Opinion ID: 1192075
Heading Depth: 2
Heading Rank: 1

Heading: The Parties and the Allegations

Text: Dr. Bemis filed this action in Illinois state court, alleging that Safeco had employed a computerized bill payment program to underpay systematically claims made under automobile insurance policies. The introductory paragraph of the complaint established the gravamen of the action: This is a case about a scheme by [SICA] and [SICI] (collectively, `Defendants' or `Safeco') and its Safeco insurer affiliates (such as American States) to mislead and improperly reduce payouts under medical payments coverage by using biased third party bill audit software programs to adjust those medical expense claims. S.A. 1. The complaint alleged three causes of action based on state law: (1) breach of contract, [1] (2) violation of various Illinois consumer fraud statutes and (3) unjust enrichment. The only named defendants were SICA and SICI. The complaint further explained that the suit was brought as a class action on behalf of: All insured persons and licensed medical providers who: (a) submitted first-party medical claims to a Safeco member company pursuant to a Safeco insurance policy; (b) had their claim submitted to computer review, [sic] (c) received or were tendered an amount less than the submitted medical expenses and [sic] (d) received or were tendered an amount less than the stated policy limits. S.A. 9. [2] SICA and SICI are both wholly owned subsidiaries of Safeco Corporation, which, in turn, is wholly owned by a holding company. The ultimate owner is Liberty Mutual Group Inc. SICA adjusts claims for some other companies owned by Safeco Corp. SICI only adjusts its own claims. S.A. 457. It appears that, at all relevant times, SICA adjusted claims for at least five other Safeco Corporation companies. [3] In October 1997, Safeco Corporation acquired American States Financial Corporation, the corporate parent of six other insurance companies. [4] Prior to the acquisition, the American States companies were competitors of the Safeco companies. SICA did not begin to adjust claims made under policies issued by the American States companies until December 1998 at the earliest.