United States District Court, N.D. Illinois, Eastern Division
June 17, 2004.
STEVEN E. JACOBS, Plaintiff,
THE PAUL REVERE LIFE INSURANCE COMPANY d/b/a UNUMPROVIDENT, Defendant.
The opinion of the court was delivered by: CHARLES KOCORAS, District Judge
This matter comes before the court on the motion of Defendant
Paul Revere Life Insurance Company ("Paul Revere") for a
declaration that the policy described in the complaint, issued to
Plaintiff Steven Jacobs, is not ambiguous with regard to the
inclusion of an "Information Sheet." For the reasons that follow,
the motion for a declaration is denied, as is the related motion
to bar admission of all parol evidence.
Jacobs is a commodities trader. In 1991, he purchased
disability income insurance policy number 0102517193 ("the
policy") from Paul Revere. Jacobs had a previous back injury that
had required him to undergo surgery. He disclosed this condition on his policy application, and the issued policy
contained a rider to the effect that benefits for "any loss
resulting from the sacroiliac or the lumbosacral joints, or the
lumbar spine" would be paid for a period of 12 months. For other
losses, policy benefits would continue until Jacobs turned 65.
Jacobs was 33 when he bought the policy.
In November 2001, at the age of 43, Jacobs filed a claim for
benefits with Paul Revere, stating that he was totally disabled
because of lower back problems. Paul Revere paid benefits to
Jacobs for 12 months. Thereafter, Jacobs informed Paul Revere
that the 12-month benefit limitation should have been removed
from his policy. Jacobs claims that Mark Brody, the agent who
sold him the policy, told him when he purchased the policy that
the exclusion would be removed from the policy if he remained
symptom-free for two years after the policy issued.
At first, Paul Revere informed Jacobs that the exclusion had
not been removed because he had not requested its removal. After
he formally requested its removal, he was told that the exclusion
would remain in the policy because he had not made the request in
a timely manner.
In early 2004, Jacobs filed suit in the Circuit Court of Cook
County, Illinois. The complaint sought a declaratory judgment
that Jacobs had satisfied all the requirements to have the
exclusion removed from the policy and that he was entitled to continuing benefits for his back problems. The complaint also
claimed that Paul Revere was estopped from enforcing the
exclusion and sought to reform the policy if the court found that
the contract did not provide that the exclusion could be removed.
Paul Revere removed the case to this court, and now seeks a
declaration that the policy is not ambiguous and a consequent
exclusion of all parol evidence bearing on the meaning of the
The construction of an insurance policy and a determination of
the rights created and obligations imposed by the policy are
questions of law for the court to decide. Crum and Forster
Managers Corp. v. Resolution Trust Corp., 620 N.E.2d 1073, 1077
(Ill. 1993). In construing the terms of an insurance policy, as
with any other contract, a court looks first solely at the
policy's language. See Air Safety v. Teachers Realty Corp.,
706 N.E.2d 882, 884 (Ill. 1999). If the contractual provisions
are clear and unambiguous, the court will look no further than
the "four corners" of the contract itself. See Dean Management
Inc. v. TBS Construction, Inc., 790 N.E.2d 934, 939 (Ill.App.
Ct. 2003). If the contract contains ambiguous terms, i.e., terms
that can reasonably be interpreted in more than one way,
extrinsic evidence can be used to resolve the ambiguity. Id. DISCUSSION
The instant motion is styled as one for a declaration that the
entirety of the policy is unambiguous. Paul Revere particularly
urges that the provisions of a page designated
"Form 809"*fn1 unambiguously provide that the maximum period of
benefit for lower back problems such as those Jacobs experienced
was 12 months.
Jacobs does not contend that Form 809 contains an ambiguity.
