2012 IL App (1st) 112176
Ill. App. Ct.2012Background
- Edwards, insured by State Farm, had a policy cancelled for nonpayment on Oct 23, 2008 after a balance remained due.
- State Farm provided a cancellation notice stating no coverage between cancellation and any reinstatement and detailing payment deadlines.
- Edwards later attempted late payments after cancellation (Nov 22 and Nov 28) and the policy was reinstated on Nov 28, 2008.
- Edwards was involved in a November 20, 2008 accident while uninsured; she paid the overdue amount and the policy was retroactively reinstated but not retroactively covering the accident period.
- Plaintiff sought summary judgment claiming State Farm impliedly waived cancellation; the circuit court granted judgment for Edwards with damages and fees.
- State Farm appeals, and the appellate court reverses and remands, holding material facts remain for trial and no sufficient evidence of implied waiver.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver of cancellation by post-cancellation payments | Edwards argues State Farm impliedly waived cancellation by accepting late payments. | State Farm argues clear notice denied retroactive coverage and no waiver. | Reversed; no implied waiver as a matter of law; remand for trial on facts. |
Key Cases Cited
- Pekin Insurance Co. v. Harvey, 377 Ill. App. 3d 611 (2007) (insurer need not prove actual receipt of cancellation notice; evidence of waiver issues may depend on facts)
- Shiaras v. Chupp, 61 Ill. 2d 164 (1975) (cancellation defined as unilateral insurer termination before policy end)
- Gurley v. State Farm Mut. Auto. Ins. Co., 101 Ill. App. 3d 619 (1981) (waiver after loss depends on disputed evidence; clear contract language matters)
- Butt v. State Farm Mut. Auto. Ins. Co., 107 Ill. App. 3d 68 (1982) (waiver considerations depend on facts surrounding post-cancellation payments)
- Horace Mann Ins. Co. v. Brown, 13 Ill. App. 3d 330 (1973) (cases treating post-cancellation payments as factors in waiver analysis)
- Van Hulle v. State Farm Mut. Auto. Ins. Co., 44 Ill. 2d 227 (1969) (forfeiture not favored; related waiver considerations in premium acceptance)