CHICAGO — A state appeals panel has curbed a class action lawsuit alleging State Farm concealed information about so-called "umbrella policies" from people trying to press personal injury claims resulting from vehicle collisions.
Penny Kim sued State Farm in Cook County Circuit Court, alleging the company misrepresented and concealed information about umbrella policies, allegedly violating insurance code andcommon law, while also allegedly committing statutory fraud and negligent misrepresentation. The suit stems from May 2012 communications Kim’s lawyer, Kent Sinson, had with State Farm following a car crash involving Kim and a State Farm client.
Judge Caroline Moreland granted summary judgment in favor of State Farm, determining insurers aren’t required to disclose umbrella policies under the challenged law and denying Kim’s motion for additional discovery.
Justice Bertina Lampkin, of the Illinois First District Appellate Court, wrote the opinion on Kim’s appeal, issued June 30; Justices Jesse Reyes and LeRoy Martin concurred.
According to Lampkin, Sinson wrote to State Farm before filing a personal injury lawsuit asking the company to disclose its client’s policy limits. Although the company’s initial response didn’t identify the umbrella policy, Sinson pressed and a State Farm claim representative “sent sworn, written confirmation disclosing” the client’s $1 million umbrella coverage.
Kim ultimately voluntarily dismissed the personal injury suit in April 2017, and the next year settled bodily injury claims “in exchange for payment of the combined coverage limits of $1.1 million,” Lampkin wrote. But the dispute over what State Farm disclosed, and when the insurer did so, persisted until Judge Moreland’s ruling on Jan. 2, 2020.
According to Lampkin, Illinois law distinguishes between an umbrella policy and automobile liability coverage. She added that Kim challenged a section of the Insurance Code that “narrowly refers” to disclosure of a vehicle policy, and so summary judgment in favor of State Farm was appropriate.
Since Kim’s fraud allegations were based on the claim State Farm was required to disclose the umbrella policy, those aspects of her lawsuit also failed, Lampkin said. On appeal, Kim said State Farm should be liable because at one point during conversations between parties the client didn’t disclose the umbrella policy, believing it wasn’t applicable to the insurance dispute.
“State Farm promptly informed Kim of the umbrella policy as soon as her attorney clarified that he was requesting the information,” Lampkin wrote, noting that communication preceded the client’s inaccurate response by three months — and that the client “promptly corrected to disclose the umbrella policy upon realizing the error.”
The panel said the record shows Kim was aware of the umbrella policy within two weeks of her initial lawsuit filing “and the actions by her counsel confirm that there was no confusion about the existence and limits of the umbrella policy.”
Lampkin also said State Farm can’t be held to account for statements its client or its client’s lawyers made during discovery. She noted Kim immediately moved for sanctions when receiving an inaccurate discovery response, “then elected to abandon this remedy in favor of settling her claims.”
Kim’s claims of common law and statutory fraud failed because she didn’t show how her reliance on the alleged deception caused legal harm or financial damages, the panel said. The record doesn’t show any actions Kim took based on a belief the person she was suing had only $100,000 in coverage. Although she ultimately got the full coverage limits, Kim sought damages for emotional distress and her time in pursuing litigation, but “did not disclose any basis” for either aspect.
With respect to negligent misrepresentation, the panel said, Kim failed to identify any false statement attributable to State Farm or “any negligent action taken to induce reliance.” It also rejected Kim’s argument she is entitled to legal fees and costs because nothing in the record established State Farm’s liability and said she failed to demonstrate how additional discovery would’ve allowed her to meaningfully oppose State Farm’s motion for summary judgment.
Sinson and attorney Lisa K. Lange, of Sinson Law Group, of Chicago, represented Kim.
State Farm was represented by attorneys Joseph A. Cancila, Jr., James P. Gaughan and Allison N. Siebeneck, of Riley Safer Holmes & Cancila, of Chicago.