Sieving v. Continental Casualty Company
Filing
36
MEMORANDUM Opinion and Order signed by the Honorable Elaine E. Bucklo on 4/26/2021. Mailed notice. (mgh, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
David Sieving,
Plaintiff,
v.
Continental Casualty Company
Defendant.
)
)
)
)
)
) No. 20-cv-5127
)
)
)
)
)
)
Memorandum Opinion and Order
Plaintiff David Sieving is a California resident insured
under a group long-term care policy issued by Defendant Continental
Casualty Company (“Continental”).
In September 2016, Continental
sent a letter to Mr. Sieving informing him that his insurance
premium would increase by 95.5%.
The letter also provided that
due to regulatory requirements that varied by state, the premium
increase would likely not be uniformly implemented across insured
individuals
nationwide.
Mr.
Sieving
initiated
the
instant
putative class-action lawsuit against Continental alleging, inter
alia, breach of contract and fraud.
Specifically, Mr. Sieving
contends Continental was required to make any premium increases
consistent across a nationwide class, and further that it was
foreclosed from raising premiums at all for insureds, such as Mr.
Sieving, who had purchased inflation-protection coverage in the
form of an automatic benefit increase.
Continental has moved to
dismiss the complaint in its entirety [15].
For the reasons that
follow, the motion to dismiss is granted in part and denied in
part.
I.
In reviewing the sufficiency of a complaint pursuant to a
motion to dismiss under Federal Rule of Civil Procedure 12(b)(6),
I “accept all well pled facts as true and draw all permissible
inferences in favor of the plaintiff.”
Agnew v. Nat’l Collegiate
Athletic Ass’n, 683 F.3d 328, 334 (7th Cir. 2012).
To survive a
motion to dismiss, the complaint must state a claim “that is
plausible
on
disregarded.
its
face”
after
conclusory
allegations
are
W. Bend Mut. Ins. Co. v. Schumacher, 844 F.3d 670,
675 (7th Cir. 2016) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678–
79 (2009)).
Long-term care insurance covers a variety of services for
people
who
become
unable
to
care
for
themselves,
including
assistance in the home, adult daycare, assisted living, and nursing
home services.
Continental, a Delaware corporation headquartered
in Illinois, issued and delivered the group long-term care policy
at issue, policy number 9774, to the Employees Long Term Care
Insurance
Trust
September 1989.
(“Employees
Trust”),
located
in
Illinois,
in
Mr. Sieving, who was an employee of Northrop
2
Grumman Space Systems Division at the time, purchased a certificate
under the policy with an effective date of July 1, 2003.
Mr.
Sieving was able to purchase his certificate because his employer
had access to insurance through Northrop Grumman Federal Credit
Union Space Systems Division, a participating organization under
the policy.
When
Mr.
Sieving
bought
his
certificate,
he
purchased
inflation protection with an automatic-benefit-increase option.
That is, he selected a higher premium of $110.80 per month (more
than double what his “base rate” premium would have been), and in
exchange, his benefit level automatically increased by 5% each
year, compounded annually.
The automatic benefit increases had
the purpose of helping protect Mr. Sieving against the increasing
costs of long-term care over time.
The insurance policy itself included the following language,1
under the heading “PREMIUM”:
“We cannot change the Insured’s
The insurance policy was referred to in but not attached to the
complaint. However, Continental appended a copy of the policy to
the motion to dismiss. While a document central to and referred
to in the complaint may often be considered on a motion to dismiss
without converting it to a motion for summary judgment, here, Mr.
Sieving disputes the authenticity of the version of the policy
Continental attached. See ECF No. 33 at 2. “Because the polic[y]
[is] not ‘concededly authentic,’ it would be unfair to consider
[it] in conjunction with the defendant’s motion to dismiss.”
Hallie v. Wells Fargo Bank, N.A., No. 2:12-cv-235, 2013 WL 3872814,
at *2 (N.D. Ind. July 24, 2013) (citing Tierney v. Vahle, 304 F.3d
734, 738 (7th Cir. 2002)); accord Wells Fargo Bank, N.A. v.
Worldwide Shrimp Co., No. 17 CV 4723, 2019 WL 4189480, at *3-4
(N.D. Ill. Sept. 4, 2019). Accordingly, for instant purposes, I
1
3
premiums because of age or health.
