Dowding v. Nationwide Mut. Ins. Co., No. 20 C 4118

490 F.Supp.3d 1291

Christine V. DOWDING, on behalf of herself and a putative class of similarly situated individuals, Plaintiff,

v.NATIONWIDE MUTUAL INSURANCE COMPANY, Defendant.

No. 20 C 4118

United States District Court, N.D. Illinois, Eastern Division.

Signed September 29, 2020

Daniel A. Edelman, Tara Leigh Goodwin, Cathleen M. Combs, Bryan G. Lesser, Carly Marie Cengher, Edelman, Combs, Latturner & Goodwin LLC, Patrick Neil Wartan, Taft Stettinius & Hollister LLP, Chicago, IL, William Charles Wagner, Taft Stettinius & Hollister LLP, Indianapolis, IN, for Plaintiff.

Jonathan M. Cyrluk, Steven Christopher Moeller, Carpenter Lipps & Leland LLP, Chicago, IL, Aneca E. Lasley, Pro Hac Vice, Squire Patton Boggs (US) LLP, Columbus, OH, Petrina A. McDaniel, Pro Hac Vice, Squire Patton Boggs (US) LLP, Atlanta, GA, for Defendant.

MEMORANDUM OPINION AND ORDER

Virginia M. Kendall, United States District Judge

Christine Dowding booked a roundtrip flight to Miami, Florida and a cruise that was due to depart from Miami on March 30, 2020. Like almost all travel at that time, the cruise was cancelled on account of the COVID-19 pandemic. Dowding had purchased travel insurance through Nationwide Mutual Insurance Company ("Nationwide"), but Nationwide refused to pay for her cancelled trip after the cruise line reimbursed her and the airline announced that it would provide her with a travel voucher. Dowding subsequently brought this action, which was removed from state court, against Nationwide alleging breach of contract, improper claims practice in violation of an Illinois statute, and statutory fraud. Dowding also seeks relief on behalf of a putative class. Nationwide now moves to dismiss the Complaint for failure to state a claim and to strike the class allegations for failure to satisfy the requirements of Rule 23 of the Federal Rules of Civil Procedure. As explained below, the Motion to Dismiss (Dkt. 11) is granted in part and denied in part, and the Motion to Strike (Dkt. 13) is denied.

BACKGROUND

The following factual allegations come from the Complaint. The Court assumes their truth for purposes of the instant Motions. See W. Bend Mut. Ins. Co. v. Schumacher , 844 F.3d 670, 675 (7th Cir. 2016).

Christine Dowding booked a cruise on Carnival Cruise Line that was due to depart from Miami, Florida on March 30, 2020. (Dkt. 1-1 ¶ 5.) She also booked a roundtrip flight on Frontier Airlines from Chicago to Miami. (Id. ¶ 7.) The airfare cost $1,321. (Id. ¶ 15.) Dowding purchased travel insurance through Nationwide to cover both the airfare and the cost of the cruise. (Id. ¶¶ 8–10.) Dowding paid the insurance premium and performed all necessary conditions of coverage. (Id. ¶ 9.)

Nationwide's insurance policy ("the Policy") provided full reimbursement of costs associated with a trip if the insured is prevented from taking her trip due to, inter alia , sickness that results in medically imposed restrictions as certified by a physician at the time of loss preventing the insured's participation in the trip. (Id. ¶ 11.) The Policy also provides coverage for trips that the insured cannot take on account of being quarantined. (Id. ¶ 12.)

Before departing on her trip to Florida, Dowding became ill with a cough, which a physician diagnosed as bronchitis. (Id. ¶ 13.) Coughing is a symptom of COVID-19, but testing was not widely available in March. (Id. ) Illinois was under a stay-at-home order at the time, so travelling to Florida would have been a violation of that order. (Id. )

Dowding filed a claim with Nationwide for the cost of the cruise and the full $1,321 in airfare, and a submitted a physician's note certifying that she was too sick to travel. (Id. ¶¶ 15–16.)

Carnival cancelled the cruise on account of COVID-19 and issued Dowding a refund for the full cost of the cruise. (Id. ¶¶ 17, 24.) Frontier Airlines provided Dowding with a travel voucher that she needed to use within ninety days or it would expire. (Id. ¶ 25.) Dowding had no need to travel during the ninety days following the issue of the voucher, nor was she in a position to use the funds due to the ongoing COVID-related travel restrictions. (Id. ¶ 25.)

