Petition for Writ of Certiorari — Geschke v. Air Force Association Association Association (No. 05-946)

7

The Court’s analysis entirely fails to establish an

absence of ambiguity, leaving Petitioner’s position unre-

butted: The phrase is just obviously ambiguous.

~

Controlling Illinois Law Mandates Construing

Ambiguous Insurance Policy Language in

Favor of Insured

Illinois law requires that provisions of an insurance

agreement be interpreted in thé factual context of the

case. Indiana Insurance Co. v. Pana Community Unit

School District No. 8, 314 F.2d 895, 900 (C.A.7 [I11.] 2002).

If an insurance policy’s terms are susceptible to more

than one meaning, “they are considered ambiguous and

will be construed strictly against the insurer who drafted

the policy.” Commonwealth Insurance Co. v. Stone Container

Corp., 351 F.3d 774, rehearing denied (C.A.7 [Ill.] 2003).

Under Illinois law, an insurance policy must be

liberally construed in favor of the insured. Community

Foundation For Jewish Education v. Federal Insurance

Co., 16 Fed. Appx. 462, 465 (C.A.7 [Ill.} 2001).

When competing reasonable interpretations of a policy

exist, a court is not permitted to choose which interpreta-

tion it will follow, but must construe the policy in favor of

the insured and against the insurer who drafted it. Em-

ployers Insurance of Wausau v. Ehlco Liquidating Trust,

186 Ill.2d 127, 141, 708 N.E.2d 1122, 1130, 237 Ill.Dec. 82,

rehearing denied, on remand, 309 Ill.App.3d 730, 723

N.E.2d 687, 243 Ill.Dec. 384, appeal denied, 188 I1].2d 563,

729 N.E.2d 495, 246 Ill.Dec. 122 (Til. 1995).

Particularly in view of how completely the Seventh

Circuit and the district court misread the CancerCare

policy, it is appropriate to note that judges in ruling on

summary judgment motions are not to weigh evidence and

determine the truth of the matter, but to determine

whether a genuine issue exists for trial. Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L.Ed.2d 202,

206, 212, 106 S.Ct. 2505 (198).

On the other hand, the policy language with its

repeated reference to “treatment” could certainly cause a

reasonable person to conclude that the CancerCare policy's

Blood and Plasma Benefit Rider would pay benefits to

cover the cost of treating leukemia with blood and plasma

therapy. “The determination of whether the terms of an

insurance policy are ambiguous is made by reference to a

reasonable person standard; ‘the test is ... what a reason-

able person in the position of the insured would under-

stand [the terms] to mean.’ /d. [i.e., Allstate Insurance Co.

v. Smiley, 276 Ill.App.3d 971, 659 N.E.2d 1345, 1350, 213

Ill. Dec. 698 (2 Dist. 1995)]” (App. 8)

(The Court’s misreading of the CancerCare plan policy

has also led to a doubtful contribution to Illinois insurance

law: “(5] Imsurance.... {key symbol] 2484.... Under

Illinois law, supplemental cancer insurance policy’s cover-

age provision for ‘incurred expenses for the cost of blood or

blood plasma’ conferred coverage for cost of blood products

or plasma only, not additional expenses associated with

their transfusion.” Geschke v. Air Force Association and

Monumental Life Insurance Co., 425 F.3d 337, 338 [C.A.7

2005)})

Petitioner placed into the case record and before both

the Seventh Circuit and the district court substantive

evidence that Respondents distributed promotional mate-

rials intended to lead recipients into believing that the

CancerCare plan provided coverages consistent with the

9

goal of care signified by the plan’s name. For example, AFA

stated in its pitch letter sent to Petitioner’s husband in

late April or early May 1997 (R.46 Ex. 6) that the Cancer-

Care plan paid substantial benefits for expenses for

treatment of cancer (following emphases have been

added):

“Cancer is being detected earlier, and there are

many more successful treatments. But it is usu-

ally extensive treatment, requiring specialists,

and the cost is high! That’s where AFA’s Cancer-

Care can help. It pays supplemental cash bene-

fits to help with the many expenses associated

with cancer treatment, such as:

And the brochure (R.46 Ex.7) that accompanied the

AFAs pitch letter cited a broad range of CancerCare

benefits, including:

“Blood and Plasma .. . up to $500. Up to $500 for

blood and plasma per illness period. There is no

maximum benefit for leukemia.” (Emphasis

added. )

“Lifetime Benefit. You and each of your insured

family members are provided a lifetime benefit of

$250,000.”

Petitioner’s position concerning the policy provision in

question is also supported by common sense: What would

CancerCare plan members, or any persons suffering from

cancer, be expected to do with a container of blood? (App.

9) Treat their cancer by transfusing it into their body

thernselves? Of course net. People pay a medical facility to

match blood to their individual blood type, to prepare

them for transfusion, and to perform and monitor the

trarisfusion.

10

_ Presence of Genuine Issue of

Material Fact Should Have Barred

Entry of Rule 56 Summary Judgment

Petitioner placed substantial evidence referenced in

this argument before the Seventh Circuit (and the district

court), relevant and credible evidence sufficient to a degree

that could cause a reasonable person to adopt Petitioner’s

position that “incurred expenses for the cost of blood or

blood plasma” encompasses the cost of providing treat-

ment using blood or plasma. The fact that the phrase is at

least ambiguous and should be construed in favor of

Petitioner is a materia! fact because it underpins Peti-

tioner’s claims in her case against Respondents. The fact

that Petitioner has substantial evidence to support her

position concerning that phrase, and that Respondent

rejects that position, creates a genuine issue.

On a motion for summary judgment, the nonmovant’s

evidence is to be believed, and all justifiable inferences are

to be drawn in the nonmovant’s favor. Eastman Kodak Co.

v. Image Technical Services, Inc. et al., 504 U.S. 451, 456,

119 L.Ed.2d 265, 277, 112 S.Ct. 2072 (1992).

“(S]ummary judgment will not lie if the dispute about

a material fact is ‘genuine,’ that is, if the evidence is such

that a reasonable jury could return a verdict for the

nonmoving party.” Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 248, 91 L.Ed.2d 202, 205-206, 211-212, 106 S.Ct.

2505 (1986).

Trial courts should act cautiously in granting sum-

mary judgment, and may deny summary judgment “in a

case where there is reason to believe that the better course

would be to proceed to a full trial.” Anderson v. Liberty

11

Lobby, Inc., 477 U.S. 242, 255, 91 L.Ed.2d 202, 207, 216,

106 3.Ct. 2505 (1986).

Summary judgment is a drastic measure and should

only be granted if the movant’s right to judgment is clear

and free of doubt. Traveler’s Insurance Co. v. Eljer Manu-

facturing, Inc., 197 [1l.2d 278, 292, 757 N.E.2d 481, 491,

258 []l.Dec. 792 (Til. 2001).

Nevertheless, in this nation’s courts “an atmosphere

in which summary judgment is favored” prevails. Jack H.

Friedenthal and Joshua E. Gardner, “Judicial Discretion

to Deny Summary Judgment in the Era of Managerial

Judging,” Hofstra Law Review, 31, No. 1 (2004), 91, 104.

Thus, “Summary judgment ‘can be a tool of great utility in

removing insubstantial cases from crowded dockets,

freeing court’s trial time for those that really do raise

genuine issues of material fact.’ [Citations omitted].” Mills

v. First Federal Savings and Loan Association of Belvidere,

83 F.3d 833, 846 (C.A.7 [Tll.}] 1996).

But when courts avail themselves of that “utility” by

entering summary judgments that contravene relevant

decisions from this Court, that merits review and correction.

¢

CONCLUSION

The summary judgment entered against Petitioner

was extraordinarily harsh and unjust. But beyond that,

such insupportable judgments potentially undermine the

public’s assumption that meritorious cases will be fairly

heard and, if necessary, tried, rather than being summa-

rily ejected. This would be of particular concern to that

substantial segment of the public that contracts for

12

medical insurance and pays for coverage for increasingly

expensive treatments.

