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Pekin Insurance Co. v. Adams

August 26, 2003

PEKIN INSURANCE COMPANY, PLAINTIFF-APPELLEE,
v.
AMANDA M. 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UNPUBLISHED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 M. Adams owned a Doberman pinscher, which bit a seven-year-old boy, Christopher Marshall. Amanda had renter's liability insurance from Pekin Insurance Company (Pekin), and Christopher's father, Nicholas Marshall, submitted a claim. Pekin denied the claim and filed a complaint against Amanda and Nicholas, seeking rescission of Amanda's insurance policy on the ground that she 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 appealed the summary judgment in Pekin's favor. He argued that (1) Pekin, rather than Amanda, was responsible for the misrepresentation and (2) the misrepresentation was not material. On October 28, 2002, we filed an opinion reversing the trial court's judgment and remanding the case for further proceedings. Pekin Insurance Co. v. Adams, 334 Ill. App. 3d 1083, 778 N.E.2d 1240 (2002) (original opinion). On December 2, 2002, we denied Pekin's petition for rehearing, and on April 2, 2003, the supreme court denied Pekin's petition for leave to appeal. Pekin Insurance Co. v. Adams, 203 Ill. 2d 550, 788 N.E.2d 730 (2003). On May 14, 2003, however, in the exercise of its supervisory authority, the supreme court directed us to vacate our judgment and reconsider our decision in the light of Golden Rule Insurance Co. v. Schwartz, 203 Ill. 2d 456, 786 N.E.2d 1010 (2003). Pekin Insurance Co. v. Adams, No. 95501 (May 14, 2003) (nonprecedential supervisory order directing Fourth District to vacate its original opinion and reconsider in light of Schwartz), ___ Ill. 2d ___, ___ N.E.2d ___. Accordingly, we vacated our original opinion. After reconsidering the facts of this case in the light of Golden Rule, we still find genuine issues of material fact precluding summary judgment in Pekin's favor. Therefore, we again reverse the trial court's judgment and remand this case for further proceedings.

I. BACKGROUND

Amanda testified in her deposition that she had bought the insurance policy through Bybee Insurance Agency, which was Pekin's agent. Linda Sade was an employee of the agency, and in the course of purchasing the policy, Amanda spoke with her several times on the telephone. Linda asked Amanda questions about her eligibility for insurance but never asked her if she had any animals. Afterward, the agency mailed Amanda an application for the insurance policy.

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 "X" was typed 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 she had to fill in, which the agency had highlighted. Having already been answered in the negative, question No. 9 was not highlighted. Amanda signed the application and mailed it back to the agent some five days after receiving it, without reading the following language above her signature:

"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 on her premises when she signed the application (a nine-year-old dog, which she had owned since it was a puppy), 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 Pekin's motion for summary judgment and in her deposition, she stated that ownership of a dog was a material fact, because dogs increased the risk of liability. When learning that an applicant owned a dog, the agent was 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 could either deny the application or ask for more information. Weems testified she "would [have] never issue[d] a policy with a prior dog[-]bite history." Pekin also presented a copy of its underwriting guidelines stating that "any dog with a bite history [is] not acceptable."

In its order granting Pekin's motion for summary judgment and denying defendants' motions for summary judgment, the trial court concluded 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

A. Standard of Review

We review summary judgments de novo. Warren v. Burris, 325 Ill. App. 3d 599, 603, 758 N.E.2d 889, 892 (2001). Viewing the pleadings, depositions, admissions, and affidavits in a light most favorable to the nonmoving party, we ask whether they reveal any "genuine issue as to any material fact." 735 ILCS 5/2-1005(c) (West 2002); Warren, 325 Ill. App. 3d at 602, 758 N.E.2d at 892. "Genuine" means there is evidence to support the position of the nonmoving party. N.W. v. Amalgamated Trust & Savings Bank, 196 Ill. App. 3d 1066, 1075, 554 N.E.2d 629, 636 (1990). We also ask whether "the moving party is entitled to a judgment as a matter of law"--in other words, whether the trial court correctly interpreted ...


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