West American Insurance v. Yorkville National Bank

JUSTICE SCHMIDT,

specially concurring:

I concur but write separately to point out what I think should be obvious. Many of the insurance coverage notice cases involve swearing contests between the insurance carrier and its insured as to whether oral notice was given. This case was decided below on just such a contest. The contract of insurance contained a valid condition precedent which required written notice of a claim. The obvious intent of this condition is to avoid these “he said-she said” coverage disputes. There is nothing either draconian or unfair about this condition. The written notice provision is valid. The contract language has obviously been approved by the Department of Insurance. There is no reason not to enforce it.

The underlying lawsuit was filed September 24, 2001. Written notice was not given to West American until January 19, 2004, 21/2 years later and less than 2 months before a jury trial was to begin. “Under Illinois law, a delay of even a few months in giving notice breaches the policy as a matter of law, defeats coverage, and justifies the entry of summary judgment for the insurance company.” Montgomery Ward & Co. v. Home Insurance Co., 324 Ill. App. 3d 441, 449, 753 N.E.2d 999, 1005 (2001), citing Equity General Insurance Co. v. Patis, 119 Ill. App. 3d 232, 237-38, 456 N.E.2d. 348, 352 (1983) (involving less than a five-month delay in fire loss notification); Illinois Valley Minerals Corp. v. Royal-Globe Insurance Co., 70 Ill. App. 3d 296, 300, 388 N.E.2d 348, 256 (1979) (involving a six-month delay of notice from the date of the river barge accident).

The bank had lawyers. It waited until less than two months before a jury trial in the defamation case to give written notice. Under these circumstances, I do not know how any reasonable person could find that the written notice was given “as soon as practicable” as required by the contract of insurance. There is no justification in law or equity for not enforcing the written notice provision of the contract.

The dissent in this case misconstrues the import of the Cincinnati case. The Cincinnati case relied upon by the dissent did not deal with a written notice provision. Furthermore, in Cincinnati, there was absolutely no issue as to whether West American actually had notice. In the case before us, all the bank had to do was send a copy of the complaint to the insurer. As contemplated by the contract between the parties, this would have obviated any swearing contest as to whether the insurer had notice and would have clearly given the insurer the kind of notice necessary to locate and defend the claim.