Petitioner requests the Court to grant this petition

and summarily vacate the judgment below, so that legal

counsel may take Petitioner’s case to trial.

Respectfully submitted,

IRENE M. GESCHKE

924 Mary Anne Street

Woodstock, Illinois 60098-2285

(815) 337-2171

Petitioner pro se

No.

+

In The

Supreme Court of the Gnited States

¢

IRENE M. GESCHKE, INDIVIDUALLY AND

AS EXECUTOR OF THE ESTATE OF

CLARENCE O. GESCHKE,

Petitioner,

VS.

AIR FORCE ASSOCIATION AND

MONUMENTAL LIFE INSURANCE COMPANY,

Respondents.

4

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Seventh Circuit

+

APPENDIX

e

App. 1

In the

United States Court of Appeals

for the Seventh Circuit

No. 04-3205

IRENE M. GESCHKE, individually

and as Executor of the

Estate of Clarence O. Geschke,

Plaintiff-Appellant,

AIR FORCE ASSOCIATION and

MONUMENTAL LIFE INSURANCE COMPANY,

Defendants-Appellees.

Appeal from the United States District Court

for the Northern District of Illinois, Western Division.

No. 02 C 50271 — Philip G. Reinhard, Judge.

ARGUED APRIL 7, 2005 — DECIDED SEPTEMBER 23, 2005

Before MANION, ROVNER, and SYKES, Circuit Judges.

SYKES, Circuit Judge. Clarence Geschke purchased a

defined-benefit supplemental cancer insurance policy that

promised to reimburse him for “incurred expenses for the

cost of blood or blood plasma.” Geschke developed leuke-

mia and required numerous blood transfusions. He later

died, and his widow, Irene Geschke, filed an insurance

claim that included $33,689.81 in expenses for blood and

transfusion-related charges such as laboratory testing,

App. 2

equipment, drugs, administrative fees, and other transfu-

sion expenses. The insurer paid only the cost of the blood

product itself, or $1,245.10, and denied coverage for the

related charges. Mrs. Geschke filed suit in state court

against the insurer and the association that marketed the

policy to her late husband, alleging breach of contract,

common law fraud, and violation of the Illinois Consumer

Fraud Act (““ICFA”). The defendants removed the case to

federal district court.

The district court granted summary judgment to the

defendants, holding that the unambiguous policy language

covered only the cost of the blood itself and not other costs

associated with its delivery and administration. We agree

with this conclusion. The insurance policy expressly covers

only “incurred expenses for the cost of blood or plasma,”

not related transfusion charges. This coverage language is

clear and unambiguous. Accordingly, the insurer did not

breach its contract by paying only that portion of the

transfusion-related claim that consisted of *e cost of the

blood. Summary judgment in favor of the defendants on

the common law and statutory fraud claims was also

appropriate, as there is no evidence of any false statement

or deceptive act by the defendants in connection with the

sale of the policy.

I. Background

In May 1997 Clarence Geschke enrolled in ‘he Air

Force Association’s (“AFA”) CancerCare Plan, a supple-

mental cancer insurance policy underwritten by Monu-

mental Life Insurance Company (“Monumental” or “the

insurer”). The policy and its associated riders provided

defined benefits for certain expenses incurred in the

App. 3

treatment of caacer, such as hospitalization, hospice care,

ambulance services, anesthesia, and blood and plasma. As

is relevant here, the “Blood and Plasma Benefit Rider”

included in Mr. Ceschke’s policy provided as follows:

Upon receipt of due proof that the Covered Person in=

curred expenses for the cost of blood or blood plasma,

‘we will pay a benefit for these expe:es not to exceed

the Maximum Benefit shown on the Schedule. The

expense of blood or blood plasma incurred while Hos-

pital Confined, as an outpatient or in a free standing

facility is eligible for this benefit.

The rider’s maximum benefit per IlIness Period was $500,

but the Schedule of Benefits also indicated that there was

no maximum for leukemia. Mr. Geschke paid a quarterly

premium of $31.50 for “Member & Family” coverage under

the policy and its associated riders.

Mr. Geschke was diagnosed with leukemia in March

1999. On or about April 14, 1999, he sent Monumental a

claim form seeking benefits for inpatient and outpatient

services provided by Sherman Hospital in 1998 and early

1999. The parties dispute exactly when Mr. or Mrs.

Geschke provided Monumental with documentation

sufficient to establish Mr. Geschke’s cancer diagnosis, as

required by the policy, but the issue is no longer material.

Sadly, Mr. Geschke died on June 21, 1999.

On October 18, 1999, Mrs. Geschke submitted an

updated claim to Monumental for $37,622.37. Of that

amount, $33,689.81 related to Mr. Geschke’s blood trans-

fusions. In December 1999 Monumental paid $2,114.61 to

Mrs. Geschke for hospitalization, surgical, and anesthesia

charges. Later, on March 31, 2000, Monumental paid

$1,245.10 under the Blood and Plasma Benefit Rider. In a

App. 4

follow-up letter to Mrs. Geschke dated June 23, 2000,

Monumental explained that the Blood and Plasma Benefit

Rider did not cover processing or administrative fees,

supplies, drugs, or laboratory charges associated with the

blood transfusions, and that Monumental was declining to

cover the remaining $32,444.71 of the transfusion-related

claim.

Mrs. Geschke never cashed Monumental’s checks.

Instead, she filed suit against Monumental and the AFA in

Illinois state court, alleging breach of contract and seeking

recovery of benefits under the Blood and Plasma Benefit

Rider. She also alleged common law fraud and fraud under

the ICFA, 815 ILCS §§ 505/2 et seq. The gravamen of both

fraud claims is that by failing to explain that the Blood

and Plasma Benefit Rider covered only the cost of blood

products and not related transfusion expenses, the defen-

dants fraudulently induced Mr. Geschke to purchase the

policy and pay premiums. For each of the three claims,

compensatory damages were alleged to be “in excess of

$20,000 and not more than $50,000.” In addition, the two

fraud claims included demands for punitive damages.

Monumental, a corporation chartered and located in

Maryland, removed the case to federal court with the

consent of the AFA, a corporation chartered under the laws

of the District of Columbia and located in Virginia. There-

after the defendants moved for summary judgment, which

the district court granted.’

' The motion for summary judgment was considered upon

Geschke’s second amended complaint, which was styled as a class

action on behalf of all persons who purchased the CancerCare policy

within ten years of the commencement of this action and who were

denied benefits under the Blood and Plasma Benefit Rider for the same

(Continued on following page)

App. 5

The district court concluded that although the terms

“blood” and “plasma” are not defined in the policy, a

reasonable person would understand that the phrase “cost

of blood or blood plasma” refers to the cost of the blood

product itself and not to other costs associated with the

administration of the blood product to a sick person. As

such, the court held that Monumental did not breach its

contract with Geschke. The court also held that Mrs.

Geschke could not carry her burden on the common law

and statutory fraud claims because no misrepresentation

could be inferred from policy language that was unambi-

guous, and no other evidence of false statements or decep-

tion by the defendants had been presented.

II. Discussion

A. Jurisdiction

The parties did not raise the issue of the district

court’s jurisdiction, but the defendants argued, both in the

lower court and on appeal, that Mrs. Geschke’s two fraud

claims did not accrue prior to Mr. Geschke’s death and

therefore abated. We asked at oral argument whether only

the breach of contract claim should be considered for

purposes of the $75,000 amount-in-controversy require-

ment for diversity jurisdiction under 28 U.S.C. § 1332(a).

