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

• Decision Date: 29 August 2002
• Docket Number: No. 2-01-0878.,2-01-0878.
• Citation: 776 N.E.2d 309,333 Ill. App.3d 402,267 Ill.Dec. 172
• Parties: Melissa Ann WEIS, Indiv. and on Behalf of Others Similarly Situated, Plaintiff-Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

776 N.E.2d 309

333 Ill. App.3d 402

267 Ill.Dec. 172

Melissa Ann WEIS, Indiv. and on Behalf of Others Similarly Situated, Plaintiff-Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellee.

No. 2-01-0878.

Appellate Court of Illinois, Second District.

August 29, 2002.

Craig S. Mielke, Robert M. Foote, Foote, Meyers, Mielke & Flowers, LLC, for Melissa Anne Weis.

Glen E. Amundsen, Victor J. Piekarski, Michael Resis, David K. Subramanian, O'Hagan, Smith & Amundsen, LLP, Chicago, for State Farm Mutual Automobile Insurance Co.

Justice GEIGER delivered the opinion of the court:

The plaintiff, Melissa Ann Weis, brought a class action against the defendant, State Farm Mutual Automobile Insurance Company, alleging a violation of the Illinois Department of Insurance rules, breach of contract, statutory fraud, and common-law fraud. The plaintiff appeals from the January 16, 2001, and July 10, 2001, orders of the circuit court of Kane County, dismissing her second amended complaint pursuant to section 2-615 of the Code of Civil Procedure (the Code) (735 ILCS 5/2-615 (West 2000)). We affirm.

This controversy involves the method utilized by the defendant in adjusting vehicles that have been classified as total losses. The Illinois Department of Insurance Rule 919.80 provides that, when a vehicle has been classified as a total loss, the insurer may value the vehicle from a source "published on a regular basis" or "[a]n electronically computerized source or sources which * * * computes statistically valid retail values." 50 Ill. Adm.Code §§ 919.80(c)(2)(A), (c)(2)(B)(i) (1996). The defendant values total loss vehicles using the Certified Collateral Corporation's (CCC) computerized database. CCC's computerized database system allegedly values vehicles lower than other recognized sources such as the Kelly Blue Book or the National Auto Dealers Association's Official Used Car Guide.

The plaintiff owned a 1994 Toyota Camry that was insured by the defendant. On January 26,1999, the plaintiff's vehicle was involved in an automobile accident, resulting in the vehicle being classified as a total loss. Using the value it had obtained from CCC, the defendant paid the plaintiff $12,000 for her vehicle.

The present action was initiated on December 9, 1999. On October 11, 2000, the plaintiff filed a four-count second amended complaint. Count I of the second amended complaint alleged that the defendant's method of adjusting total loss vehicles was not in compliance with the Illinois Department of Insurance Rule 919.80 (50 Ill. Adm.Code §§ 919.80(c)(2)(A), (c)(2)(B) (1996)). The plaintiff therefore sought compensatory and punitive damages and attorney fees pursuant to section 155 of the Illinois Insurance Code (Insurance Code) (215 ILCS 5/155 (West 1998)). Count II alleged a breach of contract; count III alleged a violation of the Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/2 (West 1998)); and count IV alleged a commonlaw fraud.

The defendant subsequently filed a motion to dismiss pursuant to section 2-615 of the Code (735 ILCS 5/2-615(a)(2000)). On January 10, 2001, the trial court dismissed counts I and II of the plaintiff's second amended complaint. On July 10, 2001, the trial court dismissed counts III and IV of the plaintiff's second amended complaint. Thereafter, the plaintiff filed a timely appeal.

At the outset, we note that the question presented by a section 2-615 motion to dismiss is whether the allegations of the complaint, when viewed in a light most favorable to the plaintiff, are sufficient to state a cause of action upon which relief can be granted. Hough v. Kalousek, 279 Ill.App.3d 855, 862, 216 Ill.Dec. 373, 665 N.E.2d 433 (1996). Illinois is a fact-pleading jurisdiction that requires a plaintiff to present a legally and factually sufficient complaint. Hough, 279 Ill.App.3d at 863, 216 Ill.Dec. 373, 665 N.E.2d 433. The plaintiff is not required to prove his or her case but must allege sufficient facts to state all the elements of the asserted cause of action. Inland Real Estate Corp. v. Tower Construction Co., 174 Ill.App.3d 421, 433, 123 Ill.Dec. 876, 528 N.E.2d 421 (1988).

