{ "id": 3607477, "name": "TINA LEDBETTER, a Minor by her Father and Next Friend, Jerry Ledbetter, Plaintiff-Appellee, v. CLARENCE ALLANDSLEE, Defendant and Third-Party Plaintiff-Appellee (Lincoln Towers Insurance Agency, Inc., et al., Third-Party Defendants-Appellees; Inter-Insurance Exchange of the Chicago Motor Club, Third-Party Defendant-Appellant)", "name_abbreviation": "Ledbetter v. Allandslee", "decision_date": "1987-02-05", "docket_number": "No. 85\u20143580", "first_page": "163", "last_page": "171", "citations": [ { "type": "official", "cite": "153 Ill. App. 3d 163" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "427 N.E.2d 127", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "86 Ill. 2d 339", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5468936 ], "opinion_index": 0, "case_paths": [ "/ill-2d/86/0339-01" ] }, { "cite": "260 Ill. App. 369", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5631135 ], "opinion_index": 0, "case_paths": [ "/ill-app/260/0369-01" ] }, { "cite": "216 N.E.2d 3", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1956, "opinion_index": 0 }, { "cite": "69 Ill. App. 2d 270", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 2592674 ], "year": 1956, "opinion_index": 0, "case_paths": [ "/ill-app-2d/69/0270-01" ] }, { "cite": "48 N.E.2d 559", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1966, "opinion_index": 0 }, { "cite": "318 Ill. App. 629", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3399557 ], "year": 1966, "opinion_index": 0, "case_paths": [ "/ill-app/318/0629-01" ] }, { "cite": "414 N.E.2d 500", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "92 Ill. App. 3d 29", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5534046 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/92/0029-01" ] }, { "cite": "453 N.E.2d 826", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "117 Ill. App. 3d 407", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3482197 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/117/0407-01" ] }, { "cite": "267 N.E.2d 734", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1983, "opinion_index": 0 }, { "cite": "130 Ill. App. 2d 980", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 2823247 ], "year": 1983, "opinion_index": 0, "case_paths": [ "/ill-app-2d/130/0980-01" ] }, { "cite": "713 F.2d 254", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1874638 ], "opinion_index": 0, "case_paths": [ "/f2d/713/0254-01" ] }, { "cite": "461 N.E.2d 466", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "opinion_index": 0 }, { "cite": "122 Ill. App. 3d 309", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3522388 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ill-app-3d/122/0309-01" ] }, { "cite": "473 N.E.2d 480", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "129 Ill. App. 3d 952", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3489465 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/129/0952-01" ] } ], "analysis": { "cardinality": 712, "char_count": 18110, "ocr_confidence": 0.751, "pagerank": { "raw": 7.86486014027979e-08, "percentile": 0.45924202530726693 }, "sha256": "2b3802028d16779e2c08abca66106aeb85580ed8572b817304a2da85cb5006b6", "simhash": "1:33df54bcbf677faf", "word_count": 2818 }, "last_updated": "2023-07-14T16:39:45.296283+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "TINA LEDBETTER, a Minor by her Father and Next Friend, Jerry Ledbetter, Plaintiff-Appellee, v. CLARENCE ALLANDSLEE, Defendant and Third-Party Plaintiff-Appellee (Lincoln Towers Insurance Agency, Inc., et al., Third-Party Defendants-Appellees; Inter-Insurance Exchange of the Chicago Motor Club, Third-Party Defendant-Appellant)" ], "opinions": [ { "text": "JUSTICE LINN\ndelivered the opinion of the court:\nThird-party defendant, Inter-Insurance Exchange of the Chicago Motor Club (Exchange), brings this appeal seeking reversal of a trial court\u2019s order granting summary judgment in favor of defendant third-party plaintiff, Clarence Allandslee, and against Exchange. Allandslee filed his third-party action after Exchange refused to defend and/or indemnify Allandslee in a lawsuit brought by plaintiff, Tina Ledbetter. Allandslee had previously purchased an automobile liability insurance policy from Exchange, and an accident resulting in the Ledbetter lawsuit fell within the coverage provided by the policy.