Kim v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 30 June 2021
• Docket Number: 1-20-0135
• Parties: Penny KIM, Individually and on Behalf of Others Similarly Situated, Plaintiff-Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, and State Farm Fire and Casualty Company, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

2021 IL App (1st) 200135

199 N.E.3d 737

460 Ill.Dec. 16

Penny KIM, Individually and on Behalf of Others Similarly Situated, Plaintiff-Appellant,

v.STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, and State Farm Fire and Casualty Company, Defendants-Appellees.

No. 1-20-0135

Appellate Court of Illinois, First District, Fourth Division.

Filed June 30, 2021

Kent D. Sinson and Lisa K. Lange, of Sinson Law Group, of Chicago, for appellant.

Joseph A. Cancila, Jr., James P. Gaughan, and Allison N. Siebeneck, of Riley Safer Holmes & Cancila LLP, of Chicago, for appellees.

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

¶ 1 Plaintiff Penny Kim's amended complaint against defendants State Farm Mutual Automobile Insurance Company (State Farm Mutual) and State Farm Fire and Casualty Company (State FarmFire) (collectively, State Farm) sought class certification for individuals with personal injury claims arising from motor vehicle collisions and damages from State Farm's alleged misrepresentations about or concealment of excess, or "umbrella," insurance policies. Kim also alleged against State Farm claims of insurance code violations, common law and statutory fraud, negligent misrepresentation, and attorney fees and costs.

¶ 2 The circuit court granted summary judgment in favor of State Farm and against Kim, (1) ruling that insurers were not required to disclose the existence of an umbrella insurance policy in response to a demand under the insurance statutory provision at issue, and (2) denying Kim's motion for additional discovery.

¶ 3 On appeal, Kim argues that (1) the circuit court misapplied the statutory provision regarding the disclosure of insurance coverage, (2) she presented sufficient evidence in support of her claims of fraud and negligent misrepresentation to show that State Farm made actionable false representations and omissions to conceal its insured's policy limits, (3) she was entitled to attorney fees and costs based on State Farm's vexatious and unreasonable actions, and (4) she was entitled to discovery on all her claims and class issues.

¶ 4 For the reasons that follow, we affirm the judgment of the circuit court.¹

¶ 5 I. BACKGROUND

¶ 6 This case arises from a brief series of communications in May 2012 between State Farm and Kim's counsel, Kent Sinson, following an automobile accident involving Kim and State Farm's insured, Elizabeth Swann. At no time did State Farm communicate directly with Kim.

¶ 7 On May 9, 2012, four days before Kim filed her personal injury lawsuit against Swann, Sinson wrote to State Farm claim representative Connie O'Connor and made the following demand: "Pursuant to 215 ILCS 5/143.24(b), please disclose your insured's policy limits." O'Connor responded in May 2012, identifying Swann's bodily injury automobile coverage of $100,000 per person and $300,000 per accident. Upon receiving O'Connor's disclosure, Sinson contacted O'Connor and "confronted her," stating that he had a hard time believing that Swann would live in the wealthiest suburb in the Chicagoland area and not have an umbrella policy, the premium on which usually runs about $300-$400 per year.

¶ 8 On May 21, 2012, Sinson again wrote to O'Connor to clarify that when he originally asked for disclosure of Swann's policy limits, he meant to request disclosure of any policy potentially applicable to Swann's accident with Kim. On May 24, 2012, claim representative Marco Ruvalcaba sent sworn, written confirmation disclosing that Swann was insured under an umbrella policy with a $1 million limit for liability coverage. Ruvalcaba copied the law firm representing Swann in Kim's personal injury suit on this disclosure. Thus, within weeks of Kim filing her personal injury lawsuit against Swann and before Swann was required to respond to the complaint, Kim knew the coverage limits for both Swann's auto policy and the umbrella policy.

¶ 9 Kim served Swann with interrogatories and production requests that demanded disclosure of, among other things, all insurance policies potentially applicable to the accident. Swann responded in August 2012 by disclosing her husband's auto policy but not her umbrella policy. Kim and her counsel knew this was incorrect, given State Farm's prior disclosure of the existence and limits of the umbrella policy. Sinson immediately moved for sanctions, identifying the existence of the umbrella policy and the incorrect nature of the interrogatory response.² Swann promptly corrected her answers within 30 days, on September 14, 2012, to include the umbrella policy.

