Gaston v. Founders Ins. Co.
| Decision Date | 13 March 2006 |
| Docket Number | No. 1-04-2110.,1-04-2110. |
| Citation | 847 N.E.2d 523 |
| Parties | Cecelia GASTON, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. FOUNDERS INSURANCE COMPANY, Defendant-Appellee. |
| Court | United States Appellate Court of Illinois |
Gold & Coulson (Arthur S. Gold, of counsel); Law Offices of Patrick McGuire (Patrick J. McGuire, of counsel), Chicago, for Appellant.
Parrillo, Weiss & O'Halloran (Michael J. O'Halloran, Keely Truax, of counsel), Chicago, for Appellee.
Plaintiff Cecelia Gaston appeals from the circuit court's grant of summary judgment in favor of defendant Founders Insurance Company on plaintiff's complaint in which plaintiff alleged that defendant's automobile claims procedures were unreasonable. On appeal, plaintiff contends that the trial court misconstrued the insurance policy at issue; misconstrued section 919.80(d)(6) of the Illinois Department of Insurance Regulations; erred in striking the testimony of its expert witness; erred in not finding that defendant's settlement practices violate section 155 of the Illinois Insurance Code; and erred in denying class action treatment of her claim. For the reasons set forth below, we affirm.
This case arose as a result of a disagreement concerning defendant's procedures for handling automobile collision claims. The relevant portion of plaintiff's policy, issued by defendant, is as follows:
"Coverage E — Collision. To pay for loss caused by collision to the owned automobile but only for the amount of each such loss in excess of the deductible amount stated in the declarations as applicable hereto. * * * [T]he company shall have the following options: (1) Payment to the insured of the actual cash value of the vehicle minus the deductible stated in the policy declarations; or (2) Replacement of the vehicle with other of like kind and quality; or (3) Payment of the amount the company would have paid for a replacement vehicle (including all applicable taxes and license fees), in the event the insured elects a cash settlement instead of such replacement vehicle; or (4) Repair or rebuild the automobile.
* * *
Limit of Liability. The Company's limit of liability for all losses under Part III shall not exceed the smallest of the following:
(a) the actual cash value of stolen or damaged property or part thereof at the time of the loss;
(b) the amount necessary to repair the damaged property at the time of the loss;
(c) the amount necessary to replace the stolen or damaged property at the time of the loss with like kind and quality property less depreciation; or,
(d) the applicable value, if any, stated in the declarations. * * *
Condition 11 — Part III: The company may pay for the loss in money; or may repair or replace the damaged or stolen property."
On July 13, 2002, plaintiff's car was involved in an accident and sustained body damage. On the day of the accident, plaintiff phoned defendant, her insurance company. Defendant informed plaintiff that it would send its own collision appraiser out to create an estimate on the amount of repair work her vehicle needed and that it would not pay any amount above that estimate. Defendant informed plaintiff that, under her policy, she could take her car to a body shop that participated in defendant's direct repair program (DRP) or to any other shop of her liking. If she chose a DRP shop, she was told, then her only cost for all repairs and storage would be her $500 deductible. If she chose another shop, she would be responsible for her deductible as well as for any cost above what was deemed necessary by defendant, including daily storage fees. Defendant then gave plaintiff a list of Chicago-area DRP shops and suggested Elar Auto Rebuilders, which was nearby.
On July 17, 2000, plaintiff spoke with defendant's claims adjuster and informed her that she had taken her car to West Loop Auto Body (West Loop). The claims adjuster informed plaintiff that West Loop was not a DRP shop and outlined the financial consequences to plaintiff if she had her car repaired there. She then offered to arrange to have plaintiff's car towed, free of charge, to Import Auto, a nearby DRP shop that did body work on all types of cars, including those from Loeber Motors.
On July 20, 2000, defendant's appraiser inspected plaintiff's car and prepared an estimate of $610.23. This estimate was made using a labor rate of $22 per hour for body work, $11 per hour for paint work, and $35 per hour for mechanical work, which was the rate defendant had negotiated with its DRP shops. By this time, West Loop had also prepared an estimate of the damage to plaintiff's car in the amount of $1,190.93. This estimate was made using a labor rate of $38 per hour for paint and body work and $79 per hour for mechanical work.
