Knebel Autobody Ctr., Inc. v. Country Mut. Ins. Co.

• Decision Date: 05 January 2017
• Docket Number: NO. 4-16-0379,4-16-0379
• Citation: 2017 IL App (4th) 160379 -U
• Parties: KNEBEL AUTOBODY CENTER, INC.; GASS' BODY & CHASSIS SERVICE, INC.; BILL EBERT and WADE EBERT, Individually and d/b/a AMERICAN AUTOBODY, Plaintiffs-Appellants, v. COUNTRY MUTUAL INSURANCE COMPANY, INC.; and COUNTRY PREFERRED INSURANCE COMPANY, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

2017 IL App (4th) 160379-U

KNEBEL AUTOBODY CENTER, INC.; GASS' BODY & CHASSIS SERVICE, INC.;BILL EBERT and WADE EBERT, Individually and d/b/a AMERICAN AUTOBODY, Plaintiffs-Appellants, v. COUNTRY MUTUAL INSURANCE COMPANY, INC.;and COUNTRY PREFERRED INSURANCE COMPANY, Defendants-Appellees.

NO. 4-16-0379

APPELLATE COURT OF ILLINOIS FOURTH DISTRICT

January 5, 2017

NOTICE

This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).

Appeal from Circuit Court of Sangamon County

No. 07L310

Honorable Peter C. Cavanagh, Judge Presiding.

JUSTICE POPE delivered the judgment of the court.

Justices Holder White and Appleton concurred in the judgment.

ORDER

¶ 1 Held: The trial court did not err in granting defendants' motion for summary judgment because plaintiffs had no evidence anyone failed to give business to them because of any of defendants' actions.

¶ 2 On April 20, 2016, the trial court granted defendants' motion for partial summary judgment holding defendants' estimates and form letters constituted nonactionable opinions. On April 26, 2016, the court granted defendants' motion to reconsider the court's earlier denial of defendants' motion for summary judgment and the court's denial of defendants' motion to bar the testimony and opinions of plaintiffs' expert, Dr. Stan Smith. The court issued a written order on May 3, 2016, granting defendants' motions for summary judgment and their motion to bar Dr. Smith. Plaintiffs appeal, arguing the court erred in granting defendants' motions for summary judgment and barring Dr. Smith's testimony. We affirm.

¶ 3 I. BACKGROUND

¶ 4 On October 5, 2015, defendants, Country Mutual Insurance Company, Inc., and Country Preferred Insurance Company (Country), filed a motion for summary judgment, arguing "[p]laintiffs' claims fail as a matter of law because they cannot identify a single piece of lost business due to Defendant's actions." Country attached a memorandum of law in support of its motion. According to Country, plaintiffs' case "rests upon their own unsupported conclusions and suspicions which cannot survive a motion for summary judgment."

¶ 5 On October 8, 2015, plaintiffs, Knebel Autobody Center, Inc.; Gass' Body & Chassis Service, Inc.; and Bill and Wade Ebert, Individually and d/b/a/ American Autobody, filed a motion for leave to file a third amended complaint. According to the motion, all discovery in the case would not close until November 6, 2015. "Discovery has progressed in this case to a point where the parties have obtained, or should have obtained, a sharper and narrower focus on the material facts, circumstances and issues in this case." Plaintiffs argued the third amended complaint brought "the issues into closer focus and renders it easier for the court and jury to understand and decide the facts of the case and the issues to be decided" and would make preparation of jury instructions easier and more understandable. The third amended complaint also added a count seeking punitive damages.

¶ 6 Country opposed the motion for leave to file a third amended complaint. However, the trial court allowed plaintiffs leave to file their amended complaint.

¶ 7 Plaintiffs' third amended complaint against Country included claims for tortious interference with prospective business advantage and violation of the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 to 12 (West 2014)). Plaintiffs also included a common law claim for punitive damages. According to the complaint,plaintiffs had a long history of dealing with individuals insured by Country and people with claims against individuals insured by Country. Plaintiffs allege their goal is to repair vehicles as closely as possible to pre-loss condition, and Country's goal is to pay as little as possible for vehicle repairs.

¶ 8 Plaintiffs allege Country often intentionally prepares estimates to be insufficient to repair a damaged vehicle but tells the owners of the damaged vehicle Country has "taken great care in preparing a fair estimate of the charges for all parts and services that are needed to properly repair your vehicle." They also allege Country seeks "to drive or steer repair business to cut-quality/cut-rate shops by falsely telling the owners of damaged vehicles that '... most shops agree to complete repairs for the amount of our estimate."

