play. If one of these defendants decided to defend and
indemnify UNR against a particular asbestos claim, that
decision would not be made because free market forces
compelled it; it would be made because that defendant's
contract required it. Similarly, if one of these defendants
wrongfully refused to defend and indemnify UNR, that refusal
is not wrongful because it represents a lessening of
competition but rather because it represents a breach of
UNR also asserts that while each of these defendants could
have breached their contracts individually without violating
the antitrust laws, a conspiracy to breach is a violation.
However, that assertion misapprehends the reason why
conspiracies and simultaneous individual acts are treated
differently under the Sherman Act. As already noted, the
antitrust laws are designed to protect competition. If
competitors simultaneously but independently raised their
prices, the antitrust laws assume that since there was no
conspiracy the price increase must have been caused by market
forces and is therefore unobjectionable. That is, a conspiracy
is a necessary condition for a violation of Section One of the
Sherman Act. Monsanto Co. v. Spray-Rite Service Corp., ___ U.S.
___, 104 S.Ct. 1464, 1469-71, 79 L.Ed.2d 775 (1984). However, a
conspiracy is not a sufficient condition as UNR seems to
assume. Accepting that further assumption would mean that every
conspiracy to commit some kind of wrong in the course of
business would ipso facto constitute a restraint of trade in
violation of the Sherman Act. That result was certainly not
intended by the Sherman Act's framers, Sutliff, Inc. v. Donovan
Companies, 727 F.2d 648, 655 (7th Cir. 1984). Moreover, it is
simply not true that every such conspiracy has the effect of
restraining trade, and this case is a good example. UNR does
not allege that defendants' conspiracy affected the market for
insurance policies or any other market. The only effect
alleged, ignoring UNR's conclusory allegations, is a simple
breach of contract and the concomitant harm to UNR. Even
assuming that defendants would have been unable to successfully
breach their contracts unless they acted in concert, that fact
does not transform a breach of contract into a restraint of
The essential difference between an agreement not to compete
and an agreement not to honor contracts makes the cases
principally relied on by UNR inapposite. In Radiant Burners v.
Peoples Gas Co., 364 U.S. 656, 81 S.Ct. 365, 5 L.Ed.2d 358
(1961), the Court held that a conspiracy to make the sale of
plaintiff's gas burner impossible by refusing to provide gas to
plaintiff's purchasers stated a claim under the Sherman Act. In
St. Paul Fire & Marine Ins. Co. v. Barry, 438 U.S. 531, 98
S.Ct. 2923, 57 L.Ed.2d 932 (1978), the claim was that
defendants conspired to prevent St. Paul's policy holders from
getting medical malpractice insurance from any other insurance
company. The conduct involved in these cases was a potential
violation of the Sherman Act not simply because a conspiracy
was involved and a competitor or consumer was injured as a
result. Those cases involved an attempt to prevent one or more
competitors from making contracts in the future; that is, from
engaging in trade. Since UNR makes no allegation that anyone
was restrained from engaging in trade (as opposed to abiding by
a contract), those cases do not support UNR's position.
Put simply, UNR's argument is an attempt to avoid the
requirement that anticompetitive effect be pleaded and
adequately supported by factual allegations. See Bunker Ramo,
713 F.2d at 1284; Havoco of America v. Shell Oil Co.,
626 F.2d 549, 555 (7th Cir. 1980). UNR's view is that every conspiracy
that harms a consumer violates the Sherman Act. For the reasons
stated above, that theory is simply untenable. Without adequate
allegations of anticompetitive effect count 1 is fatally
defective and must be dismissed.*fn2
II. Count 2
The second count alleges that defendant insurance companies
American Mutual, Fireman's Fund, National Surety, Commercial
Union, Falcon, and defendant Insurance Services Office
conspired together with other members of the insurance
industry to deprive UNR and other asbestos manufacturers of
the full defense of asbestos claims to which UNR and the
others were entitled under their policies, to impose
fraudulent policy interpretations on their insureds so as to
avoid their obligations under those policies, and to disrupt
and eliminate the market for occurrence liability policies so
that they could market a claims-made policy which provides
less coverage at higher premiums. UNR also alleges that these
objectives were promoted by withdrawing coverage from
insureds, by "boycott," and by "instituting litigation." First
amended complaint at par. 39(e).
Count 2 charges, with one exception, the same type of
conduct charged in count 1. Not surprisingly, UNR's answer to
the motion to dismiss count 2 is in great measure identical to
its answer to the motion to dismiss count 1, though the main
emphasis is placed on the boycott theory rather than the
price-fixing theory. No reason is given for finding an
antitrust violation that was not rejected above, and therefore
the similar charges in count 2 fail for the same reason:
insufficient allegation of anticompetitive effect.
The one new charge made in count 2 is that the count 2
defendants conspired to refuse to issue occurrence policies.
UNR's answer brief makes no mention of that charge, apparently
because UNR concedes that a joint decision by insurers to
offer one type of policy rather than another is the type of
decision that is protected by the McCarran-Ferguson Act.
The McCarran-Ferguson Act exempts from the antitrust laws
conduct which is the business of insurance, is regulated by
state law, and does not amount to boycott, coercion or
intimidation. 15 U.S.C. § 1012-1013. Union Labor Life
Insurance Co. v. Pireno, 458 U.S. 119, 129, 102 S.Ct. 3002,
3008, 73 L.Ed.2d 647 (1982), sets forth the three criteria for
determining whether a particular practice constitutes the
business of insurance within the McCarran-Ferguson Act:
first, whether the practice has the effect of
transferring or spreading a policyholder's risk;
second, whether the practice is an integral part of
the policy relationship between the insurer and the
insured; and third, whether the practice is
limited to entities within the insurance industry.
It is obvious that an agreement to change the type of policy
offered is the business of insurance. The type of coverage
offered directly affects the spreading of risk, is at the very
heart of the policy relationship, and the agreement is limited
to insurance companies.
Turning to the second requirement, there is little question
that this conduct is regulated by state law. Illinois has a
comprehensive insurance code, Ill.Rev.Stat. ch. 73, § 1 et seq.
(1981), which is sufficient to satisfy this requirement.
Klamath-Lake Pharmaceutical Ass'n v. Klamath Medical Service
Bureau, 701 F.2d 1276, 1287 (9th Cir.), cert. denied, ___ U.S.
___, 104 S.Ct. 88, 78 L.Ed.2d 96 (1983).
Finally, an agreement to change to a new type of policy is
not a boycott and does not constitute coercion or
intimidation. In St. Paul Fire & Marine Ins. Co. v. Barry,
438 U.S. 531, 98 S.Ct. 2923, 57 L.Ed.2d 932 (1978) the Court held
that refusing to offer any coverage at all would be a boycott
and hence not exempt under the McCarran-Ferguson Act. However,
the Court explicitly recognized that fixing "rates or terms of
coverage" would not constitute a boycott. Id. at 544, 98 S.Ct.
2923, 57 L.Ed.2d 932. See also Grant v. Erie Ins. Exchange,
542 F. Supp. 457 (M.D.Pa. 1982), aff'd, 716 F.2d 890 (3d Cir.
1983). Therefore, the conspiracy to refuse to issue occurrence
policies, while it might violate the antitrust laws as a
refusal to deal, is exempt from antitrust scrutiny under the
McCarran-Ferguson Act. Since no antitrust allegations remain
in count 2, it is dismissed.*fn3
III. Count 4
Count 4 charges a breach of an "implied covenant of good
faith and fair dealing" against defendant insurance companies
Continental, Bituminous, Zurich, Home, Commercial Union,
Falcon, Continental Casualty Company, National Surety,
Fireman's Fund and American Mutual. Count 4 requests
compensatory and punitive damages from each of the above-named
Count 4 is based on the same facts alleged in count 1 plus
the charges of breach of insurance contract made in count 3.
Detailed review of the facts is unnecessary since the motion
to dismiss is aimed at count 4's legal, not factual, basis.
