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SECOND DIVISION
FEBRUARY 17, 2004

In May 2000, the plaintiff, State Farm Fire and Casualty Company (StateFarm), filed a declaratory judgment action against the defendants, CatherineKiszkan, and Tracy Gordon and Earline Taylor, as administrators for theestates of Mike Matricard and Readell Taylor, respectively (Defendants). State Farm sought a declaration that its personal liability umbrella policy(PLUP), issued to its insured, Kiszkan, provided no coverage to the estate ofMatricard for a personal injury and wrongful death action filed against him bythe estate of Taylor. In May 2001, the circuit court granted State Farm'smotion for summary judgment, finding Matricard was not an insured underKiszkan's PLUP.

The Defendants appeal, arguing (1) State Farm was not entitled tosummary judgment as a material question of fact exists regarding the source ofthe misrepresentation in Matricard's insurance application that he and Kiszkanwere related, (2) State Farm waived its right to deny coverage under Kiszkan'sPLUP, and (3) the circuit court should have applied the doctrine of estoppelbecause State Farm represented that Matricard was an insured under Kiszkan'sPLUP. We affirm.

BACKGROUND

Since 1994, Kiszkan has been covered by a State Farm PLUP. Over theyears, Kiszkan has obtained several State Farm policies through State Farmagent Andrew Oberc's office and visited Oberc's office on multiple occasions. In May 1998, Kiszkan and Matricard went to Oberc's office so that Matricardcould apply for an automobile liability insurance policy (Automobile Policy)for his own vehicle. While the application for Matricard's Automobile Policywas being prepared, it was represented to Nancy Neberieza, Oberc's officemanager, that Matricard was Kiszkan's grandson and lived with her. Thisfamilial relationship was noted on Matricard's Automobile Policy applicationthat was sent to State Farm's underwriting department. In September 1998,Matricard and Taylor were involved in an automobile collision in which bothmen died. Matricard was driving his own vehicle and was covered by theAutomobile Policy issued by State Farm.

In October 1998, the attorney for Taylor's estate wrote to MarcellaHatch, a State Farm claims specialist, requesting the dollar amount ofliability coverage for Matricard under his Automobile Policy and all umbrellapolicies. She did not reply. Hatch was initially assigned the responsibilityof handling the claims brought by Taylor's estate against Matricard's estate. She also oversaw the death benefits available to Matricard's next-of-kin underhis Automobile Policy. Acting on the information in Matricard's insuranceapplication that Kiszkan was Matricard's next-of-kin, Hatch requested Kiszkanprovide State Farm with a death certificate and the medical authorizationneeded to obtain Matricard's medical records. According to Hatch, she alsoreceived confirmation from Kiszkan herself that she was Matricard'sgrandmother. In January 1999, upon receipt of Matricard's death certificatefrom Kiszkan and Matricard's medical records, State Farm paid Kiszkan $20,000for death benefits, and $2,000 for medical payment benefits under Matricard'sAutomobile Policy based on its belief that Kiszkan was Matricard's grandmotherand next-of-kin.

In February 1999, the attorney for Taylor's estate again sent State Farma letter requesting the amount of liability coverage that was available toMatricard's estate for the September 1998 collision. In March 1999, SharonSmith, a claims team manager at State Farm, answered that Matricard'sAutomobile Policy had limits of $100,000 per person and $300,000 per accidentand that "there is a Personal Umbrella policy with limits of $1,000,000 forpersonal liability."

In April 1999, the attorney for Taylor's estate sent State Farm noticeof a petition to open Matricard's estate. Included with that notice was an"Affidavit of Heirship" completed by Kiszkan, referring to herself as a"friend" of Matricard and attesting that she did not know whether Matricardhad ever been married or had any children. The service list, entitled"Exhibit A," attached to the petition, listed, inter alia, "Catherine Kiszkan,grandmother, closest known next-of-kin" (Exhibit A).

In May 1999, Taylor's estate filed a wrongful death and survival actionagainst Matricard's estate. State Farm immediately assumed Matricard'sdefense, as required under his Automobile Policy, and the file was assigned toMary Lou Kovac. From her review of the file, Kovac understood Kiszkan to beMatricard's grandmother and the PLUP coverage was available to Matricard as aninsured. In December 1999, the attorney for Taylor's estate made a settlementdemand on State Farm requesting the entire $1.1 million in coverage availableunder Matricard's Automobile Policy and Kiszkan's PLUP. State Farm did notsettle.

