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Lee v. John Deere Insurance Co.

November 4, 2002


Appeal from the Circuit Court of Cook County. The Honorable Ronald C. Riley, Judge Presiding.

The opinion of the court was delivered by: Justice Cohen

On March 1, 1996, Tak Kwong Lee, a delivery truck operator employed by Asia Distributors, Inc., d/b/a Asia Distributors and Trucking, Inc. (Asia), was fatally injured after being pinned between a private automobile and an Asia delivery truck. The at-fault driver was underinsured. Lee's estate filed an action in chancery seeking a declaration of the limits of underinsured motorist (UIM) coverage potentially available to Lee under a policy then in effect through Asia's insurer, the John Deere Insurance Company, n/k/a Sentry Select Insurance Company (John Deere).

The circuit court granted summary judgment in favor of Lee predicated on its finding that John Deere's use of a separate form for the rejection of increased UIM coverage limits violated section 143a-2(2) of the Illinois Insurance Code (215 ILCS 5/143a-2(2) (West 1992)). The circuit court reformed the policy then in effect, thereby raising Asia's UIM coverage limit from $40,000 per accident to match its bodily injury coverage limit of $1 million per accident.

We hold that the circuit court misapplied section 143a-2(2) and consequently erred in granting summary judgment in favor of Lee. Accordingly, the judgment of the circuit court is reversed.


The record reflects that the president of Asia was Andy W.Y. Lin, a/k/a Waiyip Lin. Lin contacted Elite Insurance Agency, Inc. (Elite), an insurance brokerage firm, by telephone and spoke to Elite employee Michael Amwoza about obtaining motor vehicle liability insurance for Asia's delivery trucks. On September 2, 1994, based on information provided by Lin, Amwoza completed a "Non-Fleet Transportation Application" form (NFTA form) on Asia's behalf in order to obtain an insurance quote from John Deere. Amwoza testified at his deposition that he informed Lin over the phone that Asia could obtain increased uninsured (UM) and UIM coverage above the statutory minimum of $20,000 per person / $40,000 per accident *fn1 up to the $1 million liability limit of its policy for an increase in premium. Amwoza explained to Lin the nature of UM/UIM coverage and provided Lin with the approximate cost of obtaining increased coverage. Amwoza further testified that Lin declined the increased UM/UIM coverage limits because "[Lin] wanted the policy as inexpensive as he could get it." Lin, during his deposition, denied that Amwoza had ever explained UM/UIM coverage or offered Asia increased coverage limits.

The record contains a copy of the completed NFTA form indicating that Asia selected coverage limits of $1 million for liability and $20,000 per person / $40,000 per accident for both UM and UIM coverage. Amwoza obtained a quote for placing coverage with John Deere, which Asia chose to accept. Amwoza then submitted on Asia's behalf the completed NFTA form to International Risk Placement, Inc. (IRP), one of John Deere's authorized agents.

On September 8, 1994, John Deere issued a temporary insurance binder to Asia, agreeing to extend coverage effective September 2, 1994. The binder set forth liability and UM/UIM coverage limits of $1 million and $20,000 per person / $40,000 per accident, respectively. Also on September 8, IRP forwarded to Elite for execution by Asia a separate form entitled "John Deere Insurance Company Selection/Rejection of Uninsured/Underinsured Motorist Coverage Illinois" (selection/rejection form). The selection/rejection form was the only form that John Deere required its Illinois insureds to complete, sign and return to John Deere. *fn2

On September 12, 1994, IRP forwarded to Elite the original and a copy of John Deere policy No. 731286-6694-947 (No. 947), effective September 2, 1994, the date the binder issued. On the date the policy issued, Asia had not yet completed and returned the selection/rejection form. Accordingly, on October 13, 1994, John Deere sent IRP a letter requesting that IRP obtain the completed form from Asia. On October 17, 1994, IRP sent Amwoza a letter advising that the selection/rejection form must be signed and returned by October 28, 1992, in order to avoid cancellation of Asia's policy.

The record contains an executed copy of the selection/rejection form, dated September 16, 1994, and apparently signed "Waiyip Lin." Lin testified in his deposition, however, that the purported signature was not his. The executed form reflected that Asia had rejected increased UM/UIM coverage and instead had requested the "minimum required to meet the Financial Responsibility Laws of the state."

On November 17, 1994, John Deere cancelled policy No. 947 for nonpayment of premiums. On January 20, 1995, Amwoza filed a second NFTA form on Asia's behalf to reinstate coverage with John Deere. The second NFTA form reflects that Asia again requested coverage limits of $1 million for liability and $20,000 per person / $40,000 per accident for both UM and UIM. Amwoza faxed the completed NFTA form to IRP on January 20, 1995. By letter dated January 25, 1995, IRP informed Amwoza that it had bound coverage for Asia effective January 20, 1995, under policy No. 731286-7695-955 (No. 955), and had attached a second selection/rejection form for execution by Asia and return to IRP.

On February 23, 1995, John Deere requested that IRP obtain an executed selection/rejection form from Asia with respect to policy No. 955, informing IRP that the policy would be cancelled if John Deere had not received the executed form by March 16, 1995. IRP forwarded John Deere's notice to Amwoza at Elite on February 28, 1995. Lee conceded before the trial court that Elite subsequently received an executed selection/rejection form with respect to policy No. 955, dated March 7, 1995, and forwarded the form to IRP. IRP then forwarded the March 7 selection/rejection form to John Deere. Lin, however, disputed the authenticity of the signature on the March 7 selection/rejection form, which appeared on its face to have been signed by "Andy Lin." As before, the March 7 selection/rejection form indicated that Asia had rejected increased UI/UIM coverage limits.

In reliance on the executed March 7 selection/rejection form, John Deere renewed coverage and issued "Continuation Policy" No. 731786-7695-963 (No. 963), effective February 1, 1996, until cancelled, without requiring Asia to execute a third selection/rejection form. Because policy No. 963 was a renewal of No. 955, the same $1 million liability and $20,000-per-person / $40,000-per- accident UM and UIM coverage limits applied. 215 ILCS 5/143a-2(2) (West 1992).

Predicated on Asia's rejection of increased coverage limits, John Deere charged Asia an annual premium of $12 per vehicle for the $20, 000-per-person / $40,000-per-accident UI/UIM coverage under policy Nos. 947, 955 and 963. The record reflects that had Asia elected to increase its UI/UIM coverage to match its liability limit of $1 ...

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