We can, however, change the
Insured’s premiums based on his or her premium class, but only if
We change the premiums for all other Insureds in the same premium
class.”
ECF No. 1 ¶ 23.
Mr. Sieving alleges that he reviewed and relied upon a
marketing brochure issued by Continental at the time he purchased
his certificate.
Id. ¶ 30.
The marketing brochure provided, with
respect to premium changes:
LEVEL PREMIUM RATES DO NOT INCREASE JUST BECAUSE YOU
GROW OLDER
Since your premium is based on a fixed daily benefit and
on your age at the time you apply, CNA [Continental] can
predict the appropriate premium to charge you.
As a
result, premiums are expected to remain level over your
lifetime.
CNA reserves the right to change premiums for
the entire plan if necessary based on our experience,
but you can never be singled out for a rate increase
because you get older, become ill, or file claims.
Id. ¶ 29.
In an outline of coverage attached to the brochure,
Continental also included the following language:
OUR RIGHT TO CHANGE THE PREMIUM.
Your premium is based
on your age on your application date.
Your premium will
consider only the portions of the policy that were cited in the
complaint.
4
not increase because you grow older.
It will remain the
same unless the rates are increased for everyone in your
age group; you cannot be singled out for a rate increase
for any reason.
Id. ¶ 34.
The brochure also featured rate tables showing premium
amounts based on age at the time of purchase and benefit level.
Id. ¶ 37.
In addition, the brochure included a section describing the
two available inflation-protection options available under the
policy.
Under the first option, called the “Future Purchase
Option” feature, the insured would be given an opportunity to
increase benefits every three years, which he or she could accept
or decline.
The benefit increase would trigger a premium increase
based on the insured’s age at the time of the increase.
The second
option, which Mr. Sieving selected, was called the “Automatic
Benefit Increase Option.”
For
an
additional
That option was described as follows:
fixed
premium,
this
allows
benefits to increase automatically every year.
choose
this
option,
your
daily
Nursing
your
If you
Home
and
Community Based Care Benefits and your Lifetime Maximum
Benefit
Amount
will
all
increase
by
5%
per
year,
compounded annually for as long as you are insured, with
no corresponding annual increase in premium and without
5
further
proof
of
insurability,
even
while
you
are
withdrawing benefits.
Id. ¶ 67.
The brochure included a pro and con section for the
automatic benefit increases, listing as pros “Level, easy to budget
premium,” and “Benefits go up every year without corresponding
premium increases.”
Id. ¶ 68.
Mr. Sieving’s premiums did not increase for thirteen years.
However, on September 1, 2016, Continental sent a letter to Mr.
Sieving informing him that his premium would increase by 95.5%,
with a 70% increase occurring as of November 1, 2016, and a 15%
increase occurring November 1, 2017.
In a Frequently Asked
Questions section appended to the letter, Continental included the
following language:
6.
Will the premium rate increase be effective for
everyone?
Since Continental Casualty Company (CCC) must receive
approval or authorization from certain states prior to
implementing an increase, it is possible that these
states will not approve or authorize the same percentage
increase or authorize an increase at the same time.
It
is also possible some states may deny CCC’s request for
an increase, or require it be reduced or spread over
multiple years. . . .
Premium increases will be
staggered in accordance with the timing of regulatory
6
approvals
or
authorizations
and
method
of
premium
payment.
Id. ¶ 42.
Mr. Sieving alleges that this was the first time Continental
disclosed that a “premium increase is not uniform for everyone in
the same age group or premium class.”
Continental
constant
misled
for
him
those
into
who
Id.
believing
purchased
automatic benefit increases.
He also contends that
premiums
inflation
Id. ¶ 64.
would
remain
protection
with
Mr. Sieving brings the
instant class action asserting six claims for relief, including
for breach of contract, fraud, and declaratory and injunctive
relief.
II.
In
Count
contract.
I,
Mr.
Sieving
asserts
a
claim
for
breach
of
He claims that Continental breached the policy both by
increasing premiums at different rates for insureds in different
states, and by increasing premiums for those who had purchased
automatic-benefit-increase inflation protection.
With respect to the breach regarding disparate nationwide
rates,
Mr.