The five moving defendants claim that any recovery under this
theory is preempted by § 155 of Illinois Insurance Code of 1935
(Ill.Rev.Stat. ch. 73, § 767 (1981)), which authorizes a court
to award attorneys' fees plus a statutorily defined amount (in
no event to exceed $5,000) when the court finds that the
insurance company's action in refusing to recognize its
liability under its insured's policy was "vexatious and
This Court has previously held that § 155 preempts any
common-law tort recovery against an insurer. Gibe v. General
American Life Ins. Co., 84 C 1280 (N.D.Ill. May 24, 1984). An
earlier case by this court dismissing a tort claim for
compensatory and punitive damages against an insurer is
presently on appeal. United of America Bank v. Aetna Casualty
and Surety Co., 83 C 8154 (N.D.Ill. April 3, 1984), certified
for appeal in order dated April 26, 1984, appeal accepted,
Misc. 84-8022 (7th Cir. June 12, 1984). It therefore appears
that a definitive ruling will soon settle the issues raised by
the motion to dismiss count 4. To avoid delay in this case,
however, the present motion will be decided now. Furthermore,
the continuing judicial debate on these issues*fn4 has
convinced this court to reexamine its position.
Since the Illinois Supreme Court has not decided this issue,
this court must predict what rule that Court would adopt if
faced with the issue. Harris v. Karri-On Campers, Inc.,
640 F.2d 65, 68 (7th Cir. 1981); Barr Co. v. Safeco Ins. Co. of
America, 583 F. Supp. 248, 252-54 (N.D.Ill. 1984). In making
that decision, this court must consider all the data which the
Illinois Supreme Court would consider and follow the approach
that Illinois courts take toward the problem. Harris, 640 F.2d
Although the Illinois Supreme Court has not passed on
preemption as it relates to this particular statute, it has
addressed the issue of statutory preemption before. In
Hall v. Gillins, 13 Ill.2d 26, 147 N.E.2d 352 (1958), the Court
held that no new common-law right of action for a wrongful
death would be recognized where the legislature had created a
wrongful death remedy by statute. Though the statutory remedy
differed substantively from the proposed common-law action in
that it limited the kinds of damages that could be recovered to
pecuniary injury and limited the amount of damages that could
be recovered to $20,000, the Court was persuaded those
differences were "not sufficiently significant" to justify
creating a new remedy. 147 N.E.2d at 355.
A few years later the Court held that the Dram Shop Act of
1872 (now in Ill.Rev.Stat. ch. 43, § 135) preempted any
common-law recovery for damages caused by the negligent sale of
liquor. Cunningham v. Brown, 22 Ill.2d 23, 174 N.E.2d 153
(1961). In Cunningham, the Court reviewed the history leading
up to the 1872 Act and found that the Act was passed because
(1) no common-law action against tavern operators
for the sale of liquor existed, and (2) the "temperance forces
were demanding that the cost of the intoxicating liquor should
bear the damages it caused." 174 N.E.2d at 156. Since the
statutory remedy and the proposed common-law remedy both had
the same basic purpose — to make the tavern operator liable for
damages caused by his sale of liquor — the Court concluded that
the two remedies were "almost coincidental" except for the
amount of damages recoverable. The Court then cited Hall for
the proposition that the statutory limit of $15,000 on the
amount that could be recovered was not reason enough to create
a common-law action.
These two cases illustrate two principles relevant to the
question in this case. First, when the legislature has
provided a remedy for a heretofore unremedied evil, the courts
should not allow an end-run around the limits imposed by that
statute by creating a common-law action that remedies the same
basic evil. Second, the statutory and common-law actions need
not be identical for preemption to occur. In Hall, for example,
the legislature's allowing recovery only for pecuniary injury
did not justify creating a new tort that would allow recovery
for the "destruction of the family unit" as plaintiffs in that
case claimed. 147 N.E.2d at 355. Similarly, in Cunningham the
fact that the statute imposed liability without fault did not
convince the Court to create a parallel but fault-based
common-law action. 174 N.E.2d at 155. Finally, both cases held
that statutory limits on the amount recoverable were not reason
enough to create a common-law remedy.
Of course, not just any overlap between the statute and the
common-law remedy will do. Whether the legislature intended to
remedy the same basic evil as the common-law remedy is aimed
at "must be ascertained through examination of the practical
considerations to which the legislature directed itself when
enacting . . . the . . . statute." 174 N.E.2d at 156. Since
the statute here in question does not explicitly reveal the
evil the legislature was concerned with, an examination of
legislative history is necessary.
Section 155 of the Illinois Insurance Code was first enacted
in 1937 as part of a comprehensive revision of the insurance
laws. That first version of § 155 allowed reasonable attorneys'
fees if the insurance company was found to have behaved
vexatiously and without reasonable cause. The fee award could
not exceed the lesser of 25% of the amount the court or jury
awarded the insured (presumably on his contract claim), $500,
or the difference between the amount awarded the insured and
the amount the insurance company had offered in settlement
before the lawsuit.
The only indication of the legislature's intent this court
has found appears in an article explaining the New Code
generally. Havinghurst, Some Aspects of the Illinois Insurance
Code, 32 Ill.L.Rev. 391 (1937). Written by the chairman of the
committee of the Illinois State Bar Association Insurance Law
Section which drafted the basic version of the 1937 revision,
the article describes § 155 as "objectionable to [insurance]
companies" because "courts are apt to allow exorbitant amounts"
for attorneys' fees thus driving up premium rates. To rebut
that objection the author points out that (1) the court, not
the jury, makes the fee award, (2) "[n]o stated penalty is
provided for," and (3) the limits ($500 maximum at that time)
on the amount that could be awarded make the attorneys' fees
provision "the most moderate of any of the statutes." Id. at
404. The author then states:
In the absence of any allowance of attorneys'
fees, the holder of a small policy may see
practically his whole claim wiped out by expenses
if the company compels him to resort to court
action, although the refusal to pay the claim is
based upon the flimsiest sort of a pretext. The
strict limit on the amount allowable makes the
section significant only for small claims. It
should prove wholesome in its effect upon
companies unreasonably withholding payment of
such claims. It is doubtful if there are
many judges who would allow such fees when the
defense was bona fide although deemed inadequate.
One commentator has concluded from the above article that
the sole purpose of § 155 was to make possible suits by holders
of small policies by awarding the attorneys' fees that
otherwise would consume the holder's recovery on the policy.
Durham, Section 767 of the Illinois Insurance Code: Does It
Pre-Empt Tort Liability?, 16 John Marshall L.Rev. 471, 492-93.
However, the language of the statute as well as the above
quotations from Havinghurst's article contradict that
conclusion. If the legislature's sole purpose was to make suits
by holders of small policies economically worthwhile, then the
statute would have conditioned the fee award on the insured's
conduct by looking to whether the insured had prevailed and was
not otherwise undeserving. See Christiansburg Garment Co. v.
EEOC, 434 U.S. 412, 416-17, 98 S.Ct. 694, 697-98, 54 L.Ed.2d
648 (1978) (interpreting section 2000e-5(k) of Title VII).
Limiting attorneys' fee awards to cases where the insurer's
conduct was vexatious or unreasonable suggests that a second
purpose — punishing misbehaving insurance companies — was
at work. As Mr. Havinghurst wrote, § 155 "should prove
wholesome in its effect upon companies unreasonably withholding
payment of [small] claims." Although it could be argued that
the punitive remedy is insufficient where the policy amount is
large, Cunningham and Hall show that a court must not
second-guess the legislature's decision concerning the amount
necessary to fulfill the statute's purpose. That is especially
so when the constitutional provision which was invoked to
support the inadequate-remedy argument in those two cases (that
"Every person ought to find a certain remedy in the laws for
all injuries and wrongs which he may receive;" Ill. Const. Art.
II) has no application to the availability of punitive damages.
One appellate court has decided that the original § 155 does
not preempt punitive damages. In Lynch v. Mid-America Fire &
Marine, 94 Ill. App.3d 21, 418 N.E.2d 421, 49 Ill.Dec. 567 (4th
Dist. 1981), the court viewed § 155 as simply reversing the
normal rule against allowing attorneys' fees and stated "[t]he
tenor of the section gives no indication that it was intended
to cover the field of awarding compensation for bad faith or
vexatious dealing by insurers." 418 N.E.2d at 426, 49 Ill.Dec.
at 571. By lumping punitive and compensatory damages together,
however, that court did not follow the approach laid down in
Hall and Cunningham. While it may be true that § 155 was
not intended to "cover the field of awarding compensation," the
above discussion shows the 1937 legislature did intend § 155 to
fulfill the role of punitive damages. Whether § 155 preempts
compensatory damages is, of course, another matter.*fn5
The 1977 amendments to § 155 increased the punitive effect of
the award by removing the cap on attorneys' fees and providing
for the award of a separate sum not to exceed $5,000. Not
surprisingly, every Illinois appellate court that has
considered the the issue agrees that the present version of §
155 preempts punitive damages. Kinney v. St. Paul Mercury Ins.
