Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

02/23/94 PERFECTION CARPET v. STATE FARM FIRE AND

February 23, 1994

PERFECTION CARPET, INC., WILLIAM FOLLETT AND ROBERT LEDERER, PLAINTIFFS-APPELLANTS,
v.
STATE FARM FIRE AND CASUALTY COMPANY, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County. Honorable Paddy H. McNamara, Judge Presiding.

Released for Publication April 19, 1994.

Greiman, Tully, Cerda

The opinion of the court was delivered by: Greiman

JUSTICE GREIMAN delivered the opinion of the court:

Plaintiffs Perfection Carpet, Inc., William Follett and Robert Lederer appeal the dismissal with prejudice of their complaint against defendant State Farm Fire and Casualty Company.

Defendant issued a policy of insurance to the corporate plaintiff (Perfection Carpet) insuring against any losses occasioned by its liability under the Illinois Workers' Compensation Act for injuries incurred by its employees arising in and out of the course of their employment. The individual plaintiffs, Follett and Lederer, each owned 50% of the stock of the corporation, constituted its officers and members of the board of directors and were the corporation's entire work force.

Plaintiffs filed a common law action based upon contract and tort theories seeking damages for the failure of the corporation's business allegedly caused by the refusal of defendant to settle the workers' compensation claim of Lederer which would have allowed him to have proper medical attention and return to work on behalf of the corporation within a reasonable time of the accident.

We affirm the dismissal of plaintiffs' complaint and find that neither the corporate plaintiff, Perfection Carpet, nor the individual plaintiffs, Follett and Lederer, can state a common law cause of action against defendant insurer State Farm under the facts of this case. Section 155 of the Insurance Code (Ill. Rev. Stat. 1989, ch. 73, par. 767, now codified at 215 ILCS 5/155 (West 1992)) preempts any common law cause of action on behalf of Perfection Carpet as the party insured. The individual plaintiffs Follett and Lederer have no standing to bring this cause of action either as directors or officers or shareholders or employees.

The complaint declares that Perfection Carpet was in the business of selling and installing floor carpeting. Perfection Carpet was a two-man operation with Follett and Lederer providing all of the labor of the company as carpet installers. At all relevant times, perfection Carpet was insured by defendant under worker's compensation insurance.

The complaint alleges that Lederer suffered a knee injury while performing his duties as a carpet installer and laborer for Perfection Carpet and that defendant refused to pay Lederer for necessary surgery and medical care. Defendant's refusal to pay benefits and medical expenses caused Lederer to be unable to work as a carpet installer and laborer for approximately six months and Lederer's inability to attend to his duties allegedly caused Perfection Carpet to go out of business.

Count I of the three-count complaint alleges a breach of the insurance contract and states that defendant refused to pay to plaintiff Lederer benefits as required by the Workers' Compensation Act (Ill. Rev. Stat. 1989, ch. 48, par. 138.1 et seq.) including sums "for necessary surgery and other necessary and reasonable medical care and treatment" and that such refusal to pay was "unreasonable and in bad faith and in complete and total disregard for the welfare of" Perfection Carpet. Plaintiffs seek compensation for the failure of the business (Perfection Carpet) which plaintiffs value at more than $300,000.

Count II of the complaint alleges that defendant, by refusing to pay Lederer's medical expenses, engaged in a "scheme" to defraud Lederer and such scheme constitutes "wanton, wilful and gross misconduct." Plaintiffs acknowledge that defendant offered an amount less than that to which Lederer believed he was entitled because defendant claimed that Lederer's injury was not related to his employment.

Count III alleges that defendant "owed to the Plaintiffs fiduciary duties of good faith, diligence and due care by virtue of its agreement to provide workers' compensation insurance coverage" and "by failing or refusing to resolve the claim of the Plaintiff, ROBERT LEDERER, * * * breached its fiduciary duties to the Plaintiffs." As relief for counts II and III, plaintiffs request compensatory damages and punitive or exemplary damages.

Defendant filed a motion to dismiss plaintiffs' complaint under section 2-615 of the Code of Civil Procedure (Ill. Rev. Stat. 1989, ch. 110, par. 2-615, now codified at 735 ILCS 5/2-615 (West 1992)) and argued ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.