We asked whether the damages potentially recoverable in

the breach of contract action were above $75,000. After

considering the parties’ supplemental! briefing on this issue,

reasons the Geschkes’ claim was denied. Nothing in the record indicates

that a motion for class certification was filed or ruled upon, and the

district court’s decision on summary judgment does not treat the case

as a class action.

App. 6

we are satisfied that the district court had jurisdiction

over Mrs. Geschke’s suit

Whether § 1332 supplies jurisdiction must be deter-

mined at the outset of a case; “events after the suit begins

do nc* affect .. . diversity jurisdiction.” Johnson v. Watten-

barger, 361 F.3d 991, 993 (7th Cir. 2004) (citing Freeport-

McMoRan, Inc. v. K N Energy, Inc., 498 U.S. 426 (1991),

and other cases). We therefore look to Mrs. Geschke’s first

complaint, the one the defendants removed to federal

court, to see whether the case satisfies the jurisdictional

threshold of $75,000. Each of Mrs. Geschke’s three claims

sought compensatory damages in the amount of $20,000 to

$50,000, plus prejudgment interest. The two fraud claims

each also demanded an award of punitive damages. “It is

the case, rather than the claim, to which the $75,000

minimum applies.” Johnson, 361 F.3d at 993. The total

amount at stake was thus clearly above that mark.

Whether or not the defendants could succeed with

their argument that the fraud claims abated upon Mr.

Geschke’s death is immaterial to the jurisdictional ques-

tion. Only if it were legally impossible for Geschke to win

on claims totaling more than $75,000 would her suit fail

for want of jurisdiction. St. Paul Mercury Indem. Co. v.

Red Cab Co., 303 U.S. 283, 289 (1938); Johnson, 361 F.3d

at 993-94. “Legal impossibility” in this sense differs from

the standard for dismisse’ for failure to state a claim

under FED. R. Civ. P. 12(b).6); that there may be a plausi-

ble argument that the plaintiff’s claims must fail as a

matter of law does not mean the court lacks jurisdiction to

consider them. Bell v. Hood, 327 U.S. 678 (1946); Johnson,

361 F.3d at 993-94. If it were otherwise, “defendants would

never win in diversity cases. They could at best achieve

App. 7

jurisdictional dismissals, followed by new suits in state

court.” Johnson, 361 F.3d at 994.

The defendants’ argument that the fraud claims failed

to accrue before Mr. Geschke’s death or that if they did

accrue, did not survive his death, hardly colors this suit as

a “legal impossibility.” Though we need not decide the

issue, the defendants are probably wrong about the ac-

crual question. See Knox College v. Celotex Corp., 430

N.E.2d 976, 980 (Ill. 1981) (under Illinois’ discovery rule,

fraud claim accrues “when a person knows or reasonably

should know of his injury and also knows or reasonably

should know that it was wrongfully caused”). The question

of the survival of the punitive damages aspect of the

common law and statutory fraud claims is apparently

unsettled in Illinois. See 755 ILCS 5/27-6 (Illinois Survival

Act) (West 1994) (“In addition to the actions which survive

by the common law, the following also survive: ... actions

for fraud or deceit.”); Nat'l Bank of Bloomington v. Norfolk

& W. Ry. Co., 383 N.E.2d 919, 924 (1978) (punitive dam-

ages can be recovered if the underlying action is predi-

cated on a statute that specifically authorizes the recovery

of punitive damages); but see Duncavage v. Allen, 497

N.E.2d 433, 442 (Tl. Ct. App. 1986) (Although Illinois

Consumer Fraud Act permits court to grant prevailing

plaintiff “any relief which it deems proper,” the Act does

not explicitly authorize punitive damages, so an action to

recover such damages does not survive under the rule of

Nat'l Bank of Bloomington). In any event, because Mrs.

Geschke’s claim for punitive damages was not legally

impossible at the outset, her lawsuit meets the $75,000

jurisdictional threshold. We therefore proceed to the

merits.

App. 8

B. The Blood and Plasma Benefit Rider

We review the district court’s decision on summary

judgment de novo, employing the same methodology as the

district court. Summary judgment will be granted if there

is no genuine issue of material fact and the moving party

is entitled to judgment as a matter of law. FED. R. Civ. P.

56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). We

view the facts and draw all reasonable inferences there-

from in favor of the nonmoving party. See Franzoni v.

Hartmarx Corp., 300 F.3d 767, 771 (7th Cir. 2002). How-

ever, to survive summary judgment, the nonmoving party

may not rely on mere allegations; he must present specific

facts to show that a genuine issue of material fact exists.

Celotex, 477 U.S. at 322-23.

In Illinois, an insurance policy is treated as any other

contract and is subject to the same rules of construction.

Horning Wire Corp. v. Home Indem. Co., 8 F.3d 587, 589

(7th Cir. 1993) (citing Dempsey v. Nat'l Life & Accident

Co., 88 N.E.2d 874, 876 (1949)). Policy language that is

clear and unambiguous is accorded its plain, ordinary, and

popular meaning. Travelers Ins. Co. v. Eljer Mfg., Inc., 757

N.E.2d 481, 491 (Ill. 2001); Outboard Marine Corp. uv.

Liberty Mut. Ins. Co., 607 N.E.2d 1204, 1212 (Ill. 1992).

Ambiguities should be construed in favor of the insured.

United States Fire Ins. Co. v. Schnackenberg, 429 N.E.2d

1203, 1205 (Ill. 1981). But “a court should not search for

an ambiguity where there is none.” Allstate Ins. Co. v.

Smiley, 659 N.E.2d 1345, 1350 (Ill. 1995). The deterfhina-

tion of whether the terms of an insurance policy are

ambiguous is made by reference to a reasonable person

standard; “the test is ... what a reasonable person in the

position of the insured would understand [the terms] to

mean.” Jd. “All the provisions of an insurance contract,

~

App. 9

rather than an isolated part, should be read together to

interpret it and to determine whether an ambiguity

exists.” Schnackenberg, 429 N.E.2d at 1205.

The policy language at issue in this case is contained

in the Blood and Plasma Benefit Rider, which by its terms

provides benefits for “incurred expenses for the cost of

blood or blood plasma.” The question here is whether the

phrase “expenses for the cost of blood or blood plasma”

confers coverage for blood or plasma costs only, or includes

additional expenses associated with the transfusion of the

blood product. The policy does not define either “blood” or

“plasma,” but under Illinois law “[a] policy term is not

ambiguous because the term is not defined within the

policy or because the parties can suggest creative possibili-

ties for its meaning.” Lapham-Hickey Steel Corp. v. Prot.

Mut. Ins. Co., 655 N.E.2d 842, 846 (Ill. 1995).

Monumental argues that the “blood or blood plasma”

language in the policy is clear and unambiguous and that

a reasonable person would understand that the phrase

refers only to the cost of the blood product itself and not

the various additional charges for equipment and services

involved in providing the blood to a medical patient

undergoing treatment. Mrs. Geschke argues that it is

unreasonable to interpret the rider to cover the cost of

blood product but not the services essential for it to be

useful. A cancer patient in need of a blood transfusion, she

argues, “is not merely handed some blood and told to take

it himself as if it were aspirin.”

Mrs. Geschke is undoubtedly correct that no cancer

patient expects to be handed a pint of blood by medical

staff and told to transiuse it himself. But the way medical

services are delivered is not the issue here. The issue is

App. 10

whether Monumental] contracted with Mr. Geschke to pay

not only for the pints of blood or plasma he received but for

the various additional costs associated with the delivery of

blood to him. We agree with the insurer and the district

court that the “blood or plasma” language is clear on its

face and covers only the cost of blood or plasma.