Sieving
insurance policy:
points
to
the
following
language
in
the
“We can . . . change the Insured’s premiums
based on his or her premium class, but only if We change the
premiums for all other Insureds in the same premium class.”
No. 1 ¶ 23 (emphasis added).
ECF
“Premium class” is nowhere defined
7
in the policy.
Id. ¶ 26.
Mr. Sieving argues that “premium class”
can only mean “the nationwide pool of insureds under the group
insurance plan within a given age group.”
Id.
Continental argues
that it was not empowered to raise rates consistently nationwide
because of the state-by-state regulatory framework.
Accordingly,
because “[i]t is presumed that parties contract with knowledge of
the existing law,” Bray v. Archer-Daniels-Midland Co., 676 N.E.2d
1295,
1303
(Ill.
1997),
“premium
class”
cannot
refer
to
a
nationwide group.
I conclude that on the record currently before me, the term
“premium class” is ambiguous.
“A policy is ambiguous if it is
subject to more than one reasonable interpretation.”
Newman v.
Metro. Life Ins. Co., 885 F.3d 992, 998 (7th Cir. 2018) (citing
Thompson v. Gordon, 948 N.E.2d 39, 48 (Ill. 2011)).
terms
are
construed
as
an
‘average,
ordinary,
“Undefined
normal,
and
reasonable person’ would understand them” in the context of the
contract “as a whole.”
Id.
Mr. Sieving has presented one plausible interpretation of the
policy—that Continental promised not to raise premiums unless it
could do so for all of the insureds in a particular age group
“class” nationwide.
Continental was not, as it argues, powerless
to promise consistent nationwide premiums, because it could have
raised premiums only to the extent allowed by the most restrictive
state.
8
However,
“premium
something else.
class”
could
also
plausibly
refer
to
It could refer to the group of insureds that pay
the same premium, whether or not they are in the same age group—
for
example,
an
insured
who
purchased
an
automatic-benefit-
increase option might be in a different class from someone of the
same age who purchased at the base rate.
specific,
as
suggested
regulations at play.
by
It could also be state-
Continental,
especially
given
the
Because there is more than one reasonable
interpretation, the term is ambiguous.
See Newman, 885 F.3d at
999 (finding undefined term “class” in similar long-term care
insurance
policy
to
be
ambiguous
given
multiple
possible
meanings).
Ambiguous contracts are construed against the insurer, but
before that principle of construction is applied, the parties may
introduce
extrinsic
evidence
meaning.
Id. at 999-1000.
bearing
on
the
ambiguous
term’s
Accordingly, this issue cannot be
resolved at the motion-to-dismiss stage.
Mr. Sieving’s breach-
of-contract claim based on Continental’s inconsistent nationwide
premium increase may proceed.
Mr. Sieving also claims that Continental was contractually
precluded from increasing premiums for those who had purchased
automatic-benefit-increase inflation protection.
Mr. Sieving has
not, however, cited to any provision of the insurance policy that
he alleges was breached by the rate increase.
9
Instead, he points
exclusively to language contained in the marketing brochure he
consulted when purchasing his certificate.
Mr. Sieving’s failure to identify a breach of the policy’s
language does not, however, by itself doom Mr. Sieving’s breachof-contract
claim.
Some
Illinois
courts
have
held
that
“a
descriptive brochure furnished to an individual insured becomes a
part of the insurance contract.”
See Dobosz v. State Farm Fire &
Cas. Co., 458 N.E.2d 611, 613 (Ill. App. Ct. 1983).
considerations
in
making
this
determination
are
“The key
whether
the
insured relies on the brochure in procuring the insurance and
whether the brochure differs from the policy itself.”
Id. at 614.
Who prepared the brochure or marketing material may also be
relevant.
Id.
Accordingly, whether the brochure is properly
considered part of the insurance contract involves questions of
fact, and is not properly resolved at the motion-to-dismiss stage.
See St. Paul Ins. Co. of Ill. v. Armas, 527 N.E.2d 921, 926 (Ill.
App. Ct. 1988).
Assuming for present purposes, however, that the brochure is
properly considered part of the policy, Mr. Sieving still has not
adequately alleged a breach of contract.
Mr. Sieving points to
the brochure’s claim that the automatic benefit increase would
increase the benefit amount by 5% annually “with no corresponding
annual increase in premium.”
