APPEAL from the Circuit Court of Clark County; the Hon. CASLON
K. BENNETT, Judge, presiding.
MR. JUSTICE WEBBER DELIVERED THE OPINION OF THE COURT:
The appeal and cross-appeal in this case present problems concerning adjustment and settlement of first-party claims for automobile losses. We affirm the trial court.
Plaintiff's automobile, a 1972 Chrysler Newport, was damaged beyond economical repair in a collision. The vehicle was equipped with a variety of extra equipment such as radio, automatic transmission, power steering, power brakes, air conditioning and a vinyl roof. It had relatively high mileage but its general condition was variously described as "good," "excellent" or "topnotch."
Defendant admitted liability but disputed the amount. Various offers were made to plaintiff over a six-month period from January to June 1975. All such offers were taken from a publication described as the National Auto Dealers Association Book. The book lists the average retail value of automobiles of all makes and styles and further lists variables for extra equipment. These increase the average price. Other listed variables, such as high mileage, decrease the average price. Defendant's constant and continuing offer for plaintiff's automobile was $1,775 being the NADA book average price, plus allowance for a vinyl roof, less a high mileage deduction, and a $25 deductible. Plaintiff refused the offer.
In July 1975, plaintiff filed suit to recover the value of his automobile plus interest, and attorney's fees, for vexatious refusal to settle. A bench trial was held in the circuit court of Clark County in June and July 1978. The trial court found in favor of the plaintiff in the sum of $2,575 as the value of the automobile but refused to allow interest or attorney's fees. Defendant appealed the judgment as to value, and plaintiff cross-appealed the issue of interest and fees.
Central to our decision is an interpretation of Rule 7 of the regulations of the Illinois Department of Insurance. The pertinent parts of that rule read as follows:
"Section 7. [Implements section 154.3(d) of the Illinois Insurance Code.]
A. When the Insurance policy provides for the adjustment and settlement of first party automobile total losses on the basis of actual cash value or replacement with other of like kind and quality, one of the following methods must apply:
THE COMPANY MAY ELECT TO OFFER A REPLACEMENT VEHICLE.
(1) A replacement vehicle is defined as a specific, comparable, and available vehicle that is both furnished and paid for by the company, with no additional cost to the insured other than his deductible.
In the event the insured elects a cash settlement instead of such replacement vehicle, the company need pay only the amount it would have otherwise paid for the replacement vehicle, including all applicable taxes and license fees. As a condition precedent to this method of settlement, the company must first offer the replacement vehicle to the insured and the insured must reject the offer. Both the offer and rejection must appear in an examination of the file.
THE COMPANY MAY SELECT A CASH SETTLEMENT.
(2) A cash settlement must be based upon the retail value of the automobile as published in a generally recognized source that is uniformly and regularly used by the company. Any deviation from this procedure must be supported by documentation that gives detailed information about the automobile's condition. Any deductions from retail valuations must be measurable, discernible, itemized, and specified concerning dollar amount, and they shall be appropriate in amount.
(3) The company shall provide a reasonable written explanation to the concerned parties when cash settlement offers, as set forth in (1) and (2), are made. The explanation must specify the dollar amount of the base figure and identify the actual source. Any additions or ...