Although it is true that blood and blood plasma are of

no practical use to a patient without being transfused, it

does not follow that the Blood and Plasma Benefit Rider

covers more than the cost of the blood or plasma itself, as

only the blood products are specifically mentioned in the

rider. “Blood” and “blood transfusion” are not synonyms,

nor is the latter term subsumed within the former. The

dictionary definition of “blood” is “the fluid that circulates

in the principal vascular system of vertebrate animals

carrying nourishment and oxygen to all parts of the body

and bringing away waste products for excretion.... ”

WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 236-37

(1981). “Plasma” is defined as “the fluid part of blood, or

lymph, or milk that is distinguishable from suspended

material ... and that in blood differs from serum.” /d. at

1732. Nothing in these definitions suggests anything other

than what we.colloquially refer to as “a pint of blood,” nor

do they encompass the medical process of transfusion.

The CancerCare Plan at issue here distinguishes the

defined benefits included within the policy’s coverages

from general “treatment” and “cancer treatment.” The

policy itself does not generally cover cancer treatment, or

any treatment at all; according to the “Cancer Insurance

Benefit” provision, the policy pays “benefits according to

the Schedule of Benefits for Cancer that manifests itself

while the Covered Person is insured under this Policy.”

A special rider was avaiiable that did, under limited

App. 11

circumstances, provide coverage for cancer treatment. Mr.

Geschke purchased this rider, called the “Extended Hospi-

tal Expenses Benefit Rider.” It offered policyholders who

purchased the rider a choice: the Plan would pay “Hospital

charges for Cancer treatment while a Covered Person is

Confined in the Hospital,” beginning with the ninety-first

day of hospitalization, but only in lieu of all the other

benefits provided under the policy. Thus, for policyholders

like Mr. Geschke who purchased the Extended Hospital

Expenses rider, “cancer treatment” was considered a

benefit distinct from all the other defined benefits included

in the plan and the other riders. None of the other defined

benefits were denominated “treatment” by the policy. This

supports the conclusion that the phrase “cost of blood or

blood plasma” means the cost of blood or plasma only and

not the additional costs associated with treatment-related

services such as laboratory testing and transfusion.

Furthermore, if Mr. Geschke’s medical bills are any

guide at all, the total cost of testing and transfusing the

blood products dwarfs the cost of the blood itself by a ratio

of roughly 27:1. We must therefore consider whether a

reasonable purchaser of this policy would have thought

that by paying $31.50 per quarter for “Member & Family”

coverage he or she was obtaining coverage not only for

blood products but for the full range of services necessary

to the transfusion process. Under the Blood and Plasma

Rider, the maximum benefit per illness period is $500.

However, there is no limit on the benefit for leukemia

patients. The parties agree that leukemia treatment

generally requires numerous blood transfusions, and the

rider’s no-limit benefit for leukemia reflects that reality.

But not every purchaser of the rider expects to develop

leukemia; some are concerned about other forms of cancer.

App. 12

Given the great disproportion between the cost of blood

itself and the costs associated with transfusions, it would

be unreasonable for a purchaser of this policy to believe’

that the $500 maximum in nonleukemia cases covers

transfusions as well as blood, for $500 will not pay for the

transfusion of a single pint.’

Mrs. Geschke maintains that the Illinois Blood and

Organ Transaction Liability Act, 745 ILCS §§ 40/1 et seq.,

supports her reading of the policy because the Act defines

blood transfusions as services. The Act reads, in pertinent

part:

The procuring, furnishing, donating, processing, dis-

tributing or using human whole blood, plasma, blood

products, blood derivatives and products, corneas,

bones, or organs or other human tissue for the purpose

of injecting, transfusing or transplanting any of them

in the human body is declared for purposes of liability

in tort or contract to be the rendition of a service.

745 ILCS § 40/2. See also Brandt v. Boston Sci. Corp., 792

N.E.2d 296, 301-02 (Tl. 2003). Mrs. Geschke does not

explain why this statute informs our understanding of the

phrase “cost of blood or blood plasma” in the insurance

rider at issue here. Nor can we see any reason why it

* According to Geschke’s October 18, 1999, claim, Geschke incurred

the following expenses for blood and plasma on November 5-6, 1998:

$82.70 for “IV Drugs,” $225.75 for “Med/Sur Supplies,” $1,660.36 for

“Laboratory,” $165.60 for “Lab/Immunology,” $45.95 for “OR Services,”

and $112.65 for “Blood/Store-Proc.” The same itemized charges, and

others, were broken out in Sherman Hospital’s other billings for blood

and plasma. (Apparently $112.65 is the hospital’s price for one pint of

blood, as other “Blood/Store-Proc” charges were often exact multiples of

that amount.) Accordingly, the total cost of transfusing one pint of blood

on that particular day was $2,263.06.

App. 13

should. In Brandt, the Illinois Supreme Court described

the Act as a response to Cunningham v. MacNeal Memo-

rial Hospital, 266 N.E.2d 897 (Ill. 1970), in which the

court held that a blood transfusion transaction was the

sale of a product for purposes of a strict liability claim. The

Brandt court noted that the Act overruled Cunningham to

the extent of precluding warranty and strict liability

claims in the context of blood transfusions. Brandt, 792

N.E.2d at 301-02. The Act thus has little relevance to the

insurance coverage question in this case.

We agree with the district court that the phrase “cost

of blood or blood plasma” in the insurance rider is unam-

biguous and includes only the cost of the blood product

itself. Monumental did not breach its contract by declining

to pay the administrative, testing, transfusion, and other

charges associated with the administration of the blood

products.

C. Common Law and Statutory Fraud Claims

The elements of a common law fraud claim in Illinois

are: (1) a false statement of material fact made by the

defendant; (2) the defendant knew the statement was

false; (3) the defendant intended for the false statement to

induce the plaintiff to act; (4) the plaintiff relied upon the

truth of the statement; and (5) the plaintiff suffered

damages as a result of his reliance on the statement.

Connick v. Suzuki Motor Co., 675 N.E.2d 584, 591 (Ill.

1996). Mrs. Geschke has not come forward with any

evidence that either defendant made a false statement to

her husband or affirmatively misrepresented the scope of

coverage provided by the Blood and Plasma Benefit Rider.

Mrs. Geschke’s argument rests on the rider’s language and

App. 14

her contention that the defendants failed to explain that it

did not cover all transfusion-related costs. We have con-

cluded that the policy language unambiguously covers

only the cost of the blood or blood plasma itself; clear and

unambiguous policy language cannot form the basis of a

fraud claim. Accordingly, the common law fraud claim was

properly dismissed.

The elements of a claim under the ICFA are: (1) a

deceptive act or practice by the defendant; (2) the defen-

dant intended that the plaintiff rely on the deception; (3)

the deception occurred in the course of conduct involving

trade or commerce; (4) the plaintiff suffered actual dam-

age; and (5) the damage was proximately caused by the

deception. Oliveira v. Amoco Oil. Co., 776 N.E.2d 151, 160

(ll. 2002). As with her common law fraud claim, Mrs.

Geschke’s ICFA claim is premised upon the policy itself

and not on any statements or actions by either defendant

in connection with the sale of the policy. The blood and

plasma rider is not itself deceptive. Summary judgment in

favor of the defendants on the ICFA claim was therefore

appropriate.

‘For the foregoing reasons, the decision of the district

court granting summary judgment to the defendants is

AFFIRMED.

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit

App. 15

United States District Court .

Northern District of Illinois

Western Division

Irene M. Geschke, et al. JUDGMENT INA

CIVIL CASE

Case Number: 02 C 50271

Vv.

Air Force Association, et al.

OO Jury Verdict. This action came before the Court for a

trial by jury. The issues have been tried and the jury

rendered its verdict.

™ Decision by Court. This action came to trial or hear-

ing before the court. The issues have been tried or

heard and a decision has been rendered.

IT IS HEREBY ORDERED AND ADJUDGED that defen-

dants’ motion for summary judgment is granted as to

plaintiff’s Count I breach of contract, Count III common

law fraud and Count IV statutory fraud claims. Count II is

dismissed. This case is dismissed in its entirety with

prejudice.

