Appeal from the Circuit Court of Cook County; the Hon. Harold
A. Siegan, Judge, presiding.
JUSTICE MCGLOON DELIVERED THE OPINION OF THE COURT:
Rehearing denied August 6, 1984.
Plaintiffs appeal from the dismissal with prejudice of their class action complaint filed on behalf of all those who purchased underinsured motorist coverage in the minimum limits of $15,000 per person and $30,000 per occurrence against various insurance companies which issued the endorsements. On appeal, plaintiffs contend that (1) the complaint stated causes of action based on fraud, a violation of the Uniform Deceptive Trade Practices Act (Ill. Rev. Stat. 1983, ch. 121 1/2, par. 311 et seq.) and a violation of section 149 of the Illinois Insurance Code (Ill. Rev. Stat. 1983, ch. 73, par. 761); and (2) the trial court erred in failing to address the motion for class certification.
We affirm in part, reverse in part, and remand.
By virtue of a legislative enactment, all automobile insurers in the State of Illinois became obligated to offer underinsured coverage on vehicles registered or principally garaged in Illinois. (Ill. Rev. Stat. 1981, ch. 73, par. 755a-2(3).) An underinsured motor vehicle was defined as one, "whose ownership, maintenance or use has resulted in bodily injury or death of the insured * * * and for which the sum of the limits of liability * * * is less than the limits for underinsured coverage provided the insured * * *." (Ill. Rev. Stat. 1981, ch. 73, par. 755a-2(3).) An underinsured endorsement would allow an insured to recover the difference between the maximum limit of his underinsured coverage and the total sum recoverable under the policy maintained on the underinsured vehicle. (Ill. Rev. Stat. 1981, ch. 73, par. 755a-2(3).) Insureds could elect to purchase such coverage in any amount up to limits of their uninsured motorist coverage. (Ill. Rev. Stat. 1981, ch. 73, par. 755a-2(4).) In the event of a claim, insurers were permitted to limit recovery to either uninsured or underinsured coverage if both were applicable. Ill. Rev. Stat. 1981, ch. 73, par. 755a-2(5).
In 1981, plaintiffs Gary and Lori Glazewski, Robert Sandoval and Ella Shaw purchased underinsured motorist coverage from defendants Coronet Insurance Company, American Ambassador Casualty Company and Industrial Fire and Casualty Insurance Company, respectively. The limits of coverage were the legally required minimums of $15,000 per person and $30,000 per occurrence (15/30 coverage). On September 7, 1982, plaintiffs filed an action individually and on behalf of all others similarly situated against the insurance companies from which they purchased underinsured motorist coverage and the following insurance companies which also sold the underinsured coverage in minimum amounts: Allstate Insurance Company, Allied American Insurance Company, Comet Casualty Company, Heritage Insurance Group, Liberty Mutual Insurance Company, Merit Insurance Company, Prestige Casualty Company, Royal Insurance Company and Safeway Insurance Company. Abe Siedman, who purchased underinsured coverage from defendant Safeway, was granted leave to intervene.
Plaintiffs' second amended complaint alleged that defendants, in offering the underinsured coverage, breached their duty to deal fairly and equitably and in good faith in that they failed to disclose material and relevant facts. Specifically, plaintiffs alleged that defendants knew, but failed to disclose, the underinsured motorist coverage in the minimum limits of $15,000 per person and $30,000 per occurrence would provide no additional coverage for collisions occurring in Illinois with another Illinois motorist, that such coverage did not protect against any additional risk, and that the issuance of an underinsured endorsement was contrary to the interests of the insured. The complaint further alleged that defendants' statements, representations and omissions created the impression that underinsured coverage in the minimum limits was something of value, that defendants knew plaintiffs would rely on their statements regarding coverage, and that plaintiffs relied on the statements in purchasing the underinsured endorsement.
In count I, plaintiffs charge that defendants' acts constituted fraud. In count II, plaintiffs sought recovery for an alleged violation of section 2 of the Uniform Deceptive Trade Practices Act (Ill. Rev. Stat. 1983, ch. 121 1/2, par. 312) and in count III, plaintiffs alleged a violation of section 149 of the Illinois Insurance Code (Ill. Rev. Stat. 1983, ch. 73, par. 761).
