American Home Assurance Company v. Taylor

Appellate Court of Illinois

American Home Assurance Company v. Taylor

DecidedJune 10, 2010

Docket1-08-3169 Rel

StatusPublished

This text of American Home Assurance Company v. Taylor (American Home Assurance Company v. Taylor) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

American Home Assurance Company v. Taylor, (Ill. Ct. App. 2010).

Pincite

Opinion

Fourth Division June 10, 2010

No. 1-08-3169

AMERICAN HOME ASSURANCE COMPANY, ) Appeal from the ) Circuit Court of Plaintiff, ) Cook County. ) v. ) ) NORMAN L. TAYLOR, SEAMUS E. KEENAN, ) KATHLEEN KEENAN, PRO MED PARAMEDIC ) SERVICES, LLC, MIDWEST MEDICAL, INC., d/b/a ) ADVANCED AMBULANCE, f/k/a PRO MED ) PARAMEDIC SERVICES, NATIONAL LIABILITY ) AND FIRE INSURANCE COMPANY, and ACUITY ) INSURANCE COMPANY, ) ) Defendants ) ) (Acuity Insurance Company, ) 06 CH 21355 ) Cross-Plaintiff-Appellant; ) ) National Liability and Fire Insurance Company, ) ) Cross-Defendant-Appellee; ) ) American Home Assurance Company, PRO MED ) PARAMEDIC SERVICES, LLC, Midwest Medical, Inc., ) d/b/a Advanced Ambulance, f/k/a Pro Med Paramedic, ) Services Norman L. Taylor, Seamus E. Keenan, and ) Kathleen Keenan, ) Honorable ) William O. Maki, Defendants). ) Judge Presiding.

JUSTICE NEVILLE delivered the opinion of the court:

This declaratory judgment action involves a dispute between insurance companies insuring 1-08-3169

different parties in a collision involving a car and a medical transport van. National Liability and

Fire Insurance Company (National), which issued the policy covering the van, claimed that the

policy had been cancelled before the accident. Acuity Insurance Company (Acuity), which issued

the policy covering the car, a policy that included an uninsured motorist provision, sought a

judgment declaring that National’s insurance remained in force because National failed to comply

with the notice provisions in the Insurance Code (215 ILCS 5/I et seq. (West 2006)) for cancelling

insurance on medical transport vehicles. The trial court granted National’s motion for summary

judgment. We reverse because we find that the notice provisions in the Insurance Code required

National to send the Illinois Secretary of State notice of cancellation of the insured’s policy.

BACKGROUND

National issued a general liability policy to Pro Med Paramedic Services (Pro Med) in 2005.

The policy included coverage for Pro Med’s vehicles. To purchase the policy, Pro Med obtained a

premium financing loan from First Insurance Funding Corporation (First Insurance). Pro Med

agreed to give First Insurance a power of attorney authorizing First Insurance to cancel the policy

if Pro Med failed to make timely payments on the loan. When Pro Med failed to make the payment

due in March 2006, First Insurance sent Pro Med notice that First Insurance would cancel the policy

unless First Insurance received a payment within 10 days. Pro Med failed to make the payment.

First Insurance sent notice to National cancelling the policy as of April 4, 2006. Despite the

cancellation, Pro Med continued to operate its vehicles on Illinois's roads.

On June 6, 2006, about two months after the date shown on First Insurance’s notice of

cancellation, a Pro Med van, driven by Norman Taylor, collided with a car driven by Seamus

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Keenan. Keenan and his wife, Kathleen, had automobile insurance issued by Acuity. Keenan sued

Taylor and Pro Med to recover for Keenan’s injuries. American Home Assurance Company

(American Home), which insured Taylor’s personal car, initiated this lawsuit by filing an action for

a judgment declaring that it had no duty to defend Taylor against Keenan’s lawsuit. American Home

named both Acuity and National as defendants. The trial court entered a judgment in favor of

American Home on its complaint. American Home's judgment is not at issue in this appeal.

Acuity filed a cross-claim for a judgment declaring that it owed Keenan no coverage under

the uninsured motorist provision of its policy. National responded that it owed Pro Med no coverage

because First Insurance cancelled the policy National issued to Pro Med. Without National’s

insurance, no insurance covered the van, so Acuity, according to National, owed Keenan coverage

under the uninsured motorist provision of its policy.

National admitted, in its answers to discovery, that it did not notify the Illinois Secretary of

State of the cancellation of its policy. Acuity moved for summary judgment on its cross-claim,

arguing that the lack of notice to the Secretary of State rendered the purported cancellation

ineffective. National also moved for summary judgment, contending that it had no duty to notify the

Secretary of State of the cancellation. The trial court granted National’s motion for summary

judgment and denied Acuity’s motion for summary judgment. Acuity now appeals.

ANALYSIS

“Summary judgment is proper where the pleadings, depositions, affidavits and admissions

on file show that there is no genuine issue as to any material fact and that the moving party is entitled

to judgment as a matter of law.” Pajic v. Old Republic Insurance Co., 394 Ill. App. 3d 1040, 1043

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(2009). This appeal presents a question of statutory construction. “Questions of statutory

construction and the satisfaction of statutory requirements are questions of law properly decided on

a motion for summary judgment. [Citation.] We review de novo an order granting summary

judgment, without any deference to the judgment of the circuit court.” Pajic, 394 Ill. App. 3d at 1043.

In construing statutes, we strive to give effect to the intent of the legislature. American

Country Insurance Co. v. Wilcoxon, 127 Ill. 2d 230, 238 (1989). “Courts should first look to the

statutory language as the best indication of the intent of the drafters.” Wilcoxon, 127 Ill. 2d at 238.

However, “[i]t is a basic axiom of statutory construction that in determining the intent of the

legislature, a court may properly consider not only the language of the statute, but also ‘the reason

and necessity for the law, the evils sought to be remedied, and the purpose to be achieved.' "

Wilcoxon, 127 Ill. 2d at 239, quoting Stewart v. Industrial Comm’n, 115 Ill. 2d 337, 341 (1987), and

citing City of Springfield v. Board of Election Commissioners, 105 Ill. 2d 336, 341 (1985).

Acuity claims that the Insurance Code requires notice to a governmental agency, the Illinois

Secretary of State, when a premium finance company cancels insurance for medical transport

vehicles. See 215 ILCS 5/513a11(d) (West 2006). Acuity relies on the Illinois Vehicle Code (625

ILCS 5/1-100 et seq.), which requires special proof of insurance for medical transport vehicles. 625

ILCS 5/8-101.1, 8-102 (West 2006). Acuity points out that insurance policies covering medical

transport vehicles “shall *** contain a provision that the same cannot be cancelled by the company

issuing it without giving ten days notice in writing of such cancellation to the owner and the

Secretary of State.” 625 ILCS 5/8-110 (West 2006). According to Acuity, that restriction “shall

apply” where the premium finance company attempts to cancel an insurance policy. 215 ILCS

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5/513a11(d) (West 2006).

National relies on subsections (1) and (2) of section 8-110 of the Vehicle Code, which

provide as follows:

"Cancellation of insurance policy--Notice. 1. In the event said policy

of insurance be cancelled by the issuing company, or the authority of said

issuing company to do business in the State of Illinois be revoked, the

Secretary of State shall require the owner who filed the same either to furnish

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