When ruling on a section 2-615 motion to dismiss, the court will admit all wellpleaded facts as true and disregard legal and factual conclusions that are unsupported by allegations of fact. Lake County Grading Co. of Libertyville, Inc. v. Advance Mechanical Contractors, Inc., 275 Ill.App.3d 452, 456-57, 211 Ill.Dec. 299, 654 N.E.2d 1109 (1995). If, after the legal and factual conclusions have been disregarded, the complaint does not allege sufficient facts to state a cause of action, the motion to dismiss must be granted. Lake County Grading Co., 275 Ill.App.3d at 457, 211 Ill.Dec. 299, 654 N.E.2d 1109. The standard of review on a section 2-615 dismissal is de novo. T & S Signs, Inc. v. Village of Wadsworth, 261 Ill.App.3d 1080, 1084, 199 Ill.Dec. 467, 634 N.E.2d 306 (1994)

. For the reasons that follow, we agree with the trial court that each of the counts in the plaintiff's second amended complaint failed to state a cause of action.

In count I of her second amended complaint, the plaintiff sought compensatory and punitive damages and attorney fees, asserting that she was entitled to this relief due to the defendant's violation of the Illinois Department of Insurance Rule 919.80(c)(1)(A) (50 Ill. Adm.Code § 919.80(c)(1)(A) (1996)). However, a violation of the insurance rules contained in Title 50 of the Illinois Administrative Code does not give rise to a private cause of action. See 215 ILCS 5/401 through 407 (West 2000). The Insurance Code provides that "[t]he Director [of the Department of Insurance] is charged with the rights, powers and duties appertaining to the enforcement and execution of all the insurance laws of this State." 215 ILCS 5/401 (West 2000). Accordingly, the Department of Insurance and its Director may make reasonable rules and regulations, such as the insurance rules promulgated in Title 50 of the Illinois Administrative Code. See 215 ILCS 5/401(a) (West 2000). Additionally, the Department of Insurance and its Director may investigate violations of its rules and regulations, hold hearings, and impose penalties on those it finds in violation. See 215 ILCS 5/401(b), (c), (d) (West 2000). The enforcement of the insurance rules was clearly delegated to the Department of Insurance, and, as such, we conclude that a plaintiff cannot plead or pursue a private cause of action based on an insurer's violation of these rules. Accordingly, count I of the plaintiff's second amended complaint did not allege a valid cause of action.

We note that section 155 of the Insurance Code does allow an insured to recoup attorney fees when bringing a valid cause of action against an insurer, such as a breach of contract claim, if the insurer has vexatiously and unreasonably delayed in settling a claim or denied a claim. Cramer v. Insurance Exchange Agency, 174 Ill.2d 513, 520, 221 Ill.Dec. 473,675 N.E.2d 897 (1996). However, the plaintiff in this case does not sufficiently allege a breach of contract or any other valid cause of action. Rather, as noted above, the plaintiff attempted to allege a nonexistent cause of action. Therefore, the plaintiff was not entitled to attorney fees for bringing the invalid action.

In count II of her second amended complaint, the plaintiff asserts a claim for breach of contract. In order to state a cause of action for breach of contract, a plaintiff must allege (1) an offer and acceptance; (2) consideration; (3) definite and certain terms of the contract; (4) plaintiff's performance of all required contractual conditions; (5) defendant's breach of the terms of the contract; and (6) damage resulting from the breach. Barille v. Sears Roebuck & Co., 289 Ill.App.3d 171, 175, 224 Ill.Dec. 557, 682 N.E.2d 118 (1997).

Particularly, in pleading a cause of action for breach of contract to provide insurance, a plaintiff must allege facts indicating the particular terms of the policy that the insurance company breached. Nielsen v. United Services Automobile Ass'n., 244 Ill.App.3d 658, 662, 183 Ill.Dec. 874, 612 N.E.2d 526 (1993). We note that the plaintiff here failed to attach the insurance policy to her second amended complaint in accordance with the requirement of alleging the terms of the policy. Nevertheless, as the plaintiff attached the insurance policy to her initial complaint, the trial court considered the policy when ruling on the motion, and the defendant did not object, we will consider the policy on review. See Green v. Chicago Tribune Co., 286 Ill.App.3d 1, 4, 221 Ill.Dec. 342, 675 N.E.2d 249 (1996); Lagen v. Balcor Co., 274 Ill.App.3d 11, 16, 210 Ill.Dec. 773, 653 N.E.2d 968 (1995).

The insurance policy at issue provided in relevant part:

"Limit of liability-Comprehensive and Collision Coverages

The limit of our liability for loss to property or any part of it is the lower of:

1. actual cash value; or

2. the cost of repair or replacement. Actual Cash value is determined by the market value, age, and condition at the time the loss occurred. * * *

* * *

Settlement of Loss Comprehensive and Collision Coverages

We have the right to settle a loss with you or the owner of the property in one of the following ways:

1. pay the agreed cash value of the property at the time of the loss in exchange for the damaged property. * * *

* * *

If you and we cannot agree on the amount due, it shall be decided by an appraisal of the loss upon written request by you or us within 60 days after proof of loss is filed. Each party shall select an appraiser. These two shall select a third appraiser. The written decision of any two appraisers shall be binding. The cost of the appraiser shall be paid by the party who hired him or her. The cost of the third appraiser and other appraisal expenses shall be shared equally by both parties."

After reviewing the terms of the policy along...