Roppo v. Travelers Commercial Ins. Co.

• Decision Date: 28 August 2017
• Docket Number: No. 15–3171,15–3171
• Citation: 869 F.3d 568
• Parties: SABRINA ROPPO, individually and on behalf of others similarly situated, Plaintiff–Appellant, v. TRAVELERS COMMERCIAL INSURANCE CO., et al., Defendants–Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

869 F.3d 568

SABRINA ROPPO, individually and on behalf of others similarly situated, Plaintiff–Appellant,

v.TRAVELERS COMMERCIAL INSURANCE CO., et al., Defendants–Appellees.

No. 15–3171

United States Court of Appeals, Seventh Circuit.

Argued September 29, 2016

Decided August 28, 2017

Kent David Sinson, Attorney, Sinson Law Group, Chicago, IL, for Plaintiff–Appellant.

Mark L. Hanover, Attorney, Tiffany L. Amlot, Attorney, Kristine M. Schanbacher, Attorney, Dentons US LLP, Chicago, IL, for Defendants–Appellees.

Before Wood, Chief Judge, and Ripple and Williams, Circuit Judges.

Ripple, Circuit Judge.

This dispute arises out of representation provided by Travelers Commercial Insurance Co. ("Travelers") to one of its insureds, Jeffery Block, following a motor vehicle accident. During the course of that personal-injury suit, Travelers and the attorneys it retained for Block disclosed only the limits of Block's automobile liability policy; they did not disclose the existence of his additional umbrella policy. Ms. Roppo, the plaintiff in the underlying personal injury action, eventually learned of the umbrella policy and then settled the case.

She brought this proposed class action in state court against Travelers. Basing the action on several state law claims, she challenged Travelers's alleged practice of not disclosing the existence of umbrella policies. Travelers removed the action to the district court. Ms. Roppo then filed a motion to remand, claiming that the district court lacked jurisdiction under the Class Action Fairness Act, 28 U.S.C. § 1332(d). The district court denied Ms. Roppo's motion to remand, but allowed her to file a second amended complaint, which added Block's defense attorney, Jason Hitchings, and his law firm, Maisel & Associates, as defendants. Ms. Roppo later filed a third amended complaint, adding an additional cause of action under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c). The defendants then filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). The district court granted this motion and dismissed with prejudice the complaint's eleven counts.

Ms. Roppo now renews her argument that federal jurisdiction is lacking and therefore asks us to vacate the district court's judgment. She also contends that, even if the district court had jurisdiction, we should reverse its judgment because the third amended complaint sufficiently states claims of fraudulent misrepresentation, negligent misrepresentation, and negligence under Illinois law, as well as violations of the Illinois Insurance Code and the Illinois Consumer Fraud and Deceptive Business Practices Act. We cannot agree with her submission and, for the reasons set forth in this opinion, we affirm the district court's dismissal of Ms. Roppo's third amended complaint.

IBACKGROUND

A.

Ms. Roppo's complaint recites that, on July 11, 2011, she suffered serious personal injuries in a motor vehicle accident with Jeffrey Block, a Travelers's insured. At the time of the accident, Block carried two types of insurance with Travelers: an automobile liability policy with a policy limit of $500,000 and a general umbrella policy with a policy limit of $1,000,000. The general umbrella policy would be triggered if Block's primary automobile policy limits were exhausted.

On August 9, 2011, Ms. Roppo's attorney requested that a Travelers claims adjuster provide Block's policy limits. On August 30, 2011, Travelers informed Ms. Roppo's attorney that, on the date of the accident, Block had a $500,000 combined single limit for property damage and bodily injury liability claims. Over a year later, in December 2012, Ms. Roppo underwent foot surgery to repair several bones that were broken in the accident. She then filed the underlying personal injury action against Block in state court. According to the complaint, between December 21, 2012, and January 22, 2013, Travelers again represented to Ms. Roppo's attorney that Block had only $500,000 of coverage available for the claim.

In early 2013, as part of discovery in the underlying personal injury suit, Ms. Roppo's attorney again requested information regarding Block's insurance policies. This request explicitly included information regarding Block's "umbrella or excess insurance coverage."¹ Mr. Hitchings, representing Block in the personal injury suit,² disclosed only Block's $500,000 automobile policy. According to the complaint, Ms. Roppo's attorney had been "lied to in another case" about Travelers's policy limits, and therefore continued to question whether Block also carried an umbrella policy.³ Finally, on June 13, 2013, Mr. Hitchings disclosed the $1,000,000 umbrella policy. On May 9, 2014, Ms. Roppo settled her claim against Block for $750,000.

B.

1.

