Madison Mutual Insurance Co. v. O'Brien ( 2024 )

2024 IL App (4th) 231370-U FILED
NOTICE
This Order was filed under October 18, 2024
Supreme Court Rule 23 and is
NO. 4-23-1370 Carla Bender
not precedent except in the 4th District Appellate
limited circumstances allowed IN THE APPELLATE COURT Court, IL
under Rule 23(e)(1).
OF ILLINOIS
FOURTH DISTRICT
MADISON MUTUAL INSURANCE COMPANY, ) Appeal from the
Plaintiff-Appellant, ) Circuit Court of
v. ) Tazewell County
JEAN O’BRIEN, Independent Administrator of the ) No. 20MR231
Estate of Carol Weidman, Deceased; CASSANDRA )
WEIDMAN, a Minor by Her Motion and Next Friend; )
KIMBERLY WEIDMAN; SUSAN KING; MISTY ) Honorable
YOUNG; and CAMERON WEIDMAN, ) Paul E. Bauer,
Defendants-Appellees. ) Judge Presiding.
JUSTICE ZENOFF delivered the judgment of the court.
Justices Harris and Knecht concurred in the judgment.
ORDER
¶1 Held: The appellate court reversed the trial court’s grant of summary judgment to the
defendants where a genuine issue of material fact existed as to whether the insured
made a material misrepresentation in her application for insurance. The appellate
court affirmed the trial court’s dismissal of counts III and IV of the insurer’s second
amended complaint with prejudice.
¶2 After a pit bull owned by Carol Weidman (now deceased) attacked Susan King,
Madison Mutual Insurance Company (Madison Mutual) rescinded a homeowners insurance policy
it had previously issued to Carol. Madison Mutual then sought a declaration that rescission of the
policy was proper, asserting that it was void because Carol falsely claimed in her application for
insurance that she owned no dogs. Madison Mutual and defendants—Jean O’Brien (as the
administrator of Carol’s estate (Estate)), Cassandra Weidman, Kimberly Weidman, Susan King,
and Misty Young—filed cross-motions for summary judgment. The trial court denied Madison
Mutual’s motion and granted summary judgment in favor of defendants on the basis that no
evidence established that Carol made a misrepresentation about her ownership of a pit bull. After
Madison Mutual filed an amended complaint raising several policy defenses, the court granted
defendants’ motions to dismiss two of those defenses. Madison Mutual now appeals, arguing that
summary judgment should not have been granted in favor of defendants or, alternatively, the court
erred in dismissing two of the policy defense claims. We affirm in part, reverse in part, and remand.
¶3 I. BACKGROUND
¶4 The following facts are taken from the record, including depositions and documents
attached to the cross-motions for summary judgment. We will supplement the facts as necessary
in our analysis.
¶5 Prior to July 2019, Carol lived in her home with her grandson, Cameron Weidman,
and his pit bull, “Cash.” In July 2019, Cameron left for military boot camp and left Cash with
Carol, who fed and cared for the dog in her home.
¶6 In November 2019, Carol and her daughter, Kimberly, spoke over the phone with
Patty Ledbetter, an employee of Ledbetter Insurance Agency, Inc. (Ledbetter Insurance Agency),
and requested a quote for a homeowners insurance policy.
¶7 At Patty’s deposition, she explained that to prepare a quote, Ledbetter Insurance
Agency used worksheets containing questions tailored to the requested policy type. As part of her
job duties, she would “read through verbatim the questions on the worksheet [to the customer] and
fill out the answers accordingly.” Based upon the given answers, she would prepare a quote, which
would be reviewed by Brian Ledbetter, the owner of Ledbetter Insurance Agency. Once approved
by Brian, she would provide the quote to the customer. If the customer was satisfied with it, Patty
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would prepare an application using the information the customer provided, have the customer sign
the completed application, and submit it to an insurance company.
¶8 One of the insurance companies that Ledbetter Insurance Agency worked with was
Madison Mutual. Pursuant to an “Agency Contract,” Madison Mutual granted Ledbetter Insurance
Agency, as “the Agent,” “full power and authority to receive and accept applications for insurance
covering such classes of risks as [Madison Mutual] may from time to time authorize to be insured,
and at the discretion of [Madison Mutual] to deliver policies and collect funds for [Madison
Mutual].” The Agency Contract further provided that “[t]he Agent may solicit such applications
by such manner, time, and place as is generally considered proper, and all expenses in connection
with solicitations shall be the Agent’s.”
¶9 According to Patty, to obtain a homeowners policy quote for Carol, she asked Carol
questions from the appropriate worksheet and filled out the answers herself. One of the lines on
the questionnaire read:
“ANY DOGS IN HOME Y/N KIND________________.”
On the completed worksheet, “N” was circled, and the line after “KIND” was blank. Patty could
“not remember the conversation” and could not “specifically remember” asking Carol whether
there were any dogs in her home, as she “do[es] 100 of these” questionnaires. However, she stated
there had never been a time when she did not ask the questions on the worksheet, as “the procedure
is to read through the questions.” She affirmed that she went through each question in every section
of the questionnaire. Thus, Patty testified that the conversation would have entailed her asking
whether there were any dogs in the home, as that question was on the worksheet. Patty testified
that, because she circled “N” for the question of whether there were any dogs in the home, she did
not discuss with Carol whether she had any specific breed of dog. She explained that if a person
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told her there was a dog in the home, she would have proceeded to the “next question, what kind
of dog is it,” to “make sure it wasn’t on the no coverage list.” Patty did not show Carol the
completed worksheet.
