In the

United States Court of Appeals

For the Seventh Circuit

____________

No. 03-3569

GERALDINE TROPP, as Administrator of the

Estate of MARY E. MIKOS, individually and

on behalf of all other persons and entities

similarly situated,

Plaintiff-Appellant,

v.

WESTERN-SOUTHERN LIFE INSURANCE CO.,

d/b/a WESTERN-SOUTHERN FINANCIAL GROUP,

Defendant-Appellee.

____________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 02 C 8341—Rebecca R. Pallmeyer, Judge.

____________

ARGUED MAY 21, 2004—DECIDED AUGUST 20, 2004

____________

Before BAUER, KANNE, and DIANE P. WOOD, Circuit

Judges.

KANNE, Circuit Judge. On September 27, 2002, Geraldine

Tropp, administrator of her mother’s estate, filed a classaction complaint against Western-Southern Life Insurance

Co. in the Circuit Court of Cook County, Illinois. After

Western-Southern removed the case to federal court, Tropp
2 No. 03-3569

filed an amended class-action complaint. The amended complaint included her original claim that Western-Southern

violated the Illinois Consumer Fraud and Deceptive

Business Practices Act, 815 Ill. Comp. Stat. 505/1, et seq.

The district court, finding that the interests of the estate

were governed by a prior class-action settlement approved

by an Ohio state court, granted summary judgment to

Western-Southern on that count. Tropp also alleged (as

claims in the alternative) that Western-Southern improperly administered the class-action settlement. The district

court, after ensuring that the estate was paid an undisputed

amount under the settlement, dismissed the remaining

counts. We affirm in all respects.

I. History

Tropp is a resident of Frankfort, Illinois, and is the administrator of the estate of her mother, Mary Mikos, formerly a resident of Blue Island, Illinois. Mikos held a life

insurance policy issued by Western-Southern, a national

insurance company incorporated and with its principal

place of business in Ohio. Western-Southern specializes in

selling relatively low-limit life insurance policies, with

moderate premiums, to older individuals. 

Mikos purchased the policy on May 1, 1983. She was

seventy-four years old at the time. Complying with the

terms of the policy, Mikos made monthly payments for the

first three years. Thereafter, she had the choice of paying

monthly, quarterly, semiannually, or annually; the premium rates were higher if she chose to continue paying

through an installment plan rather than a single yearly

payment. Mikos chose to pay the premium annually after

the three-year period. But she was inappropriately charged

(and in fact paid) the higher monthly premium rate, multiplied by twelve, rather than the lower annual premium

rate. As a result, by the time Mikos had fully paid the policy
No. 03-3569 3

1 Tropp insists that she submitted a death certificate to WesternSouthern and that she refused to cash a check from WesternSouthern. Western-Southern’s business records, on the other hand,

indicate that on January 28, 2002, it notified Tropp that the check

was being sent to the local office and would be released when she

provided the required documents. It claims that no check was

issued to Tropp because the death certificate was never received.

Ultimately, this dispute is irrelevant to the disposition of the case.

on October 1, 1995, she had paid $5,544.99 in total premiums, whereas had she paid the proper amounts, she would

have paid only $4,962.28.

On January 16, 2002, Mikos died. Tropp contacted

Western-Southern by telephone the week of January 21

regarding her mother’s death. Tropp and her brother met

with two of Western-Southern’s agents later that week.

Tropp asserts that she provided the agents with a copy of

Mikos’s death certificate at that time. The agents explained

that the death benefit on the policy was $1,756 (including

accumulated dividends of $129), and on January 28,

Western-Southern issued a check in that amount to its local

office. Neither the agents nor anyone else at WesternSouthern informed Tropp that Mikos had the right to enhanced benefits under a class-action settlement, approved

by an Ohio state court the previous October. Tropp, despite her ignorance of the settlement, was suspicious of the

amount her mother had paid in premiums, so she refused

to cash the check in order to preserve her legal rights.1

The Ohio class-action lawsuit, Kriedler v. Western-Southern

Life Assurance Co., was a nationwide class action brought

by policyholders. The Kriedler plaintiffs sought damages in

connection with Western-Southern’s marketing practices

and administration of class members’ insurance policies.

The second amended complaint in Kriedler alleges expansively that “[t]he case is brought . . . on behalf of all persons

or entities who have or had an interest in individual
4 No. 03-3569

permanent life insurance policies . . . issued by [WesternSouthern] . . . and taken from January 1, 1981 through and

including December 31, 1998.” The Kriedler complaint goes

on to allege a broad range of deceptive practices by

Western-Southern in connection with these policies. The

same day the second amended complaint was filed, June 14,

2001, the parties entered into a settlement agreement.

