Timely Request For Auto Coverage Held Inapplicable To Grace Period

November 3, 2015 / Writing and Speaking

The 2nd District Appellate Court recently held that an auto policy provision extending coverage automatically to an insured’s newly acquired vehicle if notice of the insured’s request to add the vehicle to the policy is received within 30 days provided coverage for the vehicle even if the request was not received.

Plaintiff Addie M. O’Neal-Vidales, a claimant seeking coverage under the policy, was represented by Cacciatore Law Offices in Rockford. Brian Michael Nach represented the insurer, Affirmative Insurance Co. The case is O’Neal-Vidales v. Clark, 2015 IL App (2d) 141248 (Sept. 29, 2015).

Richard Clark was an insured of Affirmative for a 1992 Ford vehicle. The policy extended coverage to Clark’s newly acquired vehicles of which he obtained ownership during the policy period, so long as he notified Affirmative in writing no later than 30 days after acquisition of his election to make the Affirmative policy applicable to the new vehicle.

In 2009, within a few days after Clark acquired a 1991 Chevrolet, he was involved in an accident with the plaintiff. Before the accident, Clark called his insurance broker, InsureOne Independent Insurance Agency, to inform it of his purchase. Afterward, he said he called the number on the insurance card that he had been given when he insured the Ford. That number turned out to be the telephone number for InsureOne.

When asked at his deposition if he ever contacted Affirmative, Clark said that he had not. He also never filed a claim with Affirmative because the Chevrolet was a total loss and he ended up selling it to a junkyard.

The plaintiff eventually filed a claim with Affirmative for her personal injuries from the accident. It denied coverage on the ground that Clark’s Chevrolet did not qualify as an insured vehicle, apparently because he had never requested coverage.

In 2011, the plaintiff sued Clark. She later filed an amended complaint adding declaratory counts against, among others, Affirmative, seeking coverage.

She and Affirmative each moved for summary judgment on coverage following Clark’s deposition. Finding that Clark had never made a written request for coverage, the trial court entered summary judgment for Affirmative. Plaintiff brought this appeal.

Analysis

In an opinion by Justice Susan Fayette Hutchinson, the 2nd District reversed. She initially addressed whether the plaintiff waived her right to cite a case on appeal – American Freedom Insurance Co. v. Smith, 347 Ill. App. 3d 1 (1st Dist. 2004) – that she had not cited in the trial court. Hutchinson said that no waiver occurred because the plaintiff raised the issue of coverage in the trial court, which was the purpose for citing the American Freedom case.

She then turned to American Freedom itself, where the 1st District construed a 30-day provision for newly acquired vehicles similar to the one in the Affirmative policy. In that case, the court rejected the argument that the insured was not entitled to coverage due to his failure to request coverage in writing within the 30 days.

Specifically, the 1st District held that, in its view, the provision granted “automatic insurance” to the insured, regardless of such a request. The court characterized its view as the “majority rule” where an accident occurs within the 30-day “grace period.”

Hutchinson observed that such an approach appeared to be inconsistent with the 2nd District’s own ruling in Hall v. Country Casualty Insurance Co., 204 Ill.App.3d 765 (2d Dist. 1990). In that case, the court found against coverage under a similar provision, holding that the evidence of record did not support a “request for insurance” even if the accident had been reported to the insurer.

Hutchinson then embarked upon a discussion of a number of cases from around the country, concluding that, under the majority rule, timely notification is a condition precedent to continued coverage after – not during – the grace period.

Thus, according to her, Affirmative contracted to provide coverage during the 30-day grace period. She did not believe, moreover, that non-enforcement of the written notice requirement would increase Affirmative’s risk “in any meaningful way.”

As a final point, Hutchinson said that a fact issue existed as to whether InsureOne was Affirmative’s agent. She acknowledged that the plaintiff “did not present a fully developed analysis” of the agency issue. Nevertheless, she indicated that, even if the court did not adopt the majority rule on interpretation of the 30-day request period, a fact question on agency would require remand in any event.

The court therefore reversed the summary judgment in favor of Affirmative and remanded.

Key Points

  • No waiver occurs with respect to the citation of new authority on appeal, so long as the argument for which the new authority is cited is made in the trial court.
  • According to this court, the requirement of a timely request for coverage for a newly acquired vehicle applies only to coverage following the 30-day grace period, not for coverage during the grace period.
  • Chicago

    Illinois 60603

    10 South LaSalle Street

    Chicago, Illinois 60603

    T: 312.855.1010 TF: 800.826.3505 F: 312.606.7777 Office Managing Partner: Dennis D. Fitzpatrick

  • New York

    New York 10005

    28 Liberty Street 39th Floor

    New York, New York 10005

    T: 212.805.3900 TF: 800.826.3505 F: 212.805.3939 Office Managing Partner: Tyler Jay Lory

  • Irvine

    California 92614

    17901 Von Karman Avenue

    Suite 650

    Irvine, California 92614

    T: 949.260.3100 TF: 800.826.3505 F: 949.260.3190 Office Managing Partner: Ian R. Feldman

  • Florham Park

    New Jersey 07932

    100 Campus Drive

    Florham Park, New Jersey 07932

    T: 973.410.4130 TF: 800.826.3505 F: 973.410.4169 Office Managing Partner: Carl M. Perri

  • Michigan City

    Indiana 46360

    200 Commerce Square

    Michigan City, Indiana 46360

    T: 219.262.6106 TF: 800.826.3505 F: 312.606.7777 Office Managing Partners: Paige M. Neel, Kimbley A. Kearney

  • Appleton

    Wisconsin 54914

    4650 W. Spencer Street

    Appleton, Wisconsin 54914

    T: 920.560.4658 TF: 800.826.3505 F: 920.968.4650 Office Managing Partner: Patrick L. Breen

  • Stamford

    Connecticut 06902

    68 Southfield Avenue

    2 Stamford Landing Suite 100

    Stamford, Connecticut 06902

    T: 203.921.0303 TF: 800.826.3505 F: 212.805.3939 Office Managing Partner: Matthew J. Van Dusen

  • Tampa

    Florida 33609

    4830 West Kennedy Boulevard

    Suite 600

    Tampa, Florida 33609

    T: 813.509.2578 TF: 800.826.3505 F: 312.606.7777 Office Managing Partner: Anne E. Kevlin

  • Orlando

    Florida 32801

    618 E. South Street

    Suite 500

    Orlando, Florida 32801

    T: 813.509.2578 TF: 800.826.3505 F: 312.606.7777 Office Managing Partner: Anne E. Kevlin

  • San Francisco

    California 94111

    100 Pine Street

    Suite 1250

    San Francisco, California 94111

    T: 415.745.3598 TF: 800.826.3505 F: 949.260.3190 Office Managing Partner: Ian R. Feldman