Appeal from the Circuit Court of Cook County. The Honorable Susan Zwick, Judge Presiding.
The opinion of the court was delivered by: Justice Gordon
Plaintiff, Khalid J. Bajwa (plaintiff), administrator of the estate of Muhammad Cheema, brought a wrongful death action against Metropolitan Life Insurance Company (defendant or Met Life) alleging that Met Life's negligent issuance of an insurance policy on the life of Muhammad Cheema (decedent), designating Muhammad U. Cheema (Cheema) as the policy beneficiary, proximately caused the decedent's death. Plaintiff's fourth amended complaint, which is the subject of the instant appeal, contained four separate counts of negligence against Met Life. *fn1 The trial court granted defendant's motion to dismiss counts IV through VI of plaintiff's complaint, and also granted defendant's motion for summary judgment on count VII. *fn2 Plaintiff now appeals the trial court's judgments. We affirm in part, reverse in part and remand.
In December 1992, Cheema approached Imtiaz Sheik (Sheik), a Met Life account representative, and filled out an application for a life insurance policy on the life of the decedent. Cheema, whose name is nearly identical to the decedent's, represented himself as the decedent's son and provided Sheik with personal information about the decedent necessary for the policy application. Cheema also designated himself as the beneficiary of the policy and arranged for the policy premiums to be automatically deducted from his bank account, but listed the decedent as the "owner" of the policy on the application. Cheema then told Sheik that he would take the application to his "father" and obtain his "father's" signature, and Sheik agreed to this arrangement even though Met Life company procedure required that an insurance agent personally meet with the insured and witness the insured sign the policy application. Cheema returned the application to Sheik with a signature bearing the decedent's name. Although plaintiff asserts that Cheema forged the decedent's signature on the application, there is no evidence in the record which affirmatively refutes or supports this assertion. The record does, however, provide evidence which indicates that much of the information provided by Cheema on the policy application was incorrect. For example, the decedent's home address, occupation, years of employment, annual income, current insurance status and medical information were misstated. Further, the application wrongly indicated that Cheema was the decedent's son.
As part of the application process, the insured was required to submit to a medical examination conducted by EMSI, a paramedical company hired by Met Life. An individual who identified himself as the decedent was examined by EMSI in relation to the instant policy application. The individual, whom plaintiff now asserts was not the decedent, produced a State of Illinois identification card which identified him as the decedent. A Met Life investigator contacted the Secretary of State's office and confirmed that an identification card was issued to an individual with the same name as the decedent. Notably, the individual examined by the EMSI paramedic was listed in the report as standing 5 feet 11 inches tall and weighing 195 pounds. At the time of his death, less than a year after the paramedical examination, the decedent stood 5 feet 8 inches tall and weighed 213 pounds.
The insurance application in question, including the parts containing the paramedical examiner's certification, were submitted to a Met Life underwriter prior to issuance of the policy. The underwriter noticed anomalies in the policy application which required further investigation. Specifically, the underwriter questioned why Cheema, rather than the insured's wife, was the policy beneficiary and why the beneficiary, rather than the insured, was paying the monthly policy premiums. The underwriter also questioned why the policy amount was $200,000 when the decedent's income, pursuant to Met Life financial guidelines, qualified him for a policy in the amount of $150,000. The underwriter confronted Sheik with these discrepancies and was told that the son was the beneficiary because the wife lived in Pakistan and foreign beneficiaries were discouraged by the company. Sheik also advised the underwriter that, despite information in the application suggesting otherwise, the insured would be paying the policy premiums with some assistance from his son. Sheik also explained that the increase in the policy amount was necessary because the decedent was supporting his wife and children in Pakistan and would be buried in Pakistan upon his death. Based on these explanations, the underwriter decided that the application was acceptable and issued the policy. The underwriter never asked Sheik if he personally met with the decedent. Notably, the policy application indicated, albeit dishonestly, that Sheikh had properly met with the decedent and certified the signing of the insurance application.
A policy insuring the life of the decedent in the amount of $200,000 was issued in January 1993. A note in the record indicates that, on February 19, 1993, an individual purporting to be the insured called Met Life four times with questions concerning potential coverage on possible death claims relating to the decedent's policy. Met Life's notations concerning these calls revealed that the caller asked whether the policy would pay if he was injured in a car accident in another country, returned to this country and then died. The caller was advised that an affirmative response could not be given because different factors would influence the decision to pay on the policy. Another notation indicated that a call was received wherein the caller asked "detailed questions about if he goes to Pakistan and dies will we [Met Life] pay the claim." The notation further indicated that the caller "had specific hypothetical situations that he wanted to know if we would pay or not." The caller was given the number to the death claims division. Another call was received in which the caller asked whether Met Life would pay if he was in a car accident or his house was robbed and he was killed in Pakistan. Met Life responded by explaining the insurance contestability provision to the caller. During another call, the caller stated that he did not speak much English and put an individual on the phone whom he identified as his girlfriend. The policy conditions were then explained to the girlfriend.
