Rule 23 order filed                     NO. 5-06-0655
October 26, 2007;
Motion to publish granted                   IN THE
December 26, 2007.
                            APPELLATE COURT OF ILLINOIS

                             FIFTH DISTRICT
________________________________________________________________________

PEKIN INSURANCE COMPANY,               ) Appeal from the
                                       ) Circuit Court of
   Plaintiff-Appellant,                ) Madison County.
                                       )
v.                                     ) No. 05-MR-495
                                       )
GORDON HARVEY, d/b/a Anchor            )
Enterprises, and TRACY L. WALLACE,     ) Honorable
                                       ) Ellar Duff,
   Defendants-Appellees.               ) Judge, presiding.
________________________________________________________________________

         JUSTICE DONOVAN delivered the opinion of the court:

         The plaintiff, Pekin Insurance Company (Pekin), filed a complaint in the circuit court

of Madison County, seeking a judgment declaring that it had no obligation to defend Gordon

Harvey, doing business as Anchor Enterprises (Anchor), against a negligence action filed by

Tracy L. Wallace because it had cancelled Anchor's liability policy for the nonpayment of

the premium several months before the accident that gave rise to Wallace's action. Following

a hearing on each party's motion for a summary judgment, the circuit court found that Pekin

failed to provide a proper notice of cancellation and that Anchor's policy was in effect on the

date of the accident. The circuit court granted the defendants' motion for a summary

judgment, and it denied Pekin's motion for a summary judgment. Pekin appeals.

         The defendant Anchor is a corporation that is in the carpentry business.          On

September 6, 2002, Anchor submitted to Pekin an application for a "Commercial Lines"

policy of insurance and an initial premium payment of $200. Pekin approved the application

and issued the policy. The policy was to be effective from September 6, 2002, to September

6, 2003, at 12:01 a.m. The total cost of the annual premium was $474. On December 9,

                                               1
2002, Pekin sent Anchor an invoice advising that the next premium installment of $10.34

was due on December 22, 2002. Pekin did not receive a payment from Anchor by the due

date.   On January 7, 2003, Pekin mailed to Anchor a notice of cancellation for the

nonpayment of the premium. The notice stated that the policy would terminate on January

17, 2003, at 12:01 a.m. standard time. The notice also stated that the reason for the

termination was the nonpayment of the premium.

        On June 23, 2003, Wallace was employed by a drywall company and he was working

at a residential construction project, when he fell into an unguarded hole and was injured.

Wallace filed a negligence action against Anchor in the Madison County circuit court.

Wallace alleged that he suffered severe injuries as a result of Anchor's negligence in

managing and supervising the work site. Anchor tendered its defense to Pekin, but Pekin

declined to defend the action. Pekin claimed that Anchor's policy had been terminated

several months before the occurrence due to the nonpayment of the premium. Pekin filed

this declaratory judgment action in Madison County in September 2005.

        Following a period for discovery, Pekin filed its motion for a summary judgment.

Pekin argued that it had no duty to defend the underlying negligence action against Anchor

because Anchor's policy had been cancelled for the nonpayment of the premium on January

17, 2003, and it was not in effect at the time of Wallace's accident. Pekin submitted the

affidavits of two employees who stated that Pekin had received no payment from Anchor

beyond the initial $200 payment and that the cancellation notice had been mailed to Anchor

on January 7, 2003.

        Subsequently, Wallace filed a motion for a summary judgment. Wallace claimed that

Pekin had not given adequate notice of the cancellation because it had failed to provide "at

least 10 days['] notice" prior to the cancellation as required in the policy. Wallace noted that

the notice had been mailed sometime after 7:45 a.m. on January 7, 2003, and stated that the


                                               2
policy would terminate January 17, 2003, at 12:01 a.m. Wallace argued that Pekin did not

mail the notice 10 "full days," i.e., ten 24-hour periods, prior to the effective date and hour

of cancellation. Anchor joined in Wallace's motion.

       The circuit court determined that Pekin had failed to provide a proper notice of

cancellation of the policy and that, thus, there was coverage under Anchor's policy at the

time of the accident. The court denied Pekin's motion for a summary judgment, and it

granted the defendants' motion for a summary judgment.

       On appeal, Pekin contends that the circuit court erred in finding that the notice was

insufficient and that the policy was in effect on the day of Wallace's accident. Pekin argues

that the court erred in interpreting the policy provision stating that Pekin may cancel the

policy for the nonpayment of a premium by mailing a notice of cancellation "at least 10 days

before the effective date of cancellation" as a requirement that the notice be mailed at least

ten 24-hour periods prior to the effective date and hour of cancellation. Pekin also argues

that under any reasonable construction of the policy's cancellation provision, the policy was

properly terminated on the tenth day after the cancellation notice was mailed and that there

was no coverage for an accident that had occurred more than five months after the policy was

cancelled.

       Wallace counters that the cancellation provision in the policy expressly states that the

insurer must give written notice of cancellation "at least 10 days before the effective date of

cancellation," that the cancellation notice was mailed sometime after 7:45 a.m. on January

7, 2003, that the notice stated that the effective date of cancellation was 12:01 a.m. on

January 17, 2003, and that Pekin provided approximately 9 b days' notice, rather than 10

"full days'" notice. Anchor joined in Wallace's brief.