On April 6, 2020, Nationwide sent Dowding a letter explaining that it had closed her claim without payment. (Id. ¶ 18.) Nationwide also refunded the premium she paid for her travel insurance. (Id. ¶ 22.) When asked for an explanation as to the account closure, Nationwide informed her that Carnival had instructed Nationwide to deny all claims. (Id. ¶ 19.)

LEGAL STANDARD

A motion to dismiss for failure to state a claim under Rule 12(b)(6) challenges the sufficiency of the complaint. Berger v. National Collegiate Athletic Association , 843 F.3d 285, 289–90 (7th Cir. 2016). When considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court must construe the complaint "in a light most favorable to the nonmoving party, accept well-pleaded facts as true, and draw all inferences in the non-moving party's favor." Bell v. City of Chicago , 835 F.3d 736, 738 (7th Cir. 2016). The complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The plaintiff need not plead "detailed factual allegations," but "labels and conclusions" or a "formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A complaint must contain sufficient factual matter that when "accepted as true ... ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). The Court generally limits it review to the four corners of the complaint, but the Court does consider documents attached to a motion to dismiss if the complaint refers to them and if they are central to the claim. Hobbs v. John , 722 F.3d 1089, 1091 n.2 (7th Cir. 2013) (citing Wright v. Associated Ins. Cos. , 29 F.3d 1244, 1248 (7th Cir. 1994) ).

DISCUSSION

I. Motion to Dismiss

Although Plaintiff's Complaint requests an insurance payout for the cost of her cruise, her response in opposition to this Motion makes clear that she now only seeks a payout for the cost of her Frontier Airlines flights. In any event, because she has already received a full reimbursement for the cost of the cruise, she does not allege a plausible injury related to the cruise expense and thus lacks standing to pursue that claim. The Court will therefore address only whether Plaintiff states a claim for recovery of the cost of her airfare under each of her three counts.

A. Count I: Breach of Contract

To state a claim for breach of contract under Illinois law, a plaintiff must allege: "(1) the existence of a valid and enforceable contract, (2) substantial performance by the plaintiff, (3) a breach by the defendant, and (4) resultant damages." Reger Dev., LLC v. Nat'l City Bank , 592 F.3d 759, 764 (7th Cir. 2010). Here, the parties do not dispute that they entered into a valid and enforceable contract and the plaintiff substantially performed; the only dispute is whether Nationwide breached the contract and if so, whether Plaintiff suffered any resultant damages.

Plaintiff requests reimbursement for her airfare despite having received a voucher from the airline for the full cost her flight. She contends that she is entitled to this reimbursement because the cash that she spent on the airfare and the voucher she received in return are not fungible. The "trip cancellation" portion of the Contract clearly reads, however: "In no event shall the amount reimbursed exceed the amount You prepaid for the Trip." (Dkt. 1-1 at 101.) Were Nationwide to pay Plaintiff for the cost of the flight, the payout would exceed the amount that she prepaid for the Trip because even if Plaintiff does not value the voucher she received as highly as the cash she expended to purchase the flight, the voucher is still worth more than $0. Thus, if she receives the voucher along with a full reimbursement from Nationwide, she would receive more than the amount to which she is entitled in reimbursement under the contract. Specifically, were Nationwide to reimburse Plaintiff for the cash value of the airfare, she would have that cash payment, plus the value of the voucher, minus the amount she originally paid in airfare, the total of which must be greater than zero dollars.¹

That a full payment from Nationwide would make Plaintiff more than whole does not, however, exclude Plaintiff's breach of contract claim. The Contract provides for a refund up to the "total original airfare cost" in the event of a trip cancellation. (Dkt. 1-1 at 22.) A trip cancellation can include a situation in which the insured is prevented from taking the trip on account of sickness, as documented by a physician, or on account of being quarantined. (Dkt. 1-1 at 32.) Here, Plaintiff adequately alleges that both of these trip cancellation reasons existed and prevented her from traveling. Plaintiff does not seek the voucher plus the full cost of airfare; instead, she only seeks the full cost of airfare. Regardless of what value the voucher may have to some, the voucher does not equate to the full cost of her ticket because of its requirement that it be used during a nationwide pandemic when air travel was being discouraged and her cruise had been cancelled. In fact, the only reason she had purchased the airfare was to get to the cruise ship and therefore the voucher is worthless to her. Assuming also that she had been ill, the limitation on the use of the voucher also places her in a deficit position because the value is even less for her—as a person who had been suffering from bronchitis during the COVID-19 pandemic. Because whatever the value of the voucher she received is, it is less than the actual cash value of the flight,...