The opinion of the court was delivered by: NORDBERG
JOHN A. NORDBERG, UNITED STATES DISTRICT JUDGE.
The plaintiffs -- John, Beryl, and Robert Gerdes -- have brought this diversity suit alleging various state-law claims arising out of their purchase of certain life insurance policies. The plaintiffs' amended complaint
includes counts for reformation of the contracts against John Hancock Life Insurance Co. (Hancock) (Count I); for violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, Ill. Rev. Stat. ch. 121 1/2, para. 262 (1987), against Hancock, Frank Clegg, Michael Sekara, and Raymond Jones (Counts II, IV, VII, and X, respectively); for common law fraud against Hancock, Clegg, Sekara, and Jones (Counts III, V, VIII, and XI, respectively); and for negligent misrepresentation against Clegg, Sekara, and Jones (Counts VI, IX, and XII, respectively). In essence, the plaintiffs allege that they bought the Hancock life insurance policies after Jones, as an agent of the Columbus General Agency (the insurance marketing company of Clegg and Sekara), made certain misrepresentations to the plaintiffs regarding the costs of maintaining the policies; Hancock, however, allegedly refused to comply with the terms and conditions as represented during the sale of the policies.
For purposes of a motion to dismiss, the court must accept as true all well-pleaded factual allegations in the complaint and must draw all reasonable inferences in the light most favorable to the plaintiffs. Powe v. City of Chicago, 664 F.2d 639, 642 (7th Cir. 1981). A complaint should not be dismissed for failure to state a cause of action unless it is beyond doubt that the plaintiffs could prove no set of facts that would entitle them to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). The court, however, need not accept as true legal conclusions or opinions that are couched as factual allegations. Briscoe v. LaHue, 663 F.2d 713, 723 (7th Cir. 1981), aff'd, 460 U.S. 325, 75 L. Ed. 2d 96, 103 S. Ct. 1108 (1983). Accordingly, the facts of this case, as alleged in the plaintiffs' amended complaint, are as follows.
The dispute in this case stems from the sale of Hancock life insurance policies by Jones to the Gerdes while Jones was acting as an agent of Sekara and Clegg. Clegg operated the Columbus General Agency, an enterprise that markets insurance products, before April 1, 1985; thereafter, Sekara managed the business. Between 1981 and 1983, the plaintiffs bought three life insurance policies for John Gerdes. The total face value of these insurance policies was $ 700,000.
In 1984, Jones contacted John Gerdes and solicited from him the purchase of a fourth life insurance policy in the face amount of $ 300,000. As an inducement to purchase this fourth policy, Jones represented that if the premiums on all four life insurance policies (with a total face value of $ 1,000,000) were paid up in the year 1990 (after payment of the 1989 premium), Gerdes would not be required to pay any further premiums during the remaining years of his life.
In 1985, the Gerdes bought a fifth life insurance policy with a face value of $ 500,000 -- this time on the life of Beryl Gerdes. Jones represented that no cash outlay would be required to put the policy in force; rather, the premium could be financed through a loan from Profesco Corporation, an affiliate of Hancock; Jones stated that if the Gerdes would assign the increase in the cash value of John Gerdes' life insurance policies as security for the loan, the loan would be paid by this increase in value. In addition, Jones again told the Gerdes that the premiums for the other four policies would remain unchanged and that the last premium to be paid would still be in the year 1989.