                            In the

United States Court of Appeals
              For the Seventh Circuit

Nos. 07-2613 & 07-2684

M ARGARET J. S TILWELL, H ALEY S TILWELL,
H EIDI S TILWELL, JAMIE S TILWELL, and M EGAN S TILWELL,

                                            Plaintiffs-Appellants,
                                v.


A MERICAN G ENERAL L IFE INSURANCE C OMPANY,

                               Defendant, Third-Party Plaintiff,
                                     Appellee, Cross-Appellant,
                                v.


F IRST M ID-ILLINOIS B ANK & T RUST,
T USCOLA F URNITURE G ROUP, LLC,
and JANKO F INANCIAL G ROUP, LLC,

                     Third-Party Defendants, Cross-Appellees.


           Appeals from the United States District Court
                for the Central District of Illinois.
         No. 05 C 2160—Michael P. McCuskey, Chief Judge.



    A RGUED JANUARY 22, 2008—D ECIDED F EBRUARY 5, 2009
2                                    Nos. 07-2613 & 07-2684

  Before E ASTERBROOK, Chief Judge, and W OOD and S YKES,
Circuit Judges.
   S YKES, Circuit Judge. Margaret Stilwell sued American
General Life Insurance Company for breach of contract,
challenging the validity of a reassignment of her interest
in a $4 million life-insurance policy on the life of her
husband, James. To secure debt used to finance one of
her husband’s businesses, Mrs. Stilwell made two assign-
ments of the policy to Janko Financial Group, L.L.C., each
in the amount of $2 million. Janko, in turn, reassigned
its interest in the policy to Tuscola Furniture Group, L.L.C.,
a subsidiary formed to finance Mr. Stilwell’s furniture
business. James Stilwell died in 2003 and American
General paid Tuscola more than $500,000 from the
policy proceeds to satisfy his debt. After paying other
claims not at issue here, American General sent
Mrs. Stilwell a check for $25,000—her share of what was
left of the $4 million policy; her four daughters got
about $4,000 apiece. She did not object at the time
these payments were made.
  Instead, after filing for bankruptcy and receiving a
discharge of her debts, Mrs. Stilwell sued American
General for breach of the insurance policy. She argued
primarily that Janko’s reassignment of the policy to
Tuscola was invalid because of an ambiguity in the form
of the notice of reassignment Janko sent to American
General. The district court disagreed and entered sum-
mary judgment for American General.
  We affirm. Janko’s reassignment of its interest in the life-
insurance policy was valid notwithstanding the alleged
Nos. 07-2613 & 07-2684                                     3

flaw in the written notice Janko provided to American
General. The notice requirement in the policy is for
the insurer’s benefit alone; although American General
initially construed the form as a notice of release and not
reassignment, the insurer ultimately accepted it as a
notice of the reassignment from Janko to Tuscola. In
any event, the alleged ambiguity in the notice to
American General did not affect the validity of the reas-
signment, and the policy expressly subordinates the
rights of the policy’s owner and beneficiaries to the rights
of assignees. Accordingly, American General did not
breach the insurance contract by paying Tuscola before
Mrs. Stilwell and her daughters.


                      I. Background
  American General issued a $4 million insurance policy
on the life of James Stilwell in 1998. His wife, Margaret,
was the owner of the policy and a 60% beneficiary.
Their four daughters were also beneficiaries and split the
remaining 40% interest equally. The policy allowed the
owner to change beneficiaries and to make assignments
provided that “[n]o assignment of this policy will be
binding on us [American General] until filed with us in
writing and recorded by us.”
 James Stilwell was the owner and president of
Amishland Country Village.1 In 1999 Amishland and Janko



1
  James Stilwell, an entrepreneur who owned several
businesses and some development property in central Illinois,
                                              (continued...)
4                                      Nos. 07-2613 & 07-2684

Financial Group entered into a consignment agreement
to help finance Amishland’s retail-furniture business.
Under the contract James and Margaret were required to
personally guarantee Amishland’s debt and maintain
life insurance of at least $2 million for the benefit of Janko
and its lender. To satisfy this obligation, Mrs. Stilwell
made two assignments of the American General policy
proceeds to Janko, each in the amount of $2 million.
American General was notified in writing and entered
each assignment into the policy’s records.
  The next year, Janko created Tuscola Furniture Group
to handle Amishland’s financing needs. Janko then trans-
ferred its rights and obligations under the 1999 consign-
ment agreement to Tuscola via an assignment and assump-
tion agreement. On the following day, Tuscola and
Amishland entered into a new consignment agreement
replacing the one formed in 1999 with Janko. The only
material difference in the two contracts was that the
2000 agreement reduced the amount the Stilwells were
required to personally guarantee from $2 million to
$1.25 million.
  A few days after this transaction, the Stilwells’ insurance
agent sent Tuscola an assignment form so that it could
notify American General of the life-insurance assign-