Rather, he claims that the policy included a mechanism for
removing the 12-month restriction. Without this limitation,
losses caused by back injuries would be subject to the same
timeline as any other loss, namely until Jacobs turns 65. He
points to a document entitled "Policy Issue Information Sheet" to
support his argument. In a section discussing loss resulting from
back problems, the sheet cryptically states "On request,
reconsideration can be given to removal, modification or
reduction subject to NO RECURRENCE, PHYSICIAN'S STATEMENT, IN 02
YRS." According to Jacobs, this statement bears out his assertion
that the restriction was not meant to be a permanent fixture of
his insurance coverage. Paul Revere insists that the contents of the information sheet
are immaterial because it is not a part of the policy. They rely
upon ¶ 10.1 of the policy, which provides:
This Policy*fn2 (with the application and
attached papers) is the entire contract between
[Jacobs and Paul Revere]. No change in this Policy
will be effective until approved by a Company
officer. This approval must be noted on or attached
to this Policy. No agent may change this Policy or
waive any of its provisions.
Paul Revere urges that this provision is an integration clause.
Construction of a fully integrated contract is limited to the
so-called "four corners" of the agreement; no extrinsic evidence
can be considered in interpreting the terms of the parties'
agreement. Air Safety, 706 N.E.2d. According to Paul Revere,
the information sheet falls within the category of extrinsic
evidence outside the four corners of the policy.
There are several problems with this argument. First, as Jacobs
points out, it is not a foregone conclusion that ¶ 10.1 is in
fact an integration clause. Compare id. at 885 with
Cincinnati Ins. Co. v. River City Construction Co.,
757 N.E.2d 676, 681 (Ill.App. Ct. 2001), and Longview Aluminum, LLC v.
United Steel Workers of America, 213 F. Supp.2d 876, 881 (N.D.
Ill. 2002). Second, even assuming that the agreement is fully integrated,
as ¶¶ 1.1 and 10.1 clearly state, the contract between the
parties consists of several documents. While the agreement is
unambiguous on the issue of what types of documents (riders,
amendments, and endorsements) can be considered part of it, it
gives no guidance on how to determine whether a particular
document is one of the specified types. This does not
automatically render these terms ambiguous. See Lapham-Hickey
Steel Corp. v. Protection Mut. Ins. Co., 655 N.E.2d 842, 846
(Ill. 1995). Instead, we must give them their plain and ordinary
meaning, which can be found in a dictionary. El Rincon
Supportive Servs. Org., Inc. v. First Nonprofit Mut. Ins. Co.,
803 N.E.2d 532, 536 (Ill.App. Ct. 2004). Webster's Third New
International Dictionary defines a rider as an addition or
amendment to a document often attached as a separate piece of
paper. Webster's at 1953. An amendment is defined as an
alteration effected by the process of amending. Id. at 68. An
endorsement is defined as "a provision added to an insurance
contract altering its scope or application that takes precedence
over printed portions of the policy in conflict therewith." Id.
Although these terms as written are not ambiguous, there is no
itemized list of attached documents or other means within the
policy terms that would allow us to determine whether the
information sheet fell into any of these categories when the
policy issued. Paul Revere strenuously argues that the sheet is
none of the listed types of documents, but we are not persuaded that they are correct. In
fact, from what we know about the document, it appears that it
could fall squarely within the above definition of endorsement.
Indeed, statements of Paul Revere representatives made in letters
and in court highlight the possibility that the information sheet
could fall within each of the specified categories. See Def.'s
Exh. G (appearing to refer to the information sheet as an
amendment); Def.'s Exh. H at 5, 1. 15 (referring to information
sheet as a rider); Pl.'s Exh. E (referring to the information
sheet as an endorsement). As a result, we conclude that the
contract is ambiguous on the issue of whether the information
sheet is among the documents making up the totality of the
agreement. Extrinsic evidence is necessary to determine whether
the parties intended the policy to include the terms referenced
within the sheet. The motion for a declaration that the policy is
unambiguous is accordingly denied, as is the request to bar parol
Based on the foregoing analysis, Paul Revere's motion for a
declaration and related request to bar the admission of all parol
evidence are denied.