Injured On Duty" status (IOD) and continued to receive his full salary for 90 working days following the accident. On May 15, 1979, he was placed on disability pension status, where he remained until his death on January 5, 1980, from causes unrelated to the accident.

Effective April 1, 1979, Equitable's group insurance policy insuring members of the police department was amended to increase life insurance benefits from $1,000 to $6,000 for all employees. At the time that amendment took effect, King was on IOD status, which means that his name still appeared on the active duty roster, he was still subject to all the rules and regulations of the department, and on April 6, 1979, he received his annual $200 allowance for the expense of carrying weapons.

The insurance policy provided that while an employee was disabled, the insurance protection would be the amount for which he was last insured under the group life insurance plan prior to the discontinuance of active work. The insurance booklet given to each employee, which was a part of the policy, indicated that the increased benefits were effective as to all employees on April 1, 1979, and also stated:

"If you are absent from work on the day on which your insurance would normally begin, you will become insured on the day you return to active work."

Another pertinent provision of the policy provides that an employee's insurance will cease automatically when his employment terminates. The policy also states:

"Cessation of active work by an employee shall be deemed to constitute the termination of his employment except that * * *

(b) in the case of Life and Accidental Death and Dismemberment Insurance, an employee, absent from active work because of injury or sickness may be regarded as still in the employment of the Policyholder for the full period of such absence until the effective date entered on the insurance records maintained in connection with this policy * * *."

Although King never returned to full-time active duty, Equitable obviously considered that he was an employee on the date of his death, since his widow was tendered benefits of $1,000 plus interest which she refused. Plaintiff filed this suit to recover $6,000, and in the course of the trial before the jury, plaintiff produced several witnesses who related the number of conferences, phone calls, police reports, and other police business which King transacted from his home both before and after April 1, 1979.

At the conclusion of all the evidence the trial court granted plaintiff's motion for directed verdict, ruling that the insurance policy was ambiguous and must be construed against the insurer. The court allowed plaintiff 6% interest on the proceeds of the policy from the date of death and denied plaintiff's motion for taxation of costs as a penalty for defendant's allegedly unreasonable and vexatious refusal to pay the amount owed.

On appeal, defendant asserts three errors: (1) that the trial court erred as a matter of law in construing the contract; (2) that the question whether King returned to work after April 1, 1979, was a question of fact for the jury; and (3) that defendant should have been ordered to pay no more than 5% interest.

• 1 Defendant first argues that the contract was not ambiguous since the provisions relating to the date the increased benefits took effect should be construed together to mean that the increase in benefits are payable to all persons employed by the city of Peoria on April 1, 1979, providing they are at work on that date, and any employee absent from work on April 1 will become insured in the increased amount on the day he returns to active work. We agree that the provisions should be read together, but when we do so, we find that there is still an ambiguity. The policy does not define "active work" and therein lies the ambiguity.

The rule of law in Illinois in such cases is that the issue of whether an ambiguity exists is a question of law, and further that the construction of an insurance contract presents an issue of law only, not submissible to a jury. (E.g., Voss v. Associated Life Insurance Co. (1976), 36 Ill. App.3d 105, 343 N.E.2d 174.) Thus the determination of ...


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