Stewart v. Republic Insurance

JUSTICE GREEN delivered the opinion of the court: On February 19, 1992, plaintiff Michael A. Stewart filed suit in the circuit court of McLean County against defendant Republic Insurance Corporation to recover under a dwelling insurance policy issued by defendant for damages plaintiff incurred when his dwelling and contents were destroyed by a fire on September 12, 1991. Defendant answered alleging that the policy in question had been cancelled for nonpayment of premiums before the fire. On December 2, 1993, the court entered summary judgment for defendant. Plaintiff has appealed. We affirm. Section 2 — 1005(c) of the Code of Civil Procedure provides, in part, that the circuit court shall grant summary judgment to a party seeking that relief "if 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 the moving party is entitled to a judgment as a matter of law.” (735 ILCS 5/2 — 1005(c) (West 1992).) Defendant maintains, and the circuit court agreed, that here the record before the circuit court conclusively showed that it properly cancelled plaintiff’s policy before the fire. Plaintiff disagrees, maintaining that the record shows (1) at least a question of fact exists as to whether he received a cancellation notice receipt which was a requirement for cancellation; and (2) defendant failed to mail a copy of a notice of the cancellation to plaintiff’s insurance broker or agent as required by statute to effectuate a valid cancellation. Both issues concern the operation of section 143.14 of the Illinois Insurance Code (Code) which, at all times pertinent, provided: "Notice of cancellation. No notice of cancellation of any policy of insurance, to which Section 143.11 applies, shall be effective unless mailed by the company to the named insured and the mortgage or lienholder, at the last mailing address known by the company. The company shall maintain proof of mailing of such notice on a recognized U.S. Post Office form or a form acceptable to the U.S. Post Office or other commercial mail delivery service. A copy of all such notices shall be sent to the insured’s broker if known, or the agent of record, and to the mortgagee or lienholder, if known, at the last mailing address known to the company.” (Emphasis added.) Ill. Rev. Stat. 1989, ch. 73, par. 755.14. Plaintiff’s first contention is based upon his affidavit that he did not receive any section 143.14 notice of cancellation. Defendant responds that under Bates v. Merrimack Mutual Fire Insurance Co. (1992), 238 Ill. App. 3d 1050, 605 N.E.2d 626, section 143.14 requires proper mailing of notice but does not require that the notice be received. Here, affidavits by defendant’s agents set forth a timely and proper mailing to plaintiff. We hold that under Bates those unrefuted affidavits satisfy the requirement for the requirements of section 143.14 as far as notice to the insureds is concerned. In Bates, a judgment on a jury verdict for an insured suing on a similar type of insurance policy as here was reversed by this court. The issue was whether the policy had been cancelled before the fire. The evidence showed, as here, that notice of cancellation had been properly mailed to the insured but evidence indicated it had not been received. This court stated that the statutory mailing requirements for the notice had been complied with and lack of receipt was "not relevant” because the insurer’s "responsibility was mailing, not delivery.” (Bates, 238 Ill. App. 3d at 1054, 605 N.E.2d at 629.) Plaintiff points out that in Bates, the insured did receive some notice of cancellation through a memo apparently mailed after the formal statutory notice had been sent. We do not interpret Bates as relying on that memo to be significant to the result reached. Plaintiff correctly points out that the record shows that no copy of the section 143.14 notice was sent to defendant’s broker or agent. This brings into play the curious language of section 143.14 of the Code. Its first sentence states that "[n]o notice of cancellation *** shall be effective unless” notice of cancellation is "mailed by the company” to the insured and mortgagee (Ill. Rev. Stat. 1989, ch. 73, par. 755.14), which was done here. Then the last sentence of the section does state that a