Appeal from the Circuit Court of Champaign County; the Hon.
Creed D. Tucker, Judge, presiding.
PRESIDING JUSTICE WEBBER DELIVERED THE OPINION OF THE COURT:
This appeal presents another in the growing throng of cases litigating disputes between insurers and insureds over sums allegedly due under policies. While such litigation is as old as the insurance industry itself, the present case presents an aspect which so far as we can determine has not heretofore been passed upon by the reviewing courts> of this State.
Since this appeal arose from a dismissal of plaintiff's first amended complaint as insufficient in law under section 2-615 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 2-615), no evidence has yet been presented and factual matters must be gleaned from the pleadings. Under these circumstances all well-pleaded facts are presumed true.
Plaintiff filed her original complaint in the circuit court of Champaign County and alleged that by reason of her employment she was an insured of the defendant (Blue Cross) under a group policy. She further alleged that on December 5, 1979, she received medical treatment at a Champaign hospital and that the hospital submitted its bill for $119 to the defendant; that thereafter, on December 20, 1979, defendant Blue Cross notified her that the claim was not covered under Emergency Medical Care provisions of the group policy but would notify her as to coverage under other provisions; that thereafter plaintiff communicated several times with defendant and made submissions of her claim.
Further allegations were that on December 29, 1980, the hospital filed suit against the plaintiff for the services received in December 1979 and obtained a judgment; that on January 13, 1981, plaintiff was notified by defendant that the claim had been paid; that on February 13, 1981, plaintiff's wages were garnished on account of the judgment; and that on March 16, 1981, the claim was paid by the defendant.
Plaintiff's original complaint was in four counts, each sounding under section 155 of the Illinois Insurance Code (Ill. Rev. Stat. 1981, ch. 73, par. 767) and sought $5,000 statutory damages for vexatious and unreasonable delay in payment of the claim and $20,000 exemplary damages for wilful, wanton, grossly negligent and bad faith acts and omissions by the defendant.
Defendant filed a motion to dismiss the original complaint based upon section 3 of the Non-Profit Health Care Service Plan Act (Ill. Rev. Stat. 1981, ch. 32, par. 553) and attached a certified copy of its articles of incorporation to the motion. Examination of the articles establishes that defendant was in fact organized under that act. Section 3 provides that corporations so organized are exempt from the provisions of the Illinois Insurance Code.
The trial court allowed the motion, dismissed the original complaint, and granted leave to plead over.
Plaintiff filed a first amended complaint in two counts. The factual allegations were identical with those in the original complaint as recited above. She abandoned any claim under section 155 of the Code and alleged only a common law tort: that the defendant had a duty to deal with the plaintiff fairly and in good faith and that it breached that duty by (1) failing to pay the claim; (2) failing to notify plaintiff that the claim was covered by the group policy within a reasonable time after December 20, 1979; and (3) failing to provide plaintiff with accurate information regarding the status of the claim for more than 15 months from December 20, 1979, to March 16, 1981. The first amended complaint also alleged in count I that the acts of the defendant were done in bad faith and caused her embarrassment, harassment, mental suffering, and expense in defending herself. She asked $5,000 actual damages and $20,000 exemplary damages.
Count II of the first amended complaint reiterated all of count I down through the allegations of breach of duty; it omitted the allegation of bad faith and substituted an allegation that defendant knew that its delay was causing severe emotional distress, embarrassment, humiliation, harassment and expense to the plaintiff. It then asked $5,000 in actual damages only.
Defendant filed a motion to dismiss the first amended complaint as being substantially insufficient in law, again under section 2-615 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 2-615). The trial court took the motion under advisement and ultimately issued a memorandum order allowing the motion and striking the cause. The court also made a finding under Supreme Court Rule 304(a) (87 Ill.2d R. 304(a)) which we regard as surplusage. Plaintiff appeals from the order of dismissal; we reverse and remand.
• 1 In its memorandum order the trial court concluded that the conduct alleged was not so outrageous nor so severe as to amount to the intentional infliction of emotional distress. We agree with this finding.
However, the court also dismissed on the basis of section 155 of the Illinois Insurance Code (Ill. Rev. Stat. 1981, ch. 73, par. 767), which it theretofore held to be inapplicable to the defendant in dismissing the original complaint. We are unable to account for this seeming reversal of thinking, and the memorandum order offers no explanation.
• 2 The issue, simply framed, may be stated to be: is a nonprofit health care service corporation, which is exempt from the provisions of the Illinois Insurance Code, liable in a common law tort action for bad faith in dealing with one of its insureds? In our opinion the answer is yes.
A number of prior cases have considered the question of common law tort action in the context of section 155, but all of them concerned stock or mutual companies which were subject to the Code. (Debolt v. Mutual of Omaha (1978), 56 Ill. App.3d 111, 371 N.E.2d 373; Tobolt v. Allstate Insurance Co. (1979), 75 Ill. App.3d 57, 393 N.E.2d 1171; Hoffman v. Allstate Insurance Co. (1980), 85 Ill. App.3d 631, 407 N.E.2d 156.) They are therefore not direct precedent in dealing with the issue presented here where the question is not the existence of a ...