\nAfter some preliminary discovery, Allandslee moved for summary judgment claiming that no genuine issue of material.fact existed and that he was entitled to judgment as a matter of law because: (1) Al-landslee had complied with his obligations under the policy by making all of the payments due in a timely fashion; (2) the policy was not effectively cancelled by Exchange; and (3) that as a result, the policy Allandslee purchased from Exchange was in full force and effect at the time of the Ledbetter accident. Thus, according to Allandslee\u2019s summary judgment motion, Exchange was obligated to defend and/or indemnify Allandslee in the Ledbetter lawsuit.\nExchange argued, on the other hand, that it had previously can-celled Allandslee\u2019s insurance policy and that consequently, it owed no duty whatsoever to Allandslee.\nAfter considering the parties\u2019 respective briefs and oral arguments, the trial court ruled in favor of Allandslee and ordered Exchange to defend and/or indemnify Allandslee in the Ledbetter lawsuit.\nExchange now brings this appeal contending: (1) that the trial court erred in finding that Allandslee had paid all of the premiums due Exchange, and (2) that the trial court erred in ruling that the Exchange had not effectively cancelled Allandslee\u2019s insurance policy.\nWe affirm.\nBackground\nIn early April 1979, Allandslee applied for auto liability insurance with the Lincoln Towers Insurance Agency, Inc. (Lincoln). Lincoln is a broker for the \u201cIllinois Automobile Insurance Plan.\u201d Apparently, several insurers have an agreement or plan whereby certain applications for insurance are placed into a pool and thereafter distributed evenly among the insurers. The insurer to which the risk is ultimately assigned provides the auto insurance applied for. Exchange is one of the insurers involved in this plan.\nUpon accepting Allandslee\u2019s application, Lincoln placed it into the pool. Allandslee\u2019s application was then assigned at random to Exchange. In addition to filling out an application, Allandslee also paid Lincoln a premium down payment of $111. As part of the insurer\u2019s agreement, Exchange received a percentage of Allandslee\u2019s $111 down payment.\nOn April 23, 1979, Exchange mailed Allandslee his insurance policy, an account statement, and his premium payment book. Exchange informed Allandslee that he could pay the remainder of his premium in either one lump sum or, in the alternative, in installment payments of $53 each. If Allandslee chose the installment method, his first payment was due on June 23, 1979. However, the policy, the account statement, and the premium payment book failed to contain an address to which Allandslee was to remit his premium payments. In addition, the account statement listed the amounts due as:\nyearly premium $364.00\n(the down payment) cash $111.00\ninstallment charge $10.00\n(total due) $263.00\nThus, the balance due on Allandslee\u2019s policy amounted to $263.00.\nIn the months that followed, Allandslee made the following payments on his insurance policy: $34.55 on June 19, 1979; $34.55 on July 2, 1979; $34.55 on August 8, 1979; $34.55 on September 10, 1979; $34.55 on October 11, 1979; $34.55 on November 8, 1979; $34.55 on December 11, 1979; and $34.55 on January 3, 1980. When Allandslee made these payments, however, he delivered them in person to Lincoln, rather than mailing them directly to Exchange. Lincoln accepted each of the payments, gave Allandslee a receipt, and never informed him of any problem regarding his method of payment.\nIronically, the total paid by Allandslee (through the installments), equalled $276.40. However, because his balance due was $263.00, Al-landslee actually paid more for his insurance policy than was required.\nExchange claims though that Allandslee was obligated to mail his premium installments directly to Exchange. Exchange further asserts that it was never reimbursed for any of the payments that Allandslee paid to Lincoln. That being the case, Exchange argues that it can-celled Allandslee\u2019s policy by mailing him a cancellation notice on July 17, 1979. The cancellation notice, according to Exchange, became effective on July 31, 1979.\nAllandslee, however, contends that he never received the cancellation notice sent by Exchange. Instead, Allandslee continued to make the payments in the months that followed (as set forth above) pursuant to his obligations under the insurance policy.\nOn December 13, 1979, Allandslee was involved in an auto accident in which Tina Ledbetter was injured. Allandslee went to Lincoln and informed them of the accident.