Hallihan v. Progressive Direct Ins. Co.
| Decision Date | 06 September 2016 |
| Docket Number | Case No. 3:15-CV-01068-NJR-SCW |
| Parties | SUZANNE HALLIHAN and MICHAEL HALLIHAN, on their own behalf and on behalf of all others similarly situated, Plaintiffs, v. PROGRESSIVE DIRECT INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of Illinois |
This matter is before the Court on Defendant Progressive Direct Insurance Company's Motion to Dismiss Plaintiffs' Complaint (Doc. 25).
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 inIllinois 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 ofpolicies 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.
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 threadbarerecitals 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. Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1081 (7th Cir. 1997); FED. R. CIV. P. 10(c).
The Court first reviews the issue of jurisdiction to ensure the case is properly before it. Progressive removed this putative class action to this Court from the Circuit Court of St. Clair County, Illinois, under the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. §§ 1332(d), 1453 (Doc. 1). CAFA extends federal jurisdiction over class actions where: (1) any member of the proposed class is a citizen of a state different from any defendant (i.e., minimal diversity exists); (2) the proposed class consists of more than 100 members; and (3) the amount in controversy is $5,000,000 or more, aggregating all claims and exclusive of interest and costs. See 28 U.S.C. §§ 1332(d)(2), 1332(d)(5)(B).
Plaintiffs' Complaint alleges that Suzanne Hallihan and Michael Hallihan are citizens of the State of Illinois (Doc. 1-2, ¶ 4). Progressive is incorporated in and has its principal place of business in Ohio; therefore, it is a citizen of Ohio (Doc. 11, ¶ 7). Accordingly, minimal diversity of citizenship exists under CAFA.
The required class size is also present. Plaintiffs seek to bring the action on behalf of a putative class of "all 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" (Doc 1-2, ¶ 23). Plaintiffs' Complaint estimates that Progressive issued thousands of policies that included minimum UIM coverage in the State of Illinois (Id., ¶ 24). Progressive and its affiliates in fact issued 161,077 policies in the State of Illinois with minimum UIM coverage from July 30, 2010, to December 31, 2014 (Doc. 1-1, ¶ 4). Progressive also has issued or renewed an unknown number of policies in the State of Illinois with minimum UIM coverage since January 1, 2015 (Doc. 1). Thus, the proposed class consists of more than 100 members.
Finally, CAFA's amount in controversy requirement is satisfied. Progressive earned $4,537,258 in premiums for the 161,077 policies issued between July 30, 2010, and December 31, 2014, containing minimum UIM coverage (Doc. 1-1, ¶ 5). Progressive earned additional premiums for the unknown number of policies issued since January 1, 2015, containing minimum UIM coverage. Thus, the potential actual damages of more than $4,537,258, combined with Plaintiffs' prayer for disgorgement of "funds not paid on claims made against the policies," punitive damages, attorneys' fees, and an order permanently enjoining Progressive from continuing to offer UIM coverage in its current form brings the amount in controversy well over the required $5,000,000. See Keeling v. Esurance Ins. Co., 660 F.3d 273 (7th Cir. 2011).
The Court next addresses Progressive's argument that the Complaint must be dismissed because the minimum UIM coverage purchased by Plaintiffs is not "wholly illusory;" thus, Plaintiffs' claims must fail. Relying on Cummins v. Country Mutual Insurance Company, Progressive asserts that circumstances exist where Plaintiffs...
To continue reading
Request your trial