APPEAL from the Circuit Court of Cook County; the Hon. DONALD
J. O'BRIEN, Judge, presiding.
MR. JUSTICE BUCKLEY DELIVERED THE OPINION OF THE COURT:
This is a class action against State Farm Mutual Automobile Insurance Company by two named plaintiffs who are insureds of State Farm. The action is brought individually and in a representative capacity on behalf of all other insureds of State Farm who received or were entitled to receive medical payments under their State Farm automobile insurance policy and who were required, as a condition to receiving their medical payments, to execute subrogation receipts.
Defendant moved to dismiss the complaint, alleging that it failed to state a cause of action as well as a proper class action. The chancellor denied State Farm's motion, ruling that the complaint stated a valid cause of action as well as class action. The court certified the class as all insureds of State Farm who had signed similar policies wherever situated, whether within or without the State of Illinois. The chancellor also entered a protective order, operative nationally, which precluded State Farm from destroying its records relating to the payment of medical expenses to insureds dating back to 1969. Defendant filed an interlocutory appeal from that order under Supreme Court Rule 307 (58 Ill.2d R. 307), contending that the protective order constituted an injunction and should not have been national in scope, but limited to Illinois residents. That appeal was docketed in this court as case number 77-915. Subsequently, the trial court certified three questions of law to be resolved by this court, and leave to appeal was granted pursuant to Supreme Court Rule 308 (58 Ill.2d R. 308). That appeal was docketed as number 77-1695.
The questions certified by the trial court are: (1) Does the contract of insurance in this case give State Farm the right to subrogate as to payments made to its insureds under Division 1 of Coverage C, (2) is this case properly certified as a class action, and (3) does this court have the power in the instant case to include nonresidents of the State of Illinois as residents of the plaintiff class? The issue presented in the consolidated case is whether the protective order entered against State Farm was proper.
Russell Spirek, plaintiff Ann Spirek's husband, purchased an automobile policy, number 2955 745-B17-13B, from State Farm Mutual Automobile Insurance Company which was in effect on September 7, 1974. Ann Spirek was involved in an automobile accident on that date and incurred medical expenses as a result thereof in the amount of $182.20. She applied to State Farm for medical payment benefits on or about December 30, 1975, and subsequently received them. In conjunction with such payments, she executed a "Subrogation Receipt" dated February 9, 1976, stating:
State Farm Mutual Automobile Insurance Company the sum of One Hundred Eighty-Two and 20/100 ($182.20) in full settlement and final discharge of all claims and liability under the medical payment coverages of Policy No. 2955 745 B17 13B * * * and for the consideration aforesaid and to the extent of said payment the undersigned further subrogates to said company all rights which the undersigned may have against any person or persons arising out of the loss mentioned above, and for the enforcement of such rights said insurer is hereby authorized to take any action which may be necessary either in law or in equity in its own name or that of the undersigned, and to likewise compromise or settle and to execute and sign releases and acquittances and endorse checks or drafts given in settlement of such claims in the name of the undersigned with the same force and effect as if the undersigned had executed or endorsed them.
It is further warranted that no settlement has been made by the undersigned with any person or corporation against whom a claim may lie, and no release given by the undersigned without the written consent of the said insurer, and the undersigned covenants and agrees to cooperate fully with said insurer in the prosecution of such claims and to procure and furnish all papers and documents necessary in such proceedings and to attend court and testify if the insurer deems such to be necessary. * * *
Plaintiff, Delores Skrip, purchased automobile policy number 4901 832-D17-13 from State Farm which was in effect on May 13, 1971. She was involved in an automobile accident on that date. She applied to State Farm for medical payments on or about October 27, 1975. State Farm's draft for confirmed medical expenses was tendered to her. Such tender was subject to subrogation in favor of State Farm as allegedly provided by the policy. Dolores Skrip rejected the tender.
Russell and Ann Spirek and Dolores Skrip were Illinois residents at the time their policies were issued. They both were insured under a State Farm policy, form 9536.9. The relevant provisions read:
"STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
A Mutual Insurance Company
Herein Called the Company
Agrees with the insured, named in the declarations made a part hereof, in consideration of the payment of the premium and in reliance upon the statements in the declarations and subject to all of the terms of this policy.
Note: The words in bold face italic type are defined Under Definitions within each Section.
Section 1 Liability and Medical Payments
COVERAGE C MEDICAL PAYMENTS
Division 1. To pay reasonable medical expenses incurred for services furnished within one year from the date of accident to or for the first person named in the declarations and, while residents of his household, his spouse and any relative of either who sustains bodily injury, caused by accident, while occupying the owned motor vehicle if such vehicle is being used by an insured: provided that no such payment shall be made unless the person to or for whom such payment is made shall have executed a written agreement that the amount of such payment shall be applied toward the settlement of any claim, or the satisfaction of any judgment for damages entered in his favor, against any insured because of bodily injury arising out of any accident to which coverage A applies.
Division 3. To pay $1,000 in the event of the death of the first person named in the declarations, or his spouse if a resident of the same household, which shall result directly and independently of all other causes from bodily injury caused by accident and sustained by such person or spouse while occupying or through being struck by a motor vehicle or trailer, if death occurs within 90 days of the accident. If more than one policy issued by the company applies to this division, the total limit of the company's liability under all such policies shall not exceed the amount applicable under one policy.
(The Policy Conditions Apply to All Coverages Unless Otherwise Noted)
4. Subrogation. Upon payment under this policy, except under coverages C, M, S and T, the company shall be subrogated to all the insured's rights of recovery therefor and the insured shall do whatever is necessary ...