¶ 9 In the mid 1990s, Country began hiring individuals to inspect damaged vehicles and then write estimates for repair costs (as opposed to having customers obtain estimates from body shops). These estimators perform visual inspections wherever the vehicle can be located, typically without "disassembly of the vehicle and sometimes without opening damaged components such as hoods, trunks or doors." Plaintiffs allege the estimates are sometimes prepared without including costs for certain tasks, including removal and installation of trim, blending of paint, double tape, sound-proofing, corrosion protection, and rust-proofing. Plaintiffs allege, "Defendant's estimate is prepared without the necessary care to identify all the parts and services necessary to properly repair the vehicle." Defendants' estimates are often much less than the actual repair costs for a vehicle.

¶ 10 After plaintiffs refused to perform a repair for the amount of Country's estimate, Country "embarked upon a plan or scheme to discourage customers and potential customers from patronizing Plaintiff by directing or steering Plaintiff's existing, active, potential and futurecustomers to vehicle repair shops other than the Plaintiff's shop." As a result, plaintiffs alleged they lost a substantial amount of business.

¶ 11 Plaintiffs contend Country used both verbal comments and "body shop letters" or "excess letters" to steer customers away from plaintiffs' businesses. According to the complaint, these letters "all include the false statement to Plaintiffs' existing and potential customers that (a) '...we have taken great care in preparing a fair estimate of the charges for all parts and services that are needed to properly repair your vehicle', and (b) '...Most shops agree to complete repairs for the amount of our estimate.' " Plaintiffs allege, "[t]he combination of the false statements *** and the low-ball estimate of Defendants serves to create economic concern with respect to the customer or potential customer about the cost of the repair and cause them to be steered away from Plaintiff's shop to a cut-quality[/]cut-rate shop."

¶ 12 On November 6, 2015, plaintiffs responded to Country's motion for summary judgment.

¶ 13 That same day, Country filed a motion to bar the testimony and opinions of plaintiffs' expert, Dr. Stan Smith. According to Country, Dr. Smith's testimony is speculative, lacks foundation, contains no analysis tying plaintiffs' revenue fluctuations to Country's conduct, and fails to consider numerous factors with no correlation to the allegations against Country that could have impacted plaintiff's revenue. Country also argued:

"In addition, Dr. Smith's opinions are based upon the very methods he criticizes as being employed by 'pseudo-economists' or 'junk scientists' in his own published articles and his textbook on economic damages. As a result, his testimony is nothing more than mathematical calculations of the difference in Plaintiffs'respective profits from one year to another year, and thus not an analysis of damages at all. Dr. Smith's testimony will not only fail to assist the jury in rendering a decision, it will prejudice Country because Dr. Smith's mathematical calculations will bear the imprimatur of 'expert' testimony on damages when it is nothing more than speculation and unsupported conclusions."

¶ 14 On November 13, 2015, Country filed a motion to strike portions of affidavits and other evidence submitted by plaintiffs in opposition to Country's motion for summary judgment. On November 20, 2015, the trial court granted Country's motion to strike but denied Country's motion for summary judgment.

¶ 15 On December 1, 2015, the trial court denied Country's motion to bar the expert testimony of Dr. Smith. According to the court's docket entry:

"The Court finds: Dr. Smith rendered opinions in his reports in accordance with generally accepted standards in the field of economics and that the opinions expressed are done so with a reasonable degree of economic certainty. The lost revenues are calculated specifically based on loss of revenue from Defendants who allegedly engaged in improper conduct. It is a reasonable inference to be decided by the trier of fact the lost revenue was due to the alleged interference. While the lost revenues opinions seem to ignore other potential intervening or cause(s) of the loss, this does not render the expert opinion unreasonable but potentially subjects the testimony of the expert and his opinions to crossexamination. There is arguable circumstantial evidence of proximate cause which makes the conclusions rendered more probable."

¶ 16 On March 29, 2016, Country filed a motion for partial summary judgment. According to the memorandum of law in support of Country's motion, Country argued:

"The Court should grant judgment in favor of [Country] on Plaintiffs' Third Amended Complaint to the extent it concerns Country's automobile repair estimates and the form letters which accompany those estimates because the estimates and form letters are merely nonactionable opinion. Estimates, by definition, are opinions while Country's form letters simply comment on such opinions and cannot form the basis for Plaintiffs' tortious interference with prospective business advantage and consumer fraud claims."

¶ 17 On April 7, 2016, plaintiffs filed an answer to Country's motion for partial summary judgment with regard to the "opinion" issue.

¶ 18 On April 20, 2016, the trial court entered a docket entry granting Country's partial summary judgment motion on the "o...