¶ 10 After providing a quote to Carol, Patty prepared an application for a Madison
Mutual homeowners insurance policy using the information in the worksheet. The application was
five pages long. The heading on the third page read, “Underwriting Information.” The first
question under that heading read, “Do you have a Chow, Pit Bull, Doberman, Rottweiler, Mastiff,
Wolf Hybrid, Presa Canarios, Akita, or Staffordshire Terrier dog?” The answer next to that
question was “No.” Madison Mutual included this question because at that time, it would not allow
coverage if any of those breeds were in the applicant’s home.
¶ 11 On November 15, 2019, Patty presented the prepared application to Carol for her
signature. According to Patty, she gave Carol all the pages of the application except for the
“Underwriting Information” page containing the question about dog breeds. Above the signature
lines on the last page were the following paragraphs:
“I have read this application all [sic] information contained herein is correct.
If this application contains a material misrepresentation, I fully understand that the
Company may rescind this policy as of the effective date of the application and
declare this policy void from its inception and/or cancel any and all coverage. It is
further understood that this application is a part of the policy when issued and that
[it] is intended that the Company shall rely on the contents of this application in
issuing any policy of insurance or renewal.
***
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I understand that none of the coverages noted on this application is [sic] in
effect unless (1) the application Is [sic] signed by an agent of [Madison Mutual]
and (2) the policy applied for is issued by [Madison Mutual].”
Carol signed the application in Patty’s presence. Brian’s signature appeared next to the line that
read, “Producer’s Signature” and under a paragraph that read, inter alia, “The applicant has been
asked to provide all of the information requested on this application and all of the information
provided the applicant has been set forth herein.”
¶ 12 Madison Mutual issued a homeowners insurance policy to Carol, which was
effective November 14, 2019, to November 14, 2020. The policy included the following relevant
provisions. Under the “Concealment Or Fraud” section, the policy stated:
“We provide coverage to no ‘insureds’ under this policy if, whether before
or after a loss, an ‘insured’ has:
1. Intentionally concealed or misrepresented any material fact or
circumstance;
2. Engaged in fraudulent conduct; or
3. Made false statements; [sic]
relating to this insurance.”
Under the “Duties After ‘Occurrence’ ” section, the policy provided, inter alia:
“In case of an ‘occurrence[,’] you or another ‘insured’ will perform the
following duties that apply. We have no duty to provide coverage under this policy
if your failure to comply with the following duties is prejudicial to us. You will
help us by seeing that these duties are performed:
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1. Give written notice to us or our agent as soon as is practical, which sets
forth:
a. The identity of the policy and the ‘named insured’ shown in the
Declarations;
b. Reasonably available information on the time, place and
circumstances of the ‘occurrence’; and
c. Names and addresses of any claimants and witnesses[.]”
The policy defined “occurrence” as “an accident *** which results, during the policy period, in
*** bodily injury.”
¶ 13 On March 30, 2020, Cash attacked Carol’s granddaughter, Cassandra, resulting in
injuries to her. Carol did not report the attack to Madison Mutual.
¶ 14 Another attack occurred on September 18, 2020, when Cash bit Carol’s neighbor,
Susan, and Cameron’s mother, Misty. On that date, Cash was tethered in Carol’s yard, but the
cable was long enough to allow him to reach Susan while she was emptying her trash. While Susan
and Misty were outside, Cash approached Susan and bit her right calf, resulting in a “very bad
wound.” Cash then bit Misty, resulting in lacerations to her right calf and inner thigh.
¶ 15 On October 8, 2020, Madison Mutual sent Carol a letter pertaining to “a bodily
injury sustained by Cassandra Weidman *** on March 30, 2019.” In the letter, Madison Mutual
explained that it learned from an attorney representing Cassandra that Cassandra had been bitten
by Cash at Carol’s residence on March 30. Madison Mutual confirmed the attack through records
obtained from Tazewell County Animal Control, which also indicated that Carol was Cash’s
registered owner. The letter noted the attorney’s correspondence “was the first notice or contact
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that we received at Madison Mutual from anyone regarding this incident” and that an investigation
was underway.
¶ 16 On October 28, 2020, Madison Mutual issued a “Notice of Rescission of
Homeowners Policy” to Carol. The notice stated that Carol’s homeowners policy was being
rescinded “based upon a material misrepresentation made by yourself in the application process.”
Specifically, Madison Mutual claimed Carol failed to disclose she had a pit bull in her home by
answering “no” when asked if she had any dogs. Madison Mutual further noted it would not have
issued the policy had it known Carol owned a pit bull. Accordingly, Madison Mutual rescinded
the homeowners insurance policy.
¶ 17 On October 29, 2020, Madison Mutual filed a single-count complaint against
defendants seeking a declaration that its rescission of Carol’s policy was valid. On March 31, 2022,
Jean O’Brien, as the administrator of the Estate, was substituted for Carol following her death.
¶ 18 On September 19, 2022, Madison Mutual filed a motion for summary judgment,
arguing that it properly rescinded the policy because it was “uncontroverted that Carol Weidman
made a false statement or a material misrepresentation when she informed Patty Ledbetter that no
dog was residing in the home during the course of the homeowners insurance application process.”
¶ 19 On October 14, 2022, Susan filed her response and cross-motion for summary
judgment. She argued there was “no competent evidence in the record” that Carol denied having
a dog in her home, as the only evidence suggesting as much was Patty’s testimony that she asks
everyone each question on the Ledbetter Insurance Agency worksheet. Susan further argued that
Carol would not have been aware she was signing an application containing inaccurate information
because Patty did not show her the page containing the incorrect information. Susan attached to
her motion for summary judgment an affidavit from Kimberly. Therein, Kimberly claimed that
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during the application process, Patty “never asked us about pets or animals, including dogs, that
were living in [Carol]’s home or were owned by [her].” Carol’s Estate filed a similar response and
cross-motion for summary judgment. Misty adopted the Estate’s response and motion. Cassandra
adopted the responses filed by Susan and the Estate.