A memorandum written to the vice president of the Mid-America head office who appears to have been involved in the investigation of the policy after the decedent's death refered to these calls and states:
"Barb Gardener called. They received four calls on the case you inquired about. All of them came in on 2/19. They were strange enough that the case found its way into the Consulting Services area and they noted the file. They thought there'd be a disappearing act in Pakistan."
Six days after these calls were made to Met Life, the decedent was stabbed and beaten to death in his apartment. Cheema is the suspected murderer; however, he has never been convicted of this offense. The facts establish that he fled to Pakistan after the decedent's murder and has avoided extradition thus far.
Plaintiff filed his initial complaint in this matter in February 1995 and alleged that Met Life negligently issued an insurance policy on the life of the decedent. He subsequently filed first, second and third amended complaints, all of which were dismissed for insufficiency of the pleadings pursuant to defense motions filed under section 2-615 of the Code of Civil Procedure. 735 ILCS 5/2-615 (West 1994). Plaintiff then filed his fourth amended complaint. Count IV of the complaint alleged in relevant part that Met Life: (a) negligently and carelessly issued a life insurance policy on the life of the decedent without investigating the veracity of the information on the insurance application or personally meeting the insured; (b) issued a policy in favor of a beneficiary who did not possess an insurable interest in the life of the insured; (c) improperly relied on misrepresentations made by its agent in underwriting the policy; (d) failed to warn the decedent of suspicious phone calls which suggested that he was in imminent danger; and (e) provided a motivation and temptation for the murder of the decedent by the designated beneficiary. Count V alleged gross negligence for the same acts or omissions as they related to Met Life's agent, Sheik. Count VI alleged that Met Life negligently supervised Sheik. Count VII alleged that Met Life possessed actual knowledge of the following information: (a) the decedent had no knowledge of the life insurance policy taken out on his life; (b) Cheema signed the application for the policy posing as the decedent; (c) Cheema was not related to the decedent and was specifically not the decedent's son; (d) that an imposter took the physical examination required by the policy; (e) Cheema intended to murder the decedent to collect the policy benefits; and (f) Cheema did in fact murder the decedent after the policy was officially issued.
In a written order, the trial court granted defendant's section 2-615 motion to dismiss counts IV through VI of the fourth amended complaint on grounds of insufficient pleadings, stating that "[t]hese counts were previously dismissed by prior court order, and there are no new allegations contained in the Fourth Amended Complaint which would alter the court's prior dismissal." The trial court, however, denied defendant's motion to dismiss count seven of the complaint because plaintiff pled actual knowledge on the part of Met Life. Defendant subsequently filed a motion for summary judgment on count seven, and the trial court granted the motion, reasoning that "[t]he facts, as presented by both parties in the cross-motions, fail to support these allegations [of actual knowledge], or to establish an issue of fact as between these parties."
Plaintiff now appeals the trial court's dismissal of counts IV through VI of his complaint and the summary judgment order related to count VII. Plaintiff asserts that the pleadings were sufficient to state a cause of action against defendant and that a question of fact exists as to whether Met Life breached its duty of reasonable care when it issued an insurance policy in favor of a beneficiary with no insurable interest on the life of the insured, failed to verify that the insured was aware of and consented to the policy, failed to investigate discrepancies and errors in the life insurance application and failed to warn the insured of suspicious phone calls regarding the payout of policy benefits.
To state a cause of action for negligence, a plaintiff must allege facts in his complaint which establish that defendant owed plaintiff a duty, that defendant breached that duty and that plaintiff sustained an injury as a result of the breach. Doe v. Calumet City, 161 Ill. 2d 374, 384, 641 N.E.2d 498, 503 (1994). Whether a sufficient duty exists to support a negligence claim is a question of law properly subject to de novo review by this court. Colombo v. Wal-Mart Stores, Inc., 303 Ill. App. 3d 932, 933-34, 709 N.E.2d 301, 302 (1999).
The primary issue presented by this case is whether an insurer could ever be held liable for the murder of the insured, under a theory of negligence, where the policy sold provided the incentive to the beneficiary to kill the insured. The parties agree that this is an issue of first impression in Illinois. However, similar causes of action have been raised in other states, and because Illinois is devoid of statutes or case law in this area, we look to the decisions of several other state courts for guidance.
