New York Life issued Helen Peters an annuity in 1989. By 1993, Mrs. Peters'' granddaughter, Jennifer Stenzel, was the sole surviving beneficiary. That year, Mrs. Peters executed a power of attorney that named Mrs. Stenzel and Mrs. Peters' son-in-law, Fred Elmore, her attorneys in fact. Mrs. Stenzel was also the beneficiary of her will. In 1996, Mrs. Peters executed a change of beneficiary form designating her housekeeper, Klara Hoopingarner, the sole beneficiary of the annuity. Mrs. Peters did not send the completed form to New York Life. In March 1999, as Mrs. Peters' health worsened, her former secretary sent the copy of the form to New York Life by express mail. Soon thereafter, Mr. Elmore, the agent for the policy, notified Mrs. Stenzel, who signed a change of beneficiary form as Mrs. Peters'' attorney in fact, designating First of America Bank the beneficiary of the annuity as trustee, with Mrs. Stenzel as the sole beneficiary of the trust. One week later, Mrs. Stenzel requested a full surrender of the annuity, and the proceeds were placed into Mrs. Peters'' checking account. Two months later, Mrs. Peters died.
Ms. Hoopingarner filed a complaint against Mrs. Stenzel, alleging that the change of beneficiary form completed by Mrs. Peters was effective to make her the beneficiary of the annuity. She further claimed that Mrs. Stenzel did not have the authority to change the beneficiary and surrender the annuity and that she acted in bad faith when she did so. Ms. Hoopingarner also sought damages against Mr. Elmore for fraud associated with his acts of helping Mrs. Stenzel to change the beneficiary and surrender Mrs. Peters'' annuity. The trial court granted Mrs. Stenzel's and Mr. Elmore's motions to dismiss, and Ms. Hoopingarner appealed.
The Appellate Court of Illinois, Third District, affirms. The court agrees with the trial court that Mrs. Peters failed to substantially comply with the requirements for changing the beneficiary of her annuity. The court also finds that surrendering the annuity appeared to be consistent with Mrs. Peters'' estate plan as it was known to Mrs. Stenzel, and that therefore there was no evidence that Mrs. Stenzel acted in bad faith. Finally, the court rules that because Ms. Hoopingarner failed to set forth the elements of either common law fraud or constructive fraud, the trial court properly granted Mr. Elmore''s motion to dismiss.