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F. Ryan Bemis, D/B/A Frank Bemis & Individually and On Behalf of All Situated v. Safeco Insurance Company of America and Safeco Insurance Company of Illinois

March 25, 2011

F. RYAN BEMIS, D/B/A FRANK BEMIS & INDIVIDUALLY AND ON BEHALF OF ALL SITUATED,
PLAINTIFF-APPELLEE,
v.
SAFECO INSURANCE COMPANY OF AMERICA AND SAFECO INSURANCE COMPANY OF ILLINOIS,
DEFENDANTS-APPELLANTS.



Appeal from the Associates, Circuit Court of Others Similarly Madison County. No. 05-L-152 Honorable Barbara L. Crowder, Judge, presiding.

The opinion of the court was delivered by: Justice Spomer

NOTICE

The text of this decision may be changed or corrected prior to the filing of a Petition for Rehearing or th e disposition of the same.

JUSTICE SPOMER delivered the judgment of the court, with opinion.

Justice Stewart concurred in the judgment and opinion.

Justice Donovan specially concurred, with opinion.

OPINION

The defendants, Safeco Insurance Company of America and Safeco Insurance Company of Illinois (Safeco), appeal, pursuant to Illinois Supreme Court Rule 306(a)(8) (eff. Sept. 1, 2006), the March 25, 2009, order of the circuit court of Madison County that granted the motion of the plaintiff, F. Ryan Bemis, doing business as Frank Bemis & Associates (Bemis), to certify count I of his first amended complaint, alleging a breach of contract, as a class action. For the following reasons, we reverse and remand.

FACTS

In his first amended class action complaint (complaint), Bemis alleges that he is a doctor of chiropractic medicine and treated Thatcher Levi, one of Safeco's insureds, in and before 2002 for injuries sustained in an automobile accident for which Mr. Levi was entitled to coverage under the medical payments provision of his Safeco policy.

The complaint alleges upon information and belief that the medical payments provision in Mr. Levi's Safeco insurance policy provides that Safeco will pay reasonable expenses for necessary medical services incurred as a result of a covered accident. According to the complaint, Mr. Levi assigned his claim for medical payments coverage under the Safeco policy to Bemis. Bemis submitted a bill to Safeco for $75 for a physical performance test he provided to Mr. Levi on December 23, 2002, identified by current procedural terminology (CPT) Code 97750. According to the complaint, Safeco made a $9.05 reduction of this bill and paid Bemis $65.95 for that procedure.

Exhibit A to the complaint is an explanation of review (EOR) that accompanied Safeco's payment to Bemis and reflected the $9.05 deduction. According to the EOR, the date of the accident for which the medical payments coverage applied was November 23, 2002. CPT Code 97750 was "[r]eimbursed according to UCR 80th percentile data." The complaint alleges that this reduction was produced by a computerized review of Bemis's bill using biased software, which "re-prices" medical procedures to a predetermined maximum percentile. Count I of the complaint alleges a cause of action for a breach of contract on the basis that Safeco breached the insurance contract by failing to pay the full amount of medical expenses Mr. Levi incurred. Although the complaint also contained counts alleging causes of action for a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. (West 2006)) and unjust enrichment, these counts were not the subject of Bemis's subsequent motion for class certification and thus are not a subject of this appeal.

Safeco filed a motion to dismiss count I of the complaint, arguing that Mr. Levi did not make a valid assignment of his claim to Bemis and that, thus, Bemis did not have standing to pursue a breach-of-contract claim. The circuit court denied the motion to dismiss. Subsequently, Safeco filed an answer to the complaint, attaching a copy of Mr. Levi's insurance policy. Under the terms of the medical payments coverage of Mr. Levi's policy, Safeco agreed to pay "the usual and customary charges incurred for reasonable and necessary medical *** expenses because of bodily injury caused by an accident." Thereafter, Bemis filed an amended motion for class certification, which included a request to certify a proposed class as follows:

"All persons insured by Safeco property and casualty insurance companies in the states of Arkansas, Colorado, Connecticut, Illinois, Indiana, Iowa, Mississippi, New Hampshire, New Mexico, Ohio, South Dakota, Texas, Wisconsin and ...


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