\nSoon thereafter, Ledbetter filed suit against Allandslee. Following Exchange\u2019s refusal to defend and/or indemnify Allandslee in that lawsuit, Allandslee filed this third-party action against Exchange.\nDuring the hearings before the trial court, the key issue was whether the evidence presented by Exchange was sufficient to establish that Allandslee\u2019s policy had been effectively cancelled. It appears that Exchange tendered to the trial court documents which purported to be a copy of the cancellation notice sent to Allandslee (taken from microfiche) and a copy of what Exchange claims constitutes proof that a letter by certified mail (containing the cancellation notice) had been sent to Allandslee. In addition, Exchange tendered an affidavit of one of its employees who asserted, essentially, that Allandslee had failed to properly tender the premium payments required by the policy and that as a result, Exchange had cancelled Allandslee\u2019s policy in July.\nThe problem, however, related to the legibility of Exchange\u2019s documents. Although the trial court could read the affidavit with little problem (it was typed), the trial court was unable to determine what Exchange\u2019s cancellation notice read, nor could the trial court decipher those documents relating to the mailing of the certified letter. We note that the trial court gave Exchange two extensions in order to obtain more readable copies of the documents. Notwithstanding this, Exchange was unable to provide documents of any gre\u00e1ter clarity.\nOn November 12, 1985, the trial court granted Allandslee\u2019s summary judgment motion. The trial court found that Exchange had failed to prove that Allandslee\u2019s policy had been effectively cancelled and that Allandslee had tendered all of the premium payments due.\nExchange now brings this appeal.\nOpinion\nAs set forth previously, Exchange raises two arguments in this appeal: (1) that the trial court erred in finding that Allandslee paid all of the premiums due on the policy, and (2) that the trial court erred in finding that Exchange\u2019s cancellation was ineffective.\nI\nWe first address Exchange\u2019s claim that Allandslee failed to pay Exchange all of the premiums due under the policy. Exchange contends that Allandslee made his payments to Lincoln rather than Exchange and that Exchange never received any of Allandslee\u2019s payments other than the initial $111. That being the case, Exchange asserts that Allandslee cannot bring an action based on the policy issued by Exchange for Allandslee has failed to fulfill his chief obligation under the policy, namely, the payment of premiums due.\nIt is well settled in Illinois that all ambiguities in an insurance policy must be resolved in favor of the insured and against the insurer who has drafted it. (Murphy v. Peterson (1984), 129 Ill. App. 3d 952, 473 N.E.2d 480.) Courts are to adopt that construction of a policy which favors the insured and must resolve any uncertainty in the insured\u2019s favor. (Wahls v. Aetna Life Insurance Co. (1983), 122 Ill. App. 3d 309, 461 N.E.2d 466.) In determining whether an ambiguity exists, a court is to look at any evidence that sheds light as to the intent of the parties including the situation of the parties, the purpose of the contract, and the circumstances surrounding the formation of the contract. (Chicago Board Options Exchange, Inc. v. Connecticut General Life Insurance Co. (7th Cir. 1983), 713 F.2d 254.) It has been held that the aforementioned rules are applicable to documents sent by the insurer to the insured where those documents relate to the insurance coverage contracted for. (Farmers Automobile Insurance Association v. Pursley (1971), 130 Ill. App. 2d 980, 267 N.E.2d 734.) In addition, the construction of insurance policies and the documents related thereto are questions of law for the court to decide. Sawyer Fruit & Vegetable Co-operative Corp. v. Lumbermens Mutual Casualty Co. (1983), 117 Ill. App. 3d 407, 453 N.E.2d 826.\nIn the case at bar, Allandslee applied for his insurance policy with Lincoln. At that time, Allandslee paid $111 as a down payment on the policy. Soon thereafter, Exchange, as part of the insurer\u2019s pool agreement, accepted responsibility for Allandslee\u2019s policy and received a percentage of his down payment.