ECF No. 1 ¶ 67.
But “corresponding”
is the operative word there—this is a promise that premiums will
10
not increase in step with the automatic annual 5% benefit increase,
not a promise that premiums will never increase.
Mr. Sieving also notes that in a pro-con section regarding
the automatic-benefit-increase option, the brochure listed as a
pro: “Level, easy to budget premium.”
ECF No. 1 ¶ 68.
Mr. Sieving
argues that this was a promise that premiums would be kept “level”—
meaning they could never be increased.
But the pro-con section
was clearly comparing the automatic-benefit-increase option to the
other inflation-protection option, the “Future Purchase Option.”
See id. ¶ 68 (listing as cons “Costs more initially than FPO” and
“May not track actual inflation trends as well as FPO”).
Compared
with the Future Purchase Option, which offers benefit increases
with
corresponding
premium
increases,
the
automatic-benefit-
increase option does offer a premium that is more “level”—even if
the premium is subject to periodic plan-wide increases.
And
another use of the word “level” in the brochure is consistent with
that interpretation—the brochure provides that “level
premium
rates do not increase just because you grow older” but may be
subject to other increases.
Id. ¶ 29 (emphasis added).
Further, any ambiguity regarding the promise of a “level,
easy to budget premium” is resolved when read in conjunction with
the brochure’s other sections.
The brochure provided:
“CNA
reserves the right to change premiums for the entire plan if
necessary.”
Id. ¶ 29 (emphasis added).
11
In another conspicuous
section under the capitalized heading “OUR RIGHT TO CHANGE THE
PREMIUM,” it announced that premium rates could be increased “for
everyone in your age group.”
Id. ¶ 34.
“[T]he entire plan” means
the entire plan; “everyone” means everyone.
Reading the brochure
as a whole, I cannot conclude that Mr. Sieving and other purchasers
of
the
automatic-benefit-increase
inflection
protection
were
exempt from rate increases.2
For
the
foregoing
reasons,
the
breach-of-contract
claim
pertaining to the automatic-benefit-increase inflation protection
is dismissed.
with
regard
The breach-of-contract claim may proceed, but only
to
the
purported
breach
based
on
Continental’s
inconsistent nationwide premium increase.
III.
Mr. Sieving also asserts a claim for breach of the implied
covenant of good faith and fair dealing (Count II).
However,
“Illinois courts are clear that the duty imposed by the covenant
of good faith and fair dealing generally does not give rise to a
cause of action in tort for breach of that duty.”
Woerner v.
Bankers Life & Cas. Co., 216 F. Supp. 3d 924, 929 (N.D. Ill. 2016)
Mr. Sieving also notes that Continental’s offer of inflation
protection was required, under the Illinois Administrative Code,
to “disclose in a conspicuous manner that the premium may change
in the future unless the premium is guaranteed to remain constant.”
Ill. Admin. Code tit. 50, § 2012.80(f). But, as noted above, the
disclosures in the brochure were conspicuous. At any rate, Mr.
Sieving has brought a claim for breach of contract, not breach of
the Illinois Administrative Code.
2
12
(citing Voyles v. Sandia Mortg. Corp., 751 N.E.2d 1126, 1130-31
(Ill. 2001)).
Instead of an independent source of liability, the
implied covenant of good faith and fair dealing is merely a rule
of construction that applies in the context of a breach-of-contract
claim.
Voyles, 751 N.E.2d at 1131.
Accordingly, Count II is
properly dismissed.
IV.
Next, in Count III, Mr. Sieving asserts a cause of action
under the Illinois Consumer Fraud and Deceptive Business Practice
Act (“ICFA”), 815 Ill. Comp. Stat. 505.
contends
that
“Continental’s
Specifically, Mr. Sieving
brochure
and
other
marketing
materials contained deceptive statements about future premium
increases.”
ECF No. 1 ¶ 109.
Continental moves to dismiss the ICFA claim on standing
grounds.
“[F]or a nonresident plaintiff [such as Mr. Sieving] to
have standing under the [ICFA], . . . ‘the circumstances that
relate to the disputed transaction [must] occur primarily and
substantially in Illinois.’”
Crichton v. Golden Rule Ins. Co.,
576 F.3d 392, 396 (7th Cir. 2009) (citing Avery v. State Farm Mut.
Auto. Ins. Co., 835 N.E.2d 801, 853-54 (Ill. 2005)).
