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12/02/88 Pauline Dolido, v. Zenith Radio Corporation

December 2, 1988

PAULINE DOLIDO, PLAINTIFF-APPELLANT

v.

ZENITH RADIO CORPORATION, DEFENDANT-APPELLEE

PLAINTIFF, PAULINE DOLIDO, APPEALS THE DISMISSAL OF HER COMPLAINT, PURSUANT TO SECTION 2-619 OF THE CODE OF CIVIL PROCEDURE (ILL. RE

v.

STAT. 1985, CH. 110, PAR. 2-619), IN HER ACTION TO COLLECT PROCEEDS FROM DEFENDANT ZENITH RADIO CORPORATION'S PROFIT SHARING PLAN.



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIFTH DIVISION

532 N.E.2d 298, 177 Ill. App. 3d 281, 126 Ill. Dec. 613 1988.IL.1746

Appeal from the Circuit Court of Cook County; the Hon. Thomas R. Rakowski, Judge, presiding.

APPELLATE Judges:

PRESIDING JUSTICE LORENZ delivered the opinion of the court. PINCHAM and MURRAY, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LORENZ

We remand with directions.

The following facts are pertinent to this appeal.

Plaintiff is the widow of Paul Dolido, a former employee of defendant Zenith Radio Corporation (Zenith). Paul Dolido died on December 29, 1979. At the time of his death, Paul Dolido had an interest in Zenith's profit sharing plan (sometimes the Plan) in the amount of $50,397.01. On March 2, 1981, Zenith distributed the proceeds of the Plan to Julie Kashuba, Paul Dolido's niece, whose name appeared on a designation of beneficiary form, dated December 21, 1979, containing the purported signature of Paul Dolido.

Plaintiff, as administrator of Paul Dolido's estate, sought, in a subsequent probate proceeding, recovery of that interest in separate petitions against Zenith and Kashuba. Both Zenith and Kashuba successfully moved to dismiss the respective petitions. Plaintiff appealed both rulings. In a consolidated review, this court, on April 18, 1986, in an unpublished order pursuant to Supreme Court Rule 23 (107 Ill. 2d R. 23), affirmed the dismissals. We ruled that because, under the Plan's provisions, either Kashuba, as designated beneficiary, or plaintiff, as surviving spouse in the absence of a designated beneficiary, was entitled to the interest, the proceeds were nonprobatable assets outside of any claim of the estate and therefore not property subject to probate proceedings.

Subsequently, on July 11, 1986, plaintiff filed a complaint, as amended, in the circuit court of Cook County against Zenith, seeking, in each of three counts, recovery of Paul Dolido's interest in the Plan. That complaint gives rise to the instant appeal. Relevant to each count, section 2 of the Plan, pertaining to designation of beneficiaries, provided that if, for reasons enumerated, no valid designation of beneficiary existed on file with the company at the time of death of the member, the death benefit would be paid to the member's spouse.

Count I alleged that, at the time Paul Dolido purportedly executed the designation of beneficiary form, he was incompetent by reason of a terminal illness. Count II alleged Zenith breached its duty to assure payment to the proper person when it issued payment to Kashuba over plaintiff's objections. In support, count II stated that in 1978 Paul Dolido was diagnosed as having cancer, that chemotherapy treatments he received caused confusion, that he was not competent to understand the nature of the designation of beneficiary form, and that his signature thereon was forged. Plaintiff prayed for declaration that the executed designation of beneficiary form was invalid.

Count III contained substantially the same allegations as count II. Additionally, plaintiff alleged that Zenith knew of Paul Dolido's illness, and was aware of the chemotherapy treatments, but disregarded notices of plaintiff's claim to the interest and made no attempt to determine the validity of the designation of beneficiary. Plaintiff further alleged that Zenith failed as a "stakeholder" to deposit the amount of the interest in dispute with the court.

Defendant moved to dismiss plaintiff's complaint pursuant to section 2 -- 619 of the Code of Civil Procedure. As to counts I and III, defendant argued that plaintiff lacked standing to assert a breach of contract claim because plaintiff was not the designated beneficiary under the Plan. As to count II, defendant argued that the payment of the interest to Julie Kashuba rendered the issue moot. Defendant also argued that plaintiff's claim was barred by laches because, although Paul Dolido died in December 1979, ...


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