\nExchange then mailed Allandslee his policy, the premium payment book, and an account statement. Listed on the account statement was the $111 cash down payment previously paid by Allandslee. Neither the account statement, the premium payment book, nor the policy itself indicated that the only method of acceptable payment was for Allandslee to tender the payments due (after the initial down payment of $111) directly to Exchange. In fact, the premium payment book inferred quite the opposite. The payment stubs that Allandslee retained after making each payment (and which were part of the premium payment book supplied by Exchange) explicitly provided for a \u201cteller\u2019s stamp.\u201d By providing a space for a teller to personally stamp Allandslee\u2019s receipts, it is self-evident that the mailing of the premium payments due to Exchange was not, and could not have been, the only means of payment contemplated by Exchange. A teller can only stamp a customer\u2019s receipt when that customer is personally present before the teller. If the customer simply removed the payment coupon from the premium payment book and mailed it, stamping of the payment stub by a teller would be impossible for the stub would never have left the insured\u2019s possession. Thus, we must reject Exchange\u2019s claim that the premium payment book was unambiguous in requiring Allandslee to make his payments directly to Exchange.\nFurthermore, the account statement sent to Allandslee by Exchange also supports a finding that an ambiguity existed as to where Allandslee was required to make his premium payments. The circumstances surrounding the parties\u2019 transaction indicate that Allandslee made his first payment to Lincoln. Soon thereafter, Exchange mailed an account statement to Allandslee which specifically credited Al-landslee\u2019s account for that first payment. Allandslee then tendered all of the remaining payments, like the first, in person to Lincoln. By crediting Allandslee\u2019s account with the payment made to Exchange, Exchange indicated that it approved, accepted, and credited Al-landslee\u2019s account for any payment made through Lincoln.\nThus, Exchange\u2019s insurance policy and the documents relating thereto are ambiguous with regard to where and how Allandslee was required to make payments in at least three respects: (1) none of the documents indicated in any way that the only method of acceptable payment was for Allandslee to send the payments directly to Exchange; (2) the premium payment book contained payment stubs which specifically provided for a teller to personally stamp each payment stub; and (3) Exchange credited Allandslee\u2019s account with the payment made to Lincoln thereby giving tacit approval to that method of payment. Under these circumstances, we believe that an ambiguity existed as to where, and how, Allandslee was required to make his premium payments. That being the case, we are required to resolve this uncertainty in Allandslee\u2019s favor. (See Wahls v. Aetna Life Insurance Co. (1983), 122 Ill. App. 3d 309, 461 N.E.2d 466.) Accordingly, we agree with the trial court that Allandslee fulfilled his obligations under the insurance policy when, based on the circumstances set forth above, he tendered all of his payments to Lincoln.\nIn addition, although Exchange claims that Allandslee was required to pay for his policy in full within six months (by six payments), the record reveals that Allandslee\u2019s premium payment book contained at least eight coupons and receipts. Each receipt related to a different individual payment and stated \u201cPAYMENT NUMBER [1], [2], [3],\u201d etc. In other words, the premium payment book itself contemplated at least eight payments. Clearly, there is little purpose in providing eight sets of coupons and receipts where only six are applicable. Moreover, nowhere on the account statement is there an indication that the policy was to be paid in full within six months. Based on these facts, we agree with the trial court that an ambiguity existed as to whether Allandslee was required to make six payments (as asserted by Exchange) or eight payments.\nIn sum, we believe that the trial court correctly found that Al-landslee fulfilled his obligations under the insurance policy issued by Exchange. It is evident that an ambiguity existed as to where and how Allandslee was to make his payments as well as the minimum number of payments actually due.\nII\nWe next address Exchange\u2019s claim that the trial court erred in finding that Exchange\u2019s cancellation of Allandslee\u2019s policy was ineffective.