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New York Life Insurance Co. v. Sogol

December 30, 1999

NEW YORK LIFE INSURANCE COMPANY,
PLAINTIFF,
V. MARSHA A. SOGOL AND LINDA MUSLIN, DEFENDANTS. LINDA MUSLIN,
COUNTER-PLAINTIFF/APPELLANT,
v.
MARSHA A. SOGOL, COUNTER-DEFENDANT/APPELLEE.



The opinion of the court was delivered by: Justice South

Appeal from the Circuit Court of Cook County.

Honorable John K. Madden, Judge Presiding.

On September 1, 1998, New York Life Insurance Company (New York Life) and New York Life Insurance and Annunity Corporation (New York Life Annuity) filed an action for interpleader against Linda Muslin and Marsha A. Sogol to determine who would receive the proceeds of two life insurance policies and an annuity policy owned by Bruce Muslin. Bruce had changed the beneficiary of the policies issued by New York Life and New York Life Annuity. He had also changed the beneficiary on an annuity issued by the Equitable of Iowa (Equitable Annuity). These changes were made during the pendency of a dissolution of marriage proceeding brought by Linda Muslin against him. Linda filed a two-count counterclaim against Sogol seeking a declaratory judgment and alleging conversion of the proceeds of the Equitable Annuity. Sogol filed a motion to dismiss that counterclaim.

On January 15, 1999, the court entered an order granting the motion to dismiss, and on April 14, 1999, the court entered an order granting Sogol's motion for judgment on the pleadings or in the alternative dismissing Linda Muslin as a party defendant in the interpleader action.

Bruce and Linda were married sometime prior to September 1978. Between 1978 and 1990, Bruce purchased two life insurance policies and an annuity from New York Life, and the Equitable Annuity. At the time Bruce purchased the policies, the beneficiaries of the policies were Linda and their children.

In 1993, Linda filed a dissolution action against Bruce in the circuit court of Cook County. On November 8, 1993, by agreement of both Bruce and Linda, the court entered a preliminary injunction prohibiting Bruce from "transferring, encumbering, concealing, damaging or otherwise disposing of the property of Linda Muslin or any other property of the parties." On June 6, 1996, the dissolution action was inadvertently dismissed for want of prosecution but reinstated on August 23, 1996. Linda never prosecuted her petition for dissolution of marriage to a final judgment. On or about March 4, 1998, while the injunction was still in effect, Bruce submitted change of beneficiary forms to New York Life and Equitable of Iowa, purporting to remove Linda and their children as beneficiaries of the policies and replace them with Sogol, his girlfriend. This occurred only two months prior his death on May 8, 1998. Sogol thereafter submitted claims to New York Life and Equitable of Iowa for the proceeds of the policies. Linda was unaware that Bruce had changed the beneficiaries until after his death.

The court heard oral argument on Sogol's motion to dismiss on January 5, 1999. On January 15, 1999, the court dismissed Linda's counterclaim without stating any basis for the ruling. This decision, in effect, disposed of the interpleader action, and accordingly, the trial court entered the final order on April 14, 1999. However, two days later, on April 16, 1999, the court granted Linda's motion for stay pending appeal. Linda appeals from the orders entered on January 15 and April 14, 1999.

Linda argues that the trial court erred as a matter of law when it failed to award the proceeds of the life insurance policies and annunity to her due to Bruce's violation of the terms of the preliminary injunction. Sogol responds that the preliminary injunction did not survive the dismissal of the dissolution action, was not revived in the reinstatement order, and, at any rate, did not survive the death of Bruce. Sogol argues that once Bruce died, the divorce action, including the preliminary injunction, abated as if it never existed.

The issue before the court when reviewing a motion to dismiss is one of law, and the standard of review is de novo. Van Horne v. Muller, 294 Ill. App. 3d 649, 653, 691 N.E.2d 74, 76 (1998).

The purpose of a preliminary injunction is to preserve the status quo pending a decision on the merits. Hartlein v. Illinois Power Co., 151 Ill. 2d 142, 156, 601 N.E.2d 720, 726 (1992). It is an extraordinary remedy which is applicable only to situations where an extreme emergency exists and serious harm would result if not issued. Hartlein, 151 Ill. 2d at 156, 601 N.E.2d at 726. An order vacating the inadvertent dismissal of a plaintiff's complaint renders the dismissal order nugatory and returns the parties to the status they had prior to the entry of the dismissal order. Kelch v. Watson, 237 Ill. App. 3d 875, 878, 604 N.E.2d 971, 973 (1992). The effect of a vacated order is that of a void order. Kelch, 237 Ill. App. 3d at 877, 604 N.E.2d 973.

It appears that this case is one of first impression in Illinois. The question is whether a preliminary injunction in a dissolution proceeding, which has abated upon the death of one of the parties, survives abatement.

In connection with the divorce suit filed by Linda against Bruce, a preliminary injunction was issued on November 8, 1993. This injunction prohibited Bruce from "transferring, encumbering, concealing, damaging or otherwise disposing of the property of Linda Muslin or any other property of the parties." The dissolution action was dismissed on June 6, 1996, for want of prosecution. However, on August 23, 1996, the case was reinstated. Sogol argues that since the reinstatement order did not specifically state that the preliminary injunction was reinstated, it was no longer in effect. However, the case was reinstated under the original docket number, not a new number. Thus, since there was no reason to assume that only part of the case was reinstated, the reinstatement of the dissolution action would also reinstate the preliminary injunction which was part of the original case.

Sogol contends that because the dissolution action was dismissed for want of prosecution, the preliminary injunction could not survive. In addition, she argues that at the time of Bruce's change of beneficiary, five years had elapsed since the filing of the dissolution action. Since a preliminary injunction is meant to be of short duration, Sogol asserts that the injunction could not have lasted five years. However, while a preliminary injunction is not an injunction for an indefinite period of time, there is no precise time limit for one.

"A preliminary injunction *** is not necessarily of extremely brief duration since its primary purpose is to provide relief to an injured party and maintain the status quo until a trial on the merits." Bullard v. Bullard, 66 Ill. App. 3d 132, 383 N.E.2d 684 (1978). When the case reached a conclusion or termination, the preliminary injunction would end. On or about March 4, 1998, when Bruce submitted the change of beneficiary forms to New York Life and Equitable of Iowa, the preliminary injunction was still in effect, and Bruce's attempt to change the beneficiary of the policy ...


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