Appeal from the Circuit Court of Cook County; the Hon. Arthur
L. Dunne, Judge, presiding.
JUSTICE O'CONNOR DELIVERED THE OPINION OF THE COURT:
Rehearing denied April 23, 1985.
The present action concerns an insurance contract purchased from defendant, Continental Casualty Company (Continental) by plaintiff, Illinois Central Gulf Railroad (ICG) in which Continental promised to indemnify ICG employees who suffered accidental death or serious injury in specified situations. When an employee of ICG was accidently killed and ICG was subsequently forced to pay death benefits to the heirs of the employee under the terms of a pre-existing collective bargaining agreement, Continental denied liability on the ground that the employee's death was not covered by the policy. ICG then brought a declaratory judgment action against Continental, alleging breach of contract. Continental moved to dismiss the action on the ground it was barred by a contractual limitation clause which provided that "[n]o action * * * shall be brought to recover on this policy * * * unless brought within three years from the expiration of the time within which proof of loss was required by the policy." The trial court sustained Continental's motion and dismissed ICG's action. ICG now appeals.
ICG contends: (1) that the contractual limitation of actions clause is ambiguous with respect to its action; (2) that even if the clause is unambiguous, its action was filed within the requisite time period and (3) that Continental waived its limitation of actions and cannot revive it.
The record reveals that on February 10, 1971, plaintiff ICG entered into a bargaining agreement with labor organizations representing some of its employees, including members of the Brotherhood of Maintenance of Way (BMW). Under the terms of the bargaining agreement, ICG agreed to pay accident benefits when these employees were killed or injured while "riding in, boarding, or alighting from off-track vehicles authorized by [ICG] and are (1) deadheading under orders or (2) being transported at [ICG's] expense." Nothing in the agreement required ICG to provide the benefits through an insurance policy; the benefits were strictly a potential liability of the employer.
ICG subsequently purchased a group accident insurance policy from Continental in which Continental agreed with ICG, the policyholder, to insure "insured persons" (members of various labor organizations who were employees of ICG) and promised to pay for loss resulting from injury to the extent therein limited and provided. The policy defined "injury" as bodily injury. The policy provided for $100,000 in accidental death benefits to be paid to the insured employees of ICG where death occurred as a result of an "injury sustained in consequence of riding as a passenger or operator in or on, boarding or alighting from any off-track land conveyance for the purpose of deadheading under orders or being transported at the [policyholder's] expense other than as an operator or member of the crew in any conveyance operated for the carriage of passengers for hire." The contract also included a "limitation on actions" clause which stated:
"No action at law or in equity shall be brought to recover on this policy * * * unless brought within three years from the expiration of the time within which proof of loss is required by the policy."
Regarding proof of loss, the policy provided that "[i]n the case of claim for any [loss other than loss of time from disability], written proof of such loss must be furnished to the Company within 90 days after the date of such loss."
On October 30, 1978, the collective bargaining agreement was amended to increase the death benefits from $100,000 to $150,000. The benefits under ICG's policy with Continental were amended so that they conformed with the labor agreement.
On March 25, 1980, Gary Martin, an employee of ICG and a member of BMW, was killed when a truck struck the backhoe he was operating while going from one work site to another. ICG presented a claim under the policy on behalf of Martin's heirs. On June 2, 1980, Continental rejected the claim, asserting that Martin was not deadheading when he was killed. Rather than proceeding against the insurance company under the policy, the heirs of Gary Martin opted for an alternative remedy available under the collective bargaining agreement and Federal labor laws. The BMW, on behalf of Martin's heirs, instituted a grievance procedure pursuant to the Railway Labor Act (45 U.S.C. § 153 et seq. (1976)) which established the "Railroad Adjustment Board" for settling "minor disputes" between a railroad and its employees. On February 26, 1982, the board ordered ICG to pay $150,000 (less appropriate setoffs) to Martin's heirs, holding that Martin's death came within the terms of the bargaining agreement because he died while he was riding in an off-track vehicle and was being transported at ICG's expense. Following the award, ICG again sought payment under the policy, but Continental denied the claim again on March 31, 1982.
On August 19, 1983, ICG brought this declaratory judgment action. Continental moved to dismiss the action on the ground that ICG's action was barred by the "limitation on actions" clause since its loss was sustained on the date Martin was killed, which was more than three years (plus the 90-day "proof of loss" period) prior to the initiation of suit. The trial court sustained Continental's motion and dismissed ICG's action.
The only issue we need determine on appeal is whether the trial court erred in dismissing ICG's action. ICG maintains that the clause stating the contractual limitation period is ambiguous or, in the alternative, it does not apply to ICG's action, but only to actions brought on the policy by employees and personal representatives.
In reviewing a trial court's order granting a defendant's motion to dismiss a complaint, we must regard ICG's well-pleaded facts and their reasonable inferences as true. Clear-Vu Packaging, Inc. v. National Union Fire Insurance Co. (1982), 105 Ill. App.3d 671, 674, 434 N.E.2d 365, appeal denied (1982), 91 Ill.2d 567.
In interpreting an insurance policy, the court's primary concern is to effectuate the intent of the parties as expressed by the contract. (State Farm Mutual Automobile Insurance Co. v. Schmitt (1981), 94 Ill. App.3d 1062, 419 N.E.2d 601.) "Insurance policies should be construed as a whole, giving effect to every part, as far as it is possible." (Hartford Accident & Indemnity Co. v. Case Foundation Co. (1973), 10 Ill. App.3d 115, 121, 294 N.E.2d 7, appeal denied (1973), 53 Ill.2d 608.) Any ambiguity in an insurance policy is construed ...