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09/26/94 ESTATE STEPHEN W. BLAKELY v. FEDERAL

September 26, 1994

ESTATE OF STEPHEN W. BLAKELY, PLAINTIFF-APPELLEE,
v.
FEDERAL KEMPER LIFE ASSURANCE COMPANY, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Du Page County. No. 91-P-527. Honorable John S. Teschner, Judge, Presiding.

Petition for Leave to Appeal Denied February 1, 1995.

McLAREN, Inglis, Colwell

The opinion of the court was delivered by: Mclaren

JUSTICE McLAREN delivered the opinion of the court:

On August 10, 1993, the circuit court of Du Page County denied the summary judgment motion of the defendant, Federal Kemper Life Assurance Company (Kemper), and granted the summary judgment motion of the independent executor of Stephen Blakely's estate. Kemper appeals; we affirm.

Mary Leach, a legatee and friend of Stephen Blakely, filed a petition for probate of the will and for letters testamentary for the last will and testament of Blakely. Leach was subsequently appointed independent executor for Blakely's estate. On September 6, 1991, Twyla Blakely filed a claim against the estate alleging, in part, that pursuant to a judgment for dissolution of marriage, Stephen Blakely was to maintain a life insurance policy in the amount of $182,000 but that Mr. Blakely had allowed that policy to lapse and no insurance existed.

The independent executor filed an answer to Twyla Blakely's claim, admitting that the judgment for dissolution of marriage provided that the decedent maintain a life insurance policy in the amount of $182,000 but denying that the decedent failed to do so.

The independent executor joined Kemper as a defendant and alleged that the decedent paid Kemper $179.82 more in first-year premiums than was required, that the policy did not provide for the manner of application of those excess payments, and that the executor, on behalf of the decedent, therefore elected to apply those surplus funds to a one-month premium payment. The independent executor also alleged that on January 8, 1991, Kemper served on the decedent a notice of premium due which did not meet the statutory requirements of the Illinois Insurance Code (215 ILCS 5/234 (West 1992). Kemper contends otherwise and the case at bar stems from this dispute.

On October 8, 1989, the decedent applied for a life insurance policy with Kemper. Kemper subsequently issued a life insurance policy with an initial policy date of December 22, 1989, and a face amount of $180,000. The policy specified a first-year annual premium of $1,124.60, a first-year semiannual premium of $573.55, a first-year quarterly premium of $292.40, and a first-year monthly premium of $98.40. The policy issued to Blakely was an increasing term policy and premiums increased every year. The policy also listed the guaranteed maximum premiums on the policy for years 2 through 46 of the policy, indicating for each year an annual, semiannual, quarterly, and monthly amount. The guaranteed maximum second-year premium, if paid quarterly, was listed at $427.18, and, if paid monthly, was $143.76.

With his application for insurance, the decedent submitted a premium payment in the amount of $281.25 to Kemper, purporting to represent the first quarterly premium payment for the policy. This amount was insufficient to cover the first quarterly payment. Kemper then requested the decedent to submit an additional premium payment of $56.13, for a total first quarterly premium payment of $337.38. When Kemper received the subsequent premium payment for $56.13 on January 30, 1990, Blakely's policy date was changed to February 1, 1990. In April 1990, Kemper forwarded to Stephen Blakely a notice of premium due, advising Blakely that a quarterly premium for May 1, 1990, was due in the amount of $337.38. Kemper did so despite the fact that the policy it had issued unambiguously stated that the first-year quarterly payments were to be $292.40. Blakely paid the amount requested by Kemper, which was 14% more than that stated in his policy. In June 1990 and September 1990, Kemper again sent notices of premium due to Stephen Blakely, demanding payment in the amount of $337.38. Blakely paid these amounts shortly after receiving the notices. Thus, for 1990, Blakely paid $179.92 more in premiums than required under his written policy. In January 1991, Kemper sent another notice of premium due to Blakely, advising him that the premium amount payable for the February 1, 1991, payment on his policy was $492.90. Blakely did not pay any amount to Kemper after the notice was sent in January 1991, and Blakely died between March 4, 1991, and March 13, 1991.

Kemper asserts that because of Blakely's failure to pay, his policy lapsed no later than March 4, 1991. The independent executor counters that the $179.92 which Blakely paid in excess of the premium amounts called for in his policy should be applied to monthly premium payments which would, in effect, extend Blakely's coverage under the policy beyond his date of death and, in any case, Kemper's January 1991 notice was defective.

While summary judgment is to be encouraged in the interest of prompt Disposition of lawsuits ( Town of Avon v. Geary (1991), 223 Ill. App. 3d 294, 299, 165 Ill. Dec. 798, 585 N.E.2d 194), it is a drastic means of disposing of litigation and should be allowed only when the right of the moving party to judgment is clear and free from doubt ( Pyne v. Witmer (1989), 129 Ill. 2d 351, 358, 135 Ill. Dec. 557, 543 N.E.2d 1304). The purpose of a summary judgment proceeding is to determine whether any genuine issues of material fact exist which should be tried ( Purtill v. Hess (1986), 111 Ill. 2d 229, 240, 95 Ill. Dec. 305, 489 N.E.2d 867). Evidence is to be construed strictly against the movant and liberally in favor of the nonmovant ( Tersavich v. First National Bank & Trust Co. (1991), 143 Ill. 2d 74, 80-81, 156 Ill. Dec. 753, 571 N.E.2d 733). Only if the pleadings, depositions, and affidavits reveal no genuine issue of material fact is the moving party entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 1992); Graf v. St. Luke's Evangelical Lutheran Church (1993), 253 Ill. App. 3d 588, 591, 192 Ill. Dec. 696, 625 N.E.2d 851.

I. THE TRIAL COURT CORRECTLY DENIED FEDERAL KEMPER'S SUMMARY JUDGMENT MOTION.

Kemper asserts that it is entitled to summary judgment because: (1) Kemper does not accept partial premium payments and the overpayment was insufficient to keep the policy in force, (2) Kemper should be granted a reformation of the policy, or (3) the decedent waived ...


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