Cook v. AAA Life Ins. Co., No. 1–12–3700.

CourtUnited States Appellate Court of Illinois
Writing for the CourtJustice DELORT delivered the judgment of the court, with opinion.
Citation13 N.E.3d 20
PartiesBriannah COOK, a Minor, By and Through Bruce COOK, Her Father and Next Friend, Plaintiff–Appellant, v. AAA LIFE INSURANCE COMPANY, Defendant–Appellee.
Decision Date09 June 2014
Docket NumberNo. 1–12–3700.

13 N.E.3d 20

Briannah COOK, a Minor, By and Through Bruce COOK, Her Father and Next Friend, Plaintiff–Appellant
v.
AAA LIFE INSURANCE COMPANY, Defendant–Appellee.

No. 1–12–3700.

Appellate Court of Illinois, First District.

June 9, 2014.


13 N.E.3d 26

Barbara Revak, of Cook, Revak & Associates, Ltd., of Chicago, for appellant.

Creed T. Tucker, of Tucker Robin & Merker, LLC, of Chicago, for appellee.

OPINION

Justice DELORT delivered the judgment of the court, with opinion.

¶ 1 An insured mother died in a tragic accident just a few days after she had fortuitously paid up the delinquent premiums on a life insurance policy payable to her three-year-old daughter. An innocuous mix-up at the insurance company over that last-minute payment precipitated an avalanche of litigation. Although the company offered to pay on the policy, the daughter's father and grandfather, both attorneys, refused the offer and demanded

13 N.E.3d 27

substantial penalties from the company over the brief payment delay. Along the way, the grandfather's law firm took one-third of the girl's insurance policy proceeds as a contingency fee. We agree with the two chancellors who heard the case below that the insurance company was only responsible to pay the face amount of the policy and therefore affirm.

¶ 2 BACKGROUND

¶ 3 Briannah Cook, a minor, sued defendant AAA Life Insurance Company (AAA Life) through her father, Bruce Cook (Bruce). The suit concerned a life insurance policy issued for Briannah's benefit on the life of Bruce's late wife and Briannah's mother, Camille Cook (Camille). The complaint alleged four claims, including violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 2000) (counts I and IV)), breach of contract (count II), and damages for vexatious and unreasonable delay in settling an insurance claim under section 155 of the Illinois Insurance Code (215 ILCS 5/155 (West 2000) ) (count III). The court below granted summary judgment for AAA Life on counts I, II, and IV. AAA Life also prevailed after a bench trial on count III. The court also denied Bruce's motions to join additional parties and amend his complaint and for sanctions. Bruce has appealed virtually every substantive order rendered against him.

¶ 4 The facts adduced through summary judgment and at trial are essentially uncontested. In August 2002, Camille applied for a $200,000 life insurance policy from AAA Life, naming Briannah as the beneficiary. AAA Life accepted the application and issued the policy to Camille. In May 2005, AAA Life mailed Camille a reminder that she must pay $67.50 for three months of premiums, due on May 14, 2005. The notice stated:

“TO CONTINUE YOUR INSURANCE WITH ITS VALUABLE PROTECTION YOU MUST PAY THE AMOUNT DUE BEFORE THE END OF THE GRACE PERIOD WHICH EXPIRES JUNE 15, 2005.”

Camille did not pay this premium before June 15, 2005. In July 2005, Camille sent a check for $135 to AAA Life, and the check was duly honored and paid by her credit union on July 19, 2005. Five days later, on July 24, Camille drowned in a boating accident.

¶ 5 On July 26, 2005, Bruce informed AAA Life of his wife's death. The AAA Life agent told Bruce that the policy had lapsed for nonpayment and no restorative payment had been made after the lapse date. It was not until making further investigation that Bruce discovered an entry for Camille's July 2005 payment in her check register.

¶ 6 On July 28, 2005, Juna Putvin, an AAA Life customer service representative, who was unaware of Camille's death, wrote Camille that because her “premium payment ha[d] not been received and the grace period ha[d] expired,” her coverage was “now in lapse status as of May 14, 2005.” Putvin's letter stated that AAA Life “would consider” reinstating the policy if Camille submitted a reinstatement application to AAA Life “for approval.” The letter concluded with an admonition that “until reinstatement has been approved by our Underwriting Department your coverage will remain lapsed.”

¶ 7 On August 30, 2005, Rufus Cook (Rufus), Bruce's father and an attorney, wrote to AAA Life making a claim on the policy and advising it that Bruce and Briannah were being represented by Rufus's law firm, Cook & Revak, Ltd. (the Cook firm). Rufus included a copy of Camille's

13 N.E.3d 28

final check to AAA Life showing the July 19, 2005, processing date.

¶ 8 On September 16, 2005, Brenda White, an AAA Life claims representative, responded to Rufus's letter, stating the policy had lapsed for nonpayment of premiums prior to Camille's death. She also stated that the reinstatement form was sent on July 28, 2005 and because Camille was already deceased at that time and therefore unable to complete the application, the policy “could not be reinstated and therefore remained lapsed,” and the premium would be refunded. AAA Life mailed the refund to the Cook firm on September 21, 2005. On the same day, Brenda told Rufus that he would need to send a formal demand letter to her manager, Sherry Young, who would then forward the letter to AAA Life's legal department.

¶ 9 On September 23, 2005, Bruce signed a contingent fee agreement with the Cook firm on behalf of Briannah, agreeing to pay the firm (1) one-third of the policy proceeds from any settlement with AAA Life that occurred before filing a lawsuit, or (2) 40% of any settlement or judgment if it was necessary to file a lawsuit. On October 11, 2005, Rufus sent an unfiled class action complaint to Brenda along with the $135 AAA Life check. The letter demanded full payment of the policy and indicated that AAA Life might be liable for an additional 60% statutory penalty and other damages.

