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State Farm Mutual Automobile Insurance Co. v. Lopez2/1/2001
mpanies doing business in Texas. Tex. Ins. Code Ann. art. 21.01-21.81 (Vernon 1981 & Vernon Supp. 2001). Article 21.42, entitled "Texas Laws Govern Policies," provides:
Any contract of insurance payable to any citizen or inhabitant of this State by any insurance company or corporation doing business within this State shall be held to be a contract made and entered into under and by the virtue of the laws of this State relating to insurance, and governed thereby, notwithstanding such policy or contract of insurance may provide that the contract was executed and the premiums and policy (in case it becomes a demand) should be payable without this State, or at the home office of the company or corporation issuing the same. Tex. Ins. Code Ann. art. 21.42 (Vernon 1981).
Appellees have asserted causes of action for breach of contract and fraud in the contract. In order for article 21.42 to apply, the insurance proceeds must be payable to a Texas citizen, the policy must be issued by a company doing business in Texas, and the policy must arise in the course of the insurance company's Texas business. Hefner v. Republic Indem. Co. of Am., 773 F.Supp. 11, 13 (S.D. Tex. 1991)(citing Howell v. Am. Live Stock Ins. Co., 483 F.2d 1354 (5th Cir. 1973) and General Am. Life Ins. Co. v. Rodriguez, 641 S.W.2d 264, 267 (Tex. App.-Houston [14th Dist.] 1982, no writ)). These conditions are all satisfied in this case.
Assuming, arguendo, that article 2.18 requires the application of Illinois law in this case, we disagree with appellants' interpretation of section 5/201 of the Illinois Insurance Code. A fair interpretation of section 5/201 indicates that accounting of insurance officials to policyholders, at the suit of the latter, is not prohibited by the statute in express language, is not granted to the Illinois Director of Insurance, and cannot be held to be prohibited by law unless it interferes with the prosecution of the business of the insurance company. Winger v. Chicago City Bank & Trust Co., 67 N.E.2d 265, 272 (1946). Section 5/201 is primarily concerned with interfering with, obstructing or terminating the insurance company's business and does not assume to restrain the prosecution of actions based upon contractual rights. Frontier Inv. Corp. v. Belleville Nat'l Sav. Bank, 254 N.E.2d 295, 298 (5th Dist. 1969). The determination and enforcement of contract rights are proper matters for disposition in the courts without intervention from the Illinois Director of Insurance. People ex rel. Parkinson v. Williams, 64 N.E.2d 464, 471 (1945). Section 5/201 is directed primarily against actions representing a direct effort to obstruct or terminate the prosecution of the company's business with the public, such as quo warrantor or injunction, and against orders or decrees providing administrative relief in the form of receivership, liquidation or rehabilitation of the company. Parkinson, 64 N.E.2d at 470. We conclude that section 5/201 of the Illinois Insurance Code does not preclude private citizens from bringing this type of suit against an Illinois insurance company.
We hold the trial court has jurisdiction over this suit. We decline to determine whether Texas or Illinois law should apply in this case because this matter was not fully presented to the trial court, and the trial court made no ruling on this issue. We overrule appellants' first issue.
E. General Requirements for Class Certification
Class action suits furnish an efficient means for numerous claimants with a common complaint to obtain a remedy where it is not economically feasible to obtain relief within the traditional framework of a multiplicity of small individual suits for damages. Bloyed
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