Federal court's dismissal of insurance class action could affect Madison, St. Clair cases

Steve Korris Aug. 8, 2008, 7:24am

BENTON - U.S. District Court Judge Phil Gilbert has dismissed a suit that chiropractor Kathleen Roche of Belleville proposed as a class action against Travelers Insurance, a move that casts a cloud of uncertainty over similar suits in Madison and St. Clair counties.

Gilbert ruled on July 24 that Travelers didn't breach a contract or commit fraud.

He stressed that he based his order on Illinois law, obligating Madison and St. Clair judges to agree or reason why similar suits against insurer Country Mutual should go forward.

The federal judge delved into reports from Congress and national associations of doctors and hospitals to such a degree that he may understand them better than attorneys on either side

Kevin Hoerner of Belleville, who represents Roche in at least four lawsuits, has already urged St. Clair County Associate Judge Andrew Gleeson to ignore Gilbert.

At an Aug. 6 hearing in a class action that Roche proposes against insurer Country Mutual, Hoerner told Gleeson that Gilbert's order was not precedential.

He said Gilbert was not an appellate court and the order was "persuasive at best."

"It has no impact on your decision in this case," Hoerner said.

Gleeson said he would read it.

Nothing requires Gleeson to heed Gilbert, but Gleeson can't avoid stepping into a tug of war between the Lakin Law Firm and Richard Burke of St. Louis.

When Burke worked for the Lakins, he helped them file many Madison County class actions on behalf of chiropractors alleging insurers cheated them.

Burke pursued the suits in cooperation with Paul Weiss of Chicago, a partner with the Lakins in class actions since 1999.

Many of their suits alleged that insurers cheated chiropractors, and they brought one of those against Country Mutual on behalf of Richard Coy.

Country Mutual removed it from Madison County to U.S. district court in 2006.

After District Judge Michael Reagan denied a motion to remand it, Coy dismissed it.

Burke left the Lakins, and the partnership between the Lakins and Weiss collapsed.

Burke continued teaming with Weiss, and Hoerner joined their team.

Burke sued the Lakins in U.S. district court, seeking fees and damages.

The Lakins sued Weiss's firm, Freed and Weiss, in Madison County.

Freed and Weiss sued the Lakins in Cook County.

Last year, Burke's team and Lakin lawyers both decided to take another chance with the Country Mutual allegations that Coy dismissed.

Hoerner sued Country Mutual for Roche in St. Clair County, and Coy signed up again as lead Lakin plaintiff in a new Madison County suit.

The battle for fees and damages ended after Gilbert told lawyers at a hearing in Burke's case that if it didn't stop, other law firms would bump all of them as class counsel.

The lawyers settled the dispute and resumed cooperating for the most part, but the competing cases against Country Mutual have ripped the old wound open.

On July 10, Madison County Circuit Judge Dave Hylla granted a motion from Country Mutual to stay the Lakin case pending the outcome of the Roche case in St. Clair County.

Hylla found the parties and issues substantially similar.

He wrote that "duplicity of litigation is to be avoided because it may be greatly inconvenient and wasteful even if not designed to be vexatious or harassing."

Hylla didn't dismiss the Coy case, declaring that the Roche case might not encompass all claims in the Coy case.

For Coy, Charles Chapman asked Hylla to reconsider the stay.

Chapman, who doesn't belong to the Lakin firm but works at the same address, alleged that Burke worked against the firm's interest while he worked at the firm.

He accused Burke of dismissing the first Coy suit so he and Weiss could pursue a case separate and apart from the Lakin firm.

On Aug. 1, in a letter to Hylla, Burke called Chapman's statements completely false.

"Normally I would expect Mr. Chapman to have more integrity than to make such an outrageous claim," Burke wrote, "but apparently he has come to believe as though anything is justified."

"There was never any 'conspiracy' and Mr. Chapman should know better," he wrote.

"The Lakin Law Firm's tactics of bullying their way through the court system and discrediting everything they are associated with, especially the legal profession, are hopefully coming to an end.

"I am sorry that I have to write this letter and would just as soon put my association with the Lakin Law Firm behind me; however this sort of dishonesty should not go without response."

On Monday, Aug. 4, Hylla heard the motion to reconsider his stay on the Coy case and said he would decide on Friday.

On Wednesday, Aug. 6, Gleeson heard Country Mutual's motion to dismiss.

Lisa Lilly of Chicago told him Roche didn't state a claim or allege deception.

She said Judge Gilbert had dismissed a similar suit in a recent decision.

She said Roche lacked standing to sue under consumer law and argued that Roche's interests were antithetical to interests of

Lilly stood straight and still at the counsel table, 12 feet from Gleeson, moving nothing but hands and chin.

All the while, Hoerner leaned on Gleeson's bench, rocked, shuffled, and flipped pages right under Gleeson's nose.

When Hoerner's turn came he said, "Country Mutual kept money that they were not entitled to, period."

He said he didn't claim breach of contract and didn't have to prove deception.

He alleged fraudulent concealment and immoral silence.

"It's a scheme to commit fraud," he said.

"It's not your first time around the block," he said, reminding Gleeson that he certified a Roche class action against a third party bill payer.

"They put their hand in the jar and they pulled money out," he said.

Gleeson asked for proposed orders in 14 days.

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