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Bunting v. Progressive Corp. and Progressive Michigan Insurance Co.

April 30, 2004


Appeal from the Circuit Court of Cook County. Honorable Robert V. Boharic Judge Presiding.

The opinion of the court was delivered by: Justice Gallagher

Plaintiff, Brad D. Bunting, brings this class action on behalf of himself and a putative class consisting of all persons similarly situated. In his second amended complaint, plaintiff alleged that defendants, The Progressive Corporation and Progressive Michigan Insurance Company (collectively referred to as Progressive), committed widespread consumer fraud and breach of contract in connection with a purported company-wide, systematic pattern and practice of denying Progressive's insureds the full recovery due to them under their contracts of insurance by failing to pay the actual cash value for their vehicles when they were declared to be total losses. Plaintiff further alleged that Progressive committed these acts through the use of fraudulent valuations of the vehicles prepared by defendant CCC Information Services, Inc. The trial court dismissed all counts of plaintiff's complaint. Plaintiff now appeals.


Progressive Michigan Insurance Company issued an automobile insurance policy to plaintiff, a resident of the State of Michigan. Plaintiff's insurance policy provided, in relevant part, that in the event of a total loss of his vehicle, he would be paid the vehicle's "actual cash value," reduced by the applicable deductible. On or about March 21, 2000, plaintiff was involved in an automobile accident while driving his 1990 Ford Taurus. Plaintiff notified Progressive Michigan Insurance Company, which deemed the vehicle a total loss. Progressive Michigan Insurance Company, to assist it in determining how much to pay plaintiff, used CCC Information Services, Inc. (CCC), an Illinois corporation and provider of total-loss valuation services. Based upon CCC's valuation report, Progressive proposed to pay plaintiff $4,025. Plaintiff disputed the amount, claiming that it was too low. A second evaluation was done by CCC and, based upon that reevaluation, Progressive offered plaintiff $4,236. Plaintiff disputed this figure as well. Eventually, the parties invoked the appraisal provision of the policy, which states as follows:

"If we cannot agree with you on the amount of a loss, then we or you may demand an appraisal of the loss. If so, each party shall appoint a competent and impartial appraiser. The appraisers will determine the amount of the loss. If they fail to agree, the disagreement will be submitted to a qualified and impartial umpire chosen by the appraisers. The amount of loss agreed to by any two will be binding. You will pay your appraiser's fees and expenses. We will pay our appraiser's fees and expenses. Payment of the umpire and all other expenses of the appraisal will be shared equally between us and you. Neither we nor you waive any rights under this policy by agreeing to an appraisal."

Plaintiff, however, was also sent a check in the amount of $4,236, which he accepted and negotiated. A third appraiser was never appointed and Progressive's appraiser agreed on $4,950 as the amount of loss. Plaintiff was sent a check for the difference plus license transfer fees and taxes (making the total $5,266).

Plaintiff did not seek to vacate the appraisal award. Almost four months after his total-loss claim was settled, plaintiff moved for leave to join the instant case, which initially had been filed on behalf of then-plaintiff Megan Stephens, a resident of Oregon. Ms. Stephens had filed this action on October 28, 1999, against Progressive Corporation, former defendant Progressive Preferred Insurance Company (the company that issued Ms. Stephens' policy) and CCC. In January 2000, defendants filed motions to dismiss Ms. Stephens' claims and/or to compel appraisal. On September 14, 2000, Ms. Stephens was granted leave to file a first amended complaint adding plaintiff. Thereafter, pursuant to sections 2-615 and 2-619 of the Code of Civil Procedure (735 ILCS 5/2-615, 2-619 (West 2002)), all defendants filed motions to dismiss the first amended complaint and/or to compel appraisal with respect to the claims of both plaintiffs.

On April 19, 2001, the circuit court granted defendants' section 2-615 motions, identified several pleading deficiencies and struck plaintiffs' first amended complaint. The court noted that plaintiff had failed to name, as a defendant, the entity that had issued plaintiff Bunting's policy, Progressive Michigan Insurance Company. The court concluded that the first amended complaint failed to allege how plaintiffs had been damaged. The court also found that plaintiffs had failed to plead any allegations showing how the parent corporation, Progressive, could be liable for the acts of its subsidiaries. As to plaintiff Stephens, the trial court required her to submit to the appraisal process set forth in her insurance policy. The court also ordered plaintiff to file a second amended complaint after the appraisal process had been completed and to plead with specificity the facts surrounding the appraisals of both plaintiffs. Plaintiff Stephens and then-defendant Progressive Preferred proceeded to appraisal. The umpire determined that the actual cash value of the vehicle was $14,250 and Progressive Preferred paid Ms. Stephens $15,000. After the appraisal process was completed, Ms. Stephens voluntarily dismissed her claims.