In early March 2000, Kiszkan telephoned Kovac and told her that althoughMatricard had lived with her, he was not her grandson, nor was he a bloodrelative. Within days of the telephone call, State Farm reserved its right todeny coverage to Matricard's estate under Kiszkan's PLUP based on Matricardnot being related to Kiszkan. In its reservation of rights letter, State Farmstated: "It is questionable whether Michael Matricard, deceased, was arelative of the first person named as an insured so as to be an insured asdefined in the policy."

In May 2000, State Farm filed a declaratory judgment action seeking adetermination of its rights and obligations to Matricard under the PLUP, butcontinued defending Matricard pursuant to his Automobile Policy. TheDefendants answered State Farm's complaint stating there was insufficientinformation to form a belief as to the truth of the allegation that Kiszkanand Matricard were not related. The Defendants also raised the affirmativedefenses of equitable estoppel, judicial estoppel, and waiver. State Farmdenied the applicability of each affirmative defense.

In June 2000, a jury awarded Taylor's estate a $6.3 million judgmentagainst Matricard's estate arising from the automobile accident in which bothdied. State Farm indemnified Matricard for the $100,000 limit of hisAutomobile Policy.

In September 2000, State Farm moved for summary judgment in thedeclaratory judgment action pursuant to section 2-1005(c) of the Code of CivilProcedure (735 ILCS 5/2-1005(c) (West 2000)), based on Matricard not being arelative of Kiszkan and therefore, not an insured under Kiszkan's PLUP. Insupport of its motion, State Farm attached Kiszkan's deposition transcriptwherein she testified that she and Matricard were not related. State Farmalso attached the affidavits of Neberieza (officer manager for State Farmagent Oberc), Smith (State Farm claims team manager), and Kovac (responsiblefor Matricard's file upon the filing of Taylor's lawsuit against Matricard'sestate). The affidavits detailed (1) how State Farm originally came tobelieve Matricard was Kiszkan's grandson, (2) the disclosures State Farm maderegarding insurance coverage potentially available to Matricard, and (3) howState Farm learned Kiszkan and Matricard were not actually related.

The Defendants filed a response and a cross-motion for summary judgment. The Defendants did not dispute that Kiszkan and Matricard were not related;instead, the affirmative defenses of waiver, equitable estoppel, and judicialestoppel were raised. Neberieza was deposed and testified Kiszkan accompaniedMatricard to Oberc's office, represented she was his grandmother, and assertedMatricard was there to apply for an automobile policy. Oberc and Neberiezawere personally familiar with Kiszkan and, based on the information in theinsurance application, knew Matricard and Kiszkan were living in the samehousehold. However, Neberieza did not ask whether Kiszkan was Matricard'spaternal or maternal grandmother; nor did she tell Matricard he had to berelated to Kiszkan in order to qualify for the multi-car discount; instead,Neberieza on her own initiative qualified Matricard for the multi-cardiscount.

In contrast, Kiszkan testified she did not speak with Neberieza when sheaccompanied Matricard to Oberc's office; in fact, Kiszkan denied knowingNeberieza. Kiszkan specifically denied telling Neberieza, or anyone else fromState Farm, that Matricard was her grandson.

In May 2001, the circuit court granted summary judgment to State Farm. In June 2001, the circuit court entered an order finding State Farm was notliable to Matricard's estate under Kiszkan's PLUP because he did not qualifyas an insured under her PLUP policy. Further, the circuit court declined toapply the doctrine of estoppel or waiver. This appeal followed.

ANALYSIS

I. Standard of Review

Initially we note this case comes to us on the circuit court's grant ofState Farm's summary judgment motion. Both parties agree our review of thesummary judgment ruling is de novo. Illinois Education Ass'n v. IllinoisState Board of Education, 204 Ill. 2d 456, 459, 791 N.E.2d 522 (2003). "'Summary judgment is a drastic measure and should only be granted if themovant's right to judgment is clear and free from doubt.'" Traveler'sInsurance Co. v. Eljer Manufacturing, Inc., 197 Ill. 2d 278, 292, 757 N.E.2d481 (2001), quoting Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154Ill. 2d 90, 102, 607 N.E.2d 1204 (1992). Therefore, "[s]ummary judgment isproper where, 'the pleadings, depositions, and admissions on file, togetherwith the affidavits, if any, show that there is no genuine issue as to anymaterial fact and that the moving party is entitled to judgment as a matter oflaw.'" Illinois Education Ass'n, 204 Ill. 2d at 459, quoting 735 ILCS 5/2-1005(c) (West 2000), and citing Traveler's, 197 Ill. 2d at 292;

II. Question of Material Fact

The Defendants argue State Farm was not entitled to summary judgmentbecause the Defendants' claim is based on the misrepresentation that Matricardand Kiszkan were related. According to the Defendants, there is a materialquestion of fact regarding the party responsible for that misrepresentationthat can only be resolved by a trier of fact. If State Farm is found to beresponsible for this misrepresentaion, as the Defendants' argument goes, thenthe policy exclusion that would otherwise apply to Matricard has either beenwaived by State Farm or State Farm should be estopped from asserting itsdenial of coverage.