\nA notice of cancellation must conform to the applicable provisions in the insured\u2019s policy and cancellation can only be effected through strict compliance therewith. (Conley v. Ratayzcak (1980), 92 Ill. App. 3d 29, 414 N.E.2d 500.) In determining whether notice by an insurer is sufficient to cancel a policy, courts must examine the letter containing the alleged cancellation in its entirety. (Burnett v. Illinois Agriculture Mutual Insurance Co. (1943), 318 Ill. App. 629, 48 N.E.2d 559.) In addition, a defendant-insurer who contends that an insurance policy has been effectively cancelled carries the burden of proof. McNeil v. Allstate Insurance Co. (1966), 69 Ill. App. 2d 270, 216 N.E.2d 3; see also 22 Ill. L. & Prac. Insurance sec. 249 (1956).\nIn the case at bar, paragraph 20 of Exchange\u2019s insurance policy provides:\n\u201cAll notices of cancellation shall include a specific explanation of the reason or reasons for the cancellation.\u201d\nParagraph 20 also requires that Exchange mail the cancellation notice via the United States Post Office. Thus, Exchange is required to prove that its cancellation notice: (1) explained the reason for the cancellation, and (2) was mailed through the United States Post Office.\nWe have carefully and thoroughly examined the document which Exchange claims is a copy of the cancellation notice sent to Allandslee in July 1979. While we are able to read the words \u201cNOTICE OF CANCELLATION\u201d at the top of one document, we cannot, even with the closest examination, decipher the remaining portions of the cancellation notice. The words of the notice are simply too blurry. Consequently, we are unable to determine if Exchange complied with paragraph 20 by identifying the reason or reasons for the cancellation of Allandslee\u2019s policy\nLikewise, the documents tendered by Exchange in support of its assertion that it mailed the cancellation notice to Allandslee are, at the very least, confusing.\nHence, we like the trial court, are unable to determine whether Exchange has complied with its obligations as set forth in paragraph 20. The documents tendered by Exchange as representative of the cancellation notice and proof of mailing are simply illegible. Thus, Exchange has failed to satisfy its burden of proving that it effectively cancelled Allandslee\u2019s policy and, as a result, the policy remained in effect at the time of the accident involving Tina Ledbetter. Exchange is therefore required to defend and/or indemnify Allandslee in that lawsuit.\nAlthough whether an insurer has given a cancellation notice to the insured is sometimes a question of fact for a jury to decide (See, e.g., Great Northern Life Insurance Co. v. Federal Life Insurance Co. (1931), 260 Ill. App. 369), in this case the material facts are undisputed and therefore summary judgment is appropriate. (United Farm Bureau Mutual Insurance Co. v. Elder (1981), 86 Ill. 2d 339, 427 N.E.2d 127.) We note that the trial court gave Exchange two continuances for the specific purpose of allowing Exchange to obtain more legible copies of the alleged cancellation notice. Exchange was unable to provide documents of any greater clarity. Thus, a jury trial is unnecessary for the key fact, namely whether Exchange complied with paragraph 20 of its policy, is revealed by the documents contained in the record before us.\nConclusion\nAccordingly, for the reasons set forth above, we affirm the decision of the trial court awarding summary judgment in favor for Allandslee and against Exchange.\nAffirmed.\nJOHNSON and JIGANTI, JJ., concur.", "type": "majority", "author": "JUSTICE LINN" } ], "attorneys": [ "Christine E. Smith and John J. O\u2019Connor, both of Chicago, for appellant.", "Robert K. Kelty, of Chicago, for appellee Clarence Allandslee." ], "corrections": "", "head_matter": "TINA LEDBETTER, a Minor by her Father and Next Friend, Jerry Ledbetter, Plaintiff-Appellee, v. CLARENCE ALLANDSLEE, Defendant and Third-Party Plaintiff-Appellee (Lincoln Towers Insurance Agency, Inc., et al., Third-Party Defendants-Appellees; Inter-Insurance Exchange of the Chicago Motor Club, Third-Party Defendant-Appellant)\nFirst District (4th Division)\nNo. 85\u20143580\nOpinion filed February 5, 1987.\nRehearing denied March 30, 1987.\nChristine E. Smith and John J. O\u2019Connor, both of Chicago, for appellant.\nRobert K. Kelty, of Chicago, for appellee Clarence Allandslee." }, "file_name": "0163-01", "first_page_order": 185, "last_page_order": 193 }