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Hallihan v. Progressive Direct Insurance Co.

United States District Court, S.D. Illinois

September 6, 2016

SUZANNE HALLIHAN and MICHAEL HALLIHAN, on their own behalf and on behalf of all others similarly situated, Plaintiffs,


          NANCY J. ROSENSTENGEL, United States District Judge.

         This matter is before the Court on Defendant Progressive Direct Insurance Company's Motion to Dismiss Plaintiffs' Complaint (Doc. 25).

         Factual & Procedural Background

         Defendant Progressive Direct Insurance Company (“Progressive”) offers Underinsured Motorist (“UIM”) coverage in the State of Illinois in various amounts (Doc. 1-2, ¶10). Prior to January 1, 2015, the minimum amount of UIM coverage a consumer could purchase was $20, 000 per person/$40, 000 per accident (Id.). On January 1, 2015, the minimum coverage increased to $25, 000 per person/$50, 000 per accident (Id.).[1] The minimum UIM coverage available is equal to the minimum limits required in Illinois for bodily injury liability under its Financial Responsibility Law (Id., ¶9). See 625 ILCS 5/7-203.

         Suzanne Hallihan and Michael Hallihan (“Plaintiffs”) purchased an insurance policy through Progressive that included the minimum UIM coverage with limits of $20, 000 per person/$40, 000 per accident (Id., ¶18). The Policy defines “underinsured motor vehicle” as a “vehicle … to which a bodily injury liability bond or policy applies at the time of the accident, but the sum of all applicable limits of liability for bodily injury is less than the coverage limit for Uninsured/Underinsured Motorist Bodily Injury Coverage shown on the declarations page.” (Id., ¶ 12).

         On July 25, 2014, Suzanne Hallihan submitted a formal written demand for UIM coverage arising out of an accident on November 14, 2011 (Id., ¶21). The written demand stated that “[t]he underinsured motorist's insurer State Farm paid their entire policy limit of $100, 000 to Ms. Hallihan.” (Doc. 25-3). On July 29, 2014, Progressive denied Suzanne Hallihan's claim, stating: “Since the Bodily Injury liability coverage available exceeds the Underinsured Motorist Coverage available, the vehicle occupied by Suzanne Hallihan would not meet the definition of an ‘Underinsured motor vehicle' as defined.” (Doc. 1-2, ¶ 22).

         On July 30, 2015, Plaintiffs, on behalf of themselves and all others similarly situated, filed a three-count class action complaint (“Complaint”) (Doc. 1-2) against Progressive in the Circuit Court of St. Clair County, Illinois, alleging fraudulent misrepresentation and/or omission, unjust enrichment, and a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act in relation to Progressive's sale of policies containing minimum UIM coverage. (Doc 1-2, p. 7-10). Plaintiffs assert that Progressive's minimum UIM coverage is “wholly illusory” since the coverage limits are equal to the bodily injury liability coverage required in Illinois. Plaintiffs' claim hinges on the argument that a Progressive customer with the minimum UIM coverage “would necessarily be excluded from making an Underinsured claim under the policy” because another driver would have either the same minimum coverage, such that the UIM provision would not be triggered, or the driver would be considered “uninsured” and would instead trigger the “uninsured motor vehicle” language of the policy. (Id., ¶ 14). As a result, Plaintiffs claim, in no circumstance could a customer with the minimum UIM coverage ever actually trigger his or her coverage (Id., ¶ 15). Nevertheless, according to the Complaint, Progressive continues to sell UIM coverage equal to the minimum coverage for bodily injury liability required in Illinois, thereby charging customers for coverage that is “wholly illusory” (Id., ¶ 16).

         Plaintiffs' Complaint seeks to certify a class of “[a]ll persons in the State of Illinois who purchased Minimum Underinsured Motorist Coverage offered by Progressive, its subsidiaries, agents and affiliates which use policies containing the language, or substantially similar language, set forth herein.” (Id., ¶ 23). Plaintiffs request statutory and common law damages, punitive damages, attorney fees, disgorgement of revenues gained from the sale of the contested UIM policies and funds not paid on claims made against the policies, and an order permanently enjoining Progressive from continuing to offer UIM coverage in its current form.

         Progressive filed this Motion to Dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, arguing the Complaint fails as a matter of law because Progressive's minimum UIM coverage is not illusory, Progressive properly denied Plaintiff Suzanne Hallihan's UIM claim, and Progressive did not engage in any deceptive or unfair practice. Progressive also argues Plaintiffs have failed to allege facts stating a claim for fraudulent misrepresentation and/or omission, for unjust enrichment, or for a violation of the Illinois Consumer Fraud Act.

         Legal Standard

         A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint for failure to state a claim upon which relief may be granted. See Fed. R. Civ. P. 12(b)(6). Dismissal of an action under this motion is warranted if the plaintiff can prove no set of facts in support of its claims that would entitle it to relief. Gen. Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1080 (7th Cir. 1997).

         To survive a Rule 12(b)(6) motion, a complaint must “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). While a complaint need not include detailed factual allegations, there “must be enough to raise a right to relief above the speculative level.” Id. at 555. The plaintiff must “plead [] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” McReynolds v. Merrill Lynch & Co., 694 F.3d 873, 885 (7th Cir. 2012) (quoting Ashcroft v. Iqbal, 556 U.S. 662 (2009)). “In reviewing the sufficiency of a complaint under the plausibility standard, [a court must] accept the well-pleaded facts in the complaint as true, but [it] ‘need not accept as true legal conclusions, or threadbare recitals of the elements of a cause of action, supported by mere conclusory statements.'” Alam v. Miller Brewing Co., 709 F.3d 662, 665-66 (7th Cir. 2013) (quoting Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009)).

         When ruling on a motion to dismiss, a federal court may consider documents attached to the pleadings without converting the motion to dismiss into a motion for summary judgment, as long as the documents are referred to in the complaint and central to the plaintiff's claims. See Adams v. City of Indianapolis, 742 F.3d 720, 729 (7th Cir. 2014); Gen. ...

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