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11/09/95 LINDA JOHNSON-MADAY v. PRUDENTIAL

November 9, 1995

LINDA JOHNSON-MADAY, PLAINTIFF-APPELLANT,
v.
PRUDENTIAL INSURANCE COMPANY OF AMERICA, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County. Honorable Edward G. Finnegan, Judge Presiding.

Rehearing Denied November 29, 1995. Released for Publication December 21, 1995.

The Honorable Justice McNULTY delivered the opinion of the court: Gordon and T. O'brien, JJ., concur.

The opinion of the court was delivered by: Mcnulty

JUSTICE McNULTY delivered the opinion of the court:

Plaintiff, Linda Johnson-Maday, appeals from judgment entered in favor of defendant, the Prudential Insurance Company of America, following a bench trial on plaintiff's claim for breach of her insurance contract. We find that the trial court correctly construed section 367(2)(c) of the Illinois Insurance Code (Code) (Ill. Rev. Stat. 1991, ch. 73, par. 979(2)(c) (now 215 ILCS 5/367(2)(c) (West 1994))), and therefore we affirm.

Plaintiff began working for North Suburban Medical Consultants, Ltd., in June 1991. Defendant provided health coverage as part of a benefits package for employees of North Suburban under a group insurance plan. Plaintiff met with defendant's agent, Vladimir Lesniewski, on June 11, 1991, to fill out an application for insurance. Lesniewski asked plaintiff the questions on the application and filled in her answers. At the end of the interview she signed the application. The application did not mention plaintiff's extensive hospitalizations in 1989 and 1990 for pancreatitis and related disorders. Defendant accepted the application.

Doctors at Lutheran General Hospital admitted plaintiff to the hospital in September 1991 for viral gastritis. She remained at the hospital for two months. On February 14, 1992, defendant refused topay the bill from Lutheran General on grounds that plaintiff materially misrepresented her medical history.

Lutheran General admitted plaintiff again in May 1992, this time for septicemia, and again she stayed for two months. Her bill from the two hospitalizations totaled almost $300,000. Defendant again refused to pay. Plaintiff sued for breach of the insurance contract and defendant countersued for rescission.

Plaintiff testified that at the meeting on June 11, she detailed for Lesniewski her entire medical history, and he told her he would get her medical records rather than write out the extensive history. Lesniewski testified that he wrote on the application form everything plaintiff told him about her medical history, and she did not mention her hospitalizations for pancreatic-related disorders. The trial court found that plaintiff did not meet her burden of proving that she supplied her medical history. Plaintiff does not challenge this finding on appeal.

Plaintiff also argued at trial that the Insurance Code (Ill. Rev. Stat. 1991, ch. 73, par. 613 et seq. (now 215 ILCS 5/1 et seq. (West 1994))) required defendant to accept her application for insurance regardless of her medical condition, so any misrepresentation did not materially affect defendant's risk. The court, rejecting the argument, rescinded the insurance contract and granted defendant judgment on plaintiff's claim.

On appeal plaintiff argues that the Code required defendant to offer coverage to all new employees of North Suburban, regardless of preexisting medical conditions. The Code states that any policy of group accident and health insurance must provide that:

"to the group *** originally insured shall be added from time to time all new employees of the employer, members of the association or employees of members eligible to and applying for insurance in such group or class." (Ill. Rev. Stat. 1991, ch. 73, par. 979(2)(c) (now 215 ILCS 5/367(2)(c) (West 1994))).

(See also Ill. Rev. Stat. 1991, ch. 73, par. 963B-4(d) (now 215 ILCS 5/351B-4(d) (West 1994)).) Plaintiff interprets the Code to require extension of coverage to all new employees of a covered employer, regardless of eligibility. The trial court found that the statute required coverage only for employees "eligible to and applying for insurance." Thus the central question on this appeal is whether the qualifying phrase "eligible to and applying for insurance" applies to "all new employees of the employer," or only to "employees of members."

Under the last antecedent doctrine, courts ordinarily construe qualifying phrases in statutes as applying only to the phrase immediatelypreceding the qualification. ( Board of Education of Rockford School District No. 205 v. Regional Board of School Trustees (1985), 135 Ill. App. 3d 486, 492, 481 N.E.2d 1266, 90 Ill. Dec. 355.) The doctrine does not apply when the context of the entire statute requires application of the qualification to further phrases. Board of Trustees of ...


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