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January 9, 2003


The opinion of the court was delivered by: Nan R. Nolan, United States Magistrate Judge


This case involves defendant insurer's denial of plaintiff's claims under an individual disability income policy and a business overhead expense policy. This matter is before the Court on cross-motions for summary judgment. The parties have consented to the jurisdiction of the United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). For the reasons set forth below, Plaintiff's Partial Motion for Summary Judgment is denied and Defendant's Motion for Summary Judgment is denied.

I. FACTS*fn1

A. Parties

Plaintiff Susanne Hogan ("Hogan") is an Illinois resident. Pl. Facts ¶ 1. Hogan is the president of a corporation which is in the business of construction management for real estate owners. Id. ¶ 2. Defendant The Paul Revere Life Insurance Company ("Paul Revere") is a corporation organized and licensed under the laws of the State of Massachusetts and is authorized to do business in the State of Illinois. Id. ¶ 3.

B. Hogan's Relevant Medical History

On July 18, 1994, Hogan reported to Dr. Judith Frigo a history of back problems for which she had sought acupuncture treatment, weakness in her lower legs due to performing yard work, and numbness and tingling in her extremities which was severe enough to keep her awake at night. Def. Facts ¶¶ 58-61. On that same day, Dr. Frigo recommended an MRI to rule out multiple sclerosis as the cause of Hogan's medical symptoms, which was conducted on July 19, 1994. Id. ¶¶ 62, 63. On August 23, 1994, Hogan saw Dr. Frigo for a follow-up visit at which time she reported that her arms, legs, and back were still sore from over-exertion. At that time, Hogan was taking the prescription medications, Parafin Forte, a muscle relaxant for her back problems, and Elavil to help her sleep. Id. ¶¶ 64-67; Hogan dep., p. 56. Dr. Frigo referred Hogan to Dr. Glen Glista, a neurologist, who examined Hogan on August 26, 1994. Def. Facts ¶¶ 69-70. Dr. Glista continued Hogan on the prescription medication Elavil and prescribed Naprosyn. Id. ¶¶ 73, 76. Dr. Glista suggested the possibility of another MRI scan if Hogan's symptoms did not improve. Id. ¶ 72. On August 26, 1994, Dr. Glista sent a letter to Hogan and Dr. Frigo which described his impressions after examining Hogan. Def's Ex. N. Dr. Glista stated in part that Hogan may have "some chronic, cervical strain related to cervical spondylosis and tension." Id.

C. The Disability and Business Overhead Expense Policies

On November 10, 1994, Hogan underwent a medical examination in connection with the application process for the Paul Revere disability policy and the BOE policy. Def Additional Facts ¶ 9. The medical application form in connection with Hogan's medical examination was completed by the medical examiner based upon responses given by Hogan. Id. ¶ 10. As part of the medical examination, Hogan was asked the following question:

11. Have you within the past five years:

a. Been examined by or consulted a physician or other practitioner?
The medical examiner recorded "Yes." Id. ¶ 19. The medical application provides as follows:
Details of "Yes" answers. Identify question number. Circle applicable items. Include diagnosis, dates, duration and current status. List names and addresses of all attending physicians and medical facilities.
Id. ¶ 20. The medical examiner completed the "Yes" answer to paragraph 11 of the medical application as follows: "11a — routine physical exam per Dr. Frigo." Id. ¶ 21. As part of the medical application. Hogan was also asked the following question:
Have you, within the past five years: 11c. Had an x-ray, EKG, blood or urine test, or other lab tests?"
Id. ¶ 22. The medical examiner recorded "Yes" to question 11(c). Id. The medical examiner detailed Hogan's "Yes" answer to paragraph 11(c) of the medical application as follows: "11c — blood tests for other insurance applications in May, 1994." Id. ¶ 23. As part of the medical application, Hogan was asked the following additional question:
15. Have you ever had any known indication of or been treated for:
(b) Any type of back or spinal trouble, including sprain or strain."
The medial examiner recorded "Yes" to question 15. Id. ¶ 24. The medical examiner detailed Hogan's "Yes" answer to paragraph 15(b) of the medical application as follows:
15b lumbar strain in Feb/March 1994; examined at LaGrange Hospital Emergency Dept., Dr.?
— no therapy required

— no residual of impairment

Id. ¶ 25. Hogan was asked the following as part of the medical application:

16. Have you had any surgical operation. treatment, special diet or any illness, ailment, abnormality, or injury, not mentioned above, within the past five years?"
The medical examiner recorded "No" in response to paragraph 16. Id. 26. Hogan reviewed the responses recorded by the medical examiner on the medical application form and signed it on November 10, 1994. Id. ¶ 27.

On November 16, 1994, Hogan completed a written application for the DI policy and the BOE policy with Paul Revere. Def. Additional Facts ¶¶ 1, 2. John Miklos, an independent insurance producer, completed the applications for the DI and BOE policies with Hogan's assistance on November 16, 1994. Id. ¶ 3. Paul Revere contends that in completing Hogan's applications, Miklos read each of the questions contained in the applications to Hogan, Hogan responded to the questions, and Miklos filed in the answers that she gave him. Id. ¶ 6. Hogan denies that Miklos filled in the answers on the applications with all the information Hogan supplied him. Pl. Resp. to Def. Additional Facts ¶ 6.

The applications for both the disability policy and the BOE policy submitted to Paul Revere by Hogan, contain the following question:

6. Have you ever been diagnosed or treated for: (circle all conditions that apply and give details below) d. Disease or disorder, injury, strain or sprain involving the bones, joints, muscles, ligaments, knees, back or neck?
Miklos recorded "No." Def. Additional Facts ¶ 17. The applications for both policies also contain the following question:
7. In the past 5 years, have you had any medical advice or operation, physical exam, treatment, illness, abnormality, injury or seen a therapist, counselor, psychologist, psychiatrist, chiropractor, or health practitioner not list above?
Miklos recorded "Exam for Provident D.I." Id. ¶ 18.

Miklos certified on the agent's statement that there was no other information disclosed to him by Hogan that was not recorded on the application or that was in conflict to the information contained on the application. Def. Additional Facts ¶ 7. Hogan reviewed the completed application for the disability and the BOE policies and signed the application in Miklos' presence. Id. ¶ 8. By signing the applications, Hogan certified the following:

It is understood and agreed as follows:

1) I have read the statements and answers recorded above. They are to the best of my knowledge and belief, true and complete and correctly recorded. They will become part of this application and the basis for any policy issued on it.
Id. ¶ 14. By signing both policies, Hogan further certified the following:

It is understood and agreed as follows:

3) No agent or broker has authority to waive the answer to any question, to determine insurability, to waive any of the company's rights or requirements, or to make or alter any contract or policy.
Id. ¶ 15. Miklos executed the applications on page 2 certifying as follows:
I certify that I have truly and accurately recorded on this application the information supplied by the ...

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