Co., 120 Ill. App.3d 294, 458 N.E.2d 79, 75 Ill.Dec. 911 (1st
Dist. 1983); Hoffman v. Allstate Ins. Co., 85 Ill. App.3d 631,
407 N.E.2d 156, 40 Ill.Dec. 925 (2d Dist. 1980); Debolt v.
Mutual of Omaha, 56 Ill. App.3d 111, 371 N.E.2d 373, 13
Ill.Dec. 656 (3d Dist. 1978); Fisher v. Fidelity & Deposit Co.
of Maryland, 125 Ill. App.3d 632, 466 N.E.2d 332, 80 Ill.Dec.
880 (5th Dist. 1984). Even were this court not otherwise
persuaded that punitives are preempted, the uniform rule
adopted by these decisions "is not to be disregarded by a
federal court unless it is convinced by other persuasive data
that the highest court of the state would decide
otherwise." West v. AT & T, 311 U.S. 223, 237, (1940); see also
White v. United States, 680 F.2d 1156, 1161 (7th Cir. 1982). No
such persuasive data exists.*fn6 Therefore, this court
concludes that § 155 preempts any award of punitive damages
based on a common-law theory at all times relevant to this
Count 4 also claims compensatory damages. As the labels
suggest, compensatory and punitive damages serve different
purposes: the former compensates the plaintiff while the
latter punishes the defendant. Although both kinds of damages
can be recovered by one plaintiff for one wrong, they should,
strictly speaking, be considered the fruits of separate
action. Compensatory damages are recovered by a plaintiff
acting solely for himself to remedy his own wrong. Punitive
damages, by contrast, are recovered by an "attorney general"
(whether private or public) acting to punish and deter
behavior that has been deemed harmful to the public at large.
Therefore, in accord with the approach illustrated by
Hall and Cunningham, the legislative history must be reviewed
again to see whether § 155 was also intended to compensate
insureds who had suffered loss as a result of vexatious and
unreasonable behavior by their insurance company.
As already discussed, the Havinghurst article suggests the
original § 155 had two purposes: to make suits by holders of
small policies economically feasible, and to punish misbehaving
insurance companies. The article makes no mention of an intent
to compensate plaintiffs for actual losses. Moreover, the
wording of the statute itself contradicts such an intent.
Section 155 does not provide for an award in the general sense;
it provides for attorneys' fees. As the statute itself states,
attorneys' fees are considered "part of the taxable costs in
the action" rather than part of the damages sustained.
Therefore the language the legislature expressed itself in
belies any intent to address the problem of compensating the
plaintiff for damages sustained.
The substance of the statute also belies any intent to
preempt compensatory damages, since the provisions of § 155 are
fully explainable in terms of a punitive purpose, and some of
its provisions are only explainable in terms of that purpose.
As already noted, § 155 applies only when the insurer's conduct
was vexatious and unreasonable. That limitation makes perfect
sense if the award is intended to punish the defendant, but
little sense if the award is intended to compensate the
plaintiff since the need for compensation is wholly independent
of the vexatiousness of the insurer's conduct. Similarly, the
computation of the statutory award is consistent with a
punitive but not a compensatory purpose. The award is not
figured by looking to the losses sustained, but rather by
looking to the amount of reasonable attorneys' fees incurred.
While that method of computation is consistent with a punitive
purpose, see the Havinghurst article supra and Barr v. Safeco
Ins. Co. of America, 583 F. Supp. 248, 255 (N.D.Ill. 1984), the
amount of attorneys' fees bears no necessary relation to the
amount of loss.