This is not
a “bright-line rule but rather a highly fact-bound inquiry in which
no single factor would be dispositive.”
Id.
Mr. Sieving argues that the transaction occurred “primarily
and
substantially
in
Illinois”
13
because
(1)
Continental
is
headquartered in Illinois, and (2) it marketed and sold the
insurance policy at issue to Employees Long Term Care Insurance
Trust, an Illinois resident.
at
issue
here
centers
ECF No. 21 at 21.
around
dissemination
But the ICFA claim
of
the
marketing
documents, not on negotiating the underlying policy with the Trust.
Moreover, “the administration of defendant’s business in Illinois
is insufficient to give a nonresident plaintiff a claim.” Robinson
v. DeVry Educ. Grp., Inc., No. 16 CV 7447, 2018 WL 828050, at *4
(N.D. Ill. Feb. 12, 2018) (citing Crichton, 576 F.3d at 397).
And
even
and
assuming
the
marketing
documents
were
written
at
circulated from Continental’s headquarters in Illinois, “[t]he
dissemination of a scheme to defraud from Illinois headquarters is
not dispositive either.”
Id. (citing Avery, 835 N.E.2d at 855).
The complaint alleges Mr. Sieving was a California resident
at the time he purchased his policy certificate from Continental.
ECF No. 1 ¶ 12.
Accordingly, he likely received the marketing
materials and relied on them in making his decision to purchase
the certificate in the State of California. In like circumstances,
courts have found a lack of ICFA standing.
See Crichton, 576 F.3d
at 397 (no ICFA standing despite defendant insurance company’s
“home office” in Illinois where plaintiff “reside[d] in Florida,
received promotional insurance materials there, entered into and
renewed his insurance there, submitted claims there, and was
allegedly deceived there”); Robinson, 2018 WL 828050, at *4 (no
14
ICFA
standing
despite
defendant
online
university
being
headquartered in Illinois and maintaining website with allegedly
fraudulent
content
university
in
in
their
Illinois
where
respective
plaintiffs
states
and
misrepresentations and acted upon them there”).
enrolled
“received
in
the
Accordingly,
Count III is dismissed.
V.
In Counts IV and V, Mr. Sieving asserts claims for fraud and
fraudulent omission.
As a threshold matter, the parties dispute
whether Illinois or California law governs the fraud claims.
I
conclude that Illinois law applies.
The
rules
of
the
forum
state—here,
purposes of a choice-of-law analysis.
Mfg. Co., 313 U.S. 487, 496 (1941).
Illinois—apply
for
Klaxon Co. v. Stentor Elec.
Illinois courts engage in a
choice-of-law inquiry “only if there is a conflict between Illinois
law and the law of another state such that ‘a difference in law
will make a difference in the outcome.’”
West Side Salvage, Inc.
v. RSUI Indem. Co., 878 F.3d 219, 223 (7th Cir. 2017) (citing
Townsend v. Sears, Roebuck & Co., 879 N.E.2d 893, 898 (Ill. 2007)).
“The
party
seeking
the
choice-of-law
burden of demonstrating a conflict.”
determination
bears
the
Bridgeview Health Care Ctr.,
Ltd. v. State Farm Fire & Cas. Co., 10 N.E.3d 902, 905 (Ill. 2014).
“If the party fails to establish the existence of such a conflict,
15
the court applies the law of the forum state.”
West Side Salvage,
878 F.3d at 223.
Here, Continental raised the conflict-of-laws question, so
bears the burden to demonstrate an outcome-determinative conflict
between Illinois and California law.
But Continental identifies
no such conflicts, and even concedes that “the relevant elements
of
plaintiff’s
California law.”
fraud
claims
are
ECF No. 25 at 2.
similar
under
Illinois
and
Accordingly, Illinois law will
apply.
To state a fraud claim in Illinois, a plaintiff must allege:
(1) a false statement of material fact; (2) known or
believed to be false by the person making it; (3) an
intent to induce the plaintiff to act; (4) action by the
plaintiff in justifiable reliance on the truth of the
statement; and (5) damage to the plaintiff resulting
from such reliance.
Newman, 885 F.3d at 1003 (citing Doe v. Dilling, 888 N.E.2d 24,
35-36 (Ill. 2008)).
