Supreme Court Summaries

Opinions filed August 18, 2005

No. 91494 Avery v. State Farm Mutual Automobile Insurance Co.

Appellate citation: 321 Ill. App. 3d 269.

Opinion by McMORROW, C.J.
THOMAS, J., took no part
FREEMAN, J., joined by KILBRIDE, J., concurring in part and dissenting in part

The plaintiffs in this multistate class action against Bloomington-based State Farm Insurance Company alleged that policyholders' damaged vehicles were repaired with parts that were not made by or on behalf of the original manufacturers (commonly called non-OEM parts) and which were of inferior quality. They claimed that this was common law breach of the contractual promise to restore their vehicles to preloss condition by repairing them with parts of like kind and quality. They also alleged that the insurance company deceived them in concealing the categorical inferiority of those parts, thereby violating the Illinois statute on consumer fraud. Suit was filed in the circuit court of Williamson County. A jury heard the breach-of-contract claims, while claims brought under the consumer fraud statute were simultaneously tried to the judge. At the conclusion of the 1999 trial, a verdict totaling $1,186,180,000 was returned.

In 2001, the appellate court disallowed $130,000,000 of the consumer fraud damages as duplicative, but otherwise affirmed, leaving State Farm liable for $1,056,180,000.

In this decision, the supreme court found that, because of the various types of language used in the different insurance policies, it was error for the circuit court to certify a nationwide class as to the contract claims. On the question of whether the breach-of-contract verdict could be upheld as to any subclass of policyholders, the supreme court held that the plaintiffs had failed to establish any breach of contract on the part of State Farm. The court also found that the plaintiffs failed to establish contract damages. As to the claims for statutory fraud, the circuit court, again, erred in certifying a nationwide class, this time because there was only one named plaintiff whose vehicle was assessed and repaired in Illinois. This individual, who was the only plaintiff qualified to act as a representative plaintiff in a statewide class action under the Illinois Consumer Fraud Act, testified at trial, but failed to establish causation or that he suffered actual damages. Therefore, there could be no class action on this count. All of the awards made by the circuit court now stand reversed.