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Mathis v. Lumbermen's Mutual Casualty Insurance Co.

December 30, 2004

SANDRA S. MATHIS, PLAINTIFF-APPELLEE,
v.
LUMBERMEN'S MUTUAL CASUALTY INSURANCE COMPANY, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Madison County. No. 02-L-205. Honorable George J. Moran, Jr., Judge, presiding.

The opinion of the court was delivered by: Justice Hopkins

This cause comes before this court on a permissive appeal, pursuant to Supreme Court Rule 308(a) (155 Ill. 2d R. 308(a)), of the following question certified by the trial court:

[9]     "Where a homeowner's insurance policy contains a one[-]year suit[-]filing limitation, can a Department of Insurance administrative regulation, that requires an insurer to advise [the insured] of the number of days the limitations period was tolled under 50 [Ill. Adm. Code] Section 919.80([d])(8)([C]), form the basis of an insurer's alleged waiver of the extended contractual limitation suit[-]filing time period?"

FACTS

The defendant, Lumbermen's Mutual Casualty Insurance Company (Lumbermen's), issued a homeowner's insurance policy to the plaintiff, Sandra Mathis. The policy was effective from June 6, 2000, to June 6, 2001. On July 16, 2000, Mathis's home at 1417 Third Street, Madison, Illinois, was destroyed by fire. Mathis reported her loss to Lumbermen's. By letter dated December 7, 2000, Lumbermen's denied her claim, finding misrepresentation and arson.

On January 31, 2002, Mathis filed a two-count complaint against Lumbermen's, alleging a breach of contract and defamation. On April 1, 2002, Lumbermen's filed a motion to dismiss Mathis's complaint under section 2-619(5) of the Code of Civil Procedure (735 ILCS 5/2-619(5) (West 2002)). Lumbermen's claimed that Mathis's breach-of-contract claim was time-barred because her policy contained a one-year contractual time limitation for filing suit and her complaint was filed beyond the one-year time limitation. The time limitation provision in the policy stated as follows:

"Suit Against Us. No action can be brought unless the policy provisions have been complied with and the action is started within one year of the date of loss.

However, this one[-]year period is extended by the number of days between the date proof of loss is submitted and the date the claim is denied in whole or in part."

The last sentence of the time limitation provision is based upon section 143.1 of the Illinois Insurance Code (215 ILCS 5/143.1 (West 2002)), which provides, in pertinent part:

"Whenever any policy or contract for insurance *** contains a provision limiting the period within which the insured may bring suit, the running of such period is tolled from the date proof of loss is filed, in whatever form is required by the policy, until the date the claim is denied in whole or in part." 215 ILCS 5/143.1 (West 2002).

The record on appeal does not include a record of the hearing on the motion to dismiss. However, Lumbermen's claims, and Mathis does not dispute, that at the hearing on the motion to dismiss Mathis argued that Lumbermen's waived or was estopped from asserting the contractual one-year time limitation because Lumbermen's failed to comply with the Department of Insurance's rules and regulations, specifically, section 919.80(d)(8)(C) of Title 50 of the Illinois Administrative Code, which provides:

"When the period within which the insured may bring suit under a residential fire and extended coverage policy is tolled in accordance with Section 143.1 of the [Illinois Insurance] Code [(215 ILCS 5/143.1 (West 2002))], the company, at the time it denies the claim, in whole or in part, shall advise the insured in writing of the number of days the period was tolled[] and how many days are left before the expiration of the time to bring suit." 50 Ill. Adm. Code §919.80(d)(8)(C) (2002).

In its December 7, 2000, letter, Lumbermen's did not advise Mathis of the number of days the limitation period was tolled or how many days remained before her time to file suit expired.

In the trial court's August 29, 2002, order, the court held that Lumbermen's waived the time limitation provision contained in the insurance policy. Lumbermen's filed a motion to reconsider, which the court denied. Subsequently, on Lumbermen's motion, the court certified the previously stated question, finding that the issue is a matter of law upon which reasonable persons could differ and that the resolution of the issue would materially advance ...


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