Michael W. Dobbins,

Clerk of Court

Date: 7/16/2004 /s/ Susan Wessman

Susan M. Wessman,

Deputy Clerk

App. 16

United States District Court,

Northern District of Illinois

Name of As- Philip G. | Sitting Judge

signed Judge | Reinhard | if Other than

or Magistrate Assigned

Judge Judge

CASE 02 C 50271 |DATE 7/16/2004

NUMBER

CASE TITLE GESCHKE vs. AIR FORCE

[In the following box (a) indicate the party

filing the motion, e.g., plaintiff, defendant,

3rd party plaintiff, and (b) state briefly the

nature of the motion being presented.]

MOTION:

DOCKET ENTRY:

l( 1) CO Wiled motion of [use listing in “Motion” box above.]

(2) (©) Briefin support of motion due __.

(3) © Answer brief to motion due __. Reply to answer brief

due __.

(4) (©) Rulng/Hearingon__setfor__at__.

(5) 0) Status hearing fheld/continued to] [set for/re-set for]

on. lootixe. at...

(6) © Pretrial conference fheld/continued to} [set for/re-set

for]on__setfor___ at__..

Trial [set for/re-set for]on__ at__

on

—— ee

a as

(Bench/Jury trial] [Hearing] held/continued to ___ at

—

App. 17

(9) © This case is dismissed [with/without] prejudice

and without costs [by/agreement/pursuant to]

O FRCP4(m) © General Rule 21

CO) FRCP 41(a)(1) CO) FRCP41(a\(2)

(10) @ [Other docket entry] For the reasons stated on the

reverse Memorandum Opinion and Order, defen-

dants’ motion for summary judgment is granted as

to plaintiff’s Count I breach of contract, Count III

common law fraud and Count IV statutory fraud

claims. Count II is dismissed. This case is dis-

missed in its entirety with prejudice.

(11) @ [For futher detail see order on the reverse side of

the original minute order.} /s/ Philip R. Rheinhard

No notices required,

|_| advised in open court.

|__| No notices required.

Notices mailed by

|_|judge’s staff.

3 Notified counsel by

x telephone.

Docketing to mail

notices. docketing

= deputy

Mail AO 450 form. initials

Copy to judge/ date

magistrate judge. mailed

notice

courtroom | Date/time

/SEC | deputy’s receivedin | mailing

initials central Clerk's} deputy

: Office initials

BEST AVAILABLE COPY

App. 18

(Reserved for use by the Court)

MEMORANDUM OPINION AND ORDER

Plaintiff, Irene Geschke, a citizen of Illinois, individu-

ally and as executor of the estate of her late husband,

Clarence Geschke, a citizen of Illinois, (hereinafter “dece-

dent”), filed a second amended complaint against defen-

dants, the Air Force Association, a District of Columbia

nonprofit corporation with its principal place of business

in Arlington, Virginia, (hereinafter “AFA”) and Monumen-

tal Life Insurance Company, a Maryland corporation with

its principal place of business in Baltimore, Maryland,

(hereinafter “Monumental”), seeking to recover insurance

benefits allegedly due decedent under a. group cancer

insurance policy serviced and administered by the AFA

and underwritten by Monumental. Plaintiff proceeds

under three theories: breach of contract (Counts I and IJ),

common law fraud (Count II), and statutory fraud (Count

IV). As the amount in controversy exceeds $75,000, this

court properly has diversity jurisdiction under 28 U.S.C.

§ 1332. The parties agree that Illinois law applies. Defen-

dants move for sumrnary judgment.

On summary judgment, the court must view the facts

and draw ail! reasonable inferences in the light most

favorable to the non-movant. Ziliak v. AstraZeneca LI, 324

F.3d 518, 520 (7th Cir. 2003). Summary judgment is not

appropriate where a reasonable jury could return a verdict

for the non-movant. Payne v. Pauley, 337 F.3d 767, 770

(7th Cir. 2003), The court’s sole task is to decide, based on

the evidence of record, whether there is any genuine issue

of material fact in dispute that requires a trial. Only if

there is not will the moving party be entitled to summary

judgment as a matter of law. See Payne, 337 F.3d at 771.

App. 19

Illinois law requires that a claim for breach of contract

establish: (1) the existence of a contract, (2) performance of

all conditions to be performed by plaintiff; (3) breach by

defendant, and (4) damages to plaintiff as a consequence

thereof. Shubert v. Federal Express Corp., 715 N.E.2d 659,

661 (Ill. App. Ct. 1999), In this case, the parties dispute

the existence of a genuine issue of material fact with

regard to defendants’ breach on the Blood and Plasma

benefit (hereinafter “the benefit”) as stated in Count I.’

Defendants argue that because the benefit “unambigu-

ously” provides for “expenses for the cost of blood or blood

plasma” without providing for “administration and proc-

essing fees, laboratory costs, or supplies associated with

blood transfusions or analysis” and because defendants

indeed paid the “cost of [decedent’s] blood or blood

plasma,” there is no genuine issue of material fact as to

the breach and they are entitled to summary judgment as

a matter of law.

The construction of an insurance policy and a deter-

mination of the rights and obligations thereunder are

questions of law which are appropriate subjects for dispo-

sition by summary judgment. Crum and Forster Managers

Corp. v. Resolution Trust Corp., 620 N.E.2d 1073, 1077 (Ill.

1993). In construing the language of the policy, the court’s

primary objective is to ascertain and give effect to the

intent of the parties to the contract Traveler’s Ins. Co. v.

Eljer Mfg., 757 N.E.2d 481, 491 (111.2001). In order to

* Defendants’ motion does -not discuss the merits of plaintiff's

count II breach of contract claim for defendants’ alleged failure to pay

diagnostic and surgical benefits as promised under the policy. Defen-

dants note that plaintiff’s counsel represented that plaintiff would not

be pursuing this claim and plaintiff has not disagreed with this

statement. Count Il, therefore, is dismissed.

App. 20

ascertain the meaning of the policy's words and the intent

of the parties, the court must construe the policy as a

whole and take into account the type of insurance pur-

chased, the nature of the risks involved and the overall

purpose of the contract. Traveler’s Ins. Co., 757 N.E.2d 481

at 491. The test is not what the insurer intended its words

to mean, but what a reasonable person in the position of

the insured would understand them to mean. Allstate Ins.

Co. v. Smiley, 659 N.E 2d 1345, 1350 (Ill, App. 1995).

When a contract prcvision is subject to more than one

reasonable interpretation, it is ambiguous and must be

construed against the drafter. Bourke v. The Dun &

Bradstreet Corp., 159 F.3d 1032, 1036 (7th Cir. 1998). On

the other hand, where it is susceptible to only one mean-

ing, it is clear and unambiguous, Bourke, 159 F.3d at 1037,

and a court must afford the words their plain, ordinary

and popular meaning, Outboard Marine Corp. v. Liberty

Mutual Ins. Co, 607 N.E.2d 1204, 1212 (Til. 1992).

Our primary purpose in construing the instant policy

provision is to ascertain the intent of the parties. Initially,

we look to the nature of the policy at issue and the risks

undertaken by the insurer. Outboard Marine Corp., 607

N.E.2d at 1215. The overall purpose of the contract be-

tween plaintiff and defendants is to provide specific,

supplemental insurance benefits “to help with the high

cost of cancer treatment.” Thus, unlike the comprehen-

sive general liability policy at issue in Outboard Marine

Corp., this plan is intended to provide limited benefits as

identified in the policy and not to provide primary, all-

encompassing insurance to cover all of the expenses associ-

ated with a course of cancer treatment. See Outboard

Marine Corp., 607 N.E.2d at 1215. “Treatment,” in fact, is

not referenced in any of the materials that specifically

App. 21

define the Blood and Blood Plasma benefit at issue.