¶ 10 On October 21, 2005, Diane Coudurier, an assistant general counsel for AAA Life, sent an internal email to Brenda stating that there was no basis to deny coverage under the policy. She noted that policy was “in force at the time of death,” was “not contestable” and “would be payable without investigation” because the premium check cashed by AAA Life brought the coverage up to date and there was “no indication that the insured's health had changed.” She asked for an immediate response “to keep the lawsuit from being filed.”

¶ 11 Brenda then advised Diane to contact Sherry and Diane responded: “If Sherry approves I will send the claim form out with my letter to the attorney, since he is handling this matter for the beneficiary.” On the same day, Diane wrote a letter to Rufus advising him that AAA Life acted reasonably when it initially found that evidence of insurability was not met. However, upon full consideration of the relevant facts, including that the death was accidental, she had recommended that coverage be granted upon completion of an enclosed application.

¶ 12 That did not satisfy the Cook family, however. On November 3, 2005, Rufus responded to Diane's letter, acknowledging AAA Life's offer to pay the $200,000 policy proceeds, but demanding AAA Life resolve Bruce's claims for $485,000, including the face amount of the policy with prejudgment interest, the $60,000 “provided by statute for such cases” and $100,000 in “exemplary damages.” The letter stated that AAA Life's representative had “falsely” stated that the policy had lapsed even though it had already cashed the premium check. It claimed that AAA's failure to disclose its knowledge that the premium was paid was “fraudulent as a matter of law.” The letter rejected payment of the policy, noting that Briannah's net proceeds were now diminished because of the contingency fee. The letter went on to threaten AAA Life with an additional claim for violation of state consumer protection laws.

¶ 13 Because life insurance proceeds in such a large amount cannot be paid directly to a minor, AAA Life inquired about the existence of Briannah's minor's estate. Rufus sent a second letter to Brenda on November 3, admitting that he could not

13 N.E.3d 29

provide any conservatorship or guardianship papers for Briannah because no such documents existed. AAA life explained that it would not pay Cook the policy proceeds unless a trust was established for Briannah's benefit. Rufus provided AAA life with a declaration of trust executed by Bruce, but a few days later, he wrote to Diane expressing his dissatisfaction with her handling of the claim. After receiving no response, the Cook firm filed this lawsuit on December 12, 2005.

¶ 14 Bruce moved for a temporary restraining order against AAA Life, but the court suggested that a guardian should be appointed for Briannah through the probate court. A week later, Bruce filed a petition in probate court seeking to be appointed as the guardian of Briannah's estate. On that same day, the Cook firm sent AAA Life's counsel notice of an attorney's lien on 40% of the policy proceeds. On January 10, 2006, the probate court issued letters of office appointing Bruce as guardian of Briannah's estate.

¶ 15 On January 31, 2006, AAA Life filed a petition to adjudicate lien in the probate case. AAA Life sought to pay the $200,000 to Briannah's estate and requested that the court direct the estate to make any...

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    ...or to supplement every breach of contract claim with a redundant remedy." Cook ex rel. Cook. v. AAA Life Ins. Co. , 382 Ill.Dec. 607, 13 N.E.3d 20, 32 (1st Dist. 2014) (citation omitted).In support of its ICFA claim, Western Venture asserts that Great Lakes failed to provide it with a compl......
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    ...¶ 8 We review the grant of summary judgment de novo. Cook v. AAA Life Insurance Co., 2014 IL App (1st) 123700, ¶ 24, 382 Ill.Dec. 607, 13 N.E.3d 20. Summary judgment is appropriate when the pleadings, depositions, admissions and affidavits, viewed in a light most favorable to the nonmovant,......
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20 cases
  • Nine Grp. II, LLC v. Liberty Int'l Underwriters, Inc., No. 1-19-0320
    • United States
    • United States Appellate Court of Illinois
    • June 18, 2020
    ...the circumstances, taken in broad focus." Cook ex rel. Cook v. AAA Life Insurance Co. , 2014 IL App (1st) 123700, ¶ 48, 382 Ill.Dec. 607, 13 N.E.3d 20. Accord West American Insurance , 334 Ill. App. 3d at 88, 267 Ill.Dec. 807, 777 N.E.2d 610 ; Kohlmeier v. Shelter Insurance Co. , 170 Ill. A......
  • Turner v. Orthopedic & Shoulder Ctr., NO. 4-16-0552.
    • United States
    • United States Appellate Court of Illinois
    • July 6, 2017
    ...interpretation" is not consumer fraud. Cook ex rel. Cook v. AAA Life Insurance Co ., 2014 IL App (1st) 123700, ¶ 30, 382 Ill.Dec. 607, 13 N.E.3d 20. As we soon will explain, it is defendant that has the incorrect opinion as to the meaning and effect of the "Participating Provider Agreement.......
  • Great Lakes Reinsurance v. 1600 W. Venture, LLC, Case No. 16 C 2145
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • June 13, 2017
    ...or to supplement every breach of contract claim with a redundant remedy." Cook ex rel. Cook. v. AAA Life Ins. Co. , 382 Ill.Dec. 607, 13 N.E.3d 20, 32 (1st Dist. 2014) (citation omitted).In support of its ICFA claim, Western Venture asserts that Great Lakes failed to provide it with a compl......
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    • United States
    • United States Appellate Court of Illinois
    • January 13, 2015
    ...¶ 8 We review the grant of summary judgment de novo. Cook v. AAA Life Insurance Co., 2014 IL App (1st) 123700, ¶ 24, 382 Ill.Dec. 607, 13 N.E.3d 20. Summary judgment is appropriate when the pleadings, depositions, admissions and affidavits, viewed in a light most favorable to the nonmovant,......
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