1
   (...continued)
figures prominently in another insurance-law case decided to-
day involving the “on-premises fraud” coverage in a financial-
institution bond. See First State Bank of Monticello v. Ohio Cas.
Ins. Co., Nos. 06-3685 & 06-3794.
Nos. 07-2613 & 07-2684                                   5

ment from Janko. A portion of the form titled “Release of
Assignment” had already been completed when Larry
Bianchi of Janko and Tuscola received it. Bianchi signed
it, but because he was concerned about the use of the
term “release,” he inserted the words “[i]n favor of
Tuscola Furniture Group, LLC.” American General re-
ceived this document and entered it into the policy’s
records, but as a release, not a reassignment.
  Around the same time, Mrs. Stilwell executed another
policy assignment in favor of Tuscola, this time in the
amount of $250,000. Bianchi informed her that the assign-
ment was inadequate because it was well below the
amount specified in the 2000 consignment agreement
and because it did not also name First Mid-Illinois Bank
& Trust, Tuscola’s lender, as required by the agreement.
In January 2001 Mrs. Stilwell executed a $1 million assign-
ment that was similarly inadequate; this time, the assign-
ment named only First Mid-Illinois and said nothing
of Tuscola. Bianchi informed Mrs. Stilwell that until these
deficiencies were cured, Tuscola would not release the
previous two assignments made in connection with the
1999 consignment agreement.
  James Stilwell died in May 2003, triggering American
General’s obligations under the life-insurance policy.
Tuscola and First Mid-Illinois applied jointly for pay-
ment and claimed $512,974.50 of the policy proceeds. This
amount represented what Amishland owed to Tuscola
at the time of James Stilwell’s death, $81,020 of which
Tuscola owed to First Mid-Illinois. The claim referenced
the assignments Mrs. Stilwell made to Janko, Tuscola, and
First Mid-Illinois totaling $3.25 million.
6                                  Nos. 07-2613 & 07-2684

  American General responded with letters to Janko and
Tuscola. According to its records, the insurer said, Janko
had released its assignments in December 2000, and
American General only had current records of two assign-
ments: one for $250,000 in favor of Tuscola and one
for $1 million in favor of First Mid-Illinois. Bianchi
then called Ray Swicki, director of claims for American
General, and explained that the “release” form he had
signed was meant to notify American General that Janko
had transferred its rights under the insurance policy to
Tuscola; he noted the “in favor of Tuscola” notation he
had made on the form. Tuscola followed up with corre-
spondence to American General detailing each of the
assignments made by Mrs. Stilwell and the reassignment
from Janko to Tuscola in connection with the 2000 trans-
actions. The letter also explained that the “Release of
Assignment” form was notice of a transfer or reassignment,
as Bianchi’s handwritten notation “in favor of Tuscola
Furniture Group” had attempted to make clear. American
General accepted this explanation and paid the claim
in June 2003.
  Meanwhile, in May 2003 Mrs. Stilwell received her
60% share on a separate $1 million life-insurance policy
her husband had with American General, but she did not
simultaneously claim any benefits under the $4 million
policy. After paying the Tuscola/First Mid-Illinois claim
and the claims of other creditors on the $4 million policy
(the insurer’s payment of other creditors is not at issue
here), American General sent Mrs. Stilwell a check for
60% of the remainder, totaling just over $25,000. The
Stilwells’ daughters also received $4,225.83 each.
Nos. 07-2613 & 07-2684                                      7