¶ 20 On October 28, 2022, the trial court held a hearing on the cross-motions for
summary judgment. Madison Mutual argued that rescission of the policy was proper because
Carol’s application contained a material misrepresentation that was attributable to her even if Patty
never asked about dog ownership, since Carol ultimately signed the application. Defendants
responded that there was no “competent evidence” that Carol made a false representation.
¶ 21 On November 1, 2022, the trial court entered its order denying Madison Mutual’s
motion for summary judgment and granting the cross-motions for summary judgment filed by
Susan, Misty, and the Estate. The court determined that there was “insufficient evidence” that
Carol “made any false statements of material fact” in her application for insurance, and therefore,
Madison Mutual’s rescission of her policy was improper.
¶ 22 The trial court denied Madison Mutual’s subsequent motion for reconsideration but
allowed it to amend its complaint. On February 13, 2023, Madison Mutual filed an amended
complaint, adding counts II and III, which alleged a reservation of rights. In count II, Madison
Mutual asserted that Cassandra was excluded from coverage for the March 30, 2020, attack,
because she was a household resident to whom coverage did not extend under the terms of the
policy. In count III, Madison Mutual alleged it had no obligation to cover the September 18, 2020,
attack because Carol failed to provide appropriate notice of the March 30, 2020, attack.
Specifically, Madison Mutual noted that the policy required Carol to provide written notice of an
occurrence “ ‘as soon as is practical.’ ” Madison Mutual alleged that Carol breached that provision
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by failing to provide notice of the March 2020 attack until after the September 2020 attacks.
Madison Mutual further asserted that, had Carol properly provided notice of the March 2020
attack, it would have learned that she owned a prohibited dog and canceled the policy before the
September 2020 attacks.
¶ 23 Susan moved to dismiss, alleging that count III failed to state a legally recognized
cause of action and amounted to an improper retroactive cancelation of the policy. The trial court
dismissed count III with leave for Madison Mutual to replead.
¶ 24 Madison Mutual subsequently filed a second amended complaint, which included
the prior count II, reasserted count III, and added count IV. Count IV alleged that Cameron, who
was added as a defendant, was excluded from coverage for a lawsuit Susan brought against him
related to the September 2020 attack because he was not a resident of Carol’s home. In connection
with counts III and IV, Madison Mutual again alleged that Carol breached the policy by failing to
provide notice of the March 2020 attack until after the September 2020 attacks, which prevented
Madison Mutual from discovering that she owned a prohibited dog and canceling the policy prior
to the September 2020 attack. Susan moved to dismiss counts III and IV, reasserting that those
claims did not allege cognizable policy defenses but sought “retroactive cancellation of the
policy.” The record reflects that the trial court dismissed counts III and IV with prejudice pursuant
to section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 2022)). In its order, the
court made findings pursuant to Illinois Supreme Court Rule 304(a) (eff. Mar. 8, 2016) that there
was no just reason to delay enforcement or appeal of either the order dismissing counts III and IV
or its order granting summary judgment to defendants on count I.
¶ 25 This appeal followed.
¶ 26 II. ANALYSIS
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¶ 27 A. Summary Judgment
¶ 28 On appeal, Madison Mutual first argues that the trial court erred in denying its
motion for summary judgment and granting summary judgment in favor of defendants. It argues
there is no genuine issue that it issued a policy to Carol due to a material misrepresentation in her
application for insurance, and therefore, rescission of her policy was proper. Susan and Misty were
the only defendants to file appellee briefs. They argue that the court properly granted summary
judgment in defendants’ favor because there is no evidence that Carol ever denied having a pit bull
in her home. We note that, while the remaining defendants filed no briefs, the record in this case
is simple, and we are able to decide the issues on appeal without the aid of their briefing. See First
Capitol Mortgage Corp. v. Talandis Construction Corp., 63 Ill. 2d 128, 133 (1976).
¶ 29 The grant of summary judgment is a drastic remedy, and thus, it should be granted
only when the right of the moving party is clear and free from doubt. Mashal v. City of Chicago,
2012 IL 112341, ¶ 49. Summary judgment is appropriate when “the pleadings, depositions, and
admissions on file, together with the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a judgment as a matter of law.” 725 ILCS
5/2-1005(c) (West 2022). A “genuine issue of material fact” exists when there is a dispute as to
the material facts or, if the material facts are undisputed, reasonable persons could draw different
inferences from those undisputed facts. Mashal, 2012 IL 112341, ¶ 49. “ ‘Genuine’ means there is
evidence to support the position of the nonmoving party.” Pekin Insurance Co. v. Adams, 343 Ill.
App. 3d 272, 275 (2003). “The purpose of summary judgment is not to try a question of fact, but
to determine whether a genuine issue of material fact exists.” Illinois State Bar Ass’n Mutual
Insurance Co. v. Law Office of Tuzzolino & Terpinas, 2015 IL 117096, ¶ 14. Where parties file
cross-motions for summary judgment, they agree that the case involves only a question of law and
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invite the trial court to decide the issues based on the record. Country Mutual Insurance Co. v.
Oehler’s Home Care, Inc., 2019 IL App (4th) 190080, ¶ 55. However, when parties file cross-
motions for summary judgment, the trial court is not obligated to grant one of the motions. Country
Mutual Insurance Co., 2019 IL App (4th) 190080, ¶ 55; see Kotte v. Normal Board of Fire &
Police Commissioners, 269 Ill. App. 3d 517, 520 (1995) (“The fact that both parties have filed
motions for summary judgment does not necessarily mean there is no genuine issue of material
fact.”). Notably, “if reasonable people could draw different inferences from the undisputed facts,
summary judgment is inappropriate.” Country Mutual Insurance Co., 2019 IL App (4th) 190080,
¶ 55 (quoting Travelers Property Casualty Co. of America v. ArcelorMittal USA Inc., 2019 IL App
(1st) 180129, ¶ 11). When determining whether a genuine issue of material fact exists, a court must
view the evidence in the light most favorable to the nonmoving party and strictly against the
moving party. Country Mutual Insurance Co., 2019 IL App (4th) 190080, ¶ 55. We review the
entry of summary judgment in favor of a party de novo. Illinois State Bar Ass’n Mutual Insurance
Co., 2015 IL 117096, ¶ 14.
