The opinion of the court was delivered by: Justice Burke delivered the opinion of the court
Appeal from the Circuit Court of Cook County.
Honorable Kenneth L. Gillis, Judge Presiding.
Plaintiff Jeffrey Perelman appeals from the circuit court's order dismissing his breach of contract and negligent misrepresentation claims against defendants Jack Fisher and Amsterdam Financial Group, Ltd. On appeal, plaintiff contends that:
(1) "in an action by an insured against his broker/agent, there is no presumption of knowledge of breach of contract"; (2) the statute of limitations on his claims did not commence until plaintiff knew or reasonably should have known he had been damaged and that the damage was wrongfully caused; and (3) section 2--619 of the Civil Practice Act (Act) (735 ILCS 5/2--619 (West 1992)) prohibits the trial court from resolving factual questions where the non-movant has filed a jury demand. For the reasons set forth below, we reverse and remand this case for further proceedings.
In September 1988, plaintiff hired defendant, Jack Fisher (Fisher), an insurance broker who owned and operated Amsterdam Financial Group, Ltd., for the purpose of procuring a disability insurance policy. Fisher offered and plaintiff accepted a Paul Revere Life Insurance Company disability insurance policy with a monthly disability benefit of $4,000. The Paul Revere policy was issued to plaintiff on or about January 24, 1989, accompanied by a transmittal letter requesting that plaintiff review the policy and contact Fisher if plaintiff had any questions regarding his coverage.
The Paul Revere policy as issued did not contain a provision that would increase the amount of disability payments in order to meet increases in inflation. Fisher stated in a sworn affidavit that he explained to plaintiff prior to the issuance of the policy that it did not contain a cost of living adjustment. However, plaintiff stated in a sworn affidavit that during negotiation of the policy, Fisher told plaintiff that plaintiff was purchasing a "premier" policy which was the "best" policy available at that time. Plaintiff alleged that when the policy was issued to him in January 1989, he "skimmed" through it in order to confirm that the monthly disability benefit was for $4,000 as requested. When plaintiff "skimmed" through the policy, he also observed references to benefit adjustments related to the "Consumer Price Index."
At the time plaintiff purchased and was issued the Paul Revere policy, he was also covered under a separate disability insurance policy issued to him by Minnesota Mutual Life. The Minnesota Mutual Life policy contained a provision entitled, "Monthly Income Benefit Escalator Agreement," that had the effect of increasing monthly income benefits if the insured suffered an extended period of disability. As specifically outlined in the Minnesota Mutual Life policy, plaintiff paid an additional annual premium for the "Benefit Escalator Agreement."
Plaintiff paid all premiums for the Paul Revere policy from January 1989 through March 27, 1993, when plaintiff sustained a heart attack. In November 1993, plaintiff began receiving monthly disability payments under the Paul Revere policy in the amount of $4,800. Plaintiff alleges that when the monthly disability payment he was receiving under the Paul Revere policy did not increase in October 1994, Fisher informed plaintiff that Fisher had not obtained a policy with a provision for an annual increase of the monthly benefit to meet inflation rates.
On May 20, 1997, plaintiff filed an amended complaint (complaint) in the trial court. Count I of plaintiff's complaint for breach of contract alleged that Fisher breached his duties to plaintiff by failing to procure and provide a disability policy which contained a provision that would annually increase the payable amount of monthly disability benefits to meet the rate of inflation. Count II of plaintiff's complaint for negligent misrepresentation alleged that, as defendants' client, plaintiff reasonably relied to his detriment on Fisher's representation that the Paul Revere policy would include such a provision.
Defendants filed a motion to dismiss plaintiff's complaint, arguing that the statute of limitations barred the action because it was filed seven years and two months after plaintiff received the policy. Plaintiff filed a response to defendants' motion to dismiss, arguing that the court apply the discovery rule and determine that the applicable five-year statute of limitations had not run as a matter of law because there was a genuine issue of material fact as to when plaintiff knew or should have known the terms of the policy. In its reply, defendants argued that when plaintiff received the policy on or about January 24, 1989, he reasonably knew or should have known, for the purpose of commencing the limitation period under the discovery rule, that the policy did not contain a provision for an annual increase of benefits to meet the inflation rate. Therefore, defendants argued, the statute of limitations barred plaintiff's cause of action which accrued on January 24, 1989.
At the hearing on defendants' motion to dismiss, plaintiff argued that his complaint stated a cause of action because there were questions of fact as to whether plaintiff should have known of the alleged defect in the policy when he "skimmed" it in January 1989. For example, plaintiff argued that a jury may determine that when plaintiff saw a reference to the "Consumer Price Index" in the policy, he reasonably could have interpreted that term to provide for the monthly benefit increase he allegedly requested. Defendants argued that there was no question that plaintiff should have known of any alleged deficiency in the policy when he received it because, based on Furtak v. Moffet, 284 Ill. App. 3d 255, 671 N.E.2d 827 (1996), plaintiff clearly had a duty to read and understand the contents of the policy.
On August 8, 1997, the trial court found that because the language in the Paul Revere policy was not defective and was clearly set out for plaintiff, the case was "not a Discovery Rule matter." Specifically, the court stated:
"There's nothing defective in the policy. It's not like a fireplace that sets fire to the house at some point later on. It's ...