United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
GEORGE M. MAROVICH, District Judge.
Plaintiff filed this suit seeking additional proceeds under a life insurance policy. Toward the close of discovery, when plaintiff concluded that defendant was unfairly changing its defense strategy, plaintiff filed a motion to bar defendant from changing its defense to plaintiff's claim. For the reasons set forth below, the Court denies plaintiff's motion.
After the December 16, 2012 death of Brian Baker, defendant ReliaStar Life Insurance Company ("ReliaStar") paid $2, 000, 000.00 to plaintiff VC Management LLC ("VCM"), which was the beneficiary of a policy on the life of its employee, Brian Baker. VCM filed this suit, because it believes ReliaStar should have paid it $5, 000, 000.00, i.e., $3, 000, 000.00 more than it actually paid. The parties agree that the original face value of the policy was $5, 000, 000.00. The parties also agree that before Brian Baker's death, VCM asked ReliaStar to reduce the face value of the policy at issue in this case to $2, 000, 000.00. The parties disagree, however, on whether the change was actually effectuated before Brian Baker's death.
After Reliastar paid $2, 000, 000.00 (but not $5, 000, 000.00) to VCM, VCM filed in the Circuit Court of Cook County a claim for breach of contract. Reliastar removed the case here. In its complaint, VCM alleged:
11. On or about November 27, 2012, the Owner of the Policy submitted a Request for Policy Service... to ReliaStar requesting an amendment to the Policy to decrease the face amount of the Policy from $5, 000, 000 to $2, 000, 000....
12. As of December 16, 2012, ReliaStar had not accepted the request for amendment of the Policy as set forth in the Service Request and had not issued any written amendment or endorsement to the Policy reducing the Stated Death Benefit from $5, 000, 000 to $2, 000, 000.
13. As of December 16, 2012, no officer of ReliaStar had signed any amendment, endorsement or other documents changing the Stated Death Benefit under the Policy from $5, 000, 000 to $2, 000, 000.
14. On December 18, 2012, two days after the death of the Insured, ReliaStar issued an endorsement to the Policy... purporting to amend the terms of the Policy by reducing the Stated Death Benefit to $2, 000, 000....
15. The policy change requested in the Service Request never became effective because it was not accepted by ReliaStar until December 18, 2012, two days after the death of the Insured.
(VCM Complaint at ¶¶ 11-15).
On March 5, 2014, ReliaStar filed an answer and affirmative defenses. As its first affirmative defense, ReliaStar alleged:
1. On December 17, 2010, ReliaStar issued life insurance policy AD20348111 (the "Policy") insuring the life of Brian C. Baker as the Insured, with a Policy Date of December 15, 2010. The original owner of the policy was Vestor Capital Partners LLC ("Vestor"). The original Stated Death Benefit, or face amount, of the Policy was $5 million. Brian C. Baker was the President and CIO of Vestor.
2. In October of 2012, Vestor contacted ReliaStar to transfer ownership of the Policy from Vestor to VC Management, LLC ("VCM" or the Plaintiff), change the beneficiary of the Policy to VCM, and reduce the face amount of the Policy.
3. On information and belief, VCM was the successor to Vestor, and Brian C. Baker was the president of VCM.
4. At the same time, Vestor requested similar changes to other ReliaStar life insurance policies owned by Vestor and insuring the lives of other Vestor personnel. On information and belief, all of these changes were requested ...