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Pekin Insurance Company v. Marshall

October 28, 2002

PEKIN INSURANCE COMPANY, PLAINTIFF-APPELLEE,
v.
AMANDA ADAMS, DEFENDANT,
v.
NICHOLAS MARSHALL, AS FATHER AND NEXT FRIEND OF CHRISTOPHER MARSHALL, A MINOR, DEFENDANT-APPELLANT.



Appeal from Circuit Court of Adams County No. 01MR14 Honorable Dennis K. Cashman, Judge Presiding.

The opinion of the court was delivered by: Justice Appleton

UNPUBLISHED

Amanda Adams owned a Doberman pinscher, which bit a seven-year-old boy, Christopher Marshall. Amanda had renter's liability insurance from Pekin Insurance Co. (Pekin), and Christopher's father, Nicholas Marshall, submitted a claim. Pekin denied the claim and filed a complaint for rescission of the insurance policy on the ground that Amanda had falsely stated, in her application for the insurance, that she had no "animals." The parties filed cross-motions for summary judgment. The trial court granted Pekin's motion and denied defendants' motions.

Nicholas appeals the summary judgment in Pekin's favor. He argues that (1) Pekin, rather than Amanda, was responsible for the misrepresentation and (2) the misrepresentation was not material. We reverse the trial court's judgment and remand this case for further proceedings.

I. BACKGROUND

Amanda bought the policy through Bybee Insurance Agency, which was Pekin's agent. Linda Sade was an employee of the agency. Before sending Amanda the application, Linda asked her questions over the telephone. During that telephone conversation, Linda never - 1 -asked her if she had any animals.

When Amanda received the application in the mail, answers to many of the questions were already typed in. Question No. 9 read as follows: "Does applicant or any tenant have animals or exotic pets?" An employee of the insurance agency had typed an "X" in the box corresponding to "no." Amanda testified, however, that she did not read question No. 9 or any other part of the application, except for the parts that were highlighted and which she had to fill in. She signed the application and mailed it back to the agent five days after receiving it. Above her signature, the following language appeared:

"I have read the application[,] and I declare that to the best of my knowledge and belief all of the foregoing statements are true; and that these statements are offered as an inducement to the company to issue the policy for which I am applying."

When investigating Nicholas's claim, Pekin discovered that not only did Amanda have a dog when she signed the application, but the dog had bitten a girl three or four years before biting Christopher.

Becky Weems was an underwriter for Pekin. In her affidavit in support of summary judgment and her deposition she stated that ownership of a dog is a material fact because dogs increase the risk of liability. When learning that an applicant owns a dog, the agent is supposed to ask questions about the dog and enter the additional information in the section of the application labeled "Remarks." If dissatisfied with the information, the underwriter can either deny the application or ask for more information. Becky Weems testified that she "would never issue a policy with a prior dog[-]bite history."

In its order granting Pekin's motion for summary judgment and denying defendants' motions for summary judgment, the trial court ordered that (1) the insurance policy was rescinded, (2) the insurance policy did not apply to Nicholas's claim, and (3) Pekin must refund to Amanda all of the premiums she has paid. This appeal followed.

II. ANALYSIS

Citing Beck v. Capitol Life Insurance Co., 48 Ill. App. 3d 937, 363 N.E.2d 170 (1977), among other authorities, Nicholas argues that Pekin, rather than Amanda, is responsible for the misrepresentation and Pekin should be estopped from asserting the misrepresentation as a defense.

In Beck, 48 Ill. App. 3d at 939, 363 N.E.2d at 171, the plaintiff brought an action to recover under a life insurance policy. The insurer contended that because the insured, Clarence Beck, had falsely stated, in a "reinstatement application," that he was "'now in good health and free from any symptom of disease,'" the insurer did not have to pay the claim after his death. Beck, 48 Ill. App. 3d at 939-40, 363 N.E.2d at 171-72. Clarence was, in fact, in poor health and had heart disease and diabetes when he ...


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