Plaintiff admits in her deposition that she and decedent

understood at the time of enrollment that the policy

provided supplemental coverage that paid, not medical

expenses, but specific benefits as identified under the

plan. The terms “blood” and “plasma” are not defined

within the policy itself so the court must interpret these

terms by affording them their plain, ordinary, and popular

meanings. See Outboard Marine Corp., 607 N.E.2d at

1215. “‘Usual and ordinary meaning’ has been stated

variously to be that meaning which the particular lan-

guage conveys to the popular mind, to most people, to the

average, ordinary, normal person, to a reasonable person,

to persons with usual and ordinary understanding, to a

business person, or to a layperson.” Outboard Marine

Corp., 607 N.E.2d at 1216. Webster’s Third New Interna-

tional Dictionary defines “blood” as “the fluid that circu-

lates in the principal vascular system of vertebrate

animals” and “plasma” as “the fluid part of blood.” To the

popular mind, to persons with usual and ordinary under-

standing, to the reasonable person paying just $31.50 per

family per quarter for supplemental insurance to provide

specific cancer benefits, the term “cost of blood or blood

plasma” reasonably refers only to the cost of the blood

product itself.

For these same reasons, interpreting the benefit’s

language to include the costs of administration and proc-

essing fees, laboratory costs, and supplies associated with

blood transfusions or analysis, as plaintiff asserts, is not

reasonable. In light of the plain, ordinary and popular

meaning of the terms “blood” and “plasma,” the court

cannot find that the parties intended the coverage of this

limited supplemental cancer insurance policy to extend so

App. 22

far as to cover all of the costs associated with a blood

transfusion.

The elements required to state a cause of action for

common law fraud in [Illinois are: (1) a false statement of

material fact, (2) defendants’ knowledge that the state-

ment was false, (3) defendants’ intent that the statement

induce the plaintiff to act, (4) plaintiff’s reliance upon the

truth of the statement, and (5) plaintiff's damages result-

ing from reliance on the statement. Connick v. Suzuki

Motor Co., 675 N.E.2d 584, 591 (Ill. 1996). Failure to prove

any of these five elements is fatal to a common law fraud

claim.

In this case, plaintiff states that the policy’s reference

to “expenses for the cost of blood or blood plasma” is a half-

truth amounting to a misrepresentation by which defen-

dants intended to mislead decedent into believing the

benefit would cover expenses for the processing and

administration of blood incidental to a blood transfusion.

The court does not find anything about this language to be

false or misleading. Defendants’ choice of words merely

raises a question of contract interpretation, which this

court has already decided as a matter of law in favor of

defendants. Where a contract provision is found to be

unambiguous based upon the plain meaning of the words

used in the policy, it cannot be a “false statement of mate-

rial fact.”

To successfully claim a violation of the Illinois Con-

sumer Fraud Act, (hereinafter “the Act”), 815 ILCS 505/2,

a plaintiff must prove: (1) a deceptive act or practice by

defendant, (2) defendant’s intent that plaintiff rely on the

deception, (3) the occurrence of the deception in the course

of conduct involving trade or commerce, and (4) actual

App. 23

damage to plaintiff (5) proximately caused by the decep-

tion. Oliveira v. Amoco Oil Co., 776 N.E.2d 151, 160 (Il.

2002). It is not necessary that a plaintiff show actual

reliance on the deceptive act or that the defendant com-

mitted the deceptive act in bad faith; instead, innocent

misrepresentations or omissions intended to induce the

plaintiff’s reliance are actionable. Capiccioni v. Brennan

Naperville, Inc., 791 N.E.2d 553, 558 (Ill. App. 2003).

Nevertheless, proof of actual deception of the plaintiff is

required. Shannon v. Boise Cascade Corp., 805 N.E.2d

213, 218 (Tll. 2002).

Whether a practice is deceptive or unfair under the

Act must be decided on a case by case basis. Carl Sand-

burg Village Condominium Assoc. No. 1 v. First Condomin-

ium Dev. Co., 557 N.E.2d 246, 249 (Ill. App. 1990). Just as

the court found above with respect to plaintiff’s common

law fraud claim, there is no evidence in this case of a

deceptive act or practice by defendants. This court has

already decided as a matter of law that the terms of the

Blood and Plasma benefit are unambiguous in the manner

that defendants have asserted. With that said, the benefit

is what it is and it cannot at the same time be deceptive or

misleading as to plaintiff. By the same token, plaintiff’s

argument that the benefit runs afoul of the Act’s prohibi-

tion against “unfair” practices also falls short.

For the reasons stated above, defendants’ motion for

summary judgment is granted as to plaintiff’s Count I

breach of contract, Count III common law fraud and Count

IV statutory fraud claims. Count II is dismissed. This case

is dismissed in its entirety with prejudice.

App. 24

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

Michael W. Dobbins Office of the Clerk

CLERK

Irene M. Geschke

924 Mary Anne Street

Woodstock, IL 60098-2285

Case Number: 3:02-cv-50271 Other Court No: 02 AR 294

Title: Geschke v. Air Force Assn

Assigned Judge: Honorable Philip G. Reinhard

MINUTE ORDER of 8/9/04 by Hon. Philip G. Reinhard:

Plaintiff moves pursuant to Fed.R.Civ.P.59(e) to alter or

amend the judgment entered in this case. The matters

raised by this motion do not warrant altering the decision

previously reached. AFA’s changes to its website, discov-

ered by plaintiff post-judgment, do not show the contract

language to be ambiguous. Plaintiff’s motion [73-1] is

denied. mailed notice

This docket entry was made by the Clerk on August 10,

2004

ATTENTION: This notice is being sent pursuant to Rule

77(d) of the Federal Rules of Civil Proce-

dure or Rule 49(c) of the Federal Rules of

Criminal Procedure. It was generated by

ICMS, the automated docketing system

used to maintain the civil and criminal

dockets of this District. If a minute order

or other document is enclosed, please re-

fer to it for additional information.

App. 25

For scheduled events, motion practices, recent opinions

and other information, visit our web site at www.ilnd.

uscourts.gov

Check our web site for CourtWeb — a concise listing of

rulings by judges. Check for rulings on noticed motions.

Also, subscribe to CourtWatch — a free service — tu receive

e-mail notification of CourtWeb postings.

To apply for a PACER account, call 1.800.676.6856

App. 26

United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

October 20, 2005

Before

Hon. DANIEL A. MANION, Circuit Judge

Hon. ILANA DIAMOND ROVNER, Circuit Judge

Hon. DIANE S. SYKES, Circuit Judge

No. 04-3205

IRENE M. GESCHKE, Appeal from the United

individually and as Executor Stats District Court for the

of the Estate of Clarence O. Northern District of

Geschke, Illinois, Western Division.

Plaintiff-Appellant, No. 02 C 50271

ss Philip G. Reinhard,

AIR FORCE ASSOCIATION Judge.

and MONUMENTAL LIFE

INSURANCE COMPANY,

Defendants-Appellees.

ORDER

On consideration of the petition for rehearing, all of

the judges on the panel have voted to deny rehearing. It is

therefore ordered that the petition for rehearing is DE-

NIED.

(2) FILED :

No. 05-946 MAR | - 2006

E CLERK

__SUPREME COURT, U.S.

In The

Supreme Court of the United States

IRENE M. GESCHKE, individually and as Executor

of the Estate of CLARENCE O. GESCHKE,

Petitioner,

Vv.

AIR FORCE ASSOCIATION, ET AL.,

Respondents.