State Farm argues the circuit court's grant of summary judgment wasproper because under the PLUP policy issued to Kiszkan, Matricard was requiredto be related to Kiszkan in order to qualify for coverage under that policy. As it is not disputed that Matricard and Kiszkan are not related, Matricarddid not qualify as an insured under Kiszkan's PLUP. Therefore, State Farmcannot be liable to Matricard's estate under the terms of the PLUP. In otherwords, State Farm was entitled to summary judgment because the declaratoryaction turned on the definition of "insured" under the PLUP, and the questionof the source of the misrepresentation of the relation between Kiszkan andMatricard is immaterial to the coverage provided by the PLUP.

Although the responsibility for the misrepresentation is clearlydisputed, the real question is whether the dispute is material to the issue ofcoverage under the PLUP. See Protective Insurance Co. v. Coleman, 144 Ill.App. 3d 682, 687, 494 N.E.2d 1241 (1986) ("The existence of factual questionswill not deter summary judgment unless these facts are material to thelitigation"). Although the Defendants contend that Kiszkan's denial that sheis the source of the misrepresentation that she and Matricard were bloodrelatives raises a material question of fact regarding coverage for Matricardunder the PLUP, we do not agree. The question of coverage turns not on whichside has the more credible explanation for the misrepresentation regardingMatricard being related to Kiszkan, but on the terms of the PLUP itself.

III. Applicability of Waiver and Estoppel

The Defendants further assert that under the facts presented here, StateFarm has either waived its defense under the policy or should be estopped fromasserting its policy defense. The Defendants claim that State Farm was onnotice of the lack of blood relationship between Kiszkan and Matricard asearly as April 1999 and unreasonably failed to reserve its rights under thePLUP upon receipt of such notice. Further, the Defendants contend that StateFarm should be bound by the representation it made to the Defendants that the$1 million coverage under the PLUP was available to the estate of Matricard. Finally, the Defendants point out that Matricard was defended by State Farm,without a reservation of rights, in the underlying suit brought by the Taylorestate.

Although unnecessary to our resolution of this case, we point out thatthe Defendants are not blameless in the confusion regarding the existence of ablood relation between Kiszkan and Matricard. Kiszkan, acting as thepurported "next-of-kin," provided State Farm with Matricard's deathcertificate and an authorization to obtain Matricard's medical records andaccepted $22,000 in death benefits from State Farm under Matricard'sAutomobile Policy. Additionally, counsel for the Defendants mailed State FarmKiszkan's affidavit in the form of an "Affidavit of Heirship." The caption ofthe affidavit was misleading as Kiszkan, Matricard's "friend," had no basis toassert any "heirship." State Farm also received from counsel Exhibit A, whichcompounded the misleading nature of the "Affidavit of Heirship" by listingKiszkan as "grandmother, closest known next-of-kin" of Matricard. Althoughthe Defendants claim the source of the initial misrepresentation of therelationship between Matricard and Kiszkan is disputed, it cannot be disputedthat the Defendants perpetuated the initial misrepresentation as late as April1999. Although unnecessary to our holding, we find State Farm actedreasonably in not asserting its reservation of rights until March 2000 becauseprior to that point State Farm was proceeding under the mistaken, butjustifiable, impression Matricard and Kiszkan were related; that is, Kiszkanwas Matricard's grandmother.

As to the liability of State Farm to indemnify Matricard beyond thecoverage of his Automobile Policy, this question turns on the coverageprovided under the PLUP.⁽¹⁾ It is well settled that "whether [a claimant] isentitled to recover a judgment from the proceeds of [an] insurer is determinedby the language of the policy." Giardino v. Fierke, 160 Ill. App. 3d 648,653, 513 N.E.2d 1168 (1987). Clear and unambiguous language of an insurancepolicy determines the intent of the parties contracting for insurance. SeeState Farm Mutual Automobile Insurance Co. v. George, 326 Ill. App. 3d 1065,1068, 762 N.E.2d 1163 (2002) (requiring coverage for derivative claim ofbodily injury would impermissibly extend coverage beyond the parties' intendedscope of the insurance policy). Here, the Defendants do not claim thelanguage regarding an "insured" in the PLUP can be read to extend coverage toMatricard. They concede that it cannot.

