Defense Motion to Dismiss Class Action’s Claim under Illinois Consumer Fraud and Deceptive Practices Act (ICFA) Granted because Illinois does not Permit Consumer Fraud/Deception Claim to be Founded on Breach of Contract Illinois Federal Court Holds
Plaintiffs filed a class action against Conseco and Conseco Senior Health Insurance Company (Conseco) alleging inter alia breach of contract and violations of the Illinois Consumer Fraud and Deceptive Practices Act (ICFA); specifically, the class action complaint alleged that Conseco formulated a scheme “designed to avoid paying…claims under the pretense of requiring additional documentation of proof of a claim above and beyond a Medicare verification” for the purpose of reducing payments to insureds. Langendorf v. Conseco Senior Health Ins. Co., 590 F.Supp.2d 1020, 1021 (N.D.Ill. 2008). According to the allegations underlying the class action, plaintiffs submitted to Conseco “numerous claims for reimbursement and/or payment of medical expenses” under health insurance policies issued by Conseco, but the company “systematically declined to pay Plaintiffs benefits,”“under the pretense of requiring additional documentation of proof of loss, and/or failing to accept Medicare verifications as documentation of proof of loss.” Id. Defense attorneys removed the class action to federal court under the Class Action Fairness Act of 2005 (CAFA). Id., at 1021-22. Defense attorneys moved to dismiss the class action’s ICFA claim, id., at 1022; the district court granted the motion.
The district court explained that the ICFA “prohibits unfair or deceptive acts or practices, and provides a cause of action for any person who suffers actual damages as a result of a violation.” Langendorf, at 1022 (citing 815 ILCS 505/10a(a)). The class action’s ICFA claim was premised on the theory that Conseco “perpetrated its scheme designed to avoid paying (by denying or delaying) Plaintiffs’ and Class members’ claims under the false pretense of requiring additional documentation of proof of a claim above and beyond a Medicare verification,” id. Defense attorneys argued, however, that an ICFA claim cannot be premised on a breach of contract, id., at 1022-23. In other words, Illinois law requires more than a breach of contract to support a claim for consumer fraud or deception. Id., at 1023. The district court agreed, rejecting plaintiffs’ effort to distinguish the controlling case law, id., at 1023-24. Accordingly, the district court dismissed the class action’s ICFA claim. Id., at 1024.