The insurance companies from which the named plaintiffs purchased underinsured endorsements filed motions to dismiss for failure to state a cause of action. The other defendants moved to dismiss on the ground that plaintiffs lacked standing. After reviewing memoranda filed by the parties and hearing arguments, the trial court dismissed plaintiffs' second amended complaint with prejudice. The order does not state the grounds for dismissal, nor was plaintiffs' motion for class certification addressed.
On appeal, plaintiffs contend the trial court erred in dismissing their complaint where each count stated a valid cause of action. Plaintiffs also contend the trial court erred in failing to certify the class.
• 1 Initially, we note that the complaint was properly dismissed as to defendants Allstate, Allied, American, Comet, Heritage, Liberty Mutual, Merit, Prestige, and Royal. The complaint did not allege that any of the named plaintiffs purchased policies from any of these insurance companies, and under Kittay v. Allstate Insurance Co. (1979), 78 Ill. App.3d 335, 397 N.E.2d 200, plaintiffs lack standing to represent those having a possible action against these defendants. In Kittay, plaintiffs filed an action individually and as representatives of a class against three companies from which the named plaintiffs purchased policies and 20 other companies with which the named plaintiffs had no dealings. In affirming the dismissal of the complaint against the 20 defendants for lack of standing, the appellate court reasoned that the named plaintiffs suffered no injury from the conduct of these defendants and thus could not represent others having possible action against them. Here, plaintiffs had no relationship with the eight insurance companies named above. Therefore, the complaint was properly dismissed as to these defendants.
Plaintiffs argue that each defendant engaged in similar practices by offering and accepting premiums for underinsured coverage and therefore can be sued as a class. Plaintiffs rely on exceptions to the standing requirement noted in Thompson v. Board of Education (6th Cir. 1983), 709 F.2d 1200. These exceptions provide that a plaintiff may bring an action against a class of defendants if each defendant is acting to enforce a single regulatory or administrative scheme or if the conduct of defendants is virtually identical. Admittedly, defendants in this case were required by law to offer underinsured coverage. However, even if such exceptions to the standing requirement were recognized in Illinois, the exceptions would not be applicable to this case. Each defendant was able to choose its own methods of advertising, marketing and sales. Plaintiffs' complaint is founded on defendants' misrepresentations or omissions in these areas and the conduct of each defendant in selling the coverage undoubtedly varied. We therefore find no merit in plaintiffs' contention.
• 2 In determining whether the complaint was properly dismissed as to defendant American Ambassador, Coronet, Industrial and Safeway, we must decide whether the complaint alleges sufficient facts stating a cause of action. (People ex rel. Fahner v. Carriage Way West, Inc. (1981), 88 Ill.2d 300, 430 N.E.2d 1005) and informs the opposing party of the nature of the claim (Duhl v. Nash Realty Inc. (1981), 102 Ill. App.3d 483, 429 N.E.2d 1267; Metro-Goldwyn-Mayer, Inc. v. Antioch Theatre Co., Inc. (1977), 52 Ill. App.3d 122, 367 N.E.2d 247). A complaint is to be liberally construed (First National Bank v. City of Aurora (1978), 71 Ill.2d 1, 373 N.E.2d 1326) and should not be dismissed if the facts alleged therein and the reasonable inferences therefrom indicate a possibility of recovery. Krautstrunk v. Chicago Housing Authority (1981), 95 Ill. App.3d 529, 420 N.E.2d 429; Novak v. C.M.S. Builders & Developers (1980), 83 Ill. App.3d 761, 404 N.E.2d 918.
Count I of the complaint is based on fraud. The elements of a cause of action for fraud are: a misrepresentation of material fact, knowledge by defendant that the statement is false, intent by defendant to induce the other party to act, reliance by plaintiff on the misrepresentation, and injury caused by the reliance. (Mother Earth, Ltd. v. Strawberry Camel, Ltd. (1979), 72 Ill. App.3d 37, 390 N.E.2d 393.) In addition to misrepresentations, fraud may also consist of the omissions or concealment of a material fact when such acts are done with the intent ...