To state a claim for fraudulent concealment,
rather than a false statement, “a plaintiff must allege that the
defendant concealed a material fact when he was under a duty to
disclose that fact to plaintiff.”
Toulon v. Cont’l Cas. Co., 877
F.3d 725, 737 (7th Cir. 2017) (citing Connick v. Suzuki Motor Co.
Ltd., 675 N.E.2d 584, 593 (Ill. 1996)).
Mr. Sieving alleges that
Continental’s marketing materials contained fraudulent statements
16
and omissions because (1) Continental knew that it would not
uniformly increase premiums from one state to the next, and (2)
Continental
knew
that
it
might
or
would
raise
premiums
for
purchasers of the automatic-benefit-increase option.
I turn first to Mr. Sieving’s fraud claims regarding the
inconsistent nationwide premium increases.
Continental argues
initially that Mr. Sieving did not allege any false statement.
But Mr. Sieving pleaded that Continental’s marketing brochure
provided premiums would remain the same unless increased “for
everyone in your age group.”
ECF No. 1 ¶ 34.
The brochure also
provided that Continental could raise premiums “for the entire
plan,” and included tables showing premium rates that appeared to
be based only on age and benefit level, rather than on state of
residence.
Id. ¶¶ 29, 37.
The brochure, thus, could rationally
be read to suggest that premium rates would be the same for all
individuals covered under the policy within the same age group—
regardless of their state.
That is enough to plead falsity.
See,
e.g., Newman, 885 F.3d at 1001, 1003.
Mr. Sieving has also sufficiently pleaded knowledge.
“In
Illinois, a defendant knowingly misrepresents a fact if it makes
a statement ‘with reckless disregard for its truth or falsity.’”
Id. at 1003 (citing Gerill Corp. v. Jack L. Hargrove Builders,
Inc., 538 N.E.2d 530, 536 (Ill. 1989)).
Continental portrayed its
policy as one that offered uniform nationwide premiums, and Mr.
17
Sieving alleged that it did so in bad faith, knowing that in light
of the state-by-state regulatory framework, it would not honor
that representation.
Accordingly, Mr. Sieving has satisfied the
knowledge
See
element.
id.
(knowledge
element
sufficiently
pleaded where plaintiff alleged that defendant insurance company,
in
bad
faith,
portrayed
policy
as
one
that
offered
a
fixed
premium).
Continental also argues that Mr. Sieving failed to plausibly
allege reasonable reliance.
It contends that because contracting
parties are assumed to know the law, it would not be reasonable
for Mr. Sieving to rely on any statements guaranteeing uniform
premium increases.
ECF No. 16 at 21.
But, as noted above, the
state regulations do not, in and of themselves, necessitate that
premium
increases
are
implemented
on
a
non-uniform
basis;
Continental could have chosen to limit its premium increases to
those permitted by the most restrictive state.
Accordingly, the
state regulations do not necessarily conflict with a promise of
uniformity.
Finally, Continental argues that the fraudulent concealment
claim should be dismissed because Continental did not have a duty
to
disclose
nationwide.
that
it
would
not
uniformly
increase
premiums
It is true that no duty to disclose likely arises
here based on a fiduciary relationship or a relationship of trust
and confidence between Continental and Mr. Sieving.
18
See Toulon,
877 F.3d at 737-38.
However, a duty to disclose may also arise
“when a defendant makes a statement ‘that it passes off as the
whole truth while omitting material facts that render the statement
a misleading “half-truth.”’”
Newman, 885 F.3d at 1004 (citing
Crichton, 576 F.3d at 397-98).
Here, Continental provided that it
could raise premiums “for the entire plan,” ECF No. 1 ¶ 29, or for
“everyone in your age group,” id. ¶ 34, while omitting that premium
increases
could
vary
significantly
holder’s state of residency.
based
on
the
certificate
That is enough to establish a duty
to disclose at the pleading stage.
See Newman, 885 F.3d at 1004.
Accordingly, Mr. Sieving’s fraud and fraudulent-concealment claims
pertaining
to
non-uniform
nationwide
premium
increases
may
proceed.