   Mrs. Stilwell filed for bankruptcy in November 2003
and received a discharge of her debts in April 2004.
Neither Janko nor Tuscola asserted any claims in the
bankruptcy because Amishland’s debt was satisfied by
the proceeds of James’s life-insurance policy. After emerg-
ing from bankruptcy, Mrs. Stilwell and her daughters
brought this suit against American General, arguing that
it had breached the life-insurance contract by paying
Tuscola more than it was entitled to under the assign-
ments made pursuant to the 2000 consignment agree-
ment. According to the Stilwells, Tuscola held only one
valid assignment worth $250,000. The Stilwells asserted
that the two previous assignments totaling $2 million
were no longer valid because Janko released them when
it submitted the “Release of Assignment” form to Ameri-
can General and no valid notice of the “reassignment” to
Tuscola had been filed with American General.
  American General filed a third-party complaint
against Janko, Tuscola, and First Mid-Illinois seeking
indemnification, should it be found liable. First Mid-Illinois
then filed a cross-claim for contribution from Janko and
Tuscola if it was liable under American General’s third-
party complaint. All parties moved for summary judgment.
The district court denied the Stilwells’ motion, granted
summary judgment in favor of American General, and
declared the remaining motions moot.
  The Stilwells appealed. American General filed a con-
tingent cross-appeal based on its third-party complaint.
American General and third-party defendants Janko,
Tuscola, and First Mid-Illinois then stipulated to reinstate
all third-party proceedings should the judgment be
8                                   Nos. 07-2613 & 07-2684

reversed on appeal. Accordingly, we need address only
the dispute between the Stilwells and American General.


                       II. Analysis
  We review de novo the district court’s grant of sum-
mary judgment. Matthews v. Milwaukee Area Local Postal
Workers Union, AFL-CIO, 495 F.3d 438, 441 (7th Cir. 2007).
On cross-motions for summary judgment, the party
whose motion was denied may appeal as that judgment
“has merged into the final judgment [granting the oppos-
ing motion] and is therefore appealable as well.” Santaella
v. Metro. Life Ins. Co., 123 F.3d 456, 461 (7th Cir. 1997).
Summary judgment is appropriate if “there is no genu-
ine issue as to any material fact and . . . the movant is
entitled to a judgment as a matter of law.” F ED. R. C IV.
P. 56(c).
  The Stilwells argue that American General breached the
insurance contract by overpaying Tuscola. Tuscola, they
maintain, held only one valid assignment—for $250,000—
because Janko’s attempt to transfer Mrs. Stilwell’s first
two assignments was invalid. Their argument is based
largely on the fact that the notice to American General was
styled as a “release” and not a “reassignment.” They
also argue that Tuscola’s joint claim with First Mid-Illinois
was an acknowledgment that it knew it was under-
secured; James Stilwell’s debt to Tuscola far exceeded the
$250,000 assignment from Mrs. Stilwell, so it needed to
bring itself within the larger assignment she had made
to its lender.
Nos. 07-2613 & 07-2684                                    9

  The parties agree that Illinois law controls. An assign-
ment is the “manifestation of the assignor’s intention to
transfer” a right so that the assignee acquires the right to
performance by the obligor. R ESTATEMENT (SECOND )
OF C ONTRACTS § 317(1) (1981); see also Season Comfort Corp.
v. Ben A. Borenstein Co., 655 N.E.2d 1065, 1069 (Ill. App.
Ct. 1995) (“It is necessary that the assignor manifests
an intent to transfer his rights under the contract to the
assignee.”). General contract law governs the making of
assignments. The existence of an assignment is “deter-
mined according to the intention of the parties, and that
intention is a question of fact to be derived not only
from the instruments executed by them, but from the
surrounding circumstances.” Nw. Diversified, Inc. v. Desai,
818 N.E.2d 753, 761 (Ill. App. Ct. 2004) (citation omitted);
see also Chemetall GMBH v. Zr Energy, Inc., 320 F.3d 714,
720-21 (7th Cir. 2003).
   We take the Stilwells’ arguments in reverse order; their
last argument is an indirect one and can be dispatched
quickly. The Stilwells suggest that the only reason Tuscola
filed a joint claim with First Mid-Illinois was because
it feared that its only valid assignment was the one
Mrs. Stilwell made in 2000 for $250,000, well below what
Amishland owed. There is, they insist, no other valid
explanation for the joint claim. This argument ignores
the language of the 2000 consignment agreement
between Amishland and Tuscola. Amishland agreed to
maintain a life-insurance policy on James’s life “with
TFG [Tuscola] and BANK [First Mid-Illinois] named as
beneficiary.” Any proceeds would “be used first to pay
BANK for the amount TFG owes BANK in order to
10                                 Nos. 07-2613 & 07-2684

