Roppo v. Travelers Cos., 13 C 05569

• Decision Date: 16 April 2015
• Docket Number: No. 13 C 05569,13 C 05569
• Citation: 100 F.Supp.3d 636
• Parties: Sabrina Roppo, individually and on behalf of others similarly situated, Plaintiffs, v. The Travelers Companies, et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

100 F.Supp.3d 636

Sabrina Roppo, individually and on behalf of others similarly situated, Plaintiffs

v.The Travelers Companies, et al., Defendants.

No. 13 C 05569

United States District Court, N.D. Illinois, Eastern Division.

Signed April 16, 2015

Gene K. Moskowitz, Gene Moskowitz and Associates, Limited, Kent D. Sinson, Sinson Law Group, LLC, Chicago, IL, for Plaintiffs.

Jeffrey P. Lennard, Mark L. Hanover, Tiffany L. Amlot, Dentons US LLP, Chicago, IL, for Defendants.

Memorandum Opinion and Order

Honorable Edmond E. Chang, United States District Judge

In July 2011, Plaintiff Sabrina Roppo was involved in a car accident with Jeffrey Block. Block was insured by Defendant Travelers, holding both a personal automobile insurance policy and an excess umbrella policy.¹ Roppo filed a personal-injury action against Block in state court, and Travelers provided Block with a defense. Roppo alleges that, during the course of the personal-injury suit, Travelers and the lawyers it retained for Block failed to disclose Block's umbrella-insurance policy (this despite the fact that Travelers' logo actually is an umbrella). After learning about the excess insurance coverage, Roppo settled the personal-injury action for an amount in excess of the automobile policy limits. She then brought this suit against Travelers and the lawyers, Defendants Jason Hitchings, Roanne Maisel, and Maisel & Associates,² alleging several causes of action: fraudulent misrepresentation; negligence; violations of the Illinois Insurance Code, 215 ILCS 5/143.24b, 155; violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA), 815 ILCS 505/1 et seq. ; negligent misrepresentation; and violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq.³ R. 63, Third Am. Compl. Defendants now move to dismiss or, in the alternative, to strike several paragraphs of Roppo's complaint. R. 68, Mot. Dismiss. For the reasons discussed below, Defendants' motion to dismiss granted.

I. Background

In evaluating the motion to dismiss, the Court must accept as true the complaint's factual allegations and draw reasonable inferences in Roppo's favor. Ashcroft v. al–Kidd, 563 U.S. 731, 131 S.Ct. 2074, 2079, 179 L.Ed.2d 1149 (2011). In July 2011, Roppo was injured in a traffic accident caused by Jeffrey Block. Third Am. Compl. ¶ 42. Block was insured by Travelers, which issued Block both a personal automobile insurance policy, which had a policy limit of $500,000, and a personal liability umbrella policy, which had a policy limit of $1,000,000. Id. ¶¶ 1, 44–46; R. 63–6, Pl.'s Exh. F, Umbrella Policy.

Shortly after the accident, Roppo sent a certified letter to Travelers requesting Block's policy limits “[p]ursuant to 215 ILCS 5/143.24b,” which is part of the Illinois Insurance Code. Third Am. Compl. ¶ 43; R. 63–1, Pl.'s Exh. A, Aug. 9, 2011 Letter. Rachel Grace, a Travelers Claims Representative, responded that Block had $500,000 in coverage. Third Am. Compl. ¶ 44; R. 63–3, Pl.'s Exh. C, Aug. 30, 2011 Letter. Grace also asked Roppo's counsel to provide medical records and a signed medical authorization form. Third Am. Compl. ¶ 44. More than a year later, Roppo filed a personal-injury suit against Block in state court. Id. ¶ 45. Travelers provided Block with a defense. Id. ¶ 46. Shortly after the state-court suit was filed, Grace called Roppo's counsel to assess the extent of Roppo's injuries. Id. ¶ 45. During the phone call, Grace reiterated that there was only $500,000 in coverage.Id. Roppo told Grace that a policy demand was forthcoming, and she rejected Travelers's initial settlement offer of $325,000. Id.

Jason Hitchings—who worked at Roanne Maisel's law firm, Maisel & Associates—filed an appearance on behalf of Block in the personal-injury lawsuit on January 22, 2013. Id. ¶¶ 5, 7, 46. As Block's attorney, Hitchings was responsible for responding to the interrogatories posed by Roppo in the state-court suit. Id. ¶¶ 47–48. Roppo asked Block to list all insurance policies, “including umbrella or excess insurance coverage.” Id. ¶ 47. In response, Hitchings listed only the personal automobile insurance policy. Id. ¶¶ 47–48 (identifying the date of the interrogatory responses as April 3, 2013). He did not tell Roppo about the umbrella policy. Id. Plaintiff's counsel, who had been “lied to in another case” about a tortfeasor's policy limits, “repeatedly expressed uncertainty” that there was no umbrella policy. Id. ¶ 49. Finally, on June 13, 2013, Hitchings revealed to Roppo's counsel that Block had $1,000,000 in umbrella coverage. Id. On May 9, 2014, nearly eleven months after the disclosure of the umbrella coverage, Roppo settled her claims against Block for $750,000. Id. ¶ 52.

