Kostur v. Indiana Ins. Co.

• Decision Date: 22 December 1989
• Docket Number: No. 1-88-2199,1-88-2199
• Citation: 549 N.E.2d 685,192 Ill.App.3d 859
• Parties: , 140 Ill.Dec. 34 Joseph J. KOSTUR and Catherine Kostur, Plaintiffs-Appellants, v. INDIANA INSURANCE CO. and Consolidated Insurance Co., Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 685

549 N.E.2d 685

192 Ill.App.3d 859, 140 Ill.Dec. 34

Joseph J. KOSTUR and Catherine Kostur, Plaintiffs-Appellants, v. INDIANA INSURANCE CO. and Consolidated Insurance Co. Defendants-Appellees.

No. 1-88-2199.

Appellate Court of Illinois First District, Fifth Division.

Dec. 22, 1989.

Robert A. Clifford & Assoc., Chicago (Robert A. Clifford, Keith A. Hebeisen, Robert P. Sheridan, of counsel), for plaintiffs-appellants.

Hinshaw, Culbertson, Moelmann, Hoban & Fuller, Chicago (D. Kendall Griffith, David H. Levitt, Bruce L. Carmen, of counsel), for defendants-appellees.

Justice COCCIA delivered the opinion of the court:

Plaintiffs Joseph and Catherine Kostur appeal from an order entered by the circuit court, dismissing counts I and II of their amended class action complaint. In count I, plaintiffs alleged that defendants Indiana Insurance Company and Consolidated Insurance Company violated provisions of the Illinois Insurance Code (Ill.Rev.Stat.1985, ch. 73, par. 613 et seq.), which required them to offer underinsured motorist coverage to their insureds. Plaintiffs alleged in count II that the same conduct on defendants' part constituted a violation of the Consumer Fraud and Deceptive Business Practices Act. (Ill.Rev.Stat.1985, ch. 121 1/2, par. 261 et seq.) We affirm for the reasons set forth below.

Plaintiffs' original class action complaint was filed on September 9, 1985. Defendants moved to dismiss on the grounds that, among other things, copies of the insurance policies upon which plaintiffs' claim was founded were not attached to their pleading, contrary to section 2-606 of the Code of Civil Procedure. (Ill.Rev.Stat.1985, ch. 110, par. 2-606.) An agreed order was entered on February 18, 1986, giving plaintiffs leave to file an amended complaint.

Plaintiffs' amended class action complaint, to which they appended the insurance policies in question, was filed on March 27, 1986. Plaintiffs sought declaratory, injunctive, and compensatory relief from defendants. In count I, plaintiffs alleged that Joseph was a policyholder of defendants. Catherine was injured in an automobile accident on September 14, 1984, when the car she was driving was struck by another vehicle. The driver of the other automobile carried liability insurance with limits of $100,000/$300,000, but Catherine's damages were in excess of that sum. Had Joseph's policy included underinsured motorist coverage as required by the Insurance Code, plaintiffs averred, a greater portion of Catherine's damages would have been recoverable.

Plaintiffs brought the action on their own behalf and on behalf of all persons insured under policies issued or renewed by defendants, whose policies did not provide the amount of underinsured motorist coverage required by law. Plaintiffs alleged that this class was too numerous to practically join all members, that questions of law and fact predominated over questions affecting only individual members of the class, that they would fairly and adequately protect class interests, and that a class action was the most appropriate method for adjudicating the controversy.

In addition, plaintiffs asserted that the policies issued by defendants did not automatically include underinsured motorist coverage. Defendants did not require their insureds to elect or reject such coverage, they did not offer it each time the policies were renewed, and they failed to advise their insureds of the coverage's cost. This conduct by defendants, plaintiffs concluded, violated the Insurance Code, and injured plaintiffs and the plaintiff class.

In count II, as noted above, plaintiffs claimed that defendants' conduct also violated the Consumer Fraud Act. In count III, plaintiffs charged defendants with breaching their fiduciary obligations.

On February 26, 1988, defendants moved to dismiss plaintiffs' amended class action complaint, pursuant to section 2-615 of the Code of Civil Procedure. (Ill.Rev.Stat.1987, ch. 110, par. 2-615.) Defendants argued that plaintiffs had no standing to sue, much less to be proper class representatives. According to defendants, Joseph had no standing because he had not been injured in the accident; Catherine had no standing because she was not insured under the insurance policies. Regarding count II, defendants contended that it failed to state a cause of action under the Consumer Fraud Act, since there were no allegations of deception or misrepresentation, no allegations that a false statement was made with intent that others rely on the misrepresentation, and no allegations that plaintiffs so relied. Concerning count III, defendants urged that there was no fiduciary relationship between an insurer and its insureds. See Robacki v. Allstate Insurance Co. (1984), 127 Ill.App.3d 294, 82 Ill.Dec. 471, 468 N.E.2d 1251.