release its lien on the Amish furniture.” After James
Stilwell died, Tuscola and First Mid-Illinois sought
$512,974.50, which included the amount Tuscola owed to
First Mid-Illinois. Far from an acknowledgment by
Tuscola that it only had one valid assignment worth
$250,000, the joint claim made perfect sense in light of
the requirements of the 2000 consignment agreement.
  The parties also engage in an immaterial semantic
debate over whether this was a “joint claim” or two
claims filed jointly; we need not weigh in. Whether the
claim by Tuscola and First Mid-Illinois was a single joint
claim or two claims filed jointly has no bearing on the
validity of the reassignments made by Janko to Tuscola.
  So much for the indirect argument. The Stilwells’ direct
attack on the validity of the reassignment focuses on
the notice sent by Janko to American General. They
claim that the reassignment from Janko to Tuscola was
invalid because Janko transferred the underlying debt to
Tuscola a full two weeks before sending the notice to
American General. This argument appears to rest on
the faulty assumption that the notice sent by Bianchi to
American General was the reassignment. But that form
did not alter the legal relations between Janko and
Tuscola; it was, rather, an attempt to notify American
General that Janko had reassigned its rights to Tuscola
under the assignment and assumption agreement, as
Bianchi noted by indicating that the release was “in
favor of Tuscola.” The assignment and assumption agree-
ment was a valid manifestation of Janko’s intent to
transfer its rights under the life-insurance policy to
Tuscola in return for Tuscola assuming Janko’s obliga-
Nos. 07-2613 & 07-2684                                   11

tion to finance Amishland’s retail-furniture business.
Bianchi’s attempt to notify American General of the
transaction had no effect on the validity of the underlying
assignment because the assignment was complete upon
finalization of the agreement. See Desai, 818 N.E.2d at 761
(“An assignment, ‘oral or written, occurs when there is
a transfer of some identifiable interest from the assignor
to the assignee.’ ” (quoting Klehm v. Grecian Chalet, Ltd.,
518 N.E.2d 187, 191 (Ill. App. Ct. 1987))).
  Finally, the Stilwells argue that the “Release or Assign-
ment” form signed by Bianchi was an invalid notice of
reassignment and therefore American General should
not have paid Tuscola’s claim (that is, should not have
paid any amount in excess of the $250,000 assignment
Mrs. Stilwell made directly to Tuscola). The Stilwells
invoke the provision in the insurance policy stating that
“[n]o assignment of this policy will be binding on us
[American General] until filed with us in writing and
recorded by us.” Based on the “release” language in the
notice (and notwithstanding Bianchi’s handwritten nota-
tion “in favor of Tuscola” on the form), the Stilwells
argue that because American General initially recognized
the notice as a release of the first two assignments and not
a reassignment of them, the notice was insufficient.
Bianchi’s belated explanation, they claim, is not a cure.
  This argument appears to assume that the sufficiency of
the notice to the insurer determines the validity of the
assignment; this is not so. Janko’s ambiguous attempt at
notification had no effect on the validity of its assignment
of its interest in the insurance policy to Tuscola. Only the
insurer may object to any noncompliance with the notice
12                                    Nos. 07-2613 & 07-2684

provision in the insurance policy. “Absent a statutory
requirement to the contrary, notice to the debtor is not
essential to the validity of an assignment, unless the
debtor acted to his prejudice because of lack of notice or
before receiving notice of the assignment.” Grunloh v.
Effingham Equity, Inc., 528 N.E.2d 1031, 1039 (Ill. App. Ct.
1988); 6A C.J.S. Assignments § 80 (2008). The policy’s notice
provision “is for the benefit of the insurer.” Gray v. Penn
Mut. Life Ins. Co. of Phila., 126 N.E.2d 409, 414 (Ill. App. Ct.
1955); 3 L EE R. R USS & T HOMAS F. S EGALLA, C OUCH ON
INSURANCE § 36:41 (3d ed. 1995 & Supp. 2008) (“[A] require-
ment of notice is designed for the protection of the insurer
and it alone may raise the objection that notice was not
given to it as required by the policy.”); 22 ILLINOIS L AW
AND P RACTICE, INSURANCE § 197 (West 1956 & Supp. 2008)
(“Provisions of a life insurance policy requiring notice of
an assignment to be given to the insurer are for the
benefit of it alone, and no one else may object because
of failure to comply with such provisions.”). American
General satisfied itself that Bianchi’s explanation of the
notice was accurate and verified the existence of the
reassignment from Janko to Tuscola. Under these circum-
stances, American General was required to pay Tuscola
before the Stilwells; the policy specifies that the rights
of the policy owner and beneficiaries are subject to the
rights of any assignee.
   Accordingly, summary judgment for American General
was properly entered. The judgment of the district court
is A FFIRMED.

                             2-5-09
