Appeal from the Circuit Court of Winnebago County; the Hon.
Robert C. Gill, Judge, presiding.
JUSTICE SCHNAKE DELIVERED THE OPINION OF THE COURT:
On October 26, 1979, plaintiffs filed their original single-count complaint in the circuit court of Winnebago County. In it they sought damages against the defendant, United Savings Life Insurance Co., for the fraudulent misrepresentations of the defendant's agents in connection with the sale of two life insurance policies to plaintiff Evelyn Sommer on the life of plaintiff John Sommer.
Defendant moved to dismiss on October 30, 1979, based on the five-year statute of limitations for fraud. (Ill. Rev. Stat. 1981, ch. 83, par. 16, now Ill. Rev. Stat. 1983, ch. 110, par. 13-205.) With the court's permission, plaintiffs filed an amended complaint on February 25, 1982. The amended complaint contained five counts, all based upon the same insurance policy transactions. Count I was based on common law fraud, as was the original complaint, and sought compensatory damages. Count II sought recovery of compensatory damages based on the theory of negligent misrepresentation. Count III alleged a violation of section 2 of the Consumer Fraud and Deceptive Business Practices Act (Ill. Rev. Stat. 1975, ch. 121 1/2, par. 262), and asked for compensatory damages. Count IV sought compensatory damages based on a violation of sections 149, 401, 423 and 424 of the Illinois Insurance Code (Ill. Rev. Stat. 1975, ch. 73, pars. 761, 1013, 1030 and 1031), and Rule 9.17 of the Illinois Department of Insurance. Count V sought punitive damages for the wilful fraud and wilful violations of the above statutes and rule.
The defendant renewed its motion to dismiss, which was granted on September 1, 1983. The judgment stated that count I failed to advance a valid cause of action for fraud and was also barred by the five-year statute of limitations. Likewise, counts II, IV and V were barred by the five-year statute of limitations. Count III was held barred by the three-year statute of limitations contained in section 10a(e) of the Consumer Fraud and Deceptive Business Practices Act (Ill. Rev. Stat. 1975, ch. 121 1/2, par. 270a(e)). It is from this judgment that the plaintiffs appeal.
The elements of common law fraud are clear; there must be (1) a statement of material fact as opposed to opinion, (2) the statement must be untrue, (3) the party making the statement knows or believes it to be untrue, (4) the person to whom the statement is made believed and relied on it and had a right to do so, (5) the statement was made for the purpose of inducing the other party to act, and (6) the reliance of the person to whom the statement was made led to his injury. Zickur v. Irmiger (1973), 15 Ill. App.3d 805, 807; Bennett v. Hodge (1940), 374 Ill. 326, 332.
The trial court, in dismissing count I for failing to state a cause of action, stated:
"I am going to grant the motion to dismiss Count I of the first amended Complaint. The reason is, it appears to the Court that the basis for the fraud charge is set forth and relied upon in Paragraph 6 of Count I.
And it says that as a consequence of the plaintiffs' acts of reliance as set forth in Paragraph 6 as a direct and approximate result of the aforesaid false and fraudulent representations as set forth therein.
5, I don't believe that either Paragraph 5 or 6 state a viable cause of action on the basis of fraud."
The precise reasons for the trial court's dismissal of count I are not clear; it appears that the court felt paragraphs 5 and 6 were insufficient. Paragraphs 5 and 6 state:
"5. Defendant through its agent or agents, having knowledge of the facts alleged in paragraphs 3. and 4. of the First Amended Complaint affirmatively, falsely and fraudulently represented to plaintiff, JOHN R. SOMMER, SR., and to plaintiff, EVELYN M. SOMMER, by her agent, JOHN R. SOMMER, the following:
a. On or about September, 1974, the defendants stated the premiums on a certain policy of insurance for $1,000,000 were less than premiums on his existing policies which provided less coverage.
b. On or about September, 1974, although plaintiff, JOHN R. SOMMER, SR. had advised the company's agent that the insurance applied for was intended to replace insurance with death benefits of at least $700,000.00, the company's agent completed the application form to indicate the application was not replacement insurance, and when the said plaintiff inquired about that indication, the company, by its agent, stated that was the proper answer for technical reasons the plaintiff could not understand.
c. On or about September, 1974, the defendant stated that, although the policy being offered to the plaintiffs would be too expensive for the purpose it was being sold unless it was a dividend paying policy, the defendant company was then taking action to change the policy to provide for payment of dividends.
d. On or about October 24, 1975, the defendant advised the plaintiffs that the defendant company had taken the action to provide a dividend paying policy, and the plaintiff could benefit from that action, by surrendering the policy purchased from the defendant in 1974, and converting it to a new policy.
e. On or about November, 1975, defendant represented to plaintiff, JOHN R. SOMMER, SR. that he and plaintiff, EVELYN M. SOMMER, could purchase a policy of insurance on the life of JOHN R. SOMMER, SR., with a death benefit as shown in the column headed `Death Benefit' on Exhibit A attached hereto ...