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Seidler v. Georgetown Life Insurance Co.





APPEAL from the Circuit Court of Cook County; the Hon. RAYMOND S. SARNOW, Judge, presiding.


Rehearing denied April 7, 1980.

At stake in this appeal are the proceeds of an insurance policy for $1 million on the life of Jacob Grossman who died on November 15, 1973. Evelyn Seidler (plaintiff), beneficiary of said policy, brought this action against Georgetown Life Insurance Co. (Georgetown), the insurer. We are concerned only with count I of plaintiff's complaint involving policy No. 9130. Both plaintiff and defendant filed motions in the trial court for summary judgment on this count. The trial court denied plaintiff's motion and granted defendant's motion. Thereafter, the trial court denied plaintiff's motion to vacate the order granting summary judgment to defendant. The previous order denying plaintiff's motion for summary judgment was never vacated. Plaintiff appeals.

Certain of the facts are undisputed. On March 24, 1973, the deceased signed a policy application. This document provided:

"It is agreed: (1) the Company shall incur no liability under this application until it has been received and approved, a policy has been issued and delivered, and the full first premium specified in the policy has been actually paid to and accepted by the Company while health, habits and occupation of the Proposed Insured remain as described in this application in which case the policy shall be deemed to have taken effect as of the date on which the policy was signed."

In preparing the application, deceased was assisted by Harold Gaffney. Defendant's brief describes Gaffney as the insurance agent of the deceased. Plaintiff's brief describes Gaffney as a broker for Georgetown.

A $20,000 portion of the policy was to be underwritten by Georgetown. The remaining $980,000 was reinsured by Republic National Life Insurance Company. In this situation, Georgetown would obtain the necessary information from the policy applicant. Republic would evaluate the situation and determine the premium rating to be applied to the applicant.

A medical consultant for Republic, Dr. Charles H. Lodowski, evaluated the risk. His deposition reflects that he examined the pertinent information in April of 1973. He noted the deceased had an elevated blood cholesterol level to an abnormal extent; evidence of lung calcification and a questionable life expectancy as indicated by family mortality. The mother of the deceased had died of cardiovascular disease at age 57. The father died of a stroke at age 69. This meant that, as a matter of statistics, the deceased would be classified as a person susceptible to occlusive vascular disease.

The evaluating doctor also noted the deceased was on a restricted diet and had been taking drugs in an effort to remedy the cholesterol condition. The physician also examined an X ray of the lungs and an electrocardiogram taken at the Mayo Clinic in January of 1972. The doctor found a defect in the integrity of the lung and an irregularity in the cardiogram. He considered these two findings to be medically related. The doctor concluded that the right auricle of the heart was thickened and overworked by the difficulty of supplying blood to the calcified portions of the lung.

Another X ray taken February 1972 indicated to the doctor that the calcification in the lung had progressed to the extent that scarring had begun. The doctor also had an evaluation by another physician in connection with an electrocardiogram submitted to another insurance company and medically evaluated by that company in December of 1972. This data suggested possibility of arterial enlargement, emphysema or pulmonary disease. The doctor further considered a so-called M.I.B. code prepared by an association of life insurance companies. This indicated another physician had suspected that the deceased was afflicted with arteriosclerosis.

Based upon this information, Dr. Lodowski concluded the deceased probably had a compromised life expectancy. In the opinion of the doctor, this conclusion was linked to the probability of arteriosclerosis and the possibility of heart disease. For these reasons Republic gave the deceased a Table 2 rating. At that time, the deceased at age 38 would have an average life expectancy of 29.76 years. A person of standard or ordinary risk at age 38 would have a life expectancy of 33.97 years.

Approximately 10 days after the insurance application, the deceased was admitted to a hospital in Bloomington, Illinois. The treating physician, Dr. Seymour Goldberg, diagnosed his problem as "spastic colitis, anxiety neurosis and fatigue syndrome." He was given medication and was shortly discharged from the hospital.

About one month after signing the insurance application, the deceased became a patient in the Intensive Care Unit of a hospital in Billings, Montana. The treating physician, Dr. Ross Lemire, diagnosed the condition as "a heart attack." He so advised the patient. The doctor testified that in his opinion the deceased had "suffered an anterior septal myocardial infarction acute" several days previously.

In his deposition, Dr. Lemire also stated that about 10 years previously, when the deceased was 28 years old, he had sustained a heart injury and was hospitalized. He was given an anticoagulant. At that time, this was regular medical procedure where a suspected heart attack was concerned. This episode of 10 years previously had been noted by the deceased in the insurance application. The doctor also testified the deceased had normal blood pressure and there was no evident abnormality in the heart tone. An electrocardiogram taken at the time was "definitely abnormal" but was "borderline." The doctor compared this cardiogram to later cardiograms. His diagnosis was that the deceased ...

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