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Arriola v. Time Insurance Company

June 08, 2001

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



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

Not Released For Publication

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

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

Appeal from the Circuit Court of Cook County Honorable Sidney A. Jones, III Judge Presiding.

This case involves a permissive appeal of a certified question pursuant to Supreme Court Rule 308 (155 Ill. 2d R. 308). The underlying litigation involves a multi-state class action suit challenging Time Insurance Company's (Time) collection of subrogation payments from its own insureds, where the applicable insurance policies had no provisions for subrogation. After the case was filed on August 30, 1993, but before plaintiff filed a motion for class certification, Time refunded payments to 44 of the 46 putative members of the class who resided in Illinois. Time tendered refunds to the remaining two insureds, including the plaintiff, but plaintiff refused the tender. On November 4, 1994, Time filed a motion to dismiss the case pursuant to section 2-619 of the Illinois Code of Civil Procedure. 735 ILCS 5/2-619 (West 1998). On May 15, 1995, the trial court dismissed the case with prejudice, holding that as there were only two potential members of the class in Illinois, 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 1998)). The trial court held that, consequently, plaintiff could not maintain a multi-state class action in Illinois.

 In a prior appeal, this court reversed the trial court's dismissal, holding that a motion to dismiss under section 2-619 may not be based on an asserted lack of numerosity. Arriola v. Time Insurance Co., 296 Ill. App. 3d 303, 308, 694 N.E.2d 649 (1998) (Arriola I). In doing so, we relied upon the holding in Levy v. Metropolitan Sanitary District of Chicago, 92 Ill. 2d 80, 83, 440 N.E.2d 881 (1982). There, our supreme court held:

"[N]either an order denying class certification or decertifying a class nor an order dismissing class action allegations is final and *** such orders [Citation.]" Levy, 92 Ill. 2d at 83.

The court in Levy further stated that such orders must be appealed pursuant to Supreme Court Rule 308. Supreme Court Rule 308 provides, in pertinent part:

"Rule 308. Interlocutory Appeals by Permission

(a) Requests. When the trial court, in making an interlocutory order not otherwise appealable, finds that the order involves a question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, the court shall so state in writing, identifying the question of law involved. Such a statement may be made at the time of the entry of the order or thereafter on the court's own motion or on motion of any party. The Appellate Court may thereupon in its discretion allow an appeal from the order." 155 Ill. 2d R. 308(a).

Upon remand, the trial court certified the issue as follows:

"May a national class be certified under Section 2-801 of the Code of Civil Procedure where: (1) the class action complaint alleges a national class, (2) the Court assumes there are sufficient class members outside Illinois to satisfy the numerosity requirement, but (3) there are only two remaining Illinois residents who are members of the class?

This court granted plaintiff's application for leave to appeal. The following are the pertinent facts contained in the record. Plaintiff Richard 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 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 that action. Arriola ultimately tendered a check to Time for $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 to subrogation in the absence of an express policy provision establishing such a right. In its answer, Time denied the allegations of the 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, 561 N.E.2d 652 (1990), decided September 26, 1990.

Arriola correctly points out that Time first began to seek subrogation from its insureds only after the Schultz decision was handed down. After this class action complaint was filed, the trial court limited discovery to potential members of the class who resided in Illinois. Time subsequently 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 of the 46 policyholders. There is a split in the authorities as to the scope of review of an appeal under Rule 308 as it relates to certified questions. One view is that review is strictly limited to the question identified by the circuit court order and will not be expanded on appeal to encompass other matters that could have been included but were not. Levy v. Markal Sales Corp., 311 Ill. App. 3d 552, 724 N.E.2d 1008 (2000). Another view is that the appellate court is not limited to reviewing the question presented but may also consider the appropriateness of the order giving rise to the appeal. Billerbeck v. Caterpillar Tractor Co., 292 Ill. App. 3d 350, 685 N.E.2d 1018 (1997), appeal denied, 176 Ill. 2d 570, 690 N.E.2d 1379 (1998).

Our supreme court recently addressed this issue, finding it appropriate not to answer a certified question where the record revealed that there were disputed questions of fact. Dowd & Dowd, Ltd. v. Gleason, 181 Ill. 2d 460, 469-70, 693 N.E.2d 358 (1998). The court held that under those ...


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