On approximately August 20, 2001, Rust Consulting, a

firm hired by Western-Southern to notify potential class

members of the litigation and settlement, mailed a Class

Notice package to Mikos at her address of record in Blue

Island. The package contained a detailed description of the

litigation, the settlement, a definition of the class, instructions on how to opt out of the settlement, and a complete

copy of the release and waiver of rights that would be effective against settlement participants. The release is very

broad, stating that the releasing parties shall not bring any

cause of action against Western-Southern for any of the

“Released Transactions.” The “Released Transactions” are

defined as the “marketing, solicitation, application, underwriting, acceptance, sale, purchase, face amount charge,

operation, retention, administration, interest crediting, servicing, or replacement . . . of the Policies, or any insurance

policy . . . sold in connection with, or relating in any way

directly or indirectly to the sale or solicitation of, the

Policies . . . .” Mikos did not opt out of the class.

On October 23, 2001, the Ohio trial court approved the

settlement and expressly retained “exclusive jurisdiction

over the administration, consummation, enforcement, and

interpretation of the Settlement.” (R. 8, Ex. A at 25-26.) The

court certified a class of “all persons who are or were

owners of a Policy or Policies, except . . . any owner of a

Policy or Policies who timely excludes himself or herself

from the Class . . . .” By virtue of the settlement agreement,

class members were eligible for either “General Relief” or

“Claim Evaluation Process (CEP) Relief.” 
No. 03-3569 5

Under the General Relief option, class members would

“receive coverage under a Settlement Death Benefit simply

by remaining in the Class and not electing to participate in

CEP.” The Settlement Death Benefit increases the beneficiary’s policy payment by six percent, following WesternSouthern’s receipt of proof that the insured died within a

year of the date that the settlement agreement was entered.

Under the alternative CEP relief, any class member who

believed he or she was harmed by wrongdoing in connection

with a policy was invited, in the notices sent by Rust

Consulting, to complete and submit a CEP election form by

September 23, 2001. Following the approval of the settlement by the Ohio court, class members who elected the CEP

remedy could submit claim forms to be reviewed by a third

party. Mikos did not elect to participate in the CEP. 

Tropp’s suit claimed that Western-Southern violated the

Illinois Consumer Fraud Act by overcharging her mother

for her policy premiums. In her original complaint, filed in

Illinois state court, she requested both monetary and injunctive relief for the alleged Illinois Consumer Fraud Act

violations. Once the case had been removed to federal court,

Tropp also asserted in her amended complaint that if the

class action foreclosed her Illinois Consumer Fraud Act

claim, then Western-Southern’s failure to pay the Mikos estate (and other similarly situated parties) according to the

Ohio settlement entitled the Mikos estate to payment under

breach of contract, breach of fiduciary duty, unjust enrichment, and an accounting. Western-Southern moved for

summary judgment, insisting that Mikos was covered by

the Kriedler settlement and could only recover pursuant to

that agreement, not in a separate lawsuit. Western-Southern acknowledged its obligations under the Kriedler

settlement and asserted that it stood ready to pay as soon

as it received a death certificate from Tropp.

The district court granted summary judgment to WesternSouthern on Tropp’s Illinois Consumer Fraud Act claim,

holding that Mikos indeed was a party to the Kriedler set-
6 No. 03-3569

tlement. The district judge also denied Tropp’s class certification motion, holding that the Ohio trial court had retained

jurisdiction over all issues pertaining to the administration

of the settlement and that the additional counts should be

dismissed for that reason. In addition, the district court

ordered Western-Southern to obtain Mikos’s death certificate and to tender any undisputed payments owed under

the policy. Western-Southern promptly complied with this

order, obtaining the death certificate and paying the

Settlement Death Benefit to the Mikos estate.

II. Analysis

A litigant may invoke diversity jurisdiction in federal

court when all parties are citizens of different states and

the amount in controversy exceeds $75,000. 28 U.S.C.

§ 1332. Western-Southern, the removing party, must offer

evidence that proves to a reasonable probability that jurisdiction, including the requisite amount in controversy,

exists. See Smith v. Am. Gen. Life & Accident Ins. Co., 337

F.3d 888, 892 (7th Cir. 2003). Tropp is (and Mikos was) a

citizen of Illinois. Western-Southern is organized and has

its principal place of business in Ohio. And because “the

citizenship requirement for purposes of diversity jurisdiction in a class action hinges entirely on the citizenship of

the named plaintiffs[,]” Payton v. County of Kane, 308 F.3d

673, 681 (7th Cir. 2002), there is complete diversity among

the parties. 

There is also a reasonable probability that the amount in

controversy at the time of removal exceeded $75,000.

Tropp’s original complaint, filed at the time of removal (not

the subsequent amended complaint), is considered for

jurisdictional purposes. Gossmeyer v. McDonald, 128 F.3d

481, 487-88 (7th Cir. 1997). In that complaint, Tropp’s individual compensatory damages, potential punitive damages,

and pre-filing attorneys’ fees could not reasonably amount
No. 03-3569 7

2 Tropp subsequently chose not to pursue injunctive relief in her

amended complaint, filed after removal.

to $75,000. But because the cost a defendant incurs in

complying with injunctive relief is a legitimate consideration in a jurisdictional inquiry, In re Brand Name

Prescription Drugs Antitrust Litig., 123 F.3d 599, 609 (7th

Cir. 1997), we are satisfied that Western-Southern’s affidavits establish that the costs of implementing the injunctive relief requested by Tropp in the original complaint

would exceed $75,000.2

As a federal court sitting in diversity, we apply state substantive law and federal procedural law. Musser v. Gentiva

Health Servs., 356 F.3d 751, 754 (7th Cir. 2004).

