Greenberger v. GEICO General Insurance
631 F.3d 392
7th Cir.2011Background
- Greenberger's Acura sustained damage in July 2002; GEICO paid $3,284.69 and he cashed the check but did not repair the car.
- Greenberger donated the damaged car to charity five months after payment and later filed a class-action suit in Illinois state court alleging breach of contract, Illinois Consumer Fraud and Deceptive Practices Act (ICFPA), and common-law fraud.
- GEICO removed the case to federal court under CAFA; the district court dismissed the ICFA claim and granted summary judgment on breach-of-contract and common-law fraud, without addressing class certification.
- On appeal, the Seventh Circuit held CAFA jurisdiction is not defeated by the district court’s failure to certify a class; jurisdiction attaches at filing/removal and is not lost by later developments.
- Under Avery v. State Farm, a claim for breach of the contract to restore a vehicle to its preloss condition requires a vehicle examination; here Greenberger cannot prove breach since the car was donated and unavailable for examination.
- Avery also forecloses independent ICFA and common-law fraud theories that rest on mere breach, lack of a distinct deceptive act, or lack of fiduciary duty; summary judgment affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CAFA jurisdiction unaffected by class certification | Greenberger argues lack of jurisdiction due to no class certification. | GEICO contends CAFA jurisdiction remains despite bypassed class certification. | CAFA jurisdiction remains; denial of certification does not defeat jurisdiction. |
| Breach-of-contract claim requires examination of preloss condition | Greenberger contends GEICO’s omissions breach contract to restore preloss condition. | GEICO argues amount paid plus lack of car precludes showing breach. | Avery requires car examination; donation forecloses proof of breach. |
| ICFA claim requires more than contract breach | Greenberger asserts false promise/omission under ICFA based on systemic underestimation. | GEICO asserts no deceptive act distinct from breach under Avery. | ICFA claim fails for lack of a distinct deceptive act beyond breach. |
| Common-law fraud claim viability | Greenberger asserts fraud separate from contract breach. | GEICO argues no reliance, damages, or fiduciary duty; claims are contract-based. | Common-law fraud claim fails; no actionable fraudulent act or fiduciary duty. |
Key Cases Cited
- Avery v. State Farm Mutual Automobile Insurance Co., 835 N.E.2d 826 (Ill. 2005) (breach claim requires examination of vehicle to prove restoration to preloss condition; no fraud where breach is the basis)
- Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805 (7th Cir. 2010) (CAFA jurisdiction not dependent on class certification; denial of certification does not oust jurisdiction)
- St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (1938) (jurisdictional rules generally secure once obtained)
- Gaston v. Founders Ins. Co., 847 N.E.2d 523 (Ill. App. Ct. 2006) (damages in repair cases refer to amount needed to repair, not amount the insured spends)
- Avery v. State Farm Mut. Auto. Ins. Co. (specific point), 835 N.E.2d 801 (Ill. 2005) (outline of preloss-condition and examination requirements; non-OEM parts discussed within breach framework)
- Neptuno Treuhand-Und Verwaltungsgesellschaft Mbh v. Arbor, 692 N.E.2d 812 (Ill. App. Ct. 1998) (duty to disclose depends on fiduciary or special relationship)
- Martin v. State Farm Mut. Ins. Co., 808 N.E.2d 47 (Ill. App. Ct. 2004) (no fiduciary relationship between insurer and insured as a matter of law)
- Fichtel v. Bd. of Dirs. of River Shore of Naperville Condo. Ass’n, 907 N.E.2d 903 (Ill. App. Ct. 2009) (no duty to disclose absent fiduciary relationship; summary judgment proper)
- Demitro v. General Motors Acceptance Corp., 902 N.E.2d 1163 (Ill. App. Ct. 2009) (contract breach in consumer context not automatically ICFA actionable without independent fraudulent conduct)
- Rumford v. Countrywide Funding Corp., 678 N.E.2d 369 (Ill. App. Ct. 1997) (systematic conduct may be actionable under ICFA if independent deceptive acts exist)