¶ 30 Section 154 of the Illinois Insurance Code (215 ILCS 5/154 (West 2022)) provides,
in part:
“No misrepresentation or false warranty made by the insured or in his behalf
in the negotiation for a policy of insurance, or breach of a condition of such policy
shall defeat or avoid the policy or prevent its attaching unless such
misrepresentation, false warranty or condition shall have been stated in the policy
or endorsement or rider attached thereto, or in the written application therefor. No
such misrepresentation or false warranty shall defeat or avoid the policy unless it
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shall have been made with actual intent to deceive or materially affects either the
acceptance of the risk or the hazard assumed by the company.”
This section establishes a two-pronged test for determining whether an insurance policy may be
rescinded. Illinois State Bar Ass’n Mutual Insurance Co., 2015 IL 117096, ¶ 17. “First, the
statement must be false, and second, it either must have been made with an actual intent to deceive
or must ‘materially affect the acceptance of the risk or hazard assumed by the insurer.’ ” Illinois
State Bar Ass’n Mutual Insurance Co., 2015 IL 117096, ¶ 17 (quoting Golden Rule Insurance Co.
v. Schwartz, 203 Ill. 2d 456, 464 (2003)). Because the statute is written in the disjunctive, a policy
can be defeated either when there is an actual intent to deceive or if a material misrepresentation
affects the acceptance of the risk or the hazard assumed by the insurer. Illinois State Bar Ass’n
Mutual Insurance Co., 2015 IL 117096, ¶ 17. Importantly, if the misrepresentation “materially
affects the insurer’s acceptance of the risk, it does not matter that one of the parties, or an insured,
might not have been to blame for the misrepresentation.” Illinois State Bar Ass’n Mutual Insurance
Co., 2015 IL 117096, ¶ 17. Thus, even an innocent misrepresentation permits rescission. Illinois
State Bar Ass’n Mutual Insurance Co., 2015 IL 117096, ¶ 17. Accordingly, an insurer need not
prove that a misrepresentation was made with the intent to deceive if the misrepresentation was
material to the risk it assumed. Illinois State Bar Ass’n Mutual Insurance Co., 2015 IL 117096,
¶ 17.
¶ 31 Madison Mutual argues that the trial court erred in denying its motion for summary
judgment and granting summary judgment in favor of defendants because the record established
that Carol’s application for insurance indicated that she did not have a pit bull when in fact she
did. Madison Mutual contends that this misrepresentation was material, as it issued a homeowners
insurance policy to Carol even though, normally, it would not insure any individuals who had pit
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bulls in their homes. Defendants respond that no evidence definitively established that Carol made
a misrepresentation, and therefore, the grant of summary judgment in their favor was proper.
Specifically, defendants contend that the “only evidence” that might support a determination that
Carol made a misrepresentation about owning dogs was Ledbetter’s testimony that there has never
been a time when she had not asked all the questions on the Ledbetter Insurance Agency
questionnaire. Defendants emphasize, however, that Patty could not “specifically remember”
asking Carol whether she had dogs. By contrast, they argue, Kimberly’s affidavit explicitly noted
that Patty “never asked us about pets or animals, including dogs, that were living in [Carol]’s home
or were owned by [her].” According to defendants, because Kimberly’s affidavit was definite and
“unrebutted,” no reasonable inference could be made that Carol misrepresented her pit bull
ownership.
¶ 32 We reject defendants’ argument. Contrary to their assertions, the issue of whether
Carol misrepresented her pit bull ownership remains in dispute. Initially, we note that the parties
essentially argue divergent inferences that can be drawn from the evidence presented in the cross-
motions for summary judgment. Importantly, neither Kimberly’s affidavit nor Patty’s deposition
made any explicit assertion as to whether Carol misrepresented owning a pit bull. Kimberly’s
affidavit stated only that Patty never asked whether there were any dogs in Carol’s home. Patty,
in turn, testified that she could not “specifically remember” asking Carol whether there were any
dogs in her home, but that (1) she always asked every question on the questionnaire worksheet,
which includes a question about dogs, and (2) that question was answered in the negative on the
worksheet. The parties dispute the import of this evidence, with defendants arguing that it can be
reasonably inferred that Carol made no misrepresentation about her dog ownership, while Madison
Mutual argues that it can be reasonably inferred that Carol misrepresented whether she owned a
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dog. However, whether Patty asked if Carol had a dog in her home does not necessarily resolve
the issue of whether Carol actually misrepresented having a dog in her home—let alone render it
an undisputed fact. See Beaman v. Freesmeyer, 2021 IL 125617, ¶ 72 (“Where a reasonable person
could draw divergent inferences from the undisputed material facts or where there is a dispute as
to a material fact, summary judgment should be denied and the issue decided by the trier of fact.”).
¶ 33 Indeed, the parties do not even agree as to whether Patty asked Carol if she owned
a dog. Notably, defendants attempt to portray Kimberly’s affidavit as more reliable than Patty’s
deposition testimony. They contend that Kimberly’s affidavit was more conclusive in stating Patty
did not ask Carol about her dog ownership and thus refuted Patty’s testimony that it was her typical
practice to ask every question on the questionnaire to each customer. Defendants’ argument,
however, amounts to no more than an invitation to make credibility findings and weigh competing
pieces of evidence. Contrary to defendants’ argument, “a court cannot make credibility
determinations or weigh evidence in deciding a summary-judgment motion.” Coole v. Central
Area Recycling, 384 Ill. App. 3d 390, 396 (2008). Moreover, defendants’ position disregards that,
when determining whether a genuine issue of material fact exists, a court must view the evidence
in the light most favorable to the nonmoving party and strictly against the moving party. Country
Mutual Insurance Co., 2019 IL App (4th) 190080, ¶ 55.