One month after she learned of the existence of the umbrella policy, in July 2013, Ms. Roppo filed a putative class action in the Circuit Court of Cook County, Illinois, on behalf of "all Illinois persons who made a personal injury motor vehicle claim[ ] for accidents occurring after August 12, 1988 and had the Travelers Insurance Company^{[4 ]}... misrepresent and conceal the actual policy limits of their insured's facing claims from a third-party."⁵ In Count I, Ms. Roppo alleged that Travelers had engaged in fraudulent concealment: through both Travelers's claim representative, Rachel Grace, and the attorney Travelers had retained on behalf of Block, Mr. Hitchings, Travelers had misrepresented and concealed the liability limits on Block's vehicle. In Count II, Ms. Roppo alleged an implied private right of action under 215 ILCS 5/143.24b, which requires that an insured "disclose the dollar amount of liability coverage under the insured's personal private passenger automobile liability insurance policy" when a specific request has been made.⁶

Travelers then removed the action to federal court under the Class Action Fairness Act ("CAFA"), 28 U.S.C. §§ 1332(d), 1453(b). In its moving papers, Travelers argued that all of the requirements for removal under CAFA had been met: (1) Ms. Roppo had alleged a class size of "approximately 500 persons," far exceeding CAFA's requirement of at least 100 persons;⁷ (2) there was the necessary diversity; and (3) based on the affidavit submitted by Gary G. Hafner, Travelers's Director of Underwriting, the amount in controversy ranged from the CAFA minimum of $5 million, see 28 U.S.C. § 1332(d)(2), to $500,000,000, the total amount of the insureds' coverage that, allegedly, had been concealed by Travelers.⁸ One week later, Travelers moved to dismiss Ms. Roppo's complaint in the district court for failure to state a claim for relief under Federal Rule of Civil Procedure 12(b)(6).

In response, Ms. Roppo filed a motion for leave to file a first amended complaint and also moved to remand. The new five-count complaint alleged the following causes of action: (1) fraudulent concealment against both Travelers and its claims representative, Ms. Grace; (2) negligence against the insured, Block, for failing to answer accurately interrogatories related to the limits of his insurance policies; (3) negligence against Mr. Hitchings, for his part in responding to the same interrogatories; (4) negligence against Maisel & Associates, Mr. Hitchings's law firm, for failing to train him; and (5) a violation of 215 ILCS 5/143.24b against both Travelers and Ms. Grace.⁹ In her motion to remand, Ms. Roppo asserted that the proposed new defendants all were citizens of Illinois "whose alleged conduct form[ed] a significant basis for the claims asserted."¹⁰ Therefore, the case fell within CAFA's "local controversy" exception, 28 U.S.C. § 1332(d)(4)(A).¹¹ Travelers opposed both motions.

In her reply brief in support of her motion to remand, Ms. Roppo proposed a new basis for remanding the action: Travelers had failed to establish CAFA's required amount in controversy, $5,000,000, and the minimum number of class members, 100.¹² She also urged that, even if the court had jurisdiction, it should exercise its discretion to remand under 28 U.S.C. § 1332(d)(3) because at least one-third of the proposed class members were Illinois citizens, "Illinois has a distinct nexus with the class members, the alleged harm and the defendants," and "the other requirements of ... § 1332(d)(3) [we]re easily met."¹³

Before the court could rule on the pending motions, Ms. Roppo moved for leave to file a second amended complaint.¹⁴ Ms. Roppo's proposed complaint consisted of eight counts: three counts of fraudulent concealment against Travelers, Maisel & Associates, and Mr. Hitchings (Counts I–III); negligence against Mr. Hitchings and Maisel & Associates (Counts IV–V); a violation of 215 ILCS 5/143.24b against Travelers (Count VI); and violations of the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA") against Travelers and Maisel & Associations (Counts VII–VIII).

After more briefing, the district court ultimately granted Ms. Roppo's motion for leave to file her second amended complaint, but denied the motion to remand. The court noted that Ms. Roppo "herself [had] describe[d] the size of the class to be ‘approximately 500 persons' "; because there was "no basis in the record that the Plaintiff's estimate was incorrect," Travelers could rely on that representation in establishing the class-number requirement.¹⁵ Regarding the amount in controversy, the district court found it compelling that "[e]ven if the alleged additional damages of each putative class member were as small as $10,000," as Travelers had estimated, "then the aggregate damages for the putative class would nevertheless exceed the requisite amount of $5 million (i.e. , 500 x $10,000 = $5 million)."¹⁶ Finally, the district court also concluded that the action did not fall within the local controversy exception because Mr. Hitchings and Maisel & Associates only defended Block in the suit against Ms. Roppo and were not "defendant[s] from whom significant relief [was] soug...