Del Vecchio v. Conseco, Inc.

230 F.3d 974 (7th Cir. 2000)

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Nature of the Case

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Facts

In 1947, P purchased a $ 5,000 whole life insurance policy from Bankers Life. For the next 20 years, he paid premiums, and in 1967 Bankers Life informed him that he was 'paid up' and that his policy would remain in effect without any further premium payments. In 1982, a Bankers Life agent, Joseph Gennaco, contacted P and tried to convince him to turn in his $5,000 whole life policy and replace it with a $10,000 universal life policy. Gennaco told him that after his initial premium payment (equal to the value of his surrendered policy, which was $ 3,137.27), he would not have to make any further premium payments on the new policy. Gennaco in effect told P that he could double the size of his policy without having to pay any additional money. P purchased the new policy in 1984. For the next nine years, P continued to receive annual statements from Bankers Life. In 1994 he observed that for the first time, the actual cash value of his policy was less than the cash value 'guaranteed' by the policy, by $366. The actual cash value was $3,810 (the amount he would receive if he were to surrender his policy), while the 'cash surrender loan value' listed for year 11 of the policy in the 'Table of Premiums and Values' was $4,176. The shortfall increased every year thereafter. P never paid any premium payments beyond his initial payment on the new $10,000 policy. P filed a class-action lawsuit in 1998 based on breach of contract, fraudulent misrepresentation, and breach of fiduciary duty. The court granted D's' motion for summary judgment because the statutes of limitations for the claims had run. P appeals.