I "). Accordingly, we concluded that Section 155, if applicable, only preempted a claim for punitive damages, not compensatory damages.
Although conflicting, these above-mentioned cases do have one fact in common: all were decided prior to the Seventh Circuit's opinion in Kush v. American States Insur., 853 F.2d 1380 (7th Cir. 1988). In Kush, plaintiff-insured sued his insurance carrier for intentional infliction of emotional distress after it allegedly wrongly denied him coverage under a policy. Id. at 1381-82. The insurance company contended that Section 155 preempted this tort action and consequently sought its dismissal. Id. at 1382.
After acknowledging the absence of any Illinois Supreme Court authority, the Seventh Circuit held that Section 155, if applicable, pre-empted any claim regardless of whether it sought compensatory or punitive damages. Id. at 1385 (concluding that "'any count alleging nothing more than the conduct proscribed by Section 155 is pre-empted by the statute'") (quoting Combs v. Insur. Co., 146 Ill. App. 3d 957, 964, 497 N.E.2d 503, 508, 100 Ill. Dec. 525 (1st Dist. 1986) (emphasis in original)). Importantly, as the quoted language above indicates, the court did not limit its holding to the tort of intentional infliction of emotional distress. Rather, the court stressed that:
"[it is] not the legal theory [that] plaintiff asserts that . . . determines Section 155's preemptive effect. Instead this Court must look beyond such legal theories to the predicate acts or conduct forming the basis for that claim. If the alleged conduct is within the scope of Section 155, the claim is preempted."
Id. (quoting Zakarian v. Prudential Insur., 652 F. Supp. 1126, 1136-37 (N.D. Ill. 1987)). Applying this standard, the court found that the core of plaintiff's case was an allegation of "vexatious and unreasonable delay." Id. Therefore, the Seventh Circuit concluded that Section 155 preempted the claim for intentional infliction of emotional distress and affirmed the claim's dismissal.
Although one would have believed that the Kush decision would have settled the Section 155 preemption dispute, at least among federal district courts, it has not. While no Illinois court has yet addressed the Kush opinion, four federal courts have. Of the four decisions, three have followed its mandate. See York v. Globe Life and Accident Insur., 734 F. Supp. 340, 344-45 (C.D. Ill. 1990) (claim for bad faith denial of coverage dismissed); Buehler Ltd v. Home Life Insur., 722 F. Supp. 1554, 1564 n.16 (N.D. Ill. 1989) (dicta) (claim for bad faith denial of coverage dismissed); Barr Co. v. Safeco Insur., 706 F. Supp. 616, 617-18 (N.D. Ill. 1989) ("Barr II ") (Moran, J.) (claim for intentional infliction of emotional distress dismissed).
Judge Moran's statements in Barr II are particularly noteworthy. In Barr II, Judge Moran recognized his earlier ruling in Barr I that Section 155 only preempted claims for punitive damages. In reversing his position, Judge Moran held that Kush required him to dismiss plaintiff's entire claim that the defendant-insurance company breached its duty of good faith and fair dealing. Barr II, 706 F. Supp. at 618. Judge Moran reasoned that Kush was "squarely on point" and that:
we are bound to follow Seventh Circuit pronouncements of the law, including this prediction of what the Illinois Supreme Court would rule. Plaintiff must raise its objection to Kush's holding in that court.
Id. at 618. Therefore, plaintiff's entire claim was dismissed.
Judge Rovner, however, in W.E. O'Neil Constr. v. National Union Fire Insur., 721 F. Supp. 984, 999 (N.D. Ill. 1989), disagreed with Judge Moran's pronouncement in Barr II. In W.E. O'Neil, Judge Rovner rejected the notion that Kush effectively overturned the line of cases in this district that limited Section 155's preemptive force to claims for punitive damages only. Judge Rovner highlighted three reasons for her conclusion. First, she noted that the Seventh Circuit appeared to make a distinction between the torts of bad faith denial of coverage and intentional infliction of emotional distress. Second, she recognized that the Kush court failed to address the case law that it purportedly overruled and its focus on the differences between compensatory and punitive damages. Finally, Judge Rovner indicated that the Kush opinion was apparently decided without the benefit of two Illinois appellate court cases decided just prior to Kush that reaffirmed the conclusion that Section 155 does not preempt claims for compensatory damages. Id. at 999. Therefore, for these three reasons, Judge Rovner disagreed with Barr II and found Kush not controlling.
We disagree with the W.E. O'Neil court, believe Judge Moran's reasoning in Barr II to be persuasive, and accordingly find Kush controlling. Although we are still inclined to agree with the reasoning expressed in UNR Indus. v. Continental Insur., 607 F. Supp. 855 (N.D. Ill. 1984), and Barr I, 583 F. Supp. 248 (N.D. Ill. 1984), it is inescapable that Kush is directly on point. That being so, we are not at liberty to question or disagree with the Seventh Circuit's decision. Only that court, the United States or Illinois Supreme Court or the Illinois legislature may properly do so under these circumstances. We, therefore, conclude that we are compelled to follow Kush.
In applying Kush's analytical framework, we note that Plaintiff, in Count III, has alleged that American Bankers' denial of coverage was "willful, malicious, vexatious and unreasonable." This conduct complained of falls within the heart of Section 155. Therefore, we conclude that Section 155 preempts the claim, and summary judgment is granted as to it.
D. Count IV--No Private Cause of Action
American Bankers also seeks summary judgement as to Count IV. Count IV claims that American Bankers violated sections 154.6 and 155 of Illinois' Insurance Code. American Bankers contends that section 154.6 of the Code fails to provide a private cause of action, and therefore summary judgment is proper. Because we agree, we grant summary judgment as to that portion of Count IV which purports to plead a cause of action based on section 154.6 of the Illinois Insurance Code.
Section 154.6 is entitled "Acts constituting improper claims practice." Ill. Ann. Stat. ch. 73, para. 766.6 (Smith-Hurd Supp. 1991). It is well recognized that this section provides "no private cause of action or remedy beyond those powers given to the State Director of Insurance." Van Vleck v. Ohio Casualty Insur., 128 Ill. App. 3d 959, 471 N.E.2d 925, 927, 84 Ill. Dec. 159 (3d Dist. 1984); see also Hoffman, 407 N.E.2d at 159. We, therefore, lack authority to determine whether American Bankers engaged in any improper claims practices. Summary judgment, therefore, is granted as to Count IV but only to the extent that Plaintiff attempted to plead and prove violations of Section 154.6. That aspect of Count IV which alleges a violation of Section 155 survives American Bankers' summary judgment motion.
For the foregoing reasons, the defendant's motion for summary judgment is granted in part and denied in part. The motion is granted as to Count III and that portion of Count IV which purports to allege violations of Section 154.6 of Illinois' Insurance Code.
Charles P. Kocoras
United States District Judge
Dated: January 13, 1992