APPEAL from the Circuit Court of Sangamon County; the Hon.
GORDON D. SEATOR, Judge, presiding.
MR. JUSTICE WEBBER DELIVERED THE OPINION OF THE COURT:
The plaintiffs, two corporations in the business of selling insurance, one corporation in the insurance agency business and several individuals desiring to become insurance agents and brokers, brought an action in the circuit court of Sangamon County against the defendant, the Director of Insurance of the State of Illinois, and a nonprofit corporation in the business of preparing and administering tests for the Director of Insurance. The gravamen of the amended complaint was that the individuals had been unable to pass the tests and had thus been denied licenses as insurance agents and brokers by the defendant Director of Insurance and that by reason of such failure on the tests the corporate plaintiffs had been unable to employ them. The amended complaint sought injunctive relief and damages under the due process clauses of the constitutions of the United States and the State of Illinois and the same relief under the Civil Rights Acts of 1866 and 1871 (42 U.S.C. §§ 1981 and 1983 (1976).) The trial court dismissed the amended complaint on motion of the defendants and this appeal followed.
1, 2 Before proceeding to an analysis of the complaint, we must pause for a moment to comment on the motions to dismiss. The motion of defendant Educational Testing Service (ETS) sounded under section 45 of the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, par. 45). The motion of defendant Mathias, as Director of Insurance of the State of Illinois (Director) apparently was meant to sound under section 48 of the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, par. 48), since there were affidavits attached to it. However, the motion itself did not ask for dismissal on any of the grounds listed in section 48. The trial court properly treated it as a motion under section 45, as do we likewise. Under a section 45 motion defendants cannot challenge any properly pleaded facts in the complaint. Cain v. American National Bank & Trust Co. (1975), 26 Ill. App.3d 574, 325 N.E.2d 799.
We are, therefore, presented with a pure question of pleading and law: Whether the complaint sets forth sufficient well-pleaded facts to require the defendants to answer and to proceed to trial. With one exception, we believe it does, and we therefore reverse and remand.
Under these circumstances it is necessary for us to examine and analyze the amended complaint in some detail. Count I sets forth most of the factual background. It first identifies the parties. Plaintiffs, Golden Rule Life Insurance Company and Golden Rule Insurance Company, are Illinois insurance companies, authorized to sell and service life insurance, and health and accident insurance. Plaintiff, L & R Insurance Agency, Inc., is an Illinois corporation engaged in the sale of life, and health and accident insurance in Illinois. The corporate plaintiffs maintain headquarters in Lawrenceville, Illinois, and employ about 80 fulltime agents in Illinois. They recruit about 40 new agents each year.
The five individual plaintiffs were all denied licenses as insurance agents or brokers by reason of having failed portions of the Illinois Insurance Agent's and Broker's License Qualification Examination (examination.) They allege that they each completed all the required forms and paid all the required fees and are otherwise qualified, including trustworthiness, competency, business reputation and experience. Three of the five are blacks.
The defendant Mathias is identified as the Director of Insurance of the State of Illinois. Defendant ETS is identified as a not-for-profit corporation, headquartered in Princeton, New Jersey, with offices in Evanston, Illinois, and engaged in test development, test administration, and educational and occupational measurement research.
Count I goes on to allege that for many years prior to October 1975, the predecessors of the Director formulated, administered and graded the examination, but on March 12, 1975, and on July 1, 1976, those predecessors entered into contracts with ETS to formulate, administer and grade the examination. Copies of the contracts are attached to the amended complaint. This was done by ETS between October 1975 and August 1976.
Count I then alleges that this was not a fair nor proper test and was an illegal, invalid, arbitrary and capricious exercise of authority by the Director and his predecessors in the following respects:
"(a) The Examination covered subject areas inappropriate to an entry-level examination, and not likely to be encountered by a beginning agent or broker.
(b) The Examination was complex and confusing in form and structure, and required a high level of test-taking ability and of linguistic and vocabulary skills substantially and rationally unrelated to a determination of an applicant's competency and trustworthiness as an insurance agent or broker, and inappropriate to an entry-level examination.
(c) The Examination contained many obscure and highly technical questions, knowledge of which is and was substantially and rationally unrelated to a determination of an applicant's competency as an insurance agent or broker, and inappropriate to an entry-level examination.
(d) The Examination contained many questions subject to different interpretations and different answers by individuals experienced and competent as insurance agents and brokers in the State of Illinois. Some of the different interpretations and answers, although correct in fact, were not recognized as correct by defendant ETS, with the result that there was an arbitrary testing standard substantially and rationally unrelated to a determination of an applicant's competency as an insurance agent or broker in the State of Illinois, and inappropriate to an entry-level examination.
(e) The `cut-off' or passing score for each administration of such Examination was arbitrarily established without any actual or substantial relationship to a determination of competency as an insurance agent or broker, and at a level inappropriate to an entry-level examination.
(f) The Examination tested levels of cognition of subject matter substantially and rationally unrelated to a determination of an applicant's competency as an insurance agent or broker, and at a level inappropriate to an entry-level examination.
(g) The defendants offered an inadequate degree of guidance to applicants who took the Examination.
(h) The Examination was given by defendants without having been pre-tested in any meaningful way to determine how qualified applicants would respond to it or perform on it.
(i) The Examination was given by defendants without any job validation to determine whether in fact it appropriately measured competency to engage in the business of an insurance agent or broker in the State of Illinois.
(j) The Examination was not fairly designed to measure an applicant's competency or trustworthiness to be an insurance agent or broker in the State of Illinois, but served as a method of artificially limiting and controlling the number of individuals entering the business of insurance agent or broker in the State of Illinois without regard for competency or trustworthiness. Whether intended or not, the effect of the Examination was to restrict entry into the business of insurance agent or broker in the State of Illinois to no more than approximately one-half of the persons who make application."
The corporate plaintiffs allege that under certain provisions of the Illinois Insurance Code they lose the right to obtain 90-day temporary licenses for trainees if the passing grades of those persons falls below 50% during a 6-month period. Thus, they allege, they are strongly motivated to select persons with substantial test-taking abilities without regard to their competency and trustworthiness, and so are deprived of their rights to engage in the insurance business.
The individual plaintiffs allege that by reason of failing portions of the examination they have also been deprived of the right to engage in the insurance business, that they have suffered a loss of earnings and other benefits, loss of experience and eligibility for promotion, damage to their reputations and standing in the profession.
Count I then alleges a violation of the due process clauses of the constitutions of the United States and the State of Illinois, and asks for money damages from ETS for both the corporate and individual plaintiffs.
Count II limns the same factual background as count I, but bases itself on a modified examination. It alleges that in June 1976, the Director announced that such a modified examination would be developed by ETS; that ETS did so and such examination has been administered and graded by ETS since December 1976. The plaintiffs allege the same defects and deficiencies in this modified examination as they found in the former one covered by count I. Count II also alleges a violation of ...