No. 5-99-0830 IN THE APPELLATE COURT OF ... - Appellate.net

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legal remedy is adequate, the imposition of a constructive trust is erroneous”). In this case, the circuit court did not making any findings suggesting that the actual damages already awarded to the class were an inadequate remedy for the harm allegedly inflicted on the ICFA class. Under those circumstances, the court had no power to invoke an equitable remedy in order to provide plaintiffs with additional damages above and beyond their actual damages. Indeed, the language of the statute itself makes that clear by giving the court the power to award actual damages “or” any other relief it deems proper. The disgorgement damages the court awarded must also be vacated because they were duplicative of the specification damages awarded by the jury. It is well settled that “a plaintiff seeking compensation for an injury under multiple theories of recovery may only recover once.” Bragado v. City of Zion, 839 F. Supp. 551, 555 (N.D. Ill. 1993) (citations omitted); see also Majcher v. Laurel Motors, Inc., 287 Ill.App.3d 719, 729 (2d Dist. 1997); Kipnis v. Meltzer, 253 Ill.App.3d 67, 68 (1st Dist. 1993). That is particularly true when the remedy is an equitable one: duplicative damages constitute punishment rather than compensation; it is “elementary” that equity abhors a penalty. Grounds v. VanLaningham, 256 Ill. App. 540, 546-47 (3d Dist. 1930). Yet the court’s award of “disgorgement” damages allowed plaintiffs to recover the same “savings” State Farm realized from the specification of non-OEM parts twice — once as “specification” damages and once as “disgorgement” damages. 61/ Indeed, until the judgment was entered, plaintiffs themselves repeatedly conceded that they could not recover disgorgement damages if they fully recovered the 61/ The two figures Dr. Mathur offered for State Farm’s “savings” differ because the specification damages were based on the 10½-year breach of contract class period, while disgorgement damages were based on the 3½-year ICFA class period. R. 7437-38. -134-
specification damages they had sought from the jury. R. 2459-60 (stating that “an appropriate specification breach of contract damage . . . awarded by a jury would be the same as the amount ordered by the Court to be disgorged. But you wouldn’t add the two numbers together”) (emphasis added); see also C. 29176; R. 13040. Even if the jury had chosen not to award any specification damages, however, it would have been an abuse of discretion for the court to impose a constructive trust on State Farm’s “savings.” A constructive trust is a remedy used primarily against disloyal fiduciaries who have profited from their wrongdoing. The remedy is designed to deter such wrongdoing by “removing all temptation” and “extinguish[ing] all possibility of profit flowing” from it. Hill, 212 Ill.App.3d at 1082. State Farm, however, never profited from the alleged ICFA violation, nor did it have any motive to deceive its policyholders. As a mutual company, State Farm serves no constituency other than its policyholders. Any “savings” it realizes by specifying non-OEM parts (or taking any other measures to reduce repair costs) are necessarily passed on to its policyholders, in the form of reduced premiums, increased dividends, or increased reserves to pay claims. R. 9135-36, 10708-09, 11041-44, 11473-76. Thus, a constructive trust would never be an appropriate remedy in a suit against State Farm brought by a group of policyholders. Forcing State Farm to “disgorge” $130 million in “savings” it long since passed on to its policyholders would serve no equitable purpose. Indeed, it would be affirmatively inequitable: it would take money out of current policyholders’ pockets (in the form of higher premiums, lower dividends, or reduced reserves) and give it to a smaller group of present and former policyholders who happen to be members of the ICFA class. That redistribution -135-
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No. 5-99-0830 IN THE APPELLATE COUR
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Charles Hester Enters. v. Illinois
Page 5 and 6:
In re Fibreboard Corp., 893 F.2d 70
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State v. Piedmont Funding Corp., 38
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Hansberry v. Lee, 311 U.S. 32 (1940
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1. Plaintiffs’ Body Shop Witnesse
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People v. Clayton, 302 Ill.App.3d 2
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VPHI, Inc. v. National Educ. Traini
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Okada v. MGIC Indem. Corp., 823 F.2
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Zekman v. Direct Am. Marketers, Inc
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Malooley v. Alice, 251 Ill.App.3d 5
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NATURE OF THE CASE This is an appea
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STATUTES INVOLVED Relevant portions
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to its “pre-loss condition.” DX
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OEM parts. 5/ At least two states
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paid the difference in cost out of
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epair estimate specified only OEM p
Page 35 and 36:
potential class members whose names
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member’s vehicle other than those
Page 39 and 40:
William Anderton, who had previousl
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categorically inferior and, in fact
Page 43 and 44:
specified on their repair estimates
Page 45 and 46:
Second, plaintiffs sought “instal
Page 47 and 48:
parts] are inferior.” R. 12539 (
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had an adequate remedy at law if St
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loss condition. Instead of requirin
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ARGUMENT I. Class Certification Vio
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members.” Slimack v. Country Life
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of evidence State Farm would be ent
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that are incongruous with the effic
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fenders to its pre-loss condition.
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a result of Allstate’s specificat
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insurance regulators and consumer a
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have been the overwhelming predomin
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some class members and the issue of
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not sooner, that plaintiffs could n
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explained above, class members who
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Even if the court had been right in
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value” of “parts at the time of
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page 7, supra. All of these statute
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(7th Cir. 1995) (decertifying class
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As the circuit court itself recogni
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the same shortcut, arguing — just
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epresentatives who appeared at tria
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— was injured by the alleged dece
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Litig., 182 F.R.D. at 225. Basic fa
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Meineke’s continued financial via
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this decision, plaintiffs were excu
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corresponding OEM part. R. 7169. In
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Mathur’s testimony was particular
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end of the day, Mathur conceded tha
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Zimny, 256 Ill.App.3d 386, 390-91 (
Page 105 and 106: the jury was focused on the wrong i
Page 107 and 108: to its pre-loss condition.” R. 12
Page 109 and 110: quality of non-OEM parts. See Baltu
Page 111 and 112: which is not surprising because the
Page 113 and 114: In this case, plaintiffs’ experts
Page 115 and 116: Bender could not swear that the non
Page 117 and 118: OEM part construction “had some d
Page 119 and 120: theory, even non-OEM parts that are
Page 121 and 122: of his training or expertise”). P
Page 123 and 124: eflected a policy of “discriminat
Page 125 and 126: “speak up for justice.” R. 1301
Page 127 and 128: 12984-85. The perversion of ostensi
Page 129 and 130: Polywheels company makes both the O
Page 131 and 132: parts — was simply a made-for-lit
Page 133 and 134: In contrast, each of the 47 other s
Page 135 and 136: occurred outside Illinois. 51/ In t
Page 137 and 138: laws of the State where the policy
Page 139 and 140: This Court should follow the weight
Page 141 and 142: other states, Illinois cannot apply
Page 143 and 144: state’s law when it is not within
Page 145 and 146: headquartered in Michigan); Endo, 1
Page 147 and 148: for this Court to alter that author
Page 149 and 150: y using parts of like kind and qual
Page 151 and 152: plaintiffs’ failure to identify a
Page 153 and 154: percentage of the class (New York a
Page 155: committing fraud: if all non-OEM pa
Page 159 and 160: A. It Is Unconstitutional To Punish
Page 161 and 162: that will subject him to punishment
Page 163 and 164: fact benefitted from access to non-
Page 165 and 166: deterrence and therefore must be va
Page 167 and 168: 517 U.S. at 576. This case is not i
Page 169 and 170: either higher premiums or the incre
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