The 1977 amendments to § 155 likewise do not evidence an
intent to address the issue of compensation. As with the
version, the legislative history contains no suggestion of
such intent. Nor do the amendments themselves show such an
intent. The amendment removing the limit on the amount of
attorneys' fees recoverable may make more suits against
insurers economically feasible but does nothing to compensate
the plaintiff for the damages giving rise to the suit.
Similarly, the award of a sum not to exceed $5,000, being
governed by the same standards as the attorneys' fees award of
the original section, is no more related to compensation than
the original statute was. The only intent this court can
discern from the amendments is an intent to increase the
effectiveness of the statute in achieving the two purposes
identified in Mr. Havinghurst's article by separating the
attorneys' fees award from the punitive damages award and
allowing a court to impose both. As with the original statute,
the purposes of providing attorneys' fees and punishing errant
insurers fully explains the provisions of the present statute.
Since every provision of the present and original § 155 is
fully explained by and furthers the purposes of making suits
economically feasible and punishing errant insurers, there is
nothing left over to serve the purpose of compensating
plaintiffs. To hold that the original § 155 or the obviously
punitive cash award of the current statute also preempts
compensatory damages would require the unusual assumption that
one award can serve both purposes. As already discussed,
neither the legislative history nor the statute itself suggests
that the legislature acted on that assumption. Indeed, the very
notion of punitive damages is inconsistent with the idea of one
award for both purposes since requiring a defendant to
compensate his victim is normally considered restitution, not
punishment.*fn7 Therefore, this court concludes that the
analysis mandated by Hall and Cunningham shows that § 155 was
not intended to and does not preempt recovery of compensatory
damages on a tort theory.
The two Illinois appellate courts that have considered the
issue of compensatory damages are split. The first district
has consistently held that § 155 preempts all tort actions
based on an insurer's bad faith conduct and has therefore
upheld dismissals of compensatory damage claims based on such
an action. Trautman v. Knights of Columbus, 121 Ill. App.3d 911,
460 N.E.2d 350, 77 Ill.Dec. 294 (1984); Kinney v. St. Paul
Mercury Ins. Co., 120 Ill. App.3d 294, 458 N.E.2d 79, 75
Ill.Dec. 911 (1983); Tobolt v. Allstate Ins. Co., 75 Ill. App.3d 57,
393 N.E.2d 1171, 30 Ill.Dec. 824 (1979). The first
district opinions, however, do not recognize that compensatory
damages have a function wholly different from punitive damages,
and do not examine the statute and its history to see if it was
intended to serve the compensatory function. The analysis in
these opinions is essentially the converse of Lynch: they lump
punitive and compensatory damages together and then conclude
that since the legislature intended to preempt the former it
also preempted the latter. See, e.g., Tobolt,
393 N.E.2d 1179-80, 30 Ill.Dec. at 832-33, which quotes extensively from
Debolt v. Mutual of Omaha, 56 Ill. App.3d 111, 371 N.E.2d 373,
13 Ill.Dec. 656 (4th Dist. 1978), leave to appeal denied,
71 Ill.2d 602, an opinion which dealt solely with the question of
The second district has held that while § 155 preempts
punitive damages, it "does not preempt a plaintiff's right to
claim compensatory damages for a breach of good faith and fair
dealing." Hoffman v. Allstate Ins. Co., 85 Ill. App.3d 631,
407 N.E.2d 156, 40 Ill.Dec. 925, 928 (1980). Based on the above
examination of § 155 and its history, this court concludes that
Hoffman correctly applied the principles
laid down by Hall and Cunningham and predicts that the Illinois
Supreme Court would agree with Hoffman rather than the first
district's position. Therefore, the motion to dismiss count 4
is denied but the request for punitive damages is stricken.
