United States District Court, C.D. Illinois, Peoria Division
E. SHADID, CHIEF U.S. DISTRICT JUDGE.
the Court are the Defendant, Farmers New World Life Insurance
Company's (“Farmers”), Motion for Summary
Judgment (D. 46),  the Plaintiff, Kelly Rice's, Response
(D. 47), and the Plaintiff's Reply (D. 49). For the
reasons stated, infra, the Defendant's Motion
for Summary Judgment is DENIED.
Plaintiff originally brought this breach of contract and
insurance code relief action against the Defendant in
Illinois' Circuit Court of Knox County. (D. 9-1). The
Court granted the Defendant removal of the case to the
Central District of Illinois. (D. 1); (D. 9). The Plaintiff
alleges the Defendant breached the parties' contract, a
life insurance policy issued by the Defendant to her husband,
Terry Rice. (D. 9-1 at pp. 1-3). Specifically, she claims the
Defendant failed to pay her-the designated beneficiary-$100,
000 upon Terry's death. Id. The Plaintiff
further alleges she is entitled to interest on that amount
(Id.), statutory damages, attorney's fees, and
other costs (Id. at pp. 4-6). The Defendant insists
it rescinded the life insurance policy at issue because Terry
provided false answers to medical history questions on the
application which were material to its decision to issue the
policy. (D. 46 at pg. 1). The Plaintiff maintains that she
and her husband were never asked the relevant questions. (D.
47 at pg. 1). The undisputed facts demonstrate the following:
Rogers, a Farmers insurance agent, contacted Kelly about
Terry and Kelly buying life insurance policies from Farmers
in May or June 2014. (D. 47 at pg. 10, 14); (D. 49 at pg. 1,
7). The Rices decided to purchase life insurance through
Rogers, beginning the process sometime in early July. (D. 47
at pg. 14); (D. 49 at pg. 7). Rogers never spoke directly
with Terry and obtained all of his information through Kelly
over the phone. (D. 47 at pp. 11, 14); (D. 49 at pp. 2, 7).
On July 23, 2014, in response to Rogers' inquiry as to
when the Rices were going to visit his office to sign their
life insurance applications, Kelly informed Rogers that Terry
was in the hospital. Id.
arrived at the emergency room of St. Mary Medical Center in
Galesburg at 4:21 PM on July, 222014. (D. 46-1). He
complained of abdominal pain and diarrhea. The medical staff
conducted several tests, including a computed tomography
(“CT”) scan of Terry's abdomen and pelvis.
The CT scan revealed that he had “multiple low-density
liver lesions consistent with metastatic disease.” (D.
46-3). A biopsy was recommended. Id. At 9:36 PM, he
was transferred from the emergency department to oncology.
(D. 46-2 at pg. 2).
oncology, doctor Thomas Whittle was 95% certain Terry had
colorectal cancer with additional metastases on his liver and
possibly his lungs. (D. 46-4 at pg. 4). He performed a
colonoscopy and biopsy on Terry on July 23, 2014.
Id.; (D. 46-7 at pg. 4). Whittle's office also
scheduled an appoint for Terry with an oncologist, doctor
Julius Bonello, on that day. (D. 46-10 at pg. 3). Terry was
discharged from St. Mary on July 23, 2014 at 6:42 PM. (D.
46-9). His treatment notes indicate that he was also treated
for nicotine dependence while he was there. Id.
representative with Bonello's office confirmed with Kelly
on July 24, that Terry's appointment on July 28, 2014 was
a consultation for colon cancer treatment. Id. at
pg. 12. On July 25, 2014 at 11:11 AM, a surgical pathology
report confirmed that Terry had colon cancer. (D. 46-12).
on July 25, 2014, Rogers electronically submitted Terry's
application for life insurance to Farmers. (D. 46-13 at pg.
1). The timestamp on the application indicates that Terry and
Kelly signed the application at the equivalent of 4:39 PM
Central Daylight Time. (D. 46-13 at pg. 10). The following
language was displayed above the signature line of the
electronic signature pad when Terry signed the application:
I (We) acknowledge that I (we) have read and understand all
of the forms displayed and agree that the electronic
signature I (we) provide below shall be applied to all of
these forms and will not be used on any other forms or future
(D. 46-14 at pg. 16).
to the dispute before the Court, Terry's life insurance
application contained the following questions:
5. Have you, in the past seven years, had, consulted a
physician or other healthcare provider(s) for, or been
treated or hospitalized for or taken medication for any of
the following: any diseases or disorders of the heart
(including rheumatic fever), circulatory system, diabetes/
endocrine/ thyroid, blood, kidneys, liver, digestive system,
lungs (including allergies or sleep apnea); any mental or
nervous disorders (including depression, anxiety, or
suicide); muscular, spinal, joint, or bone disorders or
injuries (including concussions); high blood pressure;
elevated cholesterol; cancer/skin cancer; stroke; epilepsy/
seizures (including dizziness or fainting); arthritis;
congenital defects or physical impairments?
7. Have you, in the past 12 months, been hospitalized for 24
or more consecutive hours?
8. Have you scheduled or been advised to have, a surgical
operation, diagnostic test, or evaluation that has ...