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03/25/94 ZBIGNIEW KUJBIDA v. HORIZON INSURANCE

March 25, 1994

ZBIGNIEW KUJBIDA, PLAINTIFF-APPELLEE
v.
HORIZON INSURANCE AGENCY, INC., COPPER HILL FINANCIAL CORP., AND ALLANTE INSURANCE AGENCY, INC.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. THE HONORABLE CARL J. CIPOLLA, JUDGE PRESIDING

Released for Publication May 5, 1994.

Gordon, Murray, McNULTY

The opinion of the court was delivered by: Gordon

JUSTICE GORDON delivered the opinion of the court:

Plaintiff, Zbigniew Kujbida, filed this action in the circuit court of Cook County against defendants for breach of contracts to provide insurance coverage. Defendant, Safeway Insurance Company, brings this appeal from the trial court's order granting partial summary judgment in favor of plaintiff on the issue of whether the insurance policy in question had been cancelled.

FACTS

In mid-April, 1989, plaintiff purchased an automobile from Berens Mercury in Chicago. At that time, a Berens employee assisted plaintiff in applying for automobile liability insurance through defendant, Allante Insurance Agency ("Allante"). In his insurance application, plaintiff and his wife, Regina Kujbida, were listed in the column labelled "Names of Drivers". The only driver's license number shown on the application was that of plaintiff. Mrs. Kujbida did not have a driver's license at that time, nor did she know how to drive.

At Allante's request, defendant, Horizon Insurance Agency, Inc. ("Horizon") arranged for defendant, Safeway Insurance Company ("Safeway"), to issue an insurance policy for plaintiff. Horizon also arranged for monthly premium payments to be made to defendant, Copper Hill Financial Corporation ("Copper Hill").

After Safeway issued its policy, it requested that plaintiff or Mrs. Kujbida complete and sign an "Exclusion of Named Drivers" form to exclude Mrs. Kujbida from coverage under the policy. Plaintiff claims to have signed and returned the form to Allante, but, according to the affidavit of a Safeway employee, Safeway never received that completed form.

On April 30, 1989, Safeway returned plaintiff's premium payments, and on May 2, 1989, according to the affidavit of a Safeway employee, Safeway mailed a "Notice of Cancellation" to plaintiff. Safeway also claims to have sent a copy of the cancellation notice to Horizon. Item 1 of the cancellation notice states that plaintiff's coverage would cease on June 1, 1989. Item 2 states "REASON for cancellation is indicated on the reverse side by items G." The reverse side of the form lists a series of possible reasons for cancellation, labelled "A" through "J". Item G states, "Failed to disclose information necessary for acceptance or for proper rating of the risk in his application or in response to inquiry by his broker or by the company or by his agent."

Subsequently, on June 24, 1989, plaintiff was involved in an automobile accident. Safeway refused to honor plaintiff's claim under the policy. On August 16, 1990, plaintiff filed a complaint against Horizon, Copper Hill, Allante and Safeway, alleging breach of the insurance contract. Safeway's answer states as an affirmative defense that the policy was cancelled effective June 1, 1989.

On December 3, 1991, the trial court entered a partial summary judgment in plaintiff's favor and against Safeway solely on the issue of whether the policy had been cancelled. The trial court ruled that the cancellation notice was ineffective, as a matter of law, because it "fails to list a specific explanation of what plaintiff failed to disclose." The trial court predicated its ruling upon section 143.15 of the Illinois Insurance Code which provides in pertinent part, "All notices of cancellation shall include a specific explanation of the reason or reasons for cancellation." Ill. Rev. Stat. 1991, ch. 73, par. 755.15.

Safeway contends that the question concerning its compliance with the specificity requirement of section 143.15 of the Insurance Act is a question of fact rather than a question of law. Safeway concedes that the issue of compliance with the statute would have been a question of law if no reason whatsoever had been shown on the cancellation notice. However, Safeway contends that, specificity being a matter of degree, fair-minded persons could reach different Conclusions as to whether the reason stated on the cancellation notice complied with the statute. Therefore, even though there is no dispute as to what words appear on the cancellation statement, the question of whether the reason given constitutes "a specific explanation of the reason or reasons for the cancellation" is a question of fact giving rise to conflicting inferences which precludes the entry of summary judgment.

Plaintiff contends in his brief that the question of whether Safeway complied with the statute is a question of law. However, he conceded during oral argument that there are varying degrees of specificity and, therefore, a determination as to whether a given reason complies with the statute can be a question of fact. Nevertheless, plaintiff contended that fair-minded individuals could not differ regarding the reason given in this particular case, i.e., that the only possible Conclusion is that the ...


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