insurer that vexatiously or unreasonably refused to pay a claim.
The Illinois Supreme Court has not yet addressed the issue of
the preemptive effect, vel non, of Section 155. There is a split
in the state appellate courts and indeed in this district over
this question. Judge Marshall, for example, has held that if
confronted with this issue, the Illinois Supreme Court would rule
that Section 155 has no preemptive effect. Roberts v.
Western-Southern Life Ins. Co., 568 F. Supp. 536 (N.D.Ill. 1983);
Kelly v. Stratton, 552 F. Supp. 641 (N.D.Ill. 1982). Judge Aspen,
on the other hand, believes that the Illinois Supreme Court would
decide that Section 155 precludes all extracontractual common law
actions, including both claims for compensatory and punitive
damages. Aabye v. Security-Connecticut Life Ins. Co., 586 F. Supp. 5,
8 (N.D.Ill. 1984) (Aspen, J.); Strader v. Union Hall, Inc.,
486 F. Supp. 159 (N.D.Ill. 1980). Although Judge Shadur believes
that the duty of a district judge is to apply the law prevailing
in the state appellate district in which the federal court sits,
rather than to attempt to predict what the state supreme court
would do if presented with the question, he believes that the
controlling precedent supports Judge Aspen's position, i.e.,
punitive damage claims have been preempted. Abbott Laboratories
v. Granite State Ins. Co., 573 F. Supp. 193 (N.D.Ill. 1983).
Finally, in a more recent decision, Judge Moran takes a middle
road, ruling that while Section 155 preempts claims for punitive
damages, it does not bar suits for compensatory damages. Barr Co.
v. Safeco Ins. Co. of America, 583 F. Supp. 248 (N.D.Ill. 1984)
On the three occasions that we have interpreted the state law,
we have held that when the Illinois legislature enacted Section
155 it preempted the field, foreclosing common law actions
seeking compensatory and punitive damages for breach of the duty
of good faith and fair dealing. Tramm Investment Corp. v. Great
Southwest Insurance Company, et al., No. 81 C. 1851 (N.D.Ill.
Feb. 15, 1983) (Grady, J.); Bank of Naperville v. Merrimack
Mutual Fire Insurance Company, No. 81 C 774 (N.D.Ill. Oct. 28,
1982) (Grady, J.); Hyler v. Prudential Insurance Company of
America, et al., No. 79 C 2507 (N.D.Ill. Aug. 3, 1982) (Grady,
Although there is state decisional authority supporting each of
the variant positions, we adhere to our prior rulings and hold
that if faced with this question, the Illinois Supreme Court
would decide that both compensatory and punitive damage actions
are preempted by the Illinois Insurance Code. We note
additionally that the Illinois Appellate Court, First Division,
recently held that Section 155 preempts both punitive and
compensatory damage actions. Kinney v. St. Paul Mercury Ins. Co.,
120 Ill.App.3d 294, 75 Ill.Dec. 911, 458 N.E.2d 79 (1st Dist.
Thus, the Illinois Insurance Code provides the sole remedy for
Illinois plaintiffs claiming denial of benefits under insurance
policies due to the vexatious and unreasonable conduct of an
insurer; no independent tort action exists.*fn4
Accordingly, we grant defendants' motion to dismiss Counts II,
IV and VIII of the complaint.