¶ 34 Here, although Kimberly claimed Patty did not ask Carol about any dogs in her
home, Patty testified that there has never been a time in which she did not ask every question on
the worksheet, including the question about dog ownership. In reviewing defendants’ motion for
summary judgment, viewing the evidence in the light most favorable to Madison Mutual as the
nonmoving party, we conclude that the trial court erred in granting defendants’ motion, as a
genuine issue of material fact exists as to whether Carol misrepresented her ownership of a pit
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bull. See Gulino v. Economy Fire & Casualty Co., 2012 IL App (1st) 102429, ¶ 24 (genuine issue
of material fact existed as to whether structural damage at insured’s residence occurred suddenly
or over time, where insurer’s expert assumed that heavy paper and debris likely caused the
basement ceiling to bend, but insured’s affidavit stated he never saw any bowing of the ceiling in
the time leading up to the collapse).
¶ 35 This conclusion does not end our analysis, however. Madison Mutual further argues
that, even if there was a genuine issue of fact as to whether Carol personally told Patty she did not
have a pit bull, the trial court nevertheless should have granted its motion for summary judgment.
It highlights the language of section 154 of the Insurance Code, which provides, in part, that a
policy can be defeated if a material misrepresentation is made “by the insured or in his behalf.”
215 ILCS 5/154 (West 2022). On appeal, Madison Mutual contends that whether the
misrepresentation about Carol’s dog ownership was made by Carol or Patty “is irrelevant”
because, even if Carol did not explicitly claim she did not have a pit bull, that assertion could be
imputed to her because Patty was acting on her behalf as “her broker.”
¶ 36 Defendants respond that Madison Mutual is barred from raising this argument on
appeal because it “did not raise any ‘agency’ theory of imputed liability” in its motion for summary
judgment or at the hearing on the motion. Instead, defendants argue, Madison Mutual “relied
entirely upon the theory that either (1) Carol Weidman lied to the agent when she was asked
whether there were any dogs in the home, or (2) Carol Weidman adopted and affirmed the absence
of a dog in the house when she signed the application.” Madison Mutual contends that it did raise
this theory, as it (1) alleged in its complaint that Carol contacted Ledbetter Insurance Agency, “an
independent insurance broker,” for a homeowners insurance quote; (2) “included the relevant
language from Section 154 of the Insurance Code (215 ILCS 5/154 (West 2022)) regarding
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misrepresentation made [sic] on ‘behalf’ of the insured” in its motion for summary judgment;
(3) cited case law holding that misrepresentations can be made on an insured’s behalf; (4) stated
at the hearing on its motion for summary judgment that Madison Mutual would not have issued
the policy had it “been apprised by this independent insurance agency through the application
process involving Carol Weidman that there was a dog”; and (5) argued in its motion to reconsider
the trial court’s summary judgment order that Ledbetter Insurance Agency was an insurance
broker, and therefore, Carol’s agent.
¶ 37 Madison Mutual’s arguments are unavailing. First, although Madison Mutual
referenced Ledbetter Insurance Agency as being an independent broker in its complaint,
defendants did not admit that fact in their answers. Nor do we see any such admission in the record.
Indeed, the Estate’s cross-motion for summary judgment refers to Patty as an “insurance agent,”
not a broker.
¶ 38 Additionally, while Madison Mutual quoted the language of section 154 and cited
Illinois State Bar Ass’n Mutual Insurance Co., these citations were not in support of any theory
that rescission of the homeowners policy was warranted due to a misrepresentation made on behalf
of Carol. Instead, after quoting the statutory language, Madison Mutual argued only that Carol
“affirmatively told Patty *** that there were no dogs within the home” and that Carol “made a
false statement or a material misrepresentation” in doing so. Similarly, beyond citing Illinois State
Bar Ass’n Mutual Insurance Co. for boilerplate summary judgment principles, Madison Mutual
referenced that case only for the proposition that a misrepresentation need not be made with the
intent to deceive for rescission to be proper. See Illinois State Bar Ass’n Mutual Insurance Co.,
2015 IL 117096, ¶ 17. We further note that to the extent Illinois State Bar Ass’n Mutual Insurance
Co. noted that misrepresentations may be made on behalf of an insured, the circumstances in that
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case were distinguishable. There, the supreme court held that rescission of a legal malpractice
insurance policy was proper where one insured attorney, unbeknownst to the other insured
attorneys, made a material misrepresentation during the policy renewal process. Illinois State Bar
Ass’n Mutual Insurance Co., 2015 IL 117096, ¶¶ 5, 7. However, the court reached that
determination after concluding (1) the “innocent insured” doctrine did not apply so as to continue
coverage for the attorneys who made no misrepresentations and (2) although the policy terms
created a separate contract with each insured, the severability clause nevertheless explicitly treated
the “ ‘statements contained in the APPLICATION,’ [as] binding on each insured,” such that the
application could not “be split off from any individual contract.” Illinois State Bar Ass’n Mutual
Insurance Co., 2015 IL 117096, ¶¶ 32, 35. Here, there are no claims that a misrepresentation was
made by another insured individual similarly situated to Carol.