II. Legal Standards

Under Federal Rule of Civil Procedure 8(a)(2), a complaint generally need only include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). This short and plain statement must “give the defendant fair notice of what the ... claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotation marks and citation omitted). The Seventh Circuit has explained that this rule “reflects a liberal notice pleading regime, which is intended to ‘focus litigation on the merits of a claim’ rather than on technicalities that might keep plaintiffs out of court.” Brooks v. Ross, 578 F.3d 574, 580 (7th Cir.2009)(quoting Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002) ).

“A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted.” Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir.2009). “[A] complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ). These allegations “must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. The allegations that are entitled to the assumption of truth are those that are factual, rather than mere legal conclusions. Iqbal, 556 U.S. at 678–79, 129 S.Ct. 1937.

Claims alleging fraud must also satisfy the heightened pleading requirement of Federal Rule of Civil Procedure Rule 9(b), which requires that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b) (emphasis added). Thus, Rule 9(b) “require[s] the plaintiff to state the identity of the person making the misrepresentation, the time, place, and content of the misrepresentation, and the method by which the misrepresentation was communicated to the plaintiff.” Uni*Quality, Inc. v. Infotronx, Inc., 974 F.2d 918, 923 (7th Cir.1992) (internal quotation marks and citation omitted). Put differently, the complaint “must describe the who, what, when, where, and how of the fraud.” Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen Co., 631 F.3d 436, 441–42 (7th Cir.2011) (internal quotation marks and citation omitted).

III. Analysis

A. Fraudulent and Negligent Misrepresentation (Counts 1–3, 10)

In Counts 1, 2, and 3, Roppo alleges that Travelers, Hitchings, and Maisel fraudulently misrepresented Block's policy limits. Third Am. Compl. at Count 1, ¶¶ 54–72; Count 2, ¶¶ 54–67; Count 3, ¶¶ 54–68. In the alternative, she claims that Travelers negligently misrepresented Block's policy limits. Id. at Count 10, ¶¶ 54–73. For all of these claims, Roppo must allege that she took “action ... in reliance on the truth of” Defendants' misrepresentations. See Soules v. Gen. Motors Corp., 79 Ill.2d 282, 37 Ill.Dec. 597, 402 N.E.2d 599, 601 (1980) (fraudulent misrepresentation); First Midwest Bank, N.A. v. Stewart Title Guar. Co., 218 Ill.2d 326, 300 Ill.Dec. 69, 843 N.E.2d 327, 332 (2006) (negligent misrepresentation). Defendants argue that there are insufficient allegations of reliance and, what's more, because Roppo's attorney “repeatedly expressed uncertainty” about the lack of an umbrella policy, Roppo has affirmatively alleged that she did not rely on the misrepresentations.⁴ Defs.' Br. at 9–11.

Roppo argues that Defendants' argument would improperly question the merits of her claim at the pleadings stage of the case. Pl.'s Resp. Br. at 8–10. Although Roppo is correct that her factual assertions are entitled to the assumption of truth at this stage, her claim may nevertheless be dismissed if she has pled herself out of court by alleging facts that demonstrate she has no viable claim, see McCready v. eBay, Inc., 453 F.3d 882, 888 (7th Cir.2006), or if she fails to allege facts that plausibly suggest reliance, see Iqbal, 556 U.S. at 678–79, 129 S.Ct. 1937. At the dismissal-motion stage, the question is whether all of Roppo's factual allegations, taken as true, demonstrate that she took “action ... in reliance on the truth of the statement.” Soules, 37 Ill.Dec. 597, 402 N.E.2d at 601 (fraudulent misrepresentation); First Midwest Bank, 300 Ill.Dec. 69, 843 N.E.2d at 332 (negligent misrepresentation).

Even under the more relaxed Rule 8 standard (which applies to the negligent misrepresentation claim), see Tricontinental Indus., Ltd. v. PricewaterhouseCoopers, LLP, 475 F.3d 824, 833 (7th Cir.2007) (applying Illinois law and holding that a claim for negligent misrepresentation “is not governed by the heightened pleading standard of Rule 9(b) ”), Roppo has failed to adequately allege reliance. Stripping away Roppo's legal conclusions, which merely state that she “relied upon” Defendants' misrepresentations, see Third Am. Compl. at Count 1, ¶ 67; Count 2, ¶ 62; Count 3, ¶ 63, there are no factual allegations in the case that describe what she did (or decided not to...