Greenberger v. Geico: Destroying Evidence Before Filing A Lawsuit Is Not A Good Idea
January 20, 2011
If you have a property damage claim and you go ahead and settle with your insurance company, you may be able to sue your insurance company if the settlement is inadequate and does not put you back in the same position as you were before the claim arose. However, if you sell the vehicle and/or junk it, the Court says that your claim will fall because without the evidence to be examined, you will not be able to prove your case and show that the insurance company short changed you. That is what happened to Steven Greenberger.
Steven Greenberger’s car was damaged in an accident, and the next day his insurer, GEICO General Insurance Co., estimated the damage and wrote him a check to cover his claim. Greenberger accepted this payment but never repaired the car. Instead, he donated the car to charity and later sued GEICO in state court alleging breach of contract, consumer fraud in violation of 815 ILL. COMP. STAT. 505/1 et seq., and common-law fraud. The suit was filed as a class action, so GEICO removed it to federal court under the Class Action Fairness Act, 28 U.S.C. § 1332d.
Though legally distinct, Greenbergers contract and fraud claims are all premised on the same basic factual allegation: that GEICO systematically omits necessary repairs from its collision-damage estimates in violation of the promise to restore the policyholders vehicle to its preloss condition. The district court sidestepped the class-certification question, dismissed the statutory consumer-fraud claim, and then entered summary judgment for GEICO on the breach-of-contract and common-law fraud counts.
Greenberger appeals.We affirm. All of Greenbergers claims are foreclosed by the Illinois Supreme Courts comprehensive decision in Avery v. State Farm Mutual Automobile Insurance Co.,835 N.E.2d 801 Ill. 2005. Among other important holdings, Avery established the common-sense proposition that a policyholders suit against his insurer for breach of its promise to restore his collision-damaged car to its preloss condition cannot succeed without an examination of the car. Id. at 826. Greenberger gave away his car, and without it, he cannot prove that what GEICO paid him was inadequate to restore the car to its preloss condition.
Avery also made clear that fraud claims must contain something more than reformulated allegations of a contractual breach. Id. at 844. Greenberger alleges that GEICO never intended to restore his car to its preloss condition and failed to disclose that it regularly breaches this contractual promise. These are breach-of-contract allegations dressed up in the language of fraud. They cannot support statutory or common-law fraud claims.