Insurance company sued for not paying off mortgage after husband's death

By Steve Gonzalez | Mar 6, 2008

Dawn Kay-Woods filed suit against Minnesota Life Insurance Company alleging the insurance company violated the Illinois Consumer Fraud Act by failing to pay an insurance claim after her husband died in a one-vehicle car crash on March 7, 2007.

According to the complaint filed Feb. 25 in Madison County Circuit Court, Minnesota Life issued a policy of insurance to Kay-Woods and her late husband, Brian Woods, on May 23, 2006, for coverage of their home mortgage loan with Wells Fargo in the amount of $61,887.

Kay-Woods claims after Brian died she filed a claim for the mortgage payoff, but alleges the benefits due under the insurance certificate have not been paid which constitutes consumer fraud.

In addition to consumer fraud, Kay-Woods alleges Minnesota Life's refusal to pay the claim also constitutes a breach of contract and vexatious and unreasonable refusal to settle pursuant to the insurance code.

According to the denial letter sent to Kay-Woods, Minnesota Life states that the benefits are not payable because the policy provision specifically excludes benefits when death is caused directly by the commission of a felony and that the policy does not require prosecution or conviction for the provision to apply.

The denial letter, which is attached to the complaint as an exhibit, alleged that Brian Woods was driving with a suspended driver's license and the toxicology report stated his blood level was 0.184 gm% for alcohol and 0.094 micrograms/ML for cocaine.

"Under Illinois law, driving while intoxicated with a suspended driver's license for a previous DUI is a felony," the denial later states. "We are satisfied that there is sufficient evidence to support a finding Mr. Woods was committing a felony at the time of his death."

Represented by Bob Perica of Wood River, Kay-Woods is seeking a judgment of $61,887, plus attorney fees, costs and appropriate statutory penalties.

The case has been assigned to Circuit Judge Nicholas Byron.

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