¶ 39 Finally, while Madison Mutual asserts it made references to Ledbetter Insurance
Agency as an “independent insurance agency” during the summary judgment hearing, the record
establishes it did not directly raise any argument that Ledbetter Insurance Agency was acting on
behalf of Carol as an insurance broker and her agent. Instead, when read in context, Madison
Mutual was asserting Ledbetter Insurance Agency was an independent entity that merely
forwarded to it an application containing either (1) an explicit misrepresentation from Carol herself
or (2) an adoption by Carol of a misrepresentation through her signature. At no point prior to the
trial court’s summary judgment ruling did Madison Mutual specifically argue that the
misrepresentation could be attributed to Carol through Ledbetter Insurance Agency’s actions as an
agent. Instead, Madison Mutual raised that argument for the first time in its motion for
reconsideration, wherein it asserted Ledbetter Insurance Agency was “an independent insurance
broker” engaged in the “customary insurance industry practice” of acting “as the agent for the
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insured/applicant when submitting application information to the insurer.” Madison Mutual further
argued that “[g]enerally, an insurance broker is an agent of the insured, not the insurer,” and
therefore, no “knowledge of the interactions” between Ledbetter Insurance Agency and Carol
could be imputed to it. Although Madison Mutual reiterates these arguments on appeal, we
conclude that they have been forfeited, as they were not raised in connection with its motion for
summary judgment but raised for the first time in its motion to reconsider the summary judgment
order. “Arguments raised for the first time in a motion for reconsideration in the circuit court are
forfeited on appeal.” Evanston Insurance Co. v. Riseborough, 2014 IL 114271, ¶ 36; see Riney v.
Weiss & Neuman Shoe Co., 217 Ill. App. 3d 435, 442 (1991) (finding appellants’ argument barred
where it was not submitted to the trial court “until the motion for reconsideration”). This is because
the purpose of a motion to reconsider the entry of summary judgment is not to excuse a failure to
present an issue that was available prior to the court’s ruling but not brought to its attention. Riney,
217 Ill. App. 3d at 442.
¶ 40 Even if Madison Mutual had not forfeited the foregoing arguments, we conclude
that there would have nevertheless existed genuine issues of material fact that would have
precluded summary judgment in its favor, as we see nothing in the record indicating the parties’
agreement that Ledbetter Insurance Agency was an insurance broker and, if so, whether it was
acting as an agent of Carol or Madison Mutual.
¶ 41 An insurance broker is
“one who procures insurance and acts as middleman between the insured and the
insurer, and solicits insurance business from the public under no employment from
any special company, but, having secured an order, places the insurance with the
company selected by the insured, or, in the absence of any selection by him, with
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the company selected by such broker.” Galiher v. Spates, 129 Ill. App. 2d 204, 206-
07 (1970).
While an insurance broker is generally recognized as an agent of the insured, “a broker can act as
the agent of the insurer, or as the agent of both the insurer and the insured.” State Security
Insurance Co. v. Burgos, 145 Ill. 2d 423, 431 (1991). Additionally, “a broker may have apparent
authority to act as the insurer’s agent,” and where a principal creates the appearance of authority,
it is “estopped to deny it to the detriment of a third party.” State Security Insurance Co., 145 Ill.
2d at 431-32. This is because the principal is responsible for the actions undertaken by the agent
under the authority given to it. See Zannini v. Reliance Insurance Co. of Illinois, Inc., 147 Ill. 2d
437, 452 (1992) (discussing Wille v. Farmers Equitable Insurance Co., 89 Ill. App. 2d 377 (1967),
and noting that, where agreement in that case gave agency authority to solicit insurance policy
applications for insurer, agency was agent of insurer, and insurer was “responsible for [agent]’s
actions” related to solicitating insurance). “[T]he person’s conduct, rather than a title, determines
whether he is an agent or a broker in a given transaction.” Zannini, 147 Ill. 2d at 452-53. Whether
an insurance broker is the agent of the insured or insurer is a question of fact but becomes a
question of law if the “evidence shows clearly he is the agent of the insured.” Galiher, 129 Ill.
App. 2d at 207.
¶ 42 The determination of whether a third party is an agent of the insurer or the insured
is critical, as it informs to what extent the insurer may be responsible—if at all—for the third
party’s actions. Of import here, if an agent of an insurer prepares an application for insurance for
an applicant but includes a false answer without collusion between the agent and applicant, “a
provision that the applicant has read the application and verified the answers before signing it will
not save the insurer from being estopped from asserting the false answer as a defense.” Pekin
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Insurance Co., 343 Ill. App. 3d at 278 (genuine issue of material fact existed as to whether
insurance company was estopped from raising a misrepresentation claim where there was evidence
the company’s agent answered “no” to question about whether applicant had a dog on an insurance
application without consulting the applicant); contra Ratliff v. Safeway Insurance Co., 257 Ill.
App. 3d 281, 282-83, 287-88 (1993) (though insured noted her son as a driver of her vehicle in
application for insurance, knowledge of that fact could not be imputed to insurer where insurance
agency failed to list the son as a driver because evidence did not establish that agency was acting
as agent for the insurer). This is because “whether the agent disregards information from the
applicant or does not seek information from the applicant, the agent (on behalf of the principal, the
insurer) manifests an indifference to the information.” Pekin Insurance Co., 343 Ill. App. 3d at
280.
¶ 43 Here, although Madison Mutual claims on appeal that Ledbetter Insurance Agency
was a broker acting as Carol’s agent, it points to no evidence in the record to establish this—let
alone render it an undisputed fact. Indeed, there is evidence in the record that undermines Madison
Mutual’s position that Ledbetter Insurance Agency was acting as Carol’s agent when it prepared
her application. Notably, in its Agency Contract, Madison Mutual granted Ledbetter Insurance
Agency the authority to “solicit such applications [for insurance] by such manner, time, and place
as is generally considered proper.” Additionally, Madison Mutual’s own form application for
insurance indicates that it considered Ledbetter Insurance Agency to be its agent for purposes of
soliciting customers. Specifically, a provision in the application provides that an applicant
understands “that none of the coverages noted on this application is [sic] in effect unless (1) the
application is signed by an agent of [Madison Mutual] and (2) the policy applied for is issued by
[Madison Mutual].” (Emphasis added.) The evidence showed that the only signature beyond
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Carol’s appearing in the application was Brian Ledbetter’s, who was the owner of Ledbetter
Insurance Agency.
