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Millsaps v. Bankers Life Co.





APPEAL from the Circuit Court of Kane County; the Hon. JOHN A. KRAUSE, Judge, presiding.


This is an appeal by plaintiff from an order dismissing Counts 1 through 6 of the second amended complaint against defendant, Dr. Jerry Cargill (Cargill), Count 7 against defendant, Retail Credit Company (Retail Credit) and Counts 10 through 12 against defendant, Bankers Life Company (Bankers Life). The dismissal order was entered upon the defendants' motions to dismiss and supporting affidavits filed by the parties. The trial court denied Retail Credit's motion to dismiss Counts 8 and 9, holding that these counts stated a cause of action as to which a fact issue existed. No cross-appeal was taken from that portion of the judgment and no further reference need be made to those counts. *fn1

Plaintiff had applied to Bankers Life for major medical insurance coverage in February, 1971. His suit for actual and punitive damages against the defendants was based primarily on Cargill's letter of March 26, 1971. That letter read as follows:

"Enclosed is a summary of Mr. Millsaps recent hospitalization. Physically the man has no notable problems; emotionally, the patient is quite mercurial in his moods. He is a strong willed man obsessed with faults of others in his family, of which there has been no objective basis. He has completely resisted any constructive advise [sic] by his wife, family, minister or myself. The man needs psychiatric help for his severe obsessions and depressions some of which have suicidial [sic] tones. He is extremely poor insurance risk."

The original complaint was filed on March 13, 1972, and asserted a cause of action based on that letter. An amended complaint was filed June 23, 1972, and the second amended complaint was filed thereafter.

In Count I plaintiff alleged that Cargill's letter of March 26 "contained false, scandalous, malicious libel * * * concerning the Plaintiff," and injured his reputation. Count 3 adds that Cargill's letter caused injury to his reputation as a real estate sales and insurance broker and alleged resulting loss of confidence and esteem of Bankers Life and of friends and acquaintances. Counts 2 and 4 are based on Cargill's two-page letter dated June 9, 1971, to one Jerry Boose and to the law firm of which Mr. Boose was a member, reciting medical history of the plaintiff and stating medical history of the plaintiff and stating in part as follows:

"Mr. Millsaps is quite rigid and absolutely uncompromising in his attitude. The patient continues weight loss and severe depression alternating with spells of extreme agitation wherein he would jump up and down in a frenzied manner or weeping uncontrollably. The serious neglect of his previously successful real estate business, his paranoid thoughts against his minister and wife and I am sure certainly toward me, are all evidences of severe personality disorder. If you can persuade this man to seek psychiatric help before further loss is sustained you would do him a great service."

(That letter was written in response to an inquiry from Attorney Boose who represented plaintiff at that time.) Counts 2 and 4 alleged that the June 9 letter contained false, scandalous, malicious and defamatory libel concerning the plaintiff, injured his reputation, and resulted in a loss of business in his profession and in the loss of the confidence and esteem of the addressees and of friends and acquaintances. *fn2

In Count 5 plaintiff alleged that as part of his application for insurance he was required to have a physicial examination which was conducted by Cargill on February 18, 1971; that Cargill's March 26 letter was a false and improper diagnosis which, because of Bankers Life's refusal to issue the policy and its having "promulgated" the "false material" to "a central insurance agency for carriers * * * or directly to other insurance carriers," constituted unlawful interference with plaintiff's contract rights.

In Count 6 plaintiff alleged that Cargill, his physician, specialized in internal medicine and has no specialized training in psychiatry or mental disorders; that after treating plaintiff as his patient Cargill, in writing the March 26 letter, did not confine himself to his area of practice but was guilty of negligently and unskillfully diagnosing plaintiff's "mental attitudes," based on information he received from a certain clergyman, not on his own expert observation; and that as a result of Cargill's negligent conduct in making this diagnosis, plaintiff has been refused insurance by Bankers Life and other companies and will be required to pay increased insurance premiums.

Count 7 alleged that Retail Credit was engaged by Bankers Life (in connection with plaintiff's insurance application) to make a credit report; that it falsely reported therein that plaintiff's marriage was about to break up, that he was no longer living with his wife, and that plaintiff could not afford the insurance because of his financial condition; and that Retail Credit's publication of such report resulting in Bankers Life's refusal to issue the insurance policy to plaintiff constituted tortious interference with plaintiff's contract.

In Counts 10, 11, and 12 plaintiff sought actual and punitive damages from Bankers Life. Count 10 alleged tortious interference with contract in that Bankers Life "republished" the March 26 letter to a central clearing agent for insurance carriers, which plaintiff alleged, on information and belief, resulted in his inability to secure insurance from other carriers. Counts 11 and 12 alleged that Bankers Life's "republication" of the March 26 letter constituted malicious libel and resulting injury to his reputation (Count 11) and loss of business in his profession (Count 12). *fn3

With regard to the motions to dismiss filed by all defendants, the trial court directed all parties to file memoranda of authorities and "any affidavits" in support of their respective positions. Plaintiff filed an affidavit to support the allegations made on information and belief in his complaint. Insofar as relevant, there were attached thereto copies of letters from two other insurance companies dated in May and June, 1971, declining plaintiff's application for insurance, as well as a copy of a letter dated in August, 1972, from the Illinois Department of Insurance notifying plaintiff of the cancellation of his surety bond in connection with his insurance broker's license.

Bankers Life filed four affidavits. Two of them had portions of plaintiff's depositions attached. From the other two affidavits the following facts appear: In connection with plaintiff's application for insurance to Bankers Life, he executed an "Authorization" dated February 15, 1971, directed to physicians or hospitals "from which" the applicant "received treatment or advice," to give Bankers Life's medical department "all information concerning my past medical history, symptoms, treatment, result of examination and diagnosis." Bankers Life had received a supplemental medical questionnaire from plaintiff dated March 15, 1971, in which he marked "X" in the "No" square to question 5(b) inquiring if, in the past five years, he had been a patient in a hospital or other facility. Plaintiff also listed Cargill as his personal physician whom he had consulted in January, 1971, on a personal problem which had caused insomnia and nervousness. Bankers Life's brokerage consultant, Verne Murphy, in his affidavit, stated that plaintiff did not tell Murphy of plaintiff's March 13 to March 15, 1971, hospitalization, and that plaintiff authorized changing the answer from "Yes" to "No" in answer to question 5(b) on the questionnaire, which change plaintiff then initialed on or shortly after March 15, 1971. After receiving the supplemental medical questionnaire Bankers Life's assistant medical director wrote a letter on March 22, 1971, to Cargill, requesting a medical history, including "complaints, objective findings, diagnostic impressions of record, and treatment prescribed." The letter also enclosed a copy of plaintiff's "Authorization" and a check for $5 "as an estimate of your charge for the services requested." In response, on March 29, 1971, Bankers Life received a letter from Cargill dated March 26, and a copy of a discharge summary, reporting plaintiff's admission to the hospital on March 13, a summary of symptoms, treatment, diagnosis, and reporting his discharge from the hospital on March 15, 1971. Bankers Life is a participating member of the Medical Information ...

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