4

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Seventh Circuit

4

BRIEF IN OPPOSITION

——¢

WILLIAM A. CHITTENDEN, III

Counsel of Record

MICHAEL B. GALIBOIS

CHITTENDEN, MuURDAY & Novotny LLC

303 West Madison Street

Suite 1400

Chicago, I\linois 60606

Phone: (312) 281-3600

Fax: (312) 281-3678

Counsel for Respondents

COCKLE LAW BRIEF PRINTING CO 1800) 225 6964

OR CALL COLLECT | 40:2) 442-2631

STATEMENT OF THE PARTIES

PURSUANT TO RULE 29.6

Respondents are Air Force Association (“AFA”) and

Monumental Life Insurance Company (“Monumental”)

(Defendants below, hereinafter collectively “Respon-

dents”). AFA is an independent, non-profit organization.

Monumental is a corporation owned, in part, by Capital

General Development Corporation and First AUSA Life

Insurance Company, Inc. No publicly held company owns

10% or more of Monumental’s corporate stock.

ii

TABLE OF CONTENTS

Page

Statement of the Parties Pursuant to Rule 29.6.......... i

ee OE CIR as viisctiinevsicnsiesdistnaianstnstoteniconaubainicen ii

ee OE BIE icin kicicicdincindiccseabinatinctinnadatnttetea ili

Respondents’ Objection to Petitioner’s Presentation of

COLIN SE HIN MIIY- sevickcncintievccinctacctchodedsinmicoussesmabics 1

RIOR icici cp Andis rernicnteveacieeatoiaaacsoainititeastd

Oe OE Cine CI soos iin cccvccninsoncnoravassmntborseribisces 2

Reasons for Denying the Petition for Writ of Certio-

I asia. ccdsnck side anknnhs issn viaeiba patace nice tains enbteicetal oa

ili

TABLE OF AUTHORITIES

CASES

Am. States Ins. Co. v. Koloms, 177 [1l.2d 473, 687

PRN Ce CRE itecssccisinmn spas vaciocedcascksnliucannescecsivecehes

Bourke v. Dun & Bradstreet Corp., 159 F.3d 1032

SER Geel APR ce venhsdss <aduccoob sok osenvbitbint kieeteapasnaeedeccsoucess

Dempsey v. Nat'l Life & Accident Ins. Co., 404 Ill.

EGS, SE INT. Be SIS IID) a cscccnc sins csvcnscescescsiccsatorvesse

Horning Wire Corp. v. Home Indemn. Co., 8 F.3d

Dee CFSIN Ras RO asin ci inicercicaguigusnimbsbiatodmiens eevee:

Jupiter Aluminum Corp. v. Home Ins. Co., 225 F.3d

EG Fe OT sivas creesniced canccni pins hapacedisobatsebivcceans

St. Michael’s Orthodox Catholic Church v. Preferred

Risk Mut. Ins., 146 Dll.App.3d 107, 496 N.E.2d

BE Pee Be SPI, SO ssisdevepritrde vedic jequdieninivecbotere states

UNR Indus., Inc. v. Cont’l Cas. Co., 942 F.2d 1101

CFIA Ae BP dosciap cs caiuinedecky sneosanciedoasincaasniastinn campos

RULES

RN SONETE TOUIO TN oi osc ctissccbicdsnss iesaceccidctene

RESPONDENTS’ OBJECTION TO PETITIONER’S

PRESENTATION OF QUESTION FOR REVIEW.

Petitioner, Irene Geschke, Individually and as Execu-

tor of the Estate of Clarence O. Geschke (Plaintiff below,

hereinafter “Petitioner”), contends that the proper ques-

tion before the Court is “[wlhether a federal appellate

court may affirm a summary judgment in favor of a

medical insurer despite controlling state case law requir-

ing ambiguous provisions in insurance policies to be

construed in favor of insureds[.]” Petitioner misconstrues

and fundamentally misstates the question presented for

review.

The United States Court of Appeals for the Seventh

Circuit did not disregard Illinois law requiring courts to

construe ambiguities in an insurance contract in favor of

an insured. To the contrary, the Seventh Circuit affirmed

entry of summary judgment in favor of Respondents

because it held that the disputed insurance policy lan-

guage is unambiguous. (App. 13-14) Thus, correctly

restated, the sole question presented for the Court’s review

is whether the Seventh Circuit, applying Illinois law,

correctly held that the relevant policy language is unam-

biguous and, therefore, does not include the additional

insurance benefits claimed by the Petitioner.

4

INTRODUCTION

Petitioner entirely fails to state any compelling

reasons warranting the grant of certiorari. Indeed, Peti-

tioner wholly disregards Supreme Court Rule 10. Peti-

tioner does not contend that the Seventh Circuit’s decision

conflicts with either a decision of another federal circuit or

a decision of the [Illinois Supreme Court; Petitioner does

not argue that the Seventh Circuit has decided an impor-

tant question of federal law that needs to be resolved by

this Court; and Petitioner does not suggest that the

Seventh Circuit has departed from the accepted and usual

course of judicial proceedings.

At most, Petitioner claims the Seventh Circuit misap-

plied Illinois common law of contracts. By Rule, a petition

claiming only a plain misapplication of law is “rarely

granted.” Sup. Ct. R. 10. This case is no exception.

,

vv

STATEMENT OF THE CASE

Petitioner’s husband, Clarence Geschke, deceased,

was a member of the AFA. (Record 59, p. 3) In May 1997,

decedent enrolled in the CancerCare Plan sponsored by

the AFA. (App. 2) Unlike a general medical liability

insurance policy, the CancerCare Plan provided specifi-

cally defined supplemental benefits for certain specific

expenses incurred in connection with the diagnosis and

treatment of cancer. (App. 10-11, 20-21) Both the Respon-

dent and the decedent understood at the time of enroll-

ment that the Plan provided supplemental coverage for

specific benefits as identified in the Plan. (App. 21)

After his enrollment, the decedent received a Certifi-

cate of Coverage (“Certificate”). (Record 59, pp. 6-7) The

Certificate explained that: “[Monumental] would pay

benefits according to the Schedule of Benefits for cancer

that manifests itself while the covered person is insured

under the group policy and any attached Riders.” (Record

46, Exh. 10, p. 6) Attached to the Certificate was a “Blood

3

and Plasma Benefit Rider” (“Rider”), which further pro-

vided:

BLOOD AND PLASMA BENEFIT RIDER

This Rider is a part of the Certificate to which it

is attached. It is issued in consideration of the

application and the payment of any premium.

The following Blood and Plasma Rider is added

to the Certificate.

Upon receipt of due proof that the Cov-

ered Person incurred expenses for

the cost of blood or blood plasma,

we will pay a benefit for these expenses

not. to exceed the Maximum Benefit

shown on the Schedule. The expense of

blood. or blood plasma incurred while

Hospital Confined, as an outpatient or

in a free standing facility is eligible for

this benefit.

Benefits are subject to all other terms and condi-

tions of the Certificate. The Rider does not waive,

alter or extend any provisions or limitations of

the Group Policy except to the extent shown

above.

(App. 3, 20-21) (emphasis added) Per the Certificate’s

Schedule of Benefits, the maximum Blood and Plasma

Benefit per illness period was $500, but there was “no

max-mum benefit for leukemia.” (App. 3)

Petitioner’s decedent was diagnosed with leukemia in

March 1999. Id. In April 1999, he submitted a claim to

Monumental seeking benefits for certain inpatient and

outpatient services. Jd. Monumental subsequently re-

quested verification of the decedent’s clinical diagnosis in

order to process the claims. (Record 46, Exhs. 16, 19-20)

4

On June 21, 1999, the decedent died. (App. 3) Following

his death, Petitioner submitted an updated claim in

October 1999 to Monumental for $37,622.37. Id. Of that

amount, $33,689.81 related to the decedent’s blood trans-

fusions. Id. Because the verification of clinical diagnosis

requested in April had not been submitted, Monumental

again requested verification of the clinical diagnosis in

order to process the claims. (Record 46, Exhs. 27-29)

On December 6, 1999, Petitioner submitted the

requested diagnosis Verification to Monumental. (Record

59, p. 14) Two weeks later, Monumental paid the eligible

benefits under the CancerCare plan for hospitalizations,

surgical and anesthesia charges. (App. 3) In March 2000,

after receiving confirmation from the hospital as to the

accurate charges for the cost of blood and blood plasma,

Monumental paid an additional $1,245.10 under the Blood

and Piasma Benefit Rider. Id.

in May 2000, Respondent challenged Monumental’s

decision to pay benefits only for the costs of blood and

blood plasma and claimed that Monumental should have

paid both charges for “blood, platelets and plasma” and

charges for “administering the blood plates and plasma.”