copy of the notice "shall be sent” to the broker or agent and the mortgagee or lienholder (Ill. Rev. Stat. 1989, ch. 73, par. 755.14). That was not done here but no statement is made that sending that copy of the notice is a condition of effective cancellation of the policy, as is the sending of the notice of cancellation to the insured and mortgagee or lienholder. In determining legislative intent, courts first consider the statutory language. (Cunningham v. Huffman (1993), 154 Ill. 2d 398, 405, 609 N.E.2d 321, 324-25.) Prior to the enactment of Public Act 79 — 686 (Pub. Act 79 — 686, § 1, eff. January 1, 1976 (1975 Ill. Laws 2152, 2154)), the predecessor to section 143.14 of the Code provided that "[n]o notice of cancellation *** is effective unless” proper mailing to the insured was made, but no reference was made to sending copies of the notice to anyone. (Ill. Rev. Stat. 1973, ch. 73, par. 755.4.) Public Act 79 — 686 then provided for an addition to section 143.14 of the Code, which provided that "[a] copy of [the notice sent to the insured] shall be sent to” the insured’s insurance agent or broker. Ill. Rev. Stat. 1975, ch. 73, par. 755.14. Section 143.14 of the Code shall be construed in such a way that every word be given some reasonable meaning. (Hirschfield v. Barrett (1968), 40 Ill. 2d 224, 230, 239 N.E.2d 831, 835.) The use of the word "shall,” with reference to sending the copy of the notice in Public Act 79 — 686, must have been intended to have a different meaning than the words indicating that "no notice *** shall be effective unless” contained in the first sentence of section 143.14 of the Code. Ill. Rev. Stat. 1989, ch. 73, par. 755.14. If the language of section 143.14 of the Code is ambiguous, we should look to the legislative intent (see Magna Bank v. Comer (1992), 232 Ill. App. 3d 300, 304, 600 N.E.2d 855, 857) and give effect to the true intent and meaning of the legislature (People v. Frieberg (1992), 147 Ill. 2d 326, 345, 589 N.E.2d 508, 517). Clearly, the prime purpose of section 143.14 as a whole is to protect the insured by giving it notice that the policy is in danger of cancellation and the overdue premium must be paid immediately. Giving the insurance agent notice might encourage the agent to contact the insured and impress upon the insured the jeopardy he or she is facing. However, if the prime purpose of the last sentence of section 143.14 is to do that, the legislature might have required the agents and brokers who receive the notice to contact the insureds. The purpose of the last sentence of section 143.14 may well be to create a procedure which will enable such agents and brokers to keep contact with their customers and maintain a relationship with them. When the context of the use of the word "shall,” which appears in the third sentence of section 143.14 of the Code (Ill. Rev. Stat. 1989, ch. 73, par. 755.14), appears in a context which indicates it is merely permissive it is often so construed. (Fumarolo v. Chicago Board of Education (1990), 142 Ill. 2d 54, 96, 566 N.E.2d 1283, 1301; In re Guardianship of Sodini (1988), 172 Ill. App. 3d 1055, 1058-59, 527 N.E.2d 530, 532.) We are aware of the rule pronounced in Newkirk v. Bigard (1985), 109 Ill. 2d 28, 33, 485 N.E.2d 321, 323, and Andrews v. Foxworthy (1978), 71 El. 2d 13, 21, 373 N.E.2d 1332, 1335, that the word "shall” is given a mandatory effect when used with reference to a right or benefit to a person. However, in those cases, unlike here, the word "shall” did not appear in the context of other language in regard to the granting or denial of the same right or benefit which was more mandatory and more clearly a condition to the granting or denial of a right or benefit. We are convinced that the legislature would have listed notification to the insured’s agent or broker as one of the requirements without which no cancellation would be effective if the legislature intended the failure to give that notification to have that effect. Accordingly, we agree with the circuit court that defendant’s failure to notify the plaintiff’s agent or broker here did not prevent defendont from effectively cancelling plaintiff’s dwelling policy before plaintiff’s loss occurred here. The summary judgment for defendant is affirmed. Affirmed.