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10/15/96 WILBURT PURITT v. ALLSTATE INSURANCE

October 15, 1996

WILBURT PURITT, DR. KIRSTEN KNUDSEN, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS-APPELLANTS,
v.
ALLSTATE INSURANCE COMPANY, DEFENDANT-APPELLEE.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE ALBERT GREEN, JUDGE PRESIDING.

The Honorable Justice Wolfson delivered the opinion of the court: Buckley and Braden, JJ., concur.

The opinion of the court was delivered by: Wolfson

JUSTICE WOLFSON delivered the opinion of the court:

This case concerns an insured's claim against his insurance company for medical payments benefits. It is more than a dispute about amounts. The insured, Wilburt Puritt (Puritt) contends Allstate Insurance Company (Allstate) has a regular policy and practice of underpaying the medical bills incurred by its insureds.

Puritt filed suit against Allstate. In it, he sought individual and class action relief. Dr. Kirsten Knudsen, assignee of the rights of five other Allstate insureds, also is a named plaintiff in these breach of contract and declaratory judgment claims against Allstate. Allstate filed motions to dismiss the complaint, contending the plaintiffs lacked standing to bring their lawsuit and that this is not a proper class action. The trial judge granted Allstate's motions. We reverse and remand for further proceedings.

BACKGROUND

The contract provision that underlies this action is the Automobile Medical Payments section in the insurance policy Allstate issued to Puritt and the five assignors. It provides:

"Allstate will pay to or on behalf of an insured person all reasonable expenses actually incurred for necessary medical treatment, medical services or medical products actually provided to the insured person. ***" Later, in the Medical Payments section, under the heading of

"Unreasonable or Unnecessary Medical Expenses," the policy provides:

"If the insured person incurs medical expenses which are unreasonable or unnecessary, we may refuse to pay for those medical expenses and contest them. Unreasonable medical expenses are fees for medical services which are substantially higher than the usual and customary charges for those services. Unnecessary medical expenses are fees for medical services which are not usually and customarily performed for treatment of the injury, including fees for an excessive number, amount or duration of medical services."

And then:

"If the insured person is sued by a medical services provider because we refuse to pay contested medical expenses, we will pay all defense costs and any resulting judgment against the insured person. ***"

The policy is silent on what happens to health provider claims that do not become lawsuits.

After Puritt's complaint was dismissed with leave to amend, he and Dr. Knudson filed the "First Amended Class Action Complaint for Declaratory Relief and Damages" that is the subject of this appeal.

The amended complaint alleged that Puritt was a person covered by an Allstate insurance policy, that he had been injured in an automobile accident, that he had received medical treatment and agreed to pay for the services rendered, that he had submitted the medical claims to Allstate, and that the claims were not paid in full based on Allstate's determination that the charges were ...


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