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12/15/87 State Farm Fire & Casualty v. Anthony S. Miceli Et Al.

December 15, 1987





518 N.E.2d 357, 164 Ill. App. 3d 874, 115 Ill. Dec. 832 1987.IL.1848

Appeal from the Circuit Court of Cook County; the Hon. Charles Durham, Judge, presiding.


PRESIDING JUSTICE SCARIANO delivered the opinion of the court. STAMOS and HARTMAN, JJ., concur.


State Farm Fire & Casualty Insurance Company (State Farm) brought this declaratory action, seeking a finding that it had no liability to Anthony and Marion Miceli for vandalism and theft claims made under a State Farm homeowner's insurance policy. The Micelis counterclaimed, alleging breach of contract. At trial, the jury returned a verdict in favor of Mr. and Mrs. Miceli and their daughters, Mary Ann and Dorothy. In answers to special interrogatories the jury found that the Micelis' son, Tony, had committed the vandalism and concealed material facts from State Farm. Upon post-trial motions the trial court overturned the findings against Tony, but entered judgment for State Farm and against all three of the children because they had failed to comply with State Farm's requests to appear for examinations under oath. The trial court also awarded Mr. and Mrs. Miceli attorney fees and costs.

State Farm appeals from the jury verdict in favor of Mr. and Mrs. Miceli and from the court's granting of fees and costs; the Miceli children appeal from the judgment in favor of State Farm and against them. The issues raised on appeal include: (1) whether the trial court properly vacated the special findings against Tony Miceli; (2) whether the finding that an insured intentionally concealed or misrepresented a material fact bars the claims of the other insureds under the policy; (3) whether the damages awarded by the jury were proper; (4) whether the trial court erred in entering judgment against the Miceli children for their failure to submit to State Farm's demands that they be examined under oath; and (5) whether the trial court erred in awarding attorney fees and costs, pursuant to section 155 of the Illinois Insurance Code (Ill. Rev. Stat. 1983, ch. 73, par. 767).

Mr. and Mrs. Miceli lived in their home in Niles, Illinois, since it was built in 1966. On July 22, 1983, the date on which the house was vandalized, the Micelis' three adult children, Tony, Mary Ann and Dorothy, lived with their parents, along with Dorothy's two children. Each July, the parents customarily vacationed in Acapulco, to which, in July 1983, Dorothy and her children accompanied them. Before leaving, Mr. and Mrs. Miceli arranged for teenager Scott Boryk to house-sit; Tony and Mary Ann also remained home during their parents' vacation.

On July 22, 1983, Boryk went to dinner with Mary Ann, her boyfriend and his family, leaving the Miceli home about 6:30 p.m. Tony remained home with a friend until approximately 8 p.m., when they went to a nearby restaurant. When Tony returned home at approximately 9 p.m., he discovered the vandalism. Paint had been spilled in a number of rooms in the house, appliances in the kitchen were damaged, and certain pieces of jewelry and stereo equipment were stolen. Tony called the police immediately. The next day he called his parents, but in order not to incur an increased airline fare, they did not return until July 26, 1983.

At the time of the incident the Micelis owned the State Farm homeowner's insurance policy which forms the subject matter of this suit. The policy was issued to Mr. and Mrs. Miceli, and it also covered the property of relatives who might be living with them. State Farm was notified of the loss, and within a week one of its representatives inspected the house and interviewed the Micelis.

During its investigation State Farm learned of a Niles police department report indicating that Randy Marsh, Tony's partner in a jewelry business and a known burglar, predicted that the Miceli home would soon be vandalized for purposes of an insurance scam. State Farm sent a reservation of rights letter, informing the Micelis that the cause of the loss was under investigation. In turn, the Micelis submitted the proof of loss required by the policy. Examinations under oath were taken by State Farm of Mr. and Mrs. Miceli; however, the Miceli children declined to present themselves for such questioning, informing State Farm that they had been advised by their attorney that they were under no contractual obligation to do so. State Farm then filed this suit for declaratory judgment, claiming that it had no liability for vandalism or theft claims, because one of the Micelis had committed those acts. The Micelis counterclaimed, alleging that State Farm had breached its policy by failing to honor their claims and had acted vexatiously in handling such claims.

Prior to trial the court granted defendants' motion in limine to prohibit police officers from mentioning Tony Miceli or his family in their testimony about Marsh. The Judge also ruled that the police officers could not testify as to the substance of any conversations with Marsh, as such testimony would be hearsay.

At trial, over defendants' objections, the court allowed State Farm to present testimony regarding Marsh's admonitions regarding the Miceli home. Arlington Heights police officer Richard Stachnik testified that Marsh, in an attempt to cooperate with police in order to reduce his sentence for a burglary conviction, had told him of a planned act of vandalism which was to occur in Niles in the forthcoming weeks. Stachnik related that he passed this information on to the Niles police department. In accordance with the trial court's ruling on defendants' motion in limine, Stachnik was not permitted to testify about Marsh's statement that Tony Miceli would vandalize his home for purposes of an insurance scam so that the family could redecorate.

Niles police detective Gerald Sheehan testified that on July 20, 1983, he drove around town with Randy Marsh while Marsh pointed out the houses he had burglarized. He further testified, in violation of the Judge's ruling on the motion in limine, as follows:

"Q. What, if anything, did you do with respect to the Miceli house after you got done driving around on July 20, 1983?

A. Based on information that we had gotten from Randy Marsh, I advised Lt. Giovannelli what Tony Miceli -- (Objections).

THE COURT: The objection to that is sustained, and that is stricken, and the jury is instructed to disregard it."

Niles police Lt. Giovannelli testified that Detective Sheehan advised him that there was a probability a burglary would soon occur at the Miceli residence. Lt. Giovannelli attempted to contact the Micelis' insurer.

"Q. What, if anything, happened when you telephoned that number?

A. I spoke to an individual -- and I am sorry, I just can't recall what the name was or who this individual might be -- and I initiated a -- some dialogue with this individual about the --

(Objection, based on foundation.)

THE COURT: The objection is ...

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