Daniel Cohen
The Lakin Law Firm of Wood River has filed a class action lawsuit against State Farm Insurance alleging it wrongfully subrogated medical payment claims instead of allowing individuals to recover from third parties in auto claims.
The lawsuit was filed June 1 in St. Clair County Circuit Court, a venue which has received close to 10 class action cases in 2006, compared to none in Madison County Circuit Court so far this year.
The complaint alleges that State Farm breached contract, violated the Illinois Consumer Fraud Act, converted plaintiffs' property and was unjustly enriched by asserting and enforcing its med-pay subrogation rights in states where it is prohibited.
"…Plaintiff and the members of the putative class suffered monetary damages in that monies to which they otherwise would have been entitled from third-party sources, including other insurance companies, were paid instead to defendant," the complaint states.
Attorneys for lead plaintiff Norman Jaeger, an Illinois resident who died as a result of injuries from a Nov. 12, 2000 auto accident, argue that State Farm violated Missouri law by making a subrogation claim for Jaeger's medical payments.
The accident occurred in Missouri, a state which does not allow medical payments to be subrogated.
Subrogation is a process in which insurance companies attempt to recover payments made to an insured party from a responsible party.
Jaeger had filed suit in federal court against the other driver and eventually received a settlement.
Jaeger's auto insurance policy did provide med-pay coverage and some of his medical bills were paid by State Farm, according to the complaint.
Daniel J. Cohen, Bradley M. Lakin and Richard J. Burke are attorneys of record from the Lakin Firm. Also representing the class are attorneys from Freed & Weiss in Chicago and Kevin T. Hoerner from Becker, Paulson, Hoerner & Thompson of Belleville.
According to the complaint, State Farm violated Missouri law by pursuing subrogation in Jaeger's case.
"Defendant claimed a right of subrogation for the payments made under the med-pay coverage of the policy, communicated directly with the insurer for the defendant driver in the lawsuit regarding the subrogation claim, and obtained direct payment from that insurer in the amount of $3,000 in satisfaction of Defendant's alleged subrogation entitlement," the complaint states.
The class includes all residents of Illinois from June 1, 1996. According to the complaint, the action is appropriate in a state court because the matter does not exceed the value of $75,000 and the class is limited to Illinois residents.