IV. Count 7
Count 7 alleges that defendants Continental, Zurich,
Bituminous, Underwriter's Adjusting Company, Home, Continental
Casualty Company, Commercial Union, Falcon, American Mutual,
National Surety and Fireman's Fund are liable for compensatory
damages and attorneys' fees under the Illinois Unfair Claims
Practices Act, Ill.Rev.Stat. ch. 73, § 766.6 (1981). However,
the Illinois appellate courts agree that § 766.7 provides no
private right of action but simply defines those practices for
which the Illinois Director of Insurance may issue a cease and
desist order under § 766.8. Hamilton v. Safeway Ins. Co.,
104 Ill. App.3d 353, 432 N.E.2d 996, 60 Ill. Dec. 97 (1st Dist.
1982); Hoffman v. Allstate Ins. Co., 85 Ill. App.3d 631,
407 N.E.2d 156, 40 Ill.Dec. 925 (2d Dist. 1980); Tobolt v. Allstate
Ins. Co., 75 Ill. App.3d 57, 393 N.E.2d 1171, 30 Ill.Dec. 824
(1st Dist. 1979). NR relies on Scroggins v. Allstate Ins. Co.,
74 Ill. App.3d 1027, 393 N.E.2d 718, 30 Ill.Dec. 682 (1st Dist.
1979), but that court's statement that § 766.6 was "enacted for
the benefit of the insured . . . as well as to provide an
administrative enforcement mechanism for the benefit of the
public at large" is, besides being dicta, not sufficient to
sustain an implied private right of action. Illinois courts
imply such an action only where it is both consistent with and
necessary to achieve the aims of the statute. Sawyer Realty
Group, Inc. v. Jarvis Corp., 89 Ill.2d 379, 386,
432 N.E.2d 849, 852, 59 Ill.Dec. 905, 908 (1982). Since the statute allows
the Director of Insurance to issue cease and desist orders to
any insurer that commits an act proscribed by § 766.6, an
implied private right of action is simply not necessary. Abbott
Laboratories v. Granite State Ins. Co., 573 F. Supp. 193, 196
In its brief UNR alternatively asks permission to amend
count 4 to base its right to sue on § 155 of the Insurance
Code, Ill.Rev.Stat. ch. 73, § 767 (1981). Defendants' reply
brief raises no objection to this amendment and this court sees
none. Therefore, count 7 is dismissed and UNR is given until
December 10, 1984 to file an amended count 7.
V. Counts 12, 13 and 14
Counts 12, 13 and 14 name UNR's former insurance broker,
Corroon & Black of Illinois, Inc. ("defendant"), as the sole
defendant and allege professional negligence, breach of
fiduciary duty, implied indemnity, and breach of implied and
oral contracts. Defendant has moved to dismiss (under
Fed.R.Civ.P. 12(b)(6) and 16) and in the alternative for a
more definite statement (under Fed.R.Civ. 12(e)) as to all
three counts. While the allegations in these counts are
broadly phrased, they are not "so vague that [the defendant]
cannot reasonably be required to frame a responsive pleading."
McDougall v. Donovan, 552 F. Supp. 1206, 1208 (N.D.Ill. 1982).
The details defendant seeks can be gained through discovery.
Wishnick v. One Stop Food & Liquor Store, 60 F.R.D. 496, 498
(N.D.Ill. 1973). Defendant's motion is therefore denied.
VI. Remaining Counts
The counts which have not been dismissed are all based on
state law. If this were an ordinary case the dismissal of the
federal claims would, since no diversity is alleged, also
require dismissal of the state law claims. By-Prod Corp. v.
Armen-Berry Co., 668 F.2d 956, 962 (7th Cir. 1982). However,
this is not an ordinary case since it originated in the
bankruptcy court. The parties are therefore directed to file
briefs limited to the question of the proper forum for the
remaining claims, keeping in mind the relevant provisions of
the Bankruptcy Amendments and Federal Judgeship Act of 1984, 98
Stat. 333. Since the choice of forum is normally a plaintiff's,
UNR shall file the opening brief by December 17, 1984.
Defendants shall file their answer
by December 31 and UNR's reply is due January 7, 1985. No
duplication of argument will be permitted and briefs exceeding
15 pages will not be accepted.
IT IS THEREFORE ORDERED that:
(1) Counts 1 and 2 are dismissed.
(2) The request for punitive damages in count 4 is stricken.
(3) Count 7 is dismissed. UNR is given until December 10,
1984, to file an amended count 7.
(4) Defendants are ordered to answer all remaining
unanswered counts by December 17, 1984.
(5) UNR's opening brief on the proper forum issue is due
December 17, 1984. Defendants' answer brief is due December
31, and UNR's reply brief is due January 7, 1985.
(6) This case is set for a status hearing on January 8, 1985
at 2:00 p.m.