Ohio National Life Assurance Corp. v. Davis

Dist. Ct. did not err in granting plaintiff-insurance company’s motion for summary judgment in action seeking to essentially void certain life insurance policies under circumstances where defendants: (1) recruited elderly third-parties to apply for and obtain life insurance policies; (2) directed said third-parties to shortly thereafter place said policies into life insurance trust controlled by one defendant; (3) paid premiums on said policies; and (4) misrepresented certain facts in policy applications to make it seem that third-parties were healthier/able to live longer lives than what they really were. Illinois common law prohibits purchase of insurance policy by persons who have no interest in survival of insured, and Dist. Ct. could properly find that defendants’ conduct constituted fraud on plaintiff and well as breach of contract on part of defendant-insurance agent who collected commissions on said policies, where defendants who had no insurable interest in insured either paid premiums on subject policies or sold policies knowing that other individuals who were paying premiums on said policies had no interest in continued life of insured. Plaintiff was also able to keep premiums that were paid by defendants on essentially void/illegal contracts.