On November 1, 2001, a second amended complaint was filed on behalf of plaintiff Bunting alone against Progressive Corporation, CCC, and a new defendant, Progressive Michigan Insurance Company. The second amended complaint contained five counts in which plaintiff alleged violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. (West 2000), breach of contract, common law fraud, and intentional interference with contract.

In December 2001, Progressive Corporation and CCC filed motions to dismiss plaintiff's second amended complaint, which the circuit court took under advisement. Plaintiff did not serve Progressive Michigan Insurance Company with the second amended complaint until June 2002. On June 18, 2002, Progressive Michigan Insurance Company filed a motion to quash for lack of personal jurisdiction. That motion was never heard or ruled upon by the trial court because, on June 28, 2002, the trial court granted the other defendants' motions to dismiss and dismissed plaintiff's claims with prejudice.

The circuit court articulated several grounds as the bases for its dismissal with prejudice of plaintiff's second amended complaint. The trial court first addressed the section 2-619 (735 ILCS 5/2-619) (West 2002)) bases of defendants' motions to dismiss. The trial court determined that the Federal Arbitration Act (FAA) (9 U.S.C. §1 et seq. 2000) applied to plaintiff's claims because the appraisal provision in Progressive's policy constitutes an arbitration. The court concluded, therefore, that plaintiff's complaint should be dismissed because plaintiff failed to give the requisite notice to vacate the arbitration award within the three-month period required by the FAA. The court also concluded that plaintiff's complaint should be dismissed because there had been an accord and satisfaction. The trial court also concluded that, pursuant to section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 2002)), each and every count of plaintiff's second amended complaint failed to state a cause of action.


Our review of motions to dismiss brought under both section 2-615 and section 2-619 is de novo. Edelman, Combs & Latturner v. Hinshaw & Culbertson, 338 Ill. App. 3d 156, 164, 788 N.E.2d 740, 747-48 (2003). A reviewing court may affirm a correct dismissal for any reason appearing in the record. Nielsen-Massey Vanillas, Inc. v. City of Waukegan, 276 Ill. App. 3d 146, 151, 657 N.E.2d 1201, 1205 (1995).


A motion to dismiss brought pursuant to section 2-615 attacks the legal sufficiency of the complaint by alleging defects on the face of the complaint. Weatherman v. Gary-Wheaton Bank of Fox Valley, N.A., 186 Ill. 2d 472, 491, 713 N.E.2d 543, 552 (1999). In deciding whether a complaint states a cause of action for purposes of a section 2-615 motion to dismiss, we must view the allegations in the light most favorable to the plaintiff and accept as true all well-pleaded facts and all reasonable inferences derived therefrom. Oliveira v. Amoco Oil Co., 201 Ill. 2d 134, 147, 776 N.E.2d 151, 159 (2002).


The Illinois Consumer Fraud and Deceptive Business Practices Act (the Act) (815 ILCS 505/1 et seq. (West 2000) states, in pertinent part, as follows:

"Unfair methods of competition and unfair or deceptive acts or practices, including but not limited to the use or employment of any deception, fraud, false pretense, false promise, misrepresentation or the concealment, suppression or omission of any material fact, with intent that others rely upon the concealment, suppression or omission of such material fact, or the use or employment of any practice described in Section 2 of the 'Uniform Deceptive Trade Practices Act', * * * in the conduct of any trade or commerce are hereby declared unlawful whether any person has in fact been misled, deceived or damaged thereby. In construing this section consideration shall be given to the interpretations of the Federal Trade Commission and the federal courts relating to Section 5(a) of the Federal Trade Commission Act." 815 ILCS 505/2 (West 2000).

Section 10a(a) of the Act authorizes private causes of action for deceptive business practices proscribed under the Act. 815 ILCS 505/10a(a)(West 2000).

In count I of plaintiff's second amended complaint, he alleges consumer fraud against all defendants on behalf of the class. Plaintiff argues that the trial court erred in dismissing count I. In the trial court, plaintiff acknowledged that he had no valid consumer fraud claim against Progressive, but claimed that he was entitled to bring such a claim against Progressive on behalf of the putative, uncertified class. The trial court correctly rejected this argument. The Illinois Supreme Court has made it very clear that where, as here, a putative class representative has no valid claim in his own right, he cannot bring such a claim on behalf of a putative class. Portwood v. Ford Motor Co., 183 Ill. 2d 459, 467 n.1, 701 N.E.2d 1102, 1105 n.1 (1998); Landesman v. General Motors Corp., 72 Ill. 2d 44, 377 N.E.2d 813 (1978). Thus, the trial court correctly dismissed count I of plaintiff's second amended complaint against Progressive. Plaintiff has apparently abandoned his consumer fraud claim against Progressive in that he has not raised it as an issue in this appeal. Supreme Court Rule ...

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