In any event, defendants concluded that they were entitled to judgment as a matter of law because they complied with the Insurance Code's provisions regarding the offering of underinsured motorist coverage. They asserted that Joseph had actual knowledge of the availability and cost of such coverage. His insurance policy, in effect at the time of Catherine's accident, included underinsured motorist coverage in the amount of $100,000/$300,000. As Joseph actually purchased such coverage, he had sufficient information to permit him to make an intelligent decision about it. Exhibits to plaintiffs' amended complaint contained a "stuffer" that defendants had sent to Joseph, informing him about the coverage at issue. In fact, defendants contended, before the accident Joseph had increased his underinsured coverage from $15,000/$30,000 to $100,000/$300,000, as shown by the declarations page of his policy.

Plaintiffs' response to defendants' motion to dismiss was filed on June 17, 1988. Plaintiffs stated that the majority of defendants' objections were curable by amendment, and they offered to make such amendments as the circuit court would require. Thus, plaintiffs replied, defendants were not entitled to dismissal with prejudice. Alternatively, plaintiffs maintained that both Joseph and Catherine had standing that defendants' offer of underinsured motorist coverage was inadequate as a matter of law, and that counts II and III stated causes of action.

At a hearing held on June 21, 1988, the circuit court dismissed plaintiffs' amended class action complaint, with prejudice. Plaintiffs have taken an appeal from the dismissal order. They concede that count III was properly dismissed, so it is not before us.

I

At the outset, we observe that the order entered by the circuit court, dismissing plaintiffs' amended class action complaint with prejudice, did not state the reasons for dismissal. Regardless of those reasons, however, we may sustain the order upon any basis found in the record. See Goldberg v. Goldberg (1982), 103 Ill.App.3d 584, 587, 59 Ill.Dec. 303, 305, 431 N.E.2d 1060, 1062.

In Downen v. Country Mutual Insurance Co. (1989), 181 Ill.App.3d 716, 130 Ill.Dec. 378, 537 N.E.2d 445, plaintiffs were the mother and stepfather of a passenger injured in an automobile wreck, whose injuries were alleged to be more than the driver's insurance would cover. They brought suit against their insurer, asking the circuit court to declare $250,000 as the amount of coverage available under their policy of insurance. Like plaintiffs in our case, plaintiffs in Downen alleged that the insurer violated the underinsured motorist provisions of the Insurance Code. The circuit court granted the defendant insurer's motion to dismiss, ruling that plaintiffs as individuals lacked standing to sue. On appeal, plaintiffs argued that the circuit court erred in ruling that they lacked standing. According to plaintiffs, standing was conferred by the fact that they purchased the insurance which covered their son. But the appellate court affirmed. The court noted that plaintiffs' complaint included no allegations that they were injured in any way by, or in consequence of, the wreck. The court quoted Weihl v. Dixon (1977), 56 Ill.App.3d 251, 253-54, 13 Ill.Dec. 789, 791, 371 N.E.2d 881, 883:

" 'Standing is an aspect of justiciability in which the primary focus is upon the personal stake in the outcome of the controversy of the person seeking the adjudication of a particular issue. [Citation.] The person seeking to invoke the jurisdiction of the court must have some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy. [Citation.] A sufficient interest in the actual controversy is equally a prerequisite for a person to maintain an action for a declaratory judgment [citation], and where such an interest is lacking, the plaintiff does not have standing to bring the action [citation].' " (Downen, 181 Ill.App.3d at 718, 130 Ill.Dec. at 379, 537 N.E.2d at 446.)

The Downen court reasoned that plaintiffs failed to allege either personal injury to themselves, or injury to any substantive or legally protected interest of their own. They did not allege facts that would give them standing, the court concluded. Downen, 181 Ill.App.3d at 718, 130 Ill.Dec. at 379, 537 N.E.2d at 446; see also Kittay v. Allstate Insurance Co. (1979), 78 Ill.App.3d 335, 33 Ill.Dec. 867, 397 N.E.2d 200 (for plaintiffs to have standing, the cause of action must consist of their primary right, the defendants' duty, and a wrong by the defendants which invades the right and breaches the duty).

In count I of their amended class action complaint, plaintiffs allege in conclusory fashion that they "have been and continue to be injured." It is settled, however, that a motion to dismiss does not admit conclusions of law or conclusions of fact unsupported by allegations of specific facts upon which such conclusions rest. (See Goldberg, 103 Ill.App.3d at 587, 59 Ill.Dec. at 306, 431 N.E.2d at 1063.) An actionable wrong cannot be made out in a complaint through the mere characterization...