A. The Effect of the Kriedler Settlement on Tropp’s

Claims

We review de novo the district court’s grant of summary

judgment, construing all facts and inferences in the light

most favorable to the non-moving party. Dykema v. Skoumal,

261 F.3d 701, 704 (7th Cir. 2001). Summary judgment is

proper when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material

fact and that the moving party is entitled to a judgment as

a matter of law.” Fed. R. Civ. P. 56(c).

As the district court noted, both parties “recognize that

the resolution of [Western-Southern’s] summary judgment

motion hinges on whether or not Mikos was a class member in

the Kriedler class action lawsuit.” This is because a release

incorporated into an order approving a class action settlement bars subsequent litigation based on the released

claims. Cf. Uhl v. Thoroughbred Tech. & Telecomms., Inc., 309

F.3d 978, 985 (7th Cir. 2002) (“The fact that each individual

class member did not know the full extent of the burden she
8 No. 03-3569

would suffer is unimportant.”), (citing Williams v. Gen. Elec.

Capital Auto Lease, 159 F.3d 266, 274 (7th Cir. 1998) (“It is

not at all uncommon for settlements to include a global

release of all claims past, present, and future, that the

parties might have brought against each other.”)).

Here, Tropp’s claim that Western-Southern collected excessive premiums from Mikos on her 1983 insurance policy, in

violation of the Illinois Consumer Fraud Act, is barred by

the terms of release in the Kriedler class-action settlement.

“Where the terms of the release are clear and explicit, the

court must enforce the release as written.” Loberg v. Hallwood

Realty Partners, L.P., 753 N.E.2d 1020, 1025 (Ill. App.

2001). The settlement agreement, which covered purchasers

of policies from 1981 to 1998 (with non-applicable exceptions), included Mikos as a member of the class. There is no

dispute that Mikos was properly notified by Rust Consulting,

the firm hired to provide notification materials to all class

members. Mikos could have opted out of the class after she

received notice of the settlement, but did not do so. 

In addition, Tropp’s claim is covered by the definition of

“Released Transactions” in the settlement. The settlement

agreement barred claims related to “policy charges” or “premium charges,” including the “adequacy of the description

of those items.” (R. 8, Ex. A at 15-18.) Tropp’s claim that

Western-Southern charged Mikos and others too much in

annual premiums is therefore foreclosed by the settlement.

B. The Dismissal of the Additional Counts

Tropp’s four additional counts were premised on the

argument that Western-Southern had violated the Kriedler

settlement by failing to immediately pay the settlement

benefit to the Mikos estate upon her death (and, of course,

that further discovery is needed to determine if this same

thing has happened to other class members). WesternSouthern counters that it simply has been waiting to receive the death certificate to complete the processing of the
No. 03-3569 9

3 Tropp’s counsel refused to submit the death certificate to

Western-Southern, claiming that Tropp had already submitted a

death certificate. Eventually, Western-Southern retrieved a copy of

the certificate itself and paid the claim. We commend the district

court for ensuring that the Mikos estate received the undisputed

funds, despite the misguided efforts of Tropp’s counsel to avoid

collecting the settlement funds for his client. Western-Southern

did not dispute that it owed the Mikos estate this money; there

was no legal issue to decide.

4 Before the claims were ultimately dismissed on August 29, 2003,

the district court had considered, on August 1, a motion by Tropp

to certify a class based on her allegations that Western-Southern

improperly failed to pay the settlement amount promptly. Because

we agree that dismissal of the substantive complaint is proper,

there is no need to consider whether class certification was

appropriate. As the district judge noted at the August 1 hearing,

“[t]hat would be a class issue potentially with respect to the Ohio

(continued...)

claim before payment.

After ensuring that Western-Southern obtained a copy

of the death certificate and that Tropp was paid the life

insurance benefit (with the additional settlement amount),3

the district court properly dismissed the four remaining

counts because the Ohio trial court had retained exclusive

jurisdiction over the administration of the settlement, and

Tropp’s claims alleged nothing more than violations of the

settlement agreement. By retaining exclusive jurisdiction,

the Ohio court asserted that it was in the best position to

effectively monitor the administration of the settlement so

that the interests of all class members are protected. See

generally In re VMS Sec. Litig., 103 F.3d 1317, 1321 (7th

Cir. 1996); Alexander v. Chicago Park Dist., 927 F.2d 1014,

1022-23 (7th Cir. 1991). If Tropp wishes to contest the propriety of the Kriedler settlement and its administration, the

proper place to litigate such a claim is the Kriedler trial

court.4
10 No. 03-3569

4 (...continued)

litigation. I don’t think it would be for this Court to determine

what relief is appropriate to class members there. I think that’s

a matter to go back before the Ohio judge and say there has been

a breach of the settlement.”

USCA-02-C-0072—8-20-04

III. Conclusion

For the foregoing reasons, we AFFIRM the district court’s

dismissal of Tropp’s lawsuit.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit