APPELLATE COURT OF ILLINOIS, FIFTH DISTRICT
536 N.E.2d 194, 180 Ill. App. 3d 539, 129 Ill. Dec. 510 1989.IL.347
Appeal from the Circuit Court of Williamson County; the Hon. Robert H. Howerton, Judge, presiding.
PRESIDING JUSTICE WELCH delivered the opinion of the court. HARRISON and LEWIS, JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE WELCH
Defendant, State Farm Insurance Company, appeals following a jury trial in the circuit court of Williamson County which resulted in a verdict and judgment in favor of plaintiff, Robert L. Keller. The suit was originally brought by plaintiff for damages resulting from defendant's breach of a contract of adjustment of an insurance claim, and for penalties under section 155 of the Illinois Insurance Code (Ill. Rev. Stat. 1987, ch. 73, par. 767) for defendant's vexatious and unreasonable delay in the settlement of the insurance claim.
Plaintiff's home in Marion, Illinois, was totally destroyed by tornado in May 1982. The home was insured by defendant insurance company for its replacement value. Under the terms of the policy, the insured is first paid the actual cash value of the home at the time of the loss, and if the home is thereafter repaired or replaced, the insured is paid the additional cost to repair or replace it, up to the designated policy limit.
After the tornado, State Farm claims adjuster Donald Long came to Marion as part of a special claims team to adjust insurance claims stemming from the tornado. He was assigned to adjust plaintiff's claim. Long and plaintiff met only two times, the first time at the site of plaintiff's destroyed home only a few days after the tornado. On June 7, 1982, plaintiff went to the Marion Holiday Inn, where Long had set up a temporary office. Plaintiff did not have an appointment, and Long had just gotten out of the shower and was not expecting plaintiff.
Plaintiff told Long that he wanted to settle his claim. Long calculated the actual cash value of plaintiff's home at the time of the loss to be $50,939.43, and, after subtracting the $100 deductible provided for under the policy, issued plaintiff a check in the amount of $50,839.43. Long then produced a document entitled "Property Claim Agreement" and explained to plaintiff that he would be entitled to an additional sum of money in the event he repaired or replaced his home. The property claim agreement recited that upon repair or replacement of his house, plaintiff would be entitled to receive the lesser of either the amount actually expended, or the sum of $11,458.94. At that time, plaintiff did not know the limit of his insurance policy and relied entirely on Long's computations. Long did have information in his file as to the limit of plaintiff's insurance. Long testified that an insured would be unable to calculate the limit of his insurance even if he had a copy of his policy, as the amount is adjusted periodically for inflation.
Thereafter, plaintiff elected to replace his home and entered into a contract to purchase a home from his son for the sum of $70,000. On July 1, 1982, plaintiff went to the local State Farm office and told his agent, Dean Colp, that he wanted the rest of the money due him under the property claim agreement. Colp told plaintiff that he would have to present a written contract to purchase the home. On July 7, 1982, plaintiff presented Colp with a contract to purchase the home and with the property claim agreement. Colp took both documents to the local claims office, where he was told that Long had made a mistake in his calculations. The sum set forth in the property claim agreement exceeded plaintiff's policy limit. Under the terms of the insurance policy, the maximum amount plaintiff could receive was $56,139.93. Under the property claim agreement, plaintiff was to receive a total of $62,298.37. Defendant refused to pay plaintiff the amount due under the property claim agreement and, instead, paid plaintiff only the maximum amount allowed under the policy. Defendant issued plaintiff a check in the amount of $5,300.50 on July 8, 1982. Plaintiff negotiated the check the next day.
On January 10, 1984, plaintiff filed a complaint in the circuit court of Williamson County. Defendant's motion to make the complaint more definite and certain was granted, and an amended complaint was filed on June 3, 1985. Defendant filed a motion to dismiss the amended complaint, which was granted in part. On April 7, 1986, plaintiff filed a second amended complaint in three counts. Count I alleged a breach of contract of adjustment. Count II, pled in the alternative to count I, alleged a breach of an implied-in-fact contract. Count III sought penalties for defendant's vexatious and unreasonable delay in settling plaintiff's claim. Defendant filed an answer to count III of the complaint, but filed a motion to dismiss counts I and II. The motion to dismiss argued that count I of the complaint, which sought to state a cause of action for breach of an express contract of adjustment, failed to allege any facts indicating consideration for the alleged contract. This motion was denied, and defendant subsequently filed an answer to the second amended complaint. In its answer, defendant raised several affirmative defenses, including that plaintiff had never given any consideration for defendant's promise to pay an amount in excess of the policy limit and that defendant's promise to pay an amount in excess of the policy limit was the result of a mutual mistake of fact.
On January 12, 1987, plaintiff filed a third amended complaint which was substantially identical to counts I and III of the second amended complaint. Count II of the second amended complaint was omitted from the third amended complaint. Defendant filed its answer on January 13, 1987.
Trial commenced on January 12, 1987. At the close of plaintiff's case, defendant moved for a directed verdict based on the lack of any evidence of consideration for defendant's promise to pay an amount greater than the policy limit. The motion was denied. At the close of all the evidence, plaintiff moved to strike the defendant's first affirmative defense regarding the lack of consideration. The court granted the motion, finding that consideration is an element of plaintiff's case, on which plaintiff has the burden of proof, and therefore it is not a proper affirmative defense. At the close of all the evidence, defendant again asked for a directed verdict on the basis that plaintiff had not established that he had given consideration for defendant's promise to pay an amount greater than the policy limit. Defendant argued that, because plaintiff had received payment of the policy limit, he had no right to sue for a greater sum and therefore forbearance from suit could not serve as consideration. The court denied the motion. Defendant also moved for a directed verdict on the basis that the contract of adjustment was the result of a mutual mistake. This motion was also denied.
On January 13, 1987, the jury returned a verdict in favor of plaintiff and against defendant, and assessed plaintiff's damages at $7,544.67.
A hearing on count II of the third amended complaint was held February 5, 1987. After hearing evidence and argument, the trial court found that defendant's delay in paying plaintiff's claim had been vexatious and unreasonable, and ordered defendant to pay plaintiff attorney fees in the amount of $2,514.89, costs in the amount of $449 and a penalty in the amount of $1,886.17 pursuant to section 155 (Ill. Rev. Stat. 1987, ch. 73, par. 767).
Defendant raises numerous issues on appeal. The first three issues relate to the subject of consideration for defendant's promise to pay more than the policy limit, an issue which was hotly disputed in the trial court. Defendant argues that: (1) the trial court erred in failing to dismiss plaintiff's third amended complaint for failure to state a cause of action for breach of contract because plaintiff did not plead the element of consideration in support of the alleged contract; (2) the trial court erred in denying defendant's motions for directed verdict in that plaintiff failed to establish that any consideration had been given in support of the alleged contract; and (3) the jury's verdict was against the manifest weight of the evidence in that plaintiff failed to establish the essential element of consideration in support of the alleged contract.
With respect to the deficiency of the complaint, defendant correctly argues that, in order to state a cause of action for breach of contract, the plaintiff must plead the existence of a contract. In order to do this, a plaintiff must allege facts sufficient to indicate the essential elements of a contract, i.e., offer, acceptance and consideration. (Pollack v. Marathon Oil Co. (1976), 34 Ill. App. 3d 861, 864, 341 N.E.2d 101, 104-05.) Defendant argues that plaintiff's complaint contains no allegation of fact to indicate that any consideration was given for the alleged contract of adjustment. Defendant's argument seems to be that, because the policy limit was paid, plaintiff could not have sued defendant for a greater amount, and therefore, forbearance from suit could not have served as the consideration for the adjustment contract.
Pleadings are to be liberally construed with a view to doing substantial Justice between the parties. (In re Estate of Schwebel (1985), 133 Ill. App. 3d 777, 785, 479 N.E.2d 500, 506.) Thus, no pleading is bad in substance which contains such information as reasonably informs the opposite party of the nature of the claim which he is called upon to meet. (Schwebel, 133 Ill. App. 3d at 785, 479 N.E.2d at 506.) Plaintiff's complaint alleges that during the adjusting of plaintiff's property damage claim, defendant promised to pay plaintiff $11,458.94, and that plaintiff and defendant entered into a property claim agreement which effected settlement of plaintiff's property insurance claim. We think these allegations are sufficient to inform defendant that the consideration being pled is plaintiff's compromise of his disputed property insurance claim and his forbearance from suit thereon.
The compromise of a disputed claim will serve as consideration (LeMaster v. Amsted Industries, Inc. (1982), 110 Ill. App. 3d 729, 735, 442 N.E.2d 1367, 1372), as will a promise to forego legal action. (Redarowicz v. Ohlendorf (1981), 95 Ill. App. 3d 444, 448, 420 N.E.2d 209, 212, modified (1982), 92 Ill. 2d 171, 441 N.E.2d 324.) Even if the claim is not valid, its compromise will support a settlement agreement as long as the claim is asserted in good faith. (LeMaster, 110 Ill. App. 3d at 735, 442 N.E.2d at 1372.) Defendant does not contend that plaintiff did not act in good faith in accepting the property claim agreement in full settlement of his claim. Instead, defendant admits that plaintiff could not have known that the offered amount was in excess of plaintiff's policy limit. We think that plaintiff's complaint was sufficient to inform defendant of the facts upon which plaintiff relied to indicate consideration for the property claim agreement.
Whether to grant or deny a motion to dismiss a complaint is within the sound discretion of the trial court. (Knox College v. Celotex Corp. (1981), 88 Ill. 2d 407, 422, 430 N.E.2d 976, 983.) The trial court's denial of defendant's motion to dismiss was not an abuse of discretion.
Defendant also argues that the trial court erred in denying its motions for directed verdict at the close of plaintiff's case and at the close of all the evidence. Defendant argues that plaintiff failed to present sufficient evidence at trial to establish that consideration had been given in support of the contract of adjustment. Specifically, defendant argues that plaintiff did not offer evidence that he had paid premiums to defendant for the sum of money offered in the property claim agreement, or that plaintiff forbore from bringing suit for a greater amount than was offered. Defendant argues that since the amount in the property claim agreement exceeds the policy limit, plaintiff could not have sued for a greater amount. For the same reason, defendant argues that the jury's verdict in favor of plaintiff is against the manifest weight of the evidence.
It is well settled that verdicts ought to be directed only in those cases in which all of the evidence, when viewed in the aspect most favorable to the opponent, so overwhelmingly favors the movant that no contrary verdict based on that evidence could ever stand. (Pedrick v. Peoria & Eastern R.R. Co. (1967), 37 Ill. 2d 494, 510, 229 N.E.2d 504, 513.) In evaluating the evidence, all reasonable inferences must be made in favor of the party opposing the motion for directed verdict. (Thorne v. Elmore (1979), 79 Ill. App. 3d 333, 340, 398 N.E.2d 837, 844.) This same test is to be applied in reviewing the trial court's decision on a motion for a directed verdict. (Thorne, 79 Ill. App. 3d at 340, 398 N.E.2d at 844.) Furthermore, the jury's verdict can be reversed as against the manifest weight of the evidence only if all the evidence, viewed in the light most favorable to appellee, so overwhelmingly favors appellant that no contrary verdict could ever stand, or if the verdict is palpably erroneous and wholly unwarranted, clearly the result of passion or prejudice, or arbitrary, unreasonable and not based upon the evidence. (Albers v. Community Consolidated No. 204 School (1987), 155 Ill. App. 3d 1083, 1085, 508 N.E.2d 1252, 1254.) In this case, the evidence does not so overwhelmingly favor defendant/appellant, nor is the verdict palpably erroneous or unreasonable.
Plaintiff testified at trial that he understood his insurance policy to be a full replacement policy and that if defendant had offered him a sum of money less than the estimated cost of replacing his home, he would not have accepted it. He testified that he settled his claim with defendant when he met Long at the Holiday Inn, received a check in the approximate amount of $50,000, and was told that he would receive an additional sum of approximately $11,000 upon building or buying a new house. Plaintiff testified that he agreed to these terms in settlement of his claim for property damage, and that he understood that by accepting the offer, he was agreeing not to seek any ...