Tillery files class action suit against Allstate

Steve Gonzalez Jun. 5, 2006, 8:45am

Steve Tillery

Nine Madison County residents and one St. Clair County resident filed a class action lawsuit against Allstate Insurance Company alleging the insurance company charges different premiums to customers with the same risks.

Attorney Stephen Tillery of St. Louis represents plaintiffs Gail Humiston, Jeffrey DePillo, Christopher and Brandi Harrison, April Pedrero, Priscilla Spencer, Frank Barunica, Rosewell Bennett, Jr., and Louis Farenzena Jr. They allege Allstate violated the Illinois Consumer Fraud and Deceptive Business Practices Act and was unjustly enriched.

According to the complaint filed May 25 in St. Clair County Circuit Court, Illinois law mandates that insurers treat like risks alike and different risks differently.

"Indeed, this fundamental concept underlying what is commonly referred to in insurance parlance as fair discrimination," the complaint states. "Unfair discrimination in premium rates, or fees, on the underhand is prohibited."

Unfair discrimination is the practice if charging different premiums, policy fees, or rates to individuals with similar insurance risk.

"Through the simultaneous use of multiple and differing insurance scoring schemes, Allstate has continuously and systematically engaged in an unlawful pattern and practice of unfair discrimination against consumers in Illinois in the determination of rates, premiums, policy pricing and/or availability of insurance," the complaint alleges.

The plaintiffs claim the use of multiple and differing scoring schemes is not based on sound actuarial principles. They also allege Allstate has used them as a basis for charging varying premiums even though they all have similar risks.

"Allstate's acts or practices were unfair as they offended public policy, are immoral, unethical, oppressive, or unscrupulous and cause substantial injury to consumers," the complaint states.

Allstate's alleged "immoral and unethical practices" serve only to benefit Allstate at the expense of the consuming public, plaintiffs claim.

"These acts resulted in Allstate receiving millions of dollars in revenue to which they are not entitled," the complaint alleges. "Allstate's unfair acts served no purpose other than to increase its own profits."

The plaintiffs' claim they were unaware of Allstate's alleged wrongful conduct and were unable to discover it until 2006.

"Because Allstate was the sole source of material information that they failed to disclose, consumers could not have had reason to anticipate the impending harm and this avoided their injuries," the complaint states.

"All Illinois residents who purchased or renewed an Illinois private passenger automobile and/or homeowners' insurance policy from Allstate Insurance Company, Allstate Property and Casualty Insurance Company, or Allstate Indemnity Company and who suffered monetary losses as a result of Allstate's simultaneous use if multiple and differing insurance scoring schemes," are eligible to join the class.

Any judge conducting proceedings and their family members, along with any lawyer of record and their employees, are not allowed to join the class.

To meet the requirements of the Class Action Fairness Act of 2005 (CAFA), the plaintiffs' claim the suit only involves citizens of Illinois.

"In any event, this class action is one in which two-thirds or more of the proposed class and the primary defendant are citizens of Illinois requiring federal courts to decline jurisdiction," the suit states.

CAFA expands diversity jurisdiction to grant federal courts original jurisdiction over certain mass actions and class actions in which the amount in controversy exceeds $5 million, and in which any of the members of a class of plaintiffs is a citizen of a state different from any defendant, unless at least two-thirds or more of the members of all proposed plaintiff classes in the aggregate and the primary defendants are citizens of the state in which the action was originally filed.

In addition, the Act requires courts computing attorneys' fees for "coupon" settlements to judge the value of the settlement based on the redeemed, rather than the face, value of the coupon. It also places restrictions on settlements that result in a net loss to class members.

The plaintiffs claim that the class action provides them an appropriate and effective method to enforce their rights without unnecessary expense or duplication.

"The expense and burden of individual litigation of a case of this magnitude makes it impractical for individual class members to seek redress for the wrongs done to them.

The plaintiffs claim that individual litigation of all the claims would produce such a multiplicity of cases that the judicial systems having jurisdiction of the claims would remain congested for years.

They claim they will "fairly and adequately" protect the interests of the class they represent and their interests are consistent with those of the class members.

The prosecution of separate actions by individual class members would create a risk of inconsistent or varying adjudications, they claim.

"Plaintiffs' envision no unusual difficulty in the management of this action as a class action."

The plaintiffs are asking the court to enter a judgment in their favor and against Allstate as follows:

  • Ordering that this action be maintained as a class action; and

  • Awarding plaintiffs and class members compensatory damages, prejudgment interest, costs of the suit and attorneys fees.

    06 L 322 (20th Circuit)

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