On July 24, 2000, defendant sent plaintiff a letter to again explain the costs she would be responsible for if she had the car repaired at West Loop, including the $50 per day storage fee she was already incurring. Two days later, defendant called plaintiff, told her that defendant would pay only $610.23 toward the repair of her car and again offered to pay for a tow of her car to a nearby DRP shop which would store and repair her car without any additional cost to plaintiff. Plaintiff then informed defendant that she wished to have her car repaired at West Loop. Defendant told plaintiff that it should be notified and allowed to re-inspect her car if West Loop found any damage beyond that contained in its original estimate.
On August 1, 2000, defendant spoke with Bill Passaglia, an owner of West Loop, who confirmed that he was charging plaintiff $50 per day in storage fees. During this conversation, Passaglia demanded that defendant pay the entire amount he was charging for repairs on plaintiff's car and threatened a lawsuit if payment was not made. Defendant then called plaintiff again to outline the consequences of having her car repaired at West Loop as opposed to a DRP shop.
Records indicate that plaintiff's car was repaired at West Loop from July 13 to August 2, 2000, and that plaintiff's bill for repair was $3,097.64, with an additional $900 charged for storage. On August 22, defendant spoke again with Passaglia and told him that, by custom, he was required to notify defendant if he found any additional damage to plaintiff's car and to cease any additional repairs until defendant's appraiser arrived to create his own estimate. Defendant was not told that plaintiff's car had already been repaired or that two additional estimates and repair orders had been issued on it. Specifically, West Loop had billed plaintiff for work on her car's sub-frame, steering components, and transmission that was not included on either West Loop's or defendant's original estimates. The record indicates that plaintiff ultimately paid West Loop $2,993.11 for repairs and storage and that defendant tendered $110.23 to plaintiff, which represented the amount of defendant's estimate less plaintiff's $500 deductible.
In September 2000, plaintiff complained to the Illinois Department of Insurance concerning this matter and was told, in a letter, that defendant had not violated either the Illinois Insurance Code or any insurance regulations.1 On December 5, plaintiff filed a class action complaint against defendant, as well as a motion for class certification. Plaintiff claimed that defendant (1) breached the contract of the insurance policy at issue; (2) violated section 155 of the Illinois Insurance Code (215 ILCS 5/155 (West 2000)); and (3) violated section 505 of the Consumer Fraud and Deceptive Trade Practices Act (815 ILCS 505/1 (West 1999)). Shortly thereafter, defendant issued a check to plaintiff in the amount of $3,527.33, which represented the full amount of plaintiff's West Loop bill, plus interest compounded from July 13, 2000. Defendant expressed a desire to settle this claim and any other claims including attorney fees, as a separate matter, in a letter that accompanied the check. Plaintiff refused the tender.
Defendant then filed a motion to dismiss plaintiff's complaint, which was granted. In the same order, the trial court also granted plaintiff leave to file an amended complaint, struck the class action aspect of the complaint under section 155 of the Insurance Code, and ordered that the motion to certify the class was to be held in abeyance.
A series of motions, responses, and replies followed over the next two years, resulting in an amended class action complaint, containing the same three causes of action as the original complaint. Defendant's subsequent motion to dismiss was granted as to the class action allegations under section 155 of the Insurance Code and the Consumer Fraud Act claim. Defendant was then directed to answer the remaining portions of the complaint, which it did.
During the course of this litigation, defendant attempted to arrange an inspection of the subject car by an independent agency several times, succeeding only when it obtained a court order. The independent agency's inspection found several indications that West Loop may not have performed all of the operations for which it billed plaintiff. The independent inspector based his findings on indicia such as tool marks, corrosion, and factory-installed decals on parts. Defendant also had one of its own employees, an individual with many years of experience in the auto body field, inspect the vehicle. Defendant's employee took over 100 photographs of the vehicle, opined that the extent of the damage claimed on West Loop's invoice was not present during defendant's initial inspection of the vehicle before repairs were made, and concurred with the independent inspector that there were indications that West Loop did not perform all the work it claimed to have performed and that the sub-frame,...
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