Madison Mutual seeks dismissal from class action

By Steve Gonzalez | May 31, 2005

Madison Mutual on 157 in Edwardsville

Circuit Judge Daniel Stack

Madison Mutual Insurance is seeking to be dismissed from a class action lawsuit filed by Godfrey resident Kyle Stark.

Stark claims the insurance company unfairly sought repayment of $5,000 in medical services rendered after an Aug. 14, 2002, auto accident. The suit was filed March 11 in Madison County Circuit Court.

Stark was a passenger in a car driven by Madison Mutual insured David Kallal. His vehicle collided with Jennifer Gibson's, who was insured by Allstate.

Madison Mutual attorney Dale Bode of Walker and Williams of Belleville claims Stark failed to state a cause of action under a fraudulent misrepresentation or tortious interference with a contract theory.

Bode will argue that when Stark accepted payment, Madison became entitled to a subrogation lien against the injury claims.

“It has been clearly established in Illinois case law in the Fifth District that an insurance company has a contractual right to be reimbursed for medical payments made on behalf of an insured under the policy,” Bode claims.

Bode also is asking the court to award legal fees and other costs to his firm seeking sanctions against Stark’s attorney Terrance O’Leary of Granite City.

“The egregious allegations made without any basis whatsoever are compounded by the fact that there is an attempt to certify this case as a class action," Bode wrote in his plea.

Judge Stack will hold the motion hearing Monday at 9 a.m. in courtroom 311.

According to Stark’s complaint, he hired attorney Joseph Hoefert to represent him in a cause of action against Gibson.

Stark claims that Hoefert began settlement talks in early 2003 when a subrogation specialist with Madison notified him that they were asserting a lien against any settlement proceeds he received.

According to the complaint, Hoefert’s firm made a check payable to Madison Mutual for $3,333.33 on April 22, 2003, for full repayment of its subrogation claim.

Stark claims Madison Mutual relies upon its generic contract as its sole justification for its claim of a subrogation lien against third-parties. Based upon its expertise in the field of insurance, Madison Mutual knew that plaintiff’s were not parties to its contract which it based its claims, and that these contracts can not form a legal basis for such claims and that its claims of entitlement to lien’s were false, his suit claims.

Stark is asking the court to order Madison Mutual to establish a fund subject to the jurisdiction of the court until the amount of those sums improperly collected by Madison is reached, order punitive damages to prevent similar conduct and order preliminary and final relief as the law and facts require to protect the interests of the class.

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