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Logan v. Allstate Life Ins. Co.

MAY 14, 1974.




APPEAL from the Circuit Court of Lake County; the Hon. L. ERIC CAREY, Judge, presiding.


Rehearing denied June 26, 1974.

This is an action to recover benefits payable under a life insurance policy. On July 16, 1968, the defendant, Allstate Life Insurance Company (Allstate), issued a decreasing term, mortgage retiring, life insurance policy upon the life of Donald P. Logan in the initial face amount of $21,000. Upon the death of the insured on October 1, 1968, Allstate claimed that the insured had misrepresented his prior medical history to its insurance agent and to its medical agent who examined the decedent, and refused to pay the benefits under the policy. Thereupon, the primary beneficiary of the policy, the wife of the insured, Ruby J. Logan, filed the instant suit against Allstate. The jury rendered a verdict for the plaintiff but the trial court granted defendant's motion for judgment notwithstanding the verdict and entered judgment for the defendant. The sole issue before this court is whether the trial court properly granted defendant's motion for judgment non obstante veredicto.

In the latter part of April, 1968, Logan went to an oral surgeon in order to have a wisdom tooth extracted. During a 7-year period prior to the time Logan went to the oral surgeon he had never been hospitalized or involved in an accident of any kind.

On May 4, 1968, he made an appointment with Dr. Leonard Goldberg. He told his wife that he made the appointment because his "tooth" was bothering him and he had lost a couple of pounds. This was his first checkup in 2 or 3 years. Logan complained to Dr. Goldberg of swelling behind his left ear. He stated to the doctor that since he had his wisdom tooth extracted, he had been feeling dizzy and had not been able to eat too well. Also, his right arm had been cramping for a few days.

The doctor's examination revealed that Logan had an enlarged lymph gland in the neck and other enlarged glands in other parts of his body. Because of Logan's pale appearance, the doctor suspected that Logan was anemic and sent him for a blood test. Results from the blood test indicated that Logan was anemic. Additionally, the results of one part of the blood test, the white cell differential count, indicated that there was something abnormal which could not have been caused by anemia or by bleeding after a tooth had been extracted.

On May 7, 1968, Dr. Goldberg advised Logan that he should be hospitalized for further tests and a lymph gland biopsy. Logan refused to be hospitalized and maintained his blood condition was caused by the bleeding from the extraction. Later, he became sick and changed his mind.

Logan was hospitalized from May 19, 1968, to June 4, 1968, for diagnostic tests as well as a lymph gland biopsy and bone marrow biopsy. The bone marrow biopsy revealed cancer cells. Dr. Goldberg and Dr. Irving A. Friedman, a specialist called in for consultation, suspected that the defendant had lymphoma. Lymphoma is a general disease of the lymph nodes and ventricular system (marrow, liver, spleen and different cells which replace these organs). The doctors began treating Logan for this disease by giving Logan various combinations of drugs.

Their diagnosis, however, was not confirmed until after Logan's death. Additionally, Logan was never told of the seriousness of his disease or that he was suffering from lymphoma. The doctors did not want to frighten the patient without any benefit. The doctors did discuss Logan's blood condition with Logan many times in a vague manner. They told Logan that he had anemia and an undetermined disease of the blood which was in a general group of diseases with which they were familiar.

After his release on June 4, 1968, Logan returned to work. Logan called Allstate Life Insurance Company and on July 9, 1968, Richard Bieck, an Allstate insurance agent, visited the Logan residence. Logan wanted a life insurance policy which would be enough to pay off the mortgage on his house. Bieck recommended a policy and they began going through the procedures required in applying for the insurance. Bieck was the one who filled in the application. At trial, Logan's wife testified:

"My husband told him that he had been in the hospital, that he had some tests made, and he went in for a check-up and said he had anemia * * *. He [Bieck] said it did not matter about the check-up that their doctor would examine my husband * * * their doctor would give him a physical."

Bieck had no recollection of visiting the Logan residence or filling out the application. The pertinent portions of the insurance application did not refresh his memory and were not introduced into evidence.

Dr. Ralph Ruthenberg, the doctor who gave Logan a medical examination as part of Logan's application for life insurance, did not have any personal recollection of his examination of Logan. Dr. Ruthenberg's medical report, however, was made part of the insurance policy and the policy has been introduced into evidence by the plaintiff. The report was filled out by Dr. Ruthenberg and signed by Logan verifying that the statements were fully and accurately recorded. The medical report revealed that Logan answered "No" to a question concerning whether he ever had or had been told he had any disorder of the blood. It also revealed that he ...

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