United States District Court, N.D. Illinois, Eastern Division
AMERICAN INTER-FIDELITY CORP., an Indiana Corporation, as Attorney in Fact for AMERICAN INTER-FIDELITY EXCHANGE, Plaintiff,
M.L. SULLIVAN INSURANCE AGENCY, INC. a/k/a Sullivan & Associates-Insurance and Risk Management and a/k/a Transportation Insurance Solutions, Inc.; SEBASTIAN MIKLOWICZ, individually and as agent of M.L. Sullivan Insurance Agency, Inc., and Transportation Insurance Solutions, Inc.; and TRANSPORTATION INSURANCE SOLUTIONS, INC., Defendants.
MEMORANDUM OPINION AND ORDER
REBECCA R. PALLMEYER United States District Judge.
American Inter-Fidelity Exchange (“AIFE”)
provides liability insurance for trucking and other
interstate transportation enterprises
(“carriers”). (Fourth Am. Compl.  ¶ 2.)
Premiums for the insurance coverage are calculated on the
basis of the number of vehicles operated by the insured
carriers, and the number of miles driven. (See id.
at ¶¶ 20- 28.) In this lawsuit, Plaintiff claims
that Defendants, M.L. Sullivan Insurance Agency, Inc.
(“Sullivan”); Transportation Insurance Solutions,
Inc. (“TIS”); and their agent, Defendant
Sebastian Miklowicz, who acted as agents of the insured
carriers, have withheld premiums owed to AIFE for the
coverage it provided. (Id. at ¶ 31.)
most recent iteration, Plaintiff's complaint alleges that
Defendants are in the business of “provid[ing]
insurance and risk management services to various individuals
and businesses, ” including at least some carriers
insured by Plaintiff. (Id. at ¶¶ 3-4.)
According to Plaintiff, Defendants collected premiums from
the carriers they represented based on accurate mileage and
vehicle numbers, but then under-reported those figures to
Plaintiff. Defendants allegedly paid Plaintiff premiums based
on these inaccurately low mileage and vehicle numbers,
retaining for themselves the higher premium commensurate with
the risk Plaintiff had underwritten. (Id. at
¶¶ 30-31.) The Fourth Amended Complaint asserts,
against all Defendants, a claim under the Illinois Consumer
Fraud and Deceptive Business Practices Act (Count I); a claim
of breach of contract (Count II) and for an accounting (Count
III) against Defendant Sullivan; and, against all Defendants,
a claim of conversion (Count IV), breach of fiduciary duty
(Count V), constructive trust (Count VI), unjust enrichment
(Count VII), and negligent misrepresentation (Count VIII).
Finally, Plaintiff alleges a claim of negligent supervision
against Sullivan and TIS (Count IX); claims Miklowicz is
liable for fraud (Count X); and seeks a constructive trust
against Miklowicz individually (Count XI).
have filed motions to dismiss several of the counts. As
explained below, the motions are granted in part and denied
court addressed some of the arguments raised here when it
granted Defendants Sullivan and Miklowicz's motions to
dismiss an earlier version of Plaintiff's
complaint. Am. Inter-Fid. Corp. v. M.L. Sullivan
Ins. Agency, Inc., No. 15 C 4545, 2016 WL 3940092 (N.D.
Ill. July 21, 2016). The court assumes familiarity with that
earlier opinion and addresses the current motions only
Count I: Illinois Consumer Fraud and Deceptive Business
argue that Plaintiff's Consumer Fraud claim fails because
the scheme alleged by Plaintiff does not implicate consumer
protection concerns. The court agrees. In its various
pleadings, Plaintiff has described the alleged wrongdoing in
different ways, but Plaintiff appeared to settle on a theory
in its brief in response to earlier motions to dismiss. That
brief, consistent with this Fourth Amended Complaint,
described Defendants' alleged scheme as one in which
insured carriers provided accurate information to Defendants;
but Defendants, apparently acting as agents for the insured
carriers or in some brokerage capacity, underreported the
risk and underpaid Plaintiffs for the coverage it was
contractually bound to provide. See Id. at *5. That
is, Plaintiff is responsible for covering all losses that the
insured carriers may suffer, but is not being paid the full
cost of that coverage. As the court explained in its earlier
opinion, “if [Sullivan's] conduct only caused
Plaintiff (an insurer) to lose premiums it was owed while the
consumer carriers were fully insured by coverage for which
they paid the appropriate premium rate, it is difficult to
see how [Sullivan's] alleged conduct ‘implicates
consumer protection concerns.'” Id.
(quoting Roppo v. Travelers Companies, 100 F.Supp.3d
636, 651 (N.D. Ill. 2015)).
response to this argument is unsatisfying. Plaintiff cites
Downers Grove Volkswagen, Inc. v. Wigglesworth Imports,
Inc., 190 Ill.App.3d 524, 534, 546 N.E.2d 33, 41 (2d
Dist. 1989), where the court recognized that a business may
pursue a Consumer Fraud Act claim to challenge trade
practices that are “addressed to the market generally
or otherwise implicate consumer protection concerns.”
The circumstances in that case were quite different: the
plaintiff in Downers Grove Volkswagen alleged that
the defendant had made false statements about the
plaintiff's pricing, potentially misleading consumers.
Id. Plaintiff in this case alleges that Defendant
made false statements to it, not to consumers. Plaintiff
suggests that Defendants' conduct harmed the insured
truck carriers “by jeopardizing their insurance
coverage” (Pl.'s Resp. in Opp. to Def.
Miklowicz's Mot. to Dismiss (“Resp. to
Miklowicz's Mot.”)  at 2), but Plaintiff has
not explained how this is. Plaintiff does not allege that it
has terminated or will terminate any consumer's coverage
for wrongdoing on the part of Defendants, or that any of the
insured carriers will be denied coverage for covered losses.
So long as the insured carriers enjoy full coverage for any
losses, they have suffered no harm. It was Plaintiff,
allegedly on the hook for insuring a greater risk than
accurately reported, who has been injured. Plaintiff's
allegations satisfy the court that Plaintiff was harmed, but
do not establish a scheme that harms consumer interests.
Count II: Breach of Contract
response to Defendant Sullivan's motion to dismiss the
breach of contract claim, Plaintiff has withdrawn this count.
Count II is dismissed without prejudice.
Count III: Accounting
Count III, Plaintiff seeks an accounting. To state such a
claim, Plaintiff must allege that it lacks an adequate remedy
at law and one of the following circumstances: “(1) a
breach of a fiduciary relationship between the parties; (2) a
need for discovery; (3) fraud; or (4) the existence of mutual
accounts which are of a complex nature.”
Cole-Haddon, Ltd. v. The Drew Philips Corps., 454
F.Supp.2d 772, 778 (N.D. Ill. 2006) (quoting Mann v.
Kemper Fin. Cos., 247 Ill.App.3d 966, 980, 618 N.E.2d
317, 327 (1st Dist. 1992). In seeking dismissal of this
count, Defendants argue, first, that Plaintiff has not
alleged the absence of a remedy at law and, second, that an
accounting is not necessary where the parties are engaged in
ample ongoing discovery. Neither argument is persuasive to
the court. First, equitable relief may well be appropriate in
this context; indeed, Defendants have not moved to dismiss
Plaintiff's claim for breach of fiduciary duty. It is not
clear that there is ...