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Arriola v. Time Insurance Co.

May 01, 1998

RICHARD ARRIOLA, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF-APPELLANT,
v.
TIME INSURANCE COMPANY, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County Honorable Lester Forman, judge Presiding.

The opinion of the court was delivered by: Justice Quinn delivered the opinion of the court:

This case is brought on appeal from a June 12, 1995, order entered by the circuit court of Cook County, dismissing plaintiff, Richard Arriola's (Arriola) class action complaint with prejudice pursuant to section 2-619 of the Illinois Code of Civil Procedure. 735 ILCS 5/2-619 (West 1994). On appeal, plaintiff contends that the trial court erred in determining as a matter of law, that plaintiff did not meet the numerosity prerequisite as defined in section 2-801 of the Illinois Code of Civil Procedure (735 ILCS 5/2-801 (West 1994)), thereby precluding him from maintaining a class action in Illinois. We conclude that a motion to dismiss under section 2-619 may not be based on an asserted lack of numerosity, and therefore we reverse.

The following are the pertinent facts contained in the record. Plaintiff Richard Arriola (Arriola), an Illinois resident, was injured in an auto accident in 1992. At the time of the accident, Arriola was named as an insured on a policy issued by defendant, Time Insurance Company (Time). Arriola recovered $554.40 for medical expenses from Time under the aforementioned policy. Arriola proceeded to file a complaint against the person responsible for the accident. Time contemporaneously notified Arriola of its subrogation lien for $554.40 with respect to any judgment or any settlement arising from said action. Arriola ultimately tendered a check to Time for the aforementioned $554.40.

On August 30, 1993, Arriola filed a complaint individually and on behalf of a class of other similarly situated individuals alleging that Time intentionally misrepresented its right of subrogation in the absence of an express policy provision establishing such a right. In its answer Time denied the allegations of the subject complaint and denied that plaintiff was entitled to an order certifying this case as a class action. The record indicates that Time subsequently acknowledged that a medical insurer has no right of subrogation in the absence of an express policy provision allowing subrogation. This was the holding in Schultz v. Gotlund, 138 Ill. 2d 171 (1990), decided September 26, 1990. Time proceeded to attempt to reimburse the 46 Illinois policyholders from whom it had sought and received subrogation payments since September 1990, including Arriola. Time obtained releases from 44 out of the aforementioned 46 policyholders.

On November 4, 1994, Time filed a motion to dismiss Arriola's class action complaint under section 2-619 of the Illinois Code of Civil Procedure. 735 ILCS 5/2-619 (West 1994). Time asserted that neither Arriola nor the court had moved for class certification and that Arriola was unable to satisfy the prerequisites for class certification pursuant to section 2-801 of the Illinois Code of Civil Procedure (Code). 735 ILCS 5/2-801 (West 1994). Speci- fically, Time argued that the trial court should dismiss the subject complaint because the numerosity requirement could not be met. In support of its motion, Time submitted the affidavit of a Time employee which stated that Time reimbursed and obtained releases from 44 of the 46 affected policyholders in the state of Illinois. Therefore, Time asserted the class size in Illinois could be no more than two policyholders.

Arriola pointed out that the trial court had restricted discovery in this case to possible Illinois claimants. Arriola asserted that this prevented plaintiff from moving for class certification in a more timely manner. Arriola further asserted that Time's actions in obtaining general releases from 44 of the 46 affected policyholders in Illinois were made in an effort to avoid liability to the larger group of affected policyholders in other states.

On May 15, 1995, the trial court granted Time's motion to dismiss, finding that Arriola failed to satisfy the numerosity prerequisites as defined by section 2-801 of the Code. Specifically, the trial court found that Arriola could not maintain a class action lawsuit where the prerequisites for an Illinois class did not exist. Arriola appeals from this order.

The sole issue on appeal is whether counts I, II and III of the subject complaint (breach of contact, unjust enrichment, and consumer fraud, respectively) should be involuntarily dismissed based upon the specific grounds, defects and/or defenses as codified in section 2-619 of the Code.

Arriola contends that the trial court erred in determining, as a matter of law, that plaintiff could not maintain a class action in Illinois where he did not meet the numerosity prerequisite as defined in section 2-801 of the Code. 735 ILCS 5/2-801 (West 1994). Time, on the other hand, asserts that the trial court correctly dismissed plaintiff's class action complaint with prejudice pursuant to section 2-619 of the Code where Arriola failed to establish numerosity, which Time asserts is an essential requirement for the maintenance of a class action lawsuit.

The purpose of a motion to dismiss under section 2-619 of the Code is to dispose of issues of law and easily proved issues of fact at the outset of a case. Zedella v. Gibson, 165 Ill. 2d 181, 185 (1995). In ruling on a section 2-619 motion to dismiss, a court may consider pleadings, depositions, and affidavits. Zedella, 165 Ill. 2d at 185. A reviewing court will determine the propriety of the granting of a motion to dismiss de novo. Spiegel v. Hollywood Towers Condominium Ass'n, 283 Ill. App. 3d 992, 998 (1996). All well-pleaded facts and reasonable inferences that can be drawn from the complaint are accepted as true and are examined to determine if a cause of action is stated. Arlt v. GreatAmerican Federal Savings & Loan Ass'n, 213 Ill. App. 3d 584, 587 (1991). The question on appeal is "whether the existence of a genuine issue of material fact should have precluded the dismissal or, absent such an issue of fact, whether dismissal is proper as a matter of law." Kedzie & 103rd Currency Exchange, Inc. v. Hodge, 156 Ill. 2d 112, 116-117 (1993).

Here, both Arriola and Time confuse an order dismissing a complaint pursuant to section 2-619 of the Code with a finding by the court with respect to class certification. A clear distinction must be made between an express finding with respect to the statutory prerequisites for class certification under section 2-802 of the Code and allegations pleaded in a complaint that properly state a cause of action for breach of contract, unjust enrichment, and consumer fraud. A motion to strike and dismiss the claim of a representative plaintiff must be distinguished from a situation where a motion to strike the class action allegations is made.

In Illinois, class certification is governed by section 2-801 of the Code. 735 ILCS 5/2-801 (West 1994). That section requires that four elements be satisfied before an action may be maintained as a class action: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of fact or law common to the class, that predominate over individual questions; (3) the representative parties will fairly and adequately protect the interest of the class; and (4) the class action is an appropriate method for the fair and efficient adjudication of the controversy. Purcell & Wardrope Chartered v. Hertz Corp., 175 Ill. App. 3d 1069, 1073 (1988).

Section 2-802 of the Illinois Code of Civil Procedure provides:

"As soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it may be so maintained and describe those whom the court finds to be members of the class. This order may be conditional and may be ...


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