¶ 44 Thus, contrary to Madison Mutual’s argument, there remained a genuine issue of
material fact regarding whether Ledbetter Insurance Agency was acting as Carol’s or Madison
Mutual’s agent when it prepared Carol’s application for insurance. Accordingly, we reject
Madison Mutual’s assertion that as a matter of law the misrepresentation of Carol’s dog ownership
could be attributed to Carol. Accordingly, we determine that the trial court did not err in denying
Madison Mutual’s motion for summary judgment.
¶ 45 B. Dismissal of Counts III and IV
¶ 46 Next, Madison Mutual argues that the trial court erred in dismissing counts III and
IV of its second amended complaint with prejudice. It contends that it pled valid policy defenses
based on Carol’s failure to comply with the policy’s notice provision relative to the March 2020
attack. In making this argument, Madison Mutual asserts that the policy’s notice provision was not
“occurrence specific” and that it had no duty to provide coverage when it suffered prejudice due
to a “failure to report an occurrence.” Madison Mutual contends it suffered prejudice because
“Carol’s failure to provide notice prevented it from discovering the pit bull and voiding the policy
before the September attacks occurred.” Susan and Misty respond that counts III and IV failed to
state any legally recognized cause of action and amounted to an improper effort to retroactively
cancel the policy.
¶ 47 To support its argument, Madison Mutual points to the “Duties After
‘Occurrence’ ” provision of the policy, which imposes a duty upon an insured to give Madison
Mutual written notice setting forth, inter alia, “[r]easonably available information on the time,
place and circumstances of the ‘occurrence.’ ” That provision further states that Madison Mutual
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has “no duty to provide coverage under this policy” when the insured’s failure to comply with the
described duties causes prejudice.
¶ 48 “A motion to dismiss pursuant to section 2-615 of the Code [of Civil Procedure]
challenges the legal sufficiency of a complaint and asserts that the plaintiff has failed to state a
cause of action.” Village of Kirkland v. Kirkland Properties Holdings Co., 2023 IL 128612, ¶ 44.
When ruling on such a motion, “a court must accept as true all well-pleaded facts and all reasonable
inferences therefrom, to determine whether the complaint’s allegations—construed in the light
most favorable to the plaintiff—are sufficient to establish a cause of action upon which relief may
be granted.” Walworth Investments-LG, LLC v. Mu Sigma, Inc., 2022 IL 127177, ¶ 39. “A court
should not dismiss a complaint pursuant to [section 2-615] unless it is clearly apparent that no set
of facts can be proved that would entitle the plaintiff to recovery.” Rehfield v. Diocese of Joliet,
2021 IL 125656, ¶ 20. The dismissal of a complaint pursuant to section 2-615 is subject to de novo
review. Village of Kirkland, 2023 IL 128612, ¶ 44.
¶ 49 “Additionally, the construction of the provisions of an insurance policy is a question
of law for which our review is de novo.” Pekin Insurance Co. v. Wilson, 237 Ill. 2d 446, 455
(2010). “The rules applicable to contract interpretation govern the interpretation of an insurance
policy.” Sproull v. State Farm Fire & Casualty Co., 2021 IL 126446, ¶ 19. When construing an
insurance policy, the primary objective “is to ascertain and give effect to the intention of the
parties, as expressed in the policy language.” Sproull, 2021 IL 126446, ¶ 19. “The construction
should be a natural and reasonable one.” Sproull, 2021 IL 126446, ¶ 19. Further, “[u]ndefined
terms will be given their plain, ordinary, and popular meaning; i.e., they will be construed with
reference to the average, ordinary, normal, reasonable person.” Sproull, 2021 IL 126446, ¶ 19.
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¶ 50 “If an ambiguity exists, then the interpretation of a document is a question of fact
which cannot be resolved by a section 2-615 motion; rather, the question can only be resolved after
a trial on the merits.” Goddard v. Continental Illinois National Bank & Trust Co. of Chicago, 177
Ill. App. 3d 504, 509 (1988). Ambiguity exists in an insurance policy “only where the policy
language is susceptible to more than one reasonable interpretation.” State Farm Mutual
Automobile Insurance Co. v. Elmore, 2020 IL 125441, ¶ 21.
¶ 51 Madison Mutual’s claim that the trial court erred in dismissing counts III and IV is
unpersuasive. Neither the case authority it cites nor the policy language it relies upon supports the
contention that failing to provide notice of an occurrence to Madison Mutual can preclude coverage
for separate, future occurrences.
¶ 52 As Madison Mutual asserts, “[i]nsurance policy notice provisions impose valid
prerequisites to insurance coverage.” West American Insurance Co. v. Yorkville National Bank,
238 Ill. 2d 177, 185 (2010). “A policy provision requiring notice ‘as soon as practicable’ means
notice must be given ‘within a reasonable time.’ ” West American Insurance Co., 238 Ill. 2d at 185(quoting Country Mutual Insurance Co. v. Livorsi Marine, Inc., 222 Ill. 2d 303, 311 (2006)). “The
purpose of a notice requirement in an insurance policy is to enable the insurer to make a timely
and thorough investigation of the insured’s claim.” (Internal quotation marks omitted.) American
States Insurance Co. v. National Cycle, Inc., 260 Ill. App. 3d 299, 310-11 (1994). Such a provision
“is a reasonable policy requirement, one which affords the insurer an opportunity to make a timely
and thorough investigation and to gather and preserve possible evidence.” Barrington
Consolidated High School v. American Insurance Co., 58 Ill. 2d 278, 281 (1974). As Madison
Mutual also notes, case authority states that “[w]here the insured fails to comply with a notice
provision, the insurer will be relieved from its duties to defend and indemnify under the policy.”