As the Defendants concede that Matricard is not a relative of Kiszkan,and hence not an insured under the PLUP, it would seem beyond dispute thatState Farm would have no liability to pay under the PLUP. See Transcontinental Insurance Co. v. National Union Fire Insurance Co., 278 Ill.App. 3d 357, 368, 662 N.E.2d 500 (1996) (there can be no potential coverage ifthe plaintiff is not an insured); Shapiro v. DiGuilio, 95 Ill. App. 3d 184,237 N.E.2d 771 (1968) (negative answer to question whether insurance policycovered liability of defendant to plaintiff determinative of all issues). Yet, the Defendants do not agree. The Defendants, however, cite no directauthority for their claim under the PLUP. Instead, the Defendants seek toestablish coverage by virtue of State Farm's handling of the Taylor estate'sclaim against Matricard for coverage under the PLUP by going outside thewritten terms of that policy and citing a single case involving waiver betweenan insured and the insurer as their support-- American States Insurance Co. v.National Cycle, Inc., 260 Ill. App. 3d 299, 631 N.E.2d 1292 (1994). Nolengthy discussion is required to distinguish that case, involving parties toa contract for insurance, from this case, where no such contractualrelationship exists between Matricard and State Farm under the PLUP. Here,there is no evidence to support "'the intentional relinquishment of a knownright'," either expressly or impliedly, by State Farm of its ultimate policydefense as required to establish waiver. American States Insurance Co. v.National Cycle, Inc., 260 Ill. App. 3d 299, 305-06, 631 N.E.2d 1292 (1994),quoting Western Casualty & Surety Co. v. Brochu, 105 Ill. 2d 486, 499, 475N.E.2d 872 (1985).

The Defendants' estoppel claim also fails. Although estoppel mayinvolve an "involuntary relinquishment," it also requires a showing by"'clear, concise and unequivocal evidence'" of prejudicial reliance. NationalCycle, 260 Ill. App. 3d at 308, quoting Old Mutual Casualty Co. v. Clark, 53Ill. App. 3d 274, 279, 368 N.E.2d 702 (1977). The Defendants have failed todemonstrate how Matricard's estate was prejudiced by State Farm's reservationof rights a month before the jury verdict against the estate of Matricard for$6.3 million. State Farm represented Matricard's estate under the AutomobilePolicy it issued Matricard for his own vehicle. There is nothing in therecord other than the Defendants' assertion that Matricard's estate wasprejudiced by surrendering its defense to State Farm. "This is merely a legalconclusion and not a statement of fact." National Cycle, 260 Ill. App. 3d at310, see also Mid-State Savings & Loan Association v. Illinois InsuranceExchange, Inc., 175 Ill. App. 3d 265, 272, 529 N.E.2d 696 (1988). Further,there is no complaint that State Farm's representation under Matricard'sAutomobile Policy was defective in any way. See National Cycle, 260 Ill. App.3d at 310. In fact, State Farm's reservation of rights only involved theissue of whether Matricard was covered under Kiszkan's PLUP, State Farm nevercontested its duty to defend Matricard's estate based on his AutomobilePolicy. When State Farm learned Matricard and Kiszkan were not related, itpromptly filed its action for declaratory judgment, but its representation ofMatricard's estate in the action filed by Taylor's estate never faltered.

Although we empathize with the argument by Taylor's estate that it isunable to collect the vast majority of the damages awarded to it by a jury inJune 2000, the fact remains that Matricard was not covered by Kiszkan's PLUP. State Farm had no duty to indemnify Matricard under the terms of her PLUP. Wenote that State Farm did have a duty to defend and indemnify Matricard up to$100,000 under Matricard's Automobile Policy and that State Farm successfullydischarged its duty.

Given the undisputed fact that Matricard and Kiszkan are not related,and hence, Matricard is not an insured under the PLUP, there exists no basisto extend coverage under the PLUP to include Matricard. Therefore, summaryjudgment was proper against the Defendants.

Affirmed.

WOLFSON, P.J., and CAHILL, J., concur.

1. Based on our holding in this case, we issued a stay in the trial ofEarline Taylor v. State Farm, (Appellate Court No. 1-03-2119) founded on aclaim of "bad faith" by State Farm in not settling, in substantial part, underKiszkan's PLUP.