At the outset, we note that state courts have increasingly recognized wrongful death claims resulting from the negligent issuance of life insurance policies. See, e.g., Life Insurance as Motive for Murder, 29 Tort & Ins. L.J. 761 (1994). Several state courts have formally recognized that such actions may proceed under the common law of negligence. See Liberty National Life Insurance Co. v. Weldon, 267 Ala. 171, 100 So. 2d 696 (1957); Life Insurance Co. v. Lopez, 443 So. 2d 947 ( Fla. 1983); Ramey v. Carolina Life Insurance Co., 244 S.C. 16, 135 S.E.2d 362 (1964); Williams v. John Hancock Mutual Life Insurance Co., 718 S.W.2d 611 (Mo. 1986); see, e.g., Insurer's Tort Liability for Wrongful or Negligent Issuance of Life Policy, 37 A.L.R.4th 972 (1985). We also note that the parties have not indicated that any states have prohibited recovery or have rejected any duty by the insurer in actions of this type. Accordingly, we are not inclined to reject out of hand the recognition of a duty by the insurer to use reasonable care so as not to provide an incentive to murder through the issuance of its life insurance policies.
The case law of other jurisdictions has recognized the validity of such claims on three different grounds which may lead to carrier liability for wrongful death in the event that the murder of the insured is committed by someone who receives the benefits of a life insurance policy. The first is where the insurance company should have known that the individual who procured and owned the policy, and named herself as the beneficiary, had no insurable interest in the life of the insured. See Weldon, 267 Ala. 171, 100 So. 2d 696. The second is where the insurance company had knowledge that the insured was unaware and did not consent to the policy. See Ramey, 244 S.C. 16, 135 S.E.2d 362; Williams, 718 S.W.2d 611. The third factual predicate is where the insurance company had actual knowledge of the beneficiary's intent to murder the insured and failed to take action. Lopez, 443 So. 2d 947. Liability has also been supported by the cumulative impact of more than one of these factual predicates. See, e.g., Ramey, 244 S.C. 16, 135 S.E. 2d 362. In our case, the plaintiff's complaint alleges that each of these factual predicates was present and that each, in itself, as well as cumulatively, is sufficient to form a basis for insurer liability. Plaintiff contends that each of these grounds was sufficiently pled in his complaint and must, for the purposes of a section 2-615 pleadings motion, be held to exist in this case. *fn3 We therefore address the sufficiency of each of these grounds in turn.
First, plaintiff contends that counts IV through VII of his complaint sufficiently pled facts establishing that Met Life owed a duty of reasonable care "not to issue a policy of life insurance in favor of a beneficiary who has no interest in the continuation of the life of the insured." For this proposition, plaintiff relies on the leading and often cited Alabama case of Liberty National Life Insurance Co. v. Weldon. In Weldon, an aunt-in-law obtained several life insurance policies on her 2 ½ -year-old niece and then poisoned the child in order to collect the insurance proceeds. The aunt-in-law was convicted of the child's murder. The child's father filed suit against the insurance companies arguing that they knew or should have known that the aunt-in-law had no insurable interest in the life of the child, that they failed to exercise "reasonable diligence" to ascertain whether an insurable interest existed even though they had a duty to do so and that their failure to perform that duty proximately caused the child's death. Weldon, 267 Ala. at 182, 100 So. 2d at 704.
In Weldon, the aunt-in-law procured the policies on her niece's life, paid the policies' premiums and named herself the beneficiary of each policy; however, she did not have an insurable interest in the life of her niece under Alabama law and, thus, was not considered an appropriate beneficiary. The insurance companies that issued the policies were well aware that the child did not live with the aunt-in-law, that the aunt-in-law did not support the child and that the child lived with her parents. Despite this knowledge, none of the insurance companies required that the child's parents sign the insurance application on the child's life. Further, the child's parents were never made aware of the policies issued on their daughter's life until after her death. Weldon, 267 Ala. at 183-85, 100 So. 2d at 705-07.
The Alabama Supreme Court considered the issue of the insurance companies' duty as a matter of first impression and held:
"It has long been recognized by this court and practically all courts in this country that an insured is placed in a position of extreme danger where a policy of insurance is issued on his life in favor of a beneficiary who has no insurable interest. *** Where this court has found that such policies are unreasonably dangerous to the insured because of the risk of murder and for this reason has declared such policies void, it would be an anomaly to hold that insurance companies have no duty to use reasonable care not to create a situation which may prove to be a stimulus for murder." Weldon, 267 Ala. at 186, 100 So. 2d at 708.
The Weldon court explained the basis for its finding of such duty stating, "we are of the opinion that such a duty exists, for there is a duty upon all to exercise reasonable care not to injure ...