       According to the "Common Policy Conditions," Pekin may cancel the policy for the

nonpayment of a premium by mailing a written notice of cancellation at least 10 days prior


                                              3
to the effective date of cancellation. The language in this policy provision practically mirrors

that found in section 143.15 of the Illinois Insurance Code (Code) (215 ILCS 5/143.15 (West

2004)). Section 143.15 provides in pertinent part that a notice of cancellation for the

nonpayment of a premium must be mailed at least 10 days before the effective date of the

cancellation. Under section 143.15 of the Code, proof of actual notice is not required when

cancellation is due to the nonpayment of a premium. Marketview Motors, Inc. v. Colonial

Insurance Co. of California, 175 Ill. 2d 460, 468, 677 N.E.2d 870, 874 (1997). Likewise,

we find nothing in the language of the policy that requires actual notice. Based on the

language of the Code and the insurance policy, the time provision in the notice requirement

begins to run the day that the notice is mailed. Marketview Motors, Inc., 175 Ill. 2d at 467,

677 N.E.2d at 874.

       In this case, Pekin presented a copy of the cancellation notice, a copy of the certificate

of mailing, and the affidavits of two employees to establish that the notice of cancellation

was mailed on January 7, 2003. The cancellation notice stated that the effective date of

cancellation was January 17, 2003, at 12:01 a.m. Based on the uncontested evidence, we

have determined that the notice was mailed on the tenth day prior to the effective date of

cancellation. In making this determination, we counted backward from and excluded January

17, 2003.

       We are unpersuaded by the defendants' arguments that Pekin failed to strictly comply

with the cancellation provisions in its policy because it provided 9 b days' notice, rather than

10 days' notice. The defendants have not pointed to any provision in the policy or the Code

that requires the cancellation notice to state the fixed hour and minute when the cancellation

becomes effective. In computing time, a day ordinarily is considered an indivisible unit. See

Fiedler v. Eckfeldt, 335 Ill. 11, 17, 166 N.E. 504, 507 (1929). As a general rule, the law will

not recognize fractions of a day unless that recognition is deemed important to the interests


                                               4
of justice or necessary to a decision regarding conflicting interests. Fiedler, 335 Ill. at 17,

166 N.E. at 507; Conley v. Ratayzcak, 92 Ill. App. 3d 29, 414 N.E.2d 500 (1980). The case

at bar does not present such a situation. For example, this is not a case where an accident

occurred on the day that the policy terminated and the case turns on which of the two

occurred first. While we can envision other circumstances in which conflicting interests or

the interests of justice may require the law to recognize fractions of a day, those

circumstances are not presented here.

       The record shows that the notice of cancellation was mailed in compliance with the

policy provision and the Code and that Anchor's policy terminated for the nonpayment of a

premium more than five months before the date of the accident. The circuit court erred in

granting the defendants' motion for a summary judgment and in denying Pekin's motion for

a summary judgment.

       Accordingly, we reverse the judgment of the circuit court, and in accordance with our

authority under Illinois Supreme Court Rule 366(a)(5) (155 Ill. 2d R. 366(a)(5)), we hereby

grant a summary judgment in favor of the plaintiff and against the defendants.



       Reversed; judgment entered.



       CHAPMAN and STEWART, JJ., concur.




                                              5
                                          NO. 5-06-0655

                                              IN THE

                               APPELLATE COURT OF ILLINOIS

                                  FIFTH DISTRICT
___________________________________________________________________________________

      PEKIN INSURANCE COMPANY,              ) Appeal from the
                                            ) Circuit Court of
         Plaintiff-Appellant,               ) Madison County.
                                            )
      v.                                    ) No. 05-MR-495
                                            )
      GORDON HARVEY, d/b/a Anchor           )
      Enterprises, and TRACY L. WALLACE,    ) Honorable
                                            ) Ellar Duff,
         Defendants-Appellees.              ) Judge, presiding.
___________________________________________________________________________________

Rule 23 Order Filed:             October 26, 2007
Motion to Publish Granted:       December 26, 2007
Opinion Filed:                   December 26, 2007
___________________________________________________________________________________

Justices:          Honorable James K. Donovan, J.

                 Honorable Melissa A. Chapman, J., and
                 Honorable Bruce D. Stewart, J.,
                 Concur
___________________________________________________________________________________

Attorney         Robert Marc Chemers, Pretzel & Stouffer, Chtd., One South Wacker Drive, Suite
for              2500, Chicago, IL 60606
Appellant
___________________________________________________________________________________

Attorneys        Gail G. Renshaw, The Lakin Law Firm, 300 Evans Avenue, P.O. Box 229, Wood
for              River, IL 62095-0229 (attorney for Tracy L. Wallace); William E. Miller III, Law
Appellees        Offices of William E. Miller III, 1403 East Broadway, Alton, IL 62002 (attorney for
                 Gordon Harvey d/b/a Anchor Enterprises)
___________________________________________________________________________________
