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12/22/89 Joseph J. Kostur Et Al., v. Insurance Company Et Al.

December 22, 1989





549 N.E.2d 685, 192 Ill. App. 3d 859, 140 Ill. Dec. 34 1989.IL.2018

Appeal from the Circuit Court of Cook County; the Hon. Robert L. Sklodowski, Judge, presiding.


JUSTICE COCCIA delivered the opinion of the court. MURRAY, P.J., and PINCHAM,* J., concur.


Plaintiffs Joseph and Catherine Kostur appeal from an order entered by the circuit court, dismissing counts I and II of their amended class action complaint. In count I, plaintiffs alleged that defendants Indiana Insurance Company and Consolidated Insurance Company violated provisions of the Illinois Insurance Code (Ill. Rev. Stat. 1985, ch. 73, par. 613 et seq.), which required them to offer underinsured motorist coverage to their insureds. Plaintiffs alleged in count II that the same conduct on defendants' part constituted a violation of the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (Ill. Rev. Stat. 1985, ch. 121 1/2, par. 261 et seq.). We affirm for the reasons set forth below.

Plaintiffs' original class action complaint was filed on September 9, 1985. Defendants moved to dismiss on the grounds that, among other things, copies of the insurance policies upon which plaintiffs' claim was founded were not attached to their pleading, contrary to section 2-606 of the Code of Civil Procedure. (Ill. Rev. Stat. 1985, ch. 110, par. 2-606.) An agreed order was entered on February 18, 1986, giving plaintiffs leave to file an amended complaint.

Plaintiffs' amended class action complaint, to which they appended the insurance policies in question, was filed on March 27, 1986. Plaintiffs sought declaratory, injunctive, and compensatory relief from defendants. In count I, plaintiffs alleged that Joseph was a policyholder of defendants. Catherine was injured in an automobile accident on September 14, 1984, when the car she was driving was struck by another vehicle. The driver of the other automobile carried liability insurance with limits of $100,000/$300,000, but Catherine's damages were in excess of that sum. Had Joseph's policy included underinsured motorist coverage as required by the Insurance Code, plaintiffs averred, a greater portion of Catherine's damages would have been recoverable.

Plaintiffs brought the action on their own behalf and on behalf of all persons insured under policies issued or renewed by defendants whose policies did not provide the amount of underinsured motorist coverage required by law. Plaintiffs alleged that this class was too numerous to practically join all members, that questions of law and fact predominated over questions affecting only individual members of the class, that they would fairly and adequately protect class interests, and that a class action was the most appropriate method for adjudicating the controversy.

In addition, plaintiffs asserted that the policies issued by defendants did not automatically include underinsured motorist coverage. Defendants did not require their insureds to elect or reject such coverage, they did not offer it each time the policies were renewed, and they failed to advise their insureds of the coverage's cost. This conduct by defendants, plaintiffs concluded, violated the Insurance Code and injured plaintiffs and the plaintiff class.

In count II, as noted above, plaintiffs claimed that defendants' conduct also violated the Consumer Fraud Act. In count III, plaintiffs charged defendants with breaching their fiduciary obligations.

On February 26, 1988, defendants moved to dismiss plaintiffs' amended class action complaint, pursuant to section 2-615 of the Code of Civil Procedure. (Ill. Rev. Stat. 1987, ch. 110, par. 2-615.) Defendants argued that plaintiffs had no standing to sue, much less to be proper class representatives. According to defendants, Joseph had no standing because he had not been injured in the accident; Catherine had no standing because she was not insured under the insurance policies. Regarding count II, defendants contended that it failed to state a cause of action under the Consumer Fraud Act, since there were no allegations of deception or misrepresentation, no allegations that a false statement was made with intent that others rely on the misrepresentation, and no allegations that plaintiffs so relied. Concerning count III, defendants urged that there was no fiduciary relationship between an insurer and its insureds. See Robacki v. Allstate Insurance Co. (1984), 127 Ill. App. 3d 294, 468 N.E.2d 1251.

In any event, defendants concluded that they were entitled to judgment as a matter of law because they complied with the Insurance Code's provisions regarding the offering of underinsured motorist coverage. They asserted that Joseph had actual knowledge of the availability and cost of such coverage. His insurance policy, in effect at the time of Catherine's accident, included underinsured motorist coverage in the amount of $100,000/$300,000. As Joseph actually purchased such coverage, he had sufficient information to permit him to make an intelligent decision about it. Exhibits to plaintiffs' amended complaint contained a "stuffer" that defendants had sent to Joseph, informing him about the coverage at issue. In fact, defendants contended, before the accident Joseph had increased his underinsured coverage from $15,000/$30,000 to $100,000/$300,000, as shown by the declarations page of his policy.

Plaintiffs' response to defendants' motion to dismiss was filed on June 17, 1988. Plaintiffs stated that the majority of defendants' objections were curable by amendment, and they offered to make such amendments as the circuit court would require. Thus, plaintiffs replied, defendants were not entitled to dismissal with prejudice. Alternatively, plaintiffs maintained that both Joseph and Catherine had standing, that defendants' offer of ...

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