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Songer v. State Farm Fire & Casualty Co.





APPEAL from the Circuit Court of Clay County; the Hon. DANIEL H. DAILEY, Judge, presiding.


Plaintiff, Robert J. Songer, appeals from an order of the circuit court of Clay County awarding him $3,500 for attorney fees, $101.62 for costs, and $1,000 as a penalty for the vexatious and unreasonable delay of defendant, Country Mutual Insurance Company, in paying its pro rata share of a fire loss incurred by plaintiff. Plaintiff contends that the amount awarded for attorney fees is unreasonably low and inadequate in light of the circumstances of the case and that the trial court erroneously considered certain factors in making its determination.

The instant case involved protracted litigation which commenced on June 19, 1975, between plaintiff and defendants, State Farm Fire and Casualty Company and Country Mutual Insurance Company. In our previous decision in this case, we summarized the procedural history as follows:

"After a fire destroyed his house and its contents, plaintiff, Robert J. Songer, brought this action in the Circuit Court of Clay County for a declaratory judgment to determine the rights and liabilities of defendant State Farm Fire and Casualty Company and defendant Country Mutual Insurance Company under their respective policies issued to the plaintiff. The trial court declared, among other things, that Country Mutual was responsible for a pro rata share of the loss, the amount to be determined in a pending companion suit. However, the trial court reserved the question of whether Country Mutual was liable for plaintiff's attorney's fees.

Country Mutual appealed. We dismissed the appeal without prejudice for lack of a final and appealable judgment. Country Mutual was granted leave to obtain a final judgment on the question of attorney's fees.

On remand the trial court found that Country Mutual was vexatious and without reasonable cause in having refused to pay its pro rata share of the loss. The court further found that the matter of attorney's fees was controlled by section 155 of the Illinois Insurance Code (Ill. Rev. Stat. 1975, ch. 73, par. 767) as it existed prior to the amendment effective October 1, 1977, which removed the maximum fee recovery limitation of $1,000. Accordingly, the trial court ordered that the plaintiff recover $1,000 of his attorney's fees from Country Mutual." Songer v. State Farm Fire & Casualty Co. (1980), 91 Ill. App.3d 248, 249-50, 414 N.E.2d 768, 769.

On the prior appeal, Country Mutual argued that the policy was cancelled by substitution prior to the loss and that its refusal to pay was not unreasonable and vexatious as to warrant any award of attorney fees. In finding that the trial court did not abuse its discretion in concluding that Country Mutual's refusal to pay was vexatious and unreasonable, we noted that:

"It is apparent that the trial court concluded that the facts of this case were plainly outside the scope of any accepted definition of the doctrine of cancellation by substitution. We agree and note further the lack of any provision in the Country Mutual policy relieving it from liability in the event of other insurance and the indications in Country Mutual's communications following the loss that it did not treat the policy as having been cancelled." (91 Ill. App.3d 248, 253, 414 N.E.2d 769, 772.)

We also found that the trial court erred in applying the prior version of section 155 of the Insurance Code and therefore remanded the cause for a determination of the amount of attorney fees to be awarded under the statute as amended.

On remand, plaintiff, with leave of court, filed an amended petition for attorney fees to include services rendered throughout the litigation, certain costs and expenses, and for assessment of a $5,000 penalty pursuant to section 155(b) of the Illinois Insurance Code. (Ill. Rev. Stat. 1979, ch. 73, par. 767(b).) On July 15, 1981, a hearing on the amended petition for attorney fees was held. John R. Meyer, plaintiff's attorney, testified that he had practiced law in Illinois since 1948, that plaintiff hired him in 1974 in connection with the fire that destroyed his residence, and that he was experienced in matters pertinent to the instant case. Meyer further testified as to the usual and customary fee for the years in question and that he spent 194 hours working on behalf of the plaintiff over the last seven years. Meyer stated that his total fees for his services was $9,563.75.

James B. Wham, the attorney for State Farm, testified as to his knowledge of the case and the work performed by Meyer. Wham stated that in his opinion the fee of $9,563.75 was reasonable.

William Robin Todd, an attorney, testified that he had been present during some of the proceedings in the instant case, examined the file and appellate briefs, and had heard the testimony of Meyer as to the hours spent and fees charged. Todd was of the opinion that the $9,563.75 was a reasonable fee.

Following arguments of counsel, the trial court orally announced its decision:

"As the recent decision held, attorneys fees can't be determined solely on the basis of hours spent times the billing rate. They have to use other elements of the ABA Code, among others the amount involved, fees customarily charged and so forth. In my opinion, a fee of $3,500.00 would be a reasonable attorney fee on the basis that this was purely between Mr. Meyer and Mr. Songer. I just don't believe it ...

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