Mr. Sieving also claims fraud and fraudulent concealment on
the grounds that Continental’s marketing materials deceptively
suggested
that
purchasers
of
the
automatic-benefit-increase
inflation protection would not be subject to premium increases.
However, for the reasons discussed above, the brochure was not
false or misleading.
The brochure provided that Continental could
“change premiums for the entire plan if necessary,” ECF No. 1 ¶ 29,
and
under
the
capitalized
heading
“OUR
RIGHT
TO
CHANGE
THE
PREMIUM,” it announced that premium rates could be increased “for
everyone in your age group,” id. ¶ 34.
There was no indication
that purchasers of the automatic-benefit-increase option were
19
exempt.
about
This is a situation “in which the consumer [wa]s warned
the
undesirable
result
and
simply
material offered by the insurance company.”
misconstrue[d]
the
See Newman, 885 F.3d
at 1001. I find no falsity or misleading half-truth. Accordingly,
to the extent Counts IV and V pertain to Mr. Sieving’s claims
regarding
the
automatic-benefit-increase
inflation
protection,
they are dismissed.
VI.
Finally, Continental moves to dismiss Mr. Sieving’s claim for
declaratory and injunctive relief in Count VI.
Count VI is
properly dismissed because “requests for declaratory judgment and
injunctions are not independent causes of action.”
Elward v.
Electrolux Home Prods., Inc., 214 F. Supp. 3d 701, 708 (N.D. Ill.
2016); see also Mohammad v. IndyMac Bank, F.S.B./One West Bank,
F.S.B., No. 16 C 7241, 2018 WL 1252112, at *6 (N.D. Ill. Mar. 12,
2018).
“It is well established that the Declaratory Judgment Act
does not create an independent cause of action.
an additional form of relief.”
It provides only
Morris v. Mfrs. Life Ins. Co., No.
EV 95-142-C H/H, 1997 WL 534156, at *10 (S.D. Ind. Aug. 6, 1997);
see also Keesler v. Electrolux Home Prods., Inc., No. 16 C 199,
2016 WL 3940114, at *3 (N.D. Ill. July 21, 2016). Similarly, “[a]n
injunction is a type of remedy, . . . as distinct from an underlying
claim for relief.”
Onyango v. Downtown Entm’t, LLC, 525 F. App’x
458, 460 (7th Cir. 2013).
20
Continental seems to argue that above and beyond Count VI’s
dismissal, however, Mr. Sieving should be precluded from seeking
an injunction in his prayer for relief.
It contends that Mr.
Sieving has an adequate remedy at law because plaintiffs’ injury
“is easily remedied by an award of money damages.”
ECF No. 16 at
26 (citing Kartman v. State Farm Mut. Auto. Ins. Co., 634 F.3d
883, 892 (7th Cir. 2011)).
But Mr. Sieving seeks to prevent
Continental from “increasing long-term care insurance premiums by
amounts that vary state-to-state” in the future.
ECF No. 1 ¶ 141.
Accordingly, I am not convinced at this stage that damages would
be an adequate remedy at law.
See In re Experian Data Breach
Litig., No. SACV 15-1592 AG (DFMx), 2016 WL 7973595, at *7 (C.D.
Cal. Dec. 29, 2016) (applying Illinois law and denying motion to
dismiss claim seeking injunction to protect plaintiffs against
future data breaches even if damages were sufficient to compensate
for prior breach); Metro-Goldwyn-Mayer Studios, Inc. v. Grokster,
Ltd., 518 F. Supp. 2d 1197, 1220 (C.D. Cal. 2007) (“[A] legal
remedy is inadequate if it would require a ‘multiplicity of
suits.’”); see also Almond v. Capital Props., Inc., 212 F.3d 20,
25 (1st Cir. 2000) (“[I]njunctions against contract breach are
common where there is some reasonable doubt about whether damages
can be sufficient [and] that assessment ordinarily turns very much
on the facts.”).
21
VII.
For the foregoing reasons, the motion to dismiss [15] is
granted in part and denied in part.
Counts II, III, and VI are
dismissed. Counts I, IV, and V may proceed insofar as they pertain
to inconsistent nationwide premium increases, but are dismissed to
the
extent
they
pertain
to
the
automatic-benefit-increase
inflation protection.
ENTER ORDER:
________________________
Elaine E. Bucklo
United States District Judge
Dated: April 26, 2021
22
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