Appeal from the United States District Court for the Northern District of Indiana, Lafayette Division. No. 06 C 127-Allen Sharp, Judge.
The opinion of the court was delivered by: Tinder, Circuit Judge.
DATE SUBMITTED JANUARY 24, 2008
Before POSNER, RIPPLE, and TINDER, Circuit Judges.
This case questions the validity under Indiana law of a suicide exclusion clause in a life insurance policy. Dean Officer ("Officer"), as the beneficiary of his wife's life insurance policy, brought this suit against Chase Insurance Life & Annuity Company ("Chase") to recover the face amount of the policy. The district court entered judgment in favor of Chase. We affirm.
Chase issued a life insurance policy to Theresa Officer ("Theresa") in the amount of one million dollars. Officer was named as the beneficiary, and the policy became effective on February 11, 2004. The policy contained a suicide provision limiting the benefits if the insured committed suicide within two years of the effective date of the policy. The Officers paid the premiums due in 2004 and 2005, totaling $540. Sadly, Theresa died of an apparent self-inflicted gunshot wound on January 4, 2006.
Officer sent a claim to Chase in April 2006 as the beneficiary of Theresa's life insurance policy. Chase sent Officer $540, representing the amount the Officers had paid in premiums. Officer filed suit in August 2006 in Jasper County, Indiana, to recover the face value of the million dollar policy. Chase removed the case to the Northern District of Indiana. Officer filed a motion for summary judgment, contending that the suicide provision was ambiguous and constituted an unenforceable forfeiture. The district court denied Officer's motion, finding that as a matter of law the insurance policy was unambiguous, valid, and enforceable. The parties then stipulated that Theresa's death was a suicide and filed an agreed motion for entry of final judgment in Chase's favor, with Officer reserving the right to appeal the denial of his summary judgment motion. The court entered final judgment on the uncontested facts in favor of Chase on July 18, 2007, and Officer now appeals.
Officer appeals the district court's determination that the suicide exclusion clause was unambiguous, valid, and enforceable as a matter of law; the facts are uncon-tested since the parties stipulated that Theresa's death was a suicide. We review pure questions of law de novo. Samuel C. Johnson 1988 Trust v. Bayfield County, Wis., 520 F.3d 822, 828 (7th Cir. 2008); Klein v. DePuy, Inc., 506 F.3d 553, 554 (7th Cir. 2007).
A. Insurance Contract Ambiguity
When sitting in diversity, we must apply the substantive law of the state as we believe the highest court of that state would apply it when faced with the same issue. Allstate Ins. Co. v. Keca, 368 F.3d 793, 796 (7th Cir. 2004). Both parties agree that Indiana law applies here. Officer does not argue that Indiana law prohibits the exclusion of suicide under life insurance policies; Indiana has long permitted exclusions of this type. See, e.g., Nw. Mut. Life Ins. Co. v. Hazelett, 4 N.E. 582 (Ind. 1886) (discussing a suicide exclusion and noting that "[i]tis neither unlawful, nor against public policy, for a contract of life insurance to stipulate that upon certain conditions or contingencies the policy shall become void"); Kunse v. Knights of the Modern Maccabees, 90 N.E. 89, 91 (Ind. App. 1909) (enforcing a suicide exclusion). Instead, Officer argues that the provision is ambiguous and should be construed in his favor. To determine whether Officer is entitled to receive the face amount of the insurance policy, we refer to Indiana's law of contract interpretation. Nat'l Athletic Sportswear, Inc. v. Westfield Ins. Co., 528 F.3d 508, 512 (7th Cir. 2008). An insurance contract is subject to the same rules of interpretation as other contracts under Indiana law. Morris v. Econ. Fire & Cas. Co., 848 N.E.2d 663, 666 (Ind. 2006). "If the language in the insurance policy is clear and unambiguous, then it should be given its plain and ordinary meaning, but if the language is ambiguous, the insurance contract should be strictly construed against the insurance company." Id. Indiana law is clear that an ambiguity does not arise merely because the two parties are able to create different interpretations of the policy language at issue. USA Life One Ins. Co. of Ind. v. Nuckolls, 682 N.E.2d 534, 538 (Ind. 1997). "Rather, the policy is ambiguous only if it is susceptible to more than one interpretation and reasonably intelligent persons would differ as to its meaning." Id. (internal quotation omitted).
Chase's suicide provision states:
We will limit the proceeds we pay under this policy if the insured commits ...