November 6, 2015
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. 11 C 7939 -
Milton I. Shadur, Judge.
Wood, Chief Judge, and Posner and Easterbrook, Circuit
Berg brought this breach of contract action when New York
Life, through its administrator Unum, refused to pay him
disability benefits. At bottom, this case turns on the
meaning of one phrase: "requires and receives regular
care by a Physician." Does the clause contain a temporal
element? The insurers say yes, and the district court agreed,
granting them summary judgment. But it certainly says nothing
about timing on its face, and we can find no other sign that
such a requirement was meant to be engrafted onto the phrase.
Applying the basic principle that the language must be
construed against the insurers, we reverse the judgment of
the district court.
1959, Eric Berg was a long-time pit broker at the Chicago
Mercantile Exchange. In 1991 and 1994, Berg bought two
disability-income insurance policies underwritten by New Yo r
k Life. In 2005, he started to experience a tremor in his
arms and hands. The tremor interfered with his ability to
write quickly and legibly, and in September 2007, the tremor
forced him to leave his job. In February 2010, a neurologist
diagnosed Berg with an "essential tremor, " and
Berg applied for total disability benefits.
New York Life and Unum approved Berg's claim on July 2,
2010, they designated his disability onset date as February
3, 2010, rather than September 2007. Then, in April 2012,
Unum discontinued Berg's total-disability benefits. It
asserted that he was eligible only for residual-disability
benefits because when he applied, his regular occupation was
that of an "unemployed person." Berg sued, seeking
benefits dating from September 2007 and a designation of
"total disability" for the purpose of future
benefits. The district court granted summary judgment to the
defendants. Berg appealed.
review the district court's decision to grant summary
judgment de novo, construing the facts in the light
most favor- able to the non-moving party-here, Berg. See
Jaburek v. Foxx, 813 F.3d 626, 630 (7th Cir. 2016).
Summary judgment is appropriate only when there is no dispute
of material fact and the moving party is entitled to judgment
as a matter of law. Fed. R. Civ. P . 56(a).
turning to the merits, we address the insurers' notice
defenses, which are dispositive if well taken. Berg does not
contest that his Notice of Claim and Proof of Loss
submissions were untimely. Country Mut. Ins. Co. v.
Livorsi Marine, Inc., 856 N.E.2d 338, 343 (Ill. 2006).
He asserts, however, that the insurers waived these defenses.
their answer to Berg's first amended complaint, the
insurers raised the argument that Berg failed to comply with
the policies' Notice of Claim or Proof of Disability or
Loss provisions. They reiterated this point in their response
to Berg's oddly styled "motion to narrow the
issues" under Federal Rule of Civil Procedure 16. This
is not a use of Rule 16 that we recognize. Rule 16, entitled
"Pretrial Conferences; Scheduling; Management, "
guides (not surprisingly) case management-it is not a tool
for resolving dispositive motions, whether under Rule 12(b)
or Rule 56. Perhaps that is why the district court's
rulings were silent on the insurers' notice defenses. No
matter: at that point, the insurers appear to have abandoned
this tack. In their summary judgment motion, the insurers
expressly relied upon the district court's reasoning in
its previous opinions, but they did not bring up notice. We
agree with Berg, therefore, that the notice defenses are
waived. See D.S. v. E. Porter Cnty. Sch. Corp., 799
F.3d 793, 800 (7th Cir. 2015) (arguments not raised in motion
for summary judgment are waived).
the main event: interpreting the insurance policies. The
parties agree that Illinois law governs here. Our primary
goal in interpreting an insurance policy "is to give
effect to the intent of the parties as expressed in the
agreement." DeSaga v. W. Bend Mut. Ins. Co.,
910 N.E.2d 159, 163 (Ill.App.Ct. 2009). Where "the terms
of an insurance policy are clear and unambiguous, they must
be given their plain and ordinary meaning and enforced as
written, unless to do so would violate public policy."
Id. If a word is specifically defined in the policy,
that meaning controls. Am. Nat. Fire Ins. Co. v.
Nat'l Union Fire Ins. Co. of Pittsburgh, PA , 796
N.E.2d 1133, 1141 (Ill.App.Ct. 2003). On the other hand, if
the policy language is "susceptible to ...