(Record 46, Exh. 34) Monumental responded to Petitioner

advising Respondent that, per the applicable Rider, the

Blood aad Plasma Benefit covered “incurred expenses for

the cost of blood and blood plasmal,]” and did not cover

“processing or administration fees, supplies, drugs or

laboratory charges[.]” (Record 46, Exh. 35)

Petitioner subsequently filed suit alleging that Re-

spondents breached the insurance contract by limiting

payment of benefits under the Blood and Plasma Benefit

Rider to the cost of blood and blood plasma. Following

5

discovery, Respondents moved for summary judgment,

arguing that the terms of the Plan’s Blood and Plasma

Benefit Rider were unambiguous and did not cover the

additional costs claimed for administration and laboratory

analysis of the blood as a matter of law.

After the motion was fully briefed, the district court

entered summary judgment in Respondents’ favor in July

2004. (App. 21-23) The district court agreed that the

purpose of the Plan, unlike a “comprehensive general

liability policy,” was to provide “specific supplemental

insurance benefits.” (App. 20) Neither the Plan generally

nor the specific Blood and Plasma Benefit Rider referenced

a general benefit for cancer “treatment.” Jd. Instead, the

Benefit included coverage for “expenses incurred for the

cost of blood or blood plasma.*(App. 19, 21) Assigning the

terms “blood” and “plasma” their “plain, ordinary and

popular meanings,” the court held that the Blood and

Plasma Benefit, “to the reasonable person paying just

$31.50 per family per quarter for supplement insurance to

provide specific cancer benefits” ... “reasonably refers

only to the cost of the blood product itself.” (App. 21) As

the language defining the Benefit was unambiguous, the

court held that Respondents did not breach the insurance

contra«t. (App. 21-23)

After the district court denied her Rule 59(e) motion,

Petitioner filed her notice of appeal on August 24, 2004.

(App. 24-25) On September 23, 2005, after briefing and

oral argument, the Seventh Circuit affirmed the district

court’s grant of summary judgment in favor of the Respon-

dents. (App. 23) On October 20, 2005, the Seventh Circuit

denied Petitioner’s petition for rehearing.

6

Petitioner filed her Petition fer Writ of Certiorari on

January 30, 2006, claiming that the Seventh Circuit

incorrectly held the CancerCare Plan’s Blood and Plasma

Benefit was unambiguous or, alternatively, that her

opposing interpretation of the Benefit creates a genuine

issue of material fact precluding entry of summary judg-

ment.

¢

REASONS FOR DENYING THE

PETITION FOR WRIT OF CERTIORARI ~-

Petitioner fails to identify any compelling reason

which might even remotely justify grant of certiorari.

Petitioner does not assert nor claim that there is a split

among the federal circuits on the issue. Neither does

Petitioner claim that the Seventh Circuit’s decision con-

flicts with an Illinois Supreme Court decision, departs

from the normal course of judicial proceedings, or raises

an “important federal question.” Petitioner merely dis-

putes the Seventh Circuit’s application of [linois law

governing interpre‘ ation of an insurance contract like the

CancerCare Plan. Notwithstanding Petitioner’s dissatis-

faction with the Seventh Circuit’s decision, a federal

appellate court’s routine application of well-settled state

contract law is wholly insufficient to warrant certiorari.

In essence, Petitioner only argues that the Seventh

Circuit’s “analysis entirely fails to establish the absence of

an ambiguity,” and thus, her claim that the Benefit is “just

obviously ambiguous” remains unrebutted. (App. 7) This

argument is fundamentally unsound.

Illinois law does not assume a contract of insurance is

ambiguous; rather it admonishes courts not to read an

ambiguity into a policy or invent one where none exists.

Horning Wire Corp. v. Home Indem. Co., 8 F.3d 587, 589

(7th Cir. 1993), citing Dempsey v. Nat'l Life & Accident Ins.

Co., 404 Ill. 423, 426, 88 N.E.2d 874, 876 (1949). Under

Illinois law, “[a] court’s primary objective in construing the

language of the policy is to ascertain and give effect to the

intentions of the parties as expressed by the terms of the

agreement.” Am. States Ins. Co. v. Koloms, 177 [l.2d 473,

479, 687 N.E.2d 72, 75 (1997). It is the insured’s burden,

not the burden of the court, to prove eligibility for insur-

ance benefits. UNR Indus., Inc. v. Cont’l Cas. Co., 942 F.2d

1101, 1108 (7th Cir. 1991), citing St. Michael’s Orthodox

Catholic Church v. Preferred Risk Mut. Ins., 146 1l.App.3d

107, 110, 496 N.E.2d 1176, 1178 (1st Dist. 1986).

Petitioner claims that it defies common sense to

interpret the Blood and Plasma Benefit to cover the “cost

of blood or blood plasma,” but not additional costs for

preparing and transfusing the blood transfusion. (App. 9)

Petitioner reasons that a patient is not expected to trans-

fuse blood themselves, but must pay additional medical

costs for this service. Jd. As the Seventh Circuit correctly

recognized, however, the issue is not the way medical

services may be delivered, but rather what costs are

covered by the terms of the insurance contract. (App. 9-10)

Although blood or blood plasma may be of no practical use

without being transfused, it does not follow that the

insurance agreement covers more than what it specifically

states. (App. 10)

As stated in the Plan’s specific Blood and Plasma

Benefit Rider, the Benefit pays “incurred expenses for the

cost of blood or blood plasma.” (App. 3, 20-21) Affording

“blood” and “plasma” their common dictionary meaning,

neither term is synonymous with the medical process of

8

transfusion. (App. 10) Because the Rider dues not make

any reference whatsoever to costs for transfusion services

(or any other processing or laboratory costs claimed by

Petitioner), these additional expenses are plainly not

covered. Id.

Petitioner also argues that the Blood and Plasma

Benefit Rider is made ambiguous by the Plan’s “repeated

reference to ‘treatment|,|’” Petitioner’s argument, how-

ever, disregards the Plan’s plain language. The Cancer-

Care Plan does not confer a general benefit for cancer

“treatment.” (App. 10) Indeed, nowhere does the word

“treatment” appear in either the Schedule of Benefits or,

more specifically, in the Blood and Plasma Benefit Rider.

(App. 10-11)

The fact that Petitioner has proffered a different

interpretation of the contract does not, as she claims,

create a material fact precluding summary judgment.

(App. 10-11) It is fundamental that “interpretation of an

insurance policy is a question of law that is an appropriate

subject for disposition by summary judgment” Jupiter

Aluminum Corp. v. Home Ins. Co., 225 F.3d 868, 873 (7th

Cir. 2000). A contract is not ambiguous simply because the

parties do not agree on the meaning of its terms. Bourke v.

Dun & Bradstreet Corp., 159 F.3d 1032, 1036 (7th Cir.

1998). Here, the Blood and Plasma Benefit Rider plainly

states that the Benefit paid for the “cost of blood or blood

plasma.” As the Seventh Circuit recognized, this language

could not reasonably be construed to mean the Benefit

paid expenses for anything other than what it expressly

provided. (App. 10-13) Because the Benefit Rider was

unambiguous, Respondents were entitled to summary

judgment as a matter of law.