¶ 10 In December 2012, Swann was deposed. She explained that when she originally answered Kim's interrogatories, she was aware of her umbrella policy but did not realize it was relevant to the personal injury case because she mistakenly believed it provided coverage only for "act of God kinds of things" related to her homeowners insurance. She also stated that she did not discuss her policy limits, coverages, or the existence of an umbrella policy with any State Farm personnel prior to answering the interrogatories. Swann's counsel also stated on the record that the error was his fault and he failed to list the umbrella policy in the initial discovery response.

¶ 11 In April 2013, Kim amended her complaint against Swann to add State Farm Mutual as a defendant and assert proposed class claims against it regarding the disclosure of the umbrella policy.

¶ 12 In June 2013, Kim made an initial settlement demand for the combined policy limits of $1.1 million. Swann produced copies of both her State Farm Mutual auto insurance policy and her State Farm Fire umbrella policy, with the relevant declaration pages, by September 2013. Kim voluntarily dismissed her personal injury suit against Swann in April 2017. In April 2018, Kim settled her bodily injury claims against Swann in exchange for payment of the combined coverage limits of $1.1 million, releasing all claims "without reliance upon any statement or representation of the released parties or her representatives."

¶ 13 State Farm Mutual moved to dismiss the claims against it, but the circuit court denied that motion on December 22, 2014. The court concluded that the issues raised in State Farm Mutual's motion could be "revisit[ed] *** on a summary judgment."

¶ 14 In March 2015, State Farm responded to Kim's interrogatories and requests for production. State Farm objected to Kim's discovery requests on the grounds that, among other things, they improperly sought class-wide, company-wide, and nationwide merits discovery on a range of topics either unlimited in timeframe or dating back to 1988. In May 2015, Kim's asserted class claims against State Farm Mutual were severed and transferred to the chancery division of the circuit court of cook county. In September 2015, Kim filed a fourth amended complaint, which raised three claims against State Farm Mutual: count I for common law fraud, count II for violation of section 143.24b of the Illinois Insurance Code ( 215 ILCS 5/143.24b (West 2010) ), and count III for violation of the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) ( 815 ILCS 505/1 et seq. (West 2010)).

¶ 15 Shortly thereafter, Kim responded to State Farm's interrogatories. She did not answer when she became aware of Swann's umbrella policy, citing the attorney-client privilege. She also did not identify any action that she personally took based on a mistaken belief about the existence of the umbrella policy, or quantify her alleged damages for emotional distress or the "time value of money." However, she admitted that her attorney's knowledge regarding the existence and limits of Swann's umbrella policy was properly imputed to her.

¶ 16 In November 2016, this case was stayed pending resolution of the appeal in Demarco v. CC Services, Inc. , No. 14-CH-10416 (Cir. Ct. Cook County, May 12, 2015), which raised the same issue of whether a demand under section 143.24b of the Insurance Code requires the disclosure of any umbrella policy. The circuit court's dismissal order in Demarco was affirmed in an unpublished order on March 24, 2017. See Demarco v. CC Services, Inc. , 2017 IL App (1st) 152933-U, 2017 WL 1148752. Though Kim was free to resume proceedings against State Farm at that time, she took no action for more than six months.

¶ 17 In December 2017, State Farm Mutual moved for summary judgment on all three counts of the fourth amended complaint. In response, Kim filed a motion under Illinois Supreme Court Rule 191 (eff. Jan. 4, 2013) for additional discovery. In May 2018, Kim requested leave to file a corrected fourth amended complaint, which contained two additional claims—count IV for negligent misrepresentation, and count V for attorney fees and costs under section 155 of the Insurance Code ( 215 ILCS 5/155 (West 2010) )—and added State Farm Fire as a defendant. State Farm Mutual opposed the motion and renewed its motion for summary judgment in July 2018. After extensive briefing, the court granted Kim's motion for leave, and Kim filed her corrected fourth amended complaint in November 2018. The court allowed State Farm leave to supplement its pending summary judgment motion to address these new claims, and State Farm did so in December 2018.

¶ 18 On June 5, 2019, the court denied Kim's Rule 191 motion for additional discovery. Thereafter, the court denied various pending motions for leave to submit overlength briefs and instructed the parties to re-brief the summary judgment motion in compliance with the page limits set by local rule. By October 2019, State Farm's summary judgment motion was fully briefed, and the matter was provisionally set for oral argument on January 8, 2020. On January 2, 2020, the court granted State Farm's motion for summary judgment on the papers. This appeal followed.

¶ 19 II. ANALYSIS

¶ 20 Kim argues that State Farm was not entitled to summary judgment because (1) the circuit court misapplied the law regarding the disclosure of insurance...