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Northbrook Property & Casualty Insurance Co. v. Applied Systems, Inc., 313 Ill. App. 3d 457, 464
(2000).
¶ 53 Significantly, however, each case Madison Mutual cites in support of its argument
involves circumstances where an insurer sought to deny coverage for the same occurrence of which
it allegedly did not receive timely notice from its insured. See Northbrook Property & Casualty
Insurance Co., 313 Ill. App. 3d at 463 (where insurer sought a judicial declaration that it had no
duty to defend or indemnify the insured in litigation because the insured failed to provide timely
notice of that litigation); Country Mutual Insurance Co., 222 Ill. 2d at 306-07 (involving the
insurer’s claim that it had no obligation to defend or indemnify the insured in connection with a
lawsuit because the insured failed to inform the insurer of the lawsuit for more than 20 months);
American States Insurance Co., 260 Ill. App. 3d at 301 (the insurer sought a declaration that it had
no duty to defend or indemnify the insured for claims arising out of a motorcycle accident due to
the insured’s failure to provide timely notice of such claims); Barrington, 58 Ill. 2d at 279-81(claim by an insurer that it had no duty to defend the insureds in a personal injury suit where it did
not receive timely notice of the accident upon which the suit was based); West American Insurance
Co., 238 Ill. 2d at 181 (the insurer sought to deny coverage for defamation lawsuit based on lack
of timely written notice of the lawsuit by the insured); American Country Insurance Co. v. Bruhn,
289 Ill. App. 3d 241, 243-44 (1997) (automobile insurer asserted it had no duty to defend the
insured regarding claims that arose out of a hit-and-run accident due to the insured providing
untimely notice of the accident); Equity General Insurance Co. v. Patis, 119 Ill. App. 3d 232, 234-
35 (1983) (the insurer asserted it had no duty to defend insured against a malpractice claim based
on untimely notice of that claim); State Security Insurance Co., 145 Ill. 2d at 427-28 (the insurer
sought a declaration that it had no duty to defend or indemnify the insureds in a wrongful death
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action resulting from a shooting due to the insurer not receiving timely notice of the shooting).
Thus, while the cited case authority clearly supports an argument that Carol’s failure to provide
notice of the March 2020 attack is a defense to coverage for claims arising out of that particular
attack, none of the cases Madison Mutual relies upon support the proposition that Carol’s failure
to provide notice of the March 2020 attack absolves Madison Mutual of any duties under the policy
for separate, future occurrences.
¶ 54 In arguing that it raised valid policy defenses, Madison Mutual broadly interprets
the policy language stating that (1) an insured has a duty after “an ‘occurrence’ ” to provide written
notice to the insurer as soon as practical and (2) Madison Mutual has “no duty to provide coverage
under this policy” when the insured’s failure to comply with that duty causes prejudice.
Specifically, Madison Mutual interprets this language to mean that if it suffers prejudice due to a
lack of timely notice, it will have no duty to provide coverage for any subsequent occurrence, and
not just the specific occurrence of which it was not timely notified. This is not a reasonable
interpretation of the policy language.
¶ 55 The policy provision at issue concerns duties relative to individual occurrences and
sets forth duties that are consistent with the purpose behind policy notice provisions, i.e., allowing
the insurer an opportunity to timely investigate the individual occurrence and to gather and
preserve possible evidence related to the individual occurrence. In particular, the policy language
requires that the insured’s written notice include information on the time, place, and circumstances
of the occurrence and the names and addresses of any claimant or witness. Additional
responsibilities for an insured under the “Duties After ‘Occurrence’ ” provision are as follows:
“2. Cooperate with us in the investigation, settlement or defense of any
claim or suit;
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3. Promptly forward to us every notice, demand, summons or other process
relating to the ‘occurrence’;
4. At our request, help us:
a. To make settlement;
b. To enforce any right of contribution or indemnity against any
person or organization who may be liable to an ‘insured’;
c. With the conduct of suits and attend hearings and trials; and
d. To secure and give evidence and obtain the attendance of
witnesses[.]”
¶ 56 When read as a whole, the language of the “Duties After ‘Occurrence’ ” provision
supports a finding that it is occurrence-specific. The duties listed are a prerequisite to coverage for
the specific occurrence that triggers those duties, not a prerequisite to coverage for separate, future
occurrences. Accepting Madison Mutual’s interpretation of the policy language would allow it to
deny coverage for every subsequent occurrence that might arise under the policy. Here, it alleged
that it was prejudiced by Carol’s failure to timely notify it of the March 2020 attack due to its
inability to discover the pit bull and void the policy before the subsequent attacks in September
2020. Madison Mutual emphasizes on appeal that there were three occurrences in this case that all
involved attacks by the same pit bull. However, because Madison Mutual alleges prejudice based
on its inability to cancel the policy after learning of the first attack, the same logic would support
the denial of coverage for any subsequent occurrence, no matter the underlying facts. This
excessively broad interpretation of the policy is not supported by the policy’s plain language and
is not a reasonable interpretation.
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¶ 57 We conclude that although a failure to provide timely notice of the March 2020
attack would serve as a defense to coverage for that particular attack, that same lack of notice does
not provide a basis for denying coverage for the subsequent September 2020 attacks. Under the
circumstances presented, we hold that Madison Mutual failed to establish that the trial court erred
in dismissing counts III and IV of the second amended complaint with prejudice and affirm the
court’s dismissal order.
¶ 58 III. CONCLUSION
¶ 59 For the reasons stated, we reverse the trial court’s entry of summary judgment in
favor of defendants, affirm the court’s dismissal of counts III and IV of the second amended
complaint, and remand for further proceedings.
¶ 60 Affirmed in part and reversed in part; cause remanded.
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