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February 6, 1992



The opinion of the court was delivered by: ANN CLAIRE WILLIAMS


Susanne Littlefield ("Littlefield"), who is white, sued Malcolm McGuffey ("McGuffey"), also known as Wally Mack among other persona, claiming he denied her rental housing and harassed and intimidated her because her boyfriend, the father of her daughter, is black. She sued McGuffey for violation of the civil rights laws and the Fair Housing Act under 42 U.S.C. §§ 1982, 3604, 3613, 3617, and for intentional infliction of emotional distress under Illinois common law. On July 26, 1990, a jury found for Littlefield and awarded her $ 50,000 in compensatory damages and $ 100,000 in punitive damages.

 The plaintiff subsequently brought a motion to recover attorney's fees pursuant to 42 U.S.C. § 1988 ("Section 1988") and § 3613(c)(2). On November 16, 1990, the court granted plaintiff Littlefield's motion and determined that Littlefield was entitled to recover attorney's fees in the amount of $ 138,252.50 and expenses in the amount of $ 9,676.98. Because $ 1,361.50 had already been paid, the court found defendant McGuffey liable for attorney's fees in the amount of $ 146,567.98. In a subsequent order dated December 10, 1990, the court awarded the plaintiff an additional $ 16,636.50 in attorney's fees and $ 10,797.88 in expenses. *fn2"

 On January 23, 1991, the plaintiff served State Farm General Insurance Company ("State Farm"), defendant McGuffey's insurance company, with a garnishment summons seeking the recovery of the $ 174,002.36 in fees and expenses previously awarded to the plaintiff. State Farm subsequently filed a motion to dismiss or stay the garnishment proceedings which the court denied on August 21, 1991. In so ruling, the court found that the sole issue involved in the federal garnishment proceedings was the recovery of the attorney's fees and costs assessed against McGuffey.

 This case is currently before the court on plaintiff Littlefield's and garnishee-defendant State Farm's cross motions for summary judgment on the question of whether State Farm is obligated to pay on defendant's behalf the attorney's fees and expenses awarded to the plaintiff under Section 1988. For the reasons stated below, the plaintiff's motion for summary judgment is granted and the garnishee-defendant's cross motion for summary judgment is denied. State Farm is ordered to pay the plaintiff the attorney's fees and expenses already assessed against defendant McGuffey in this case.

 The Motions for Summary Judgment

 A motion for summary judgment should be granted when the pleadings and discovery "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); Wolf v. Fitchburg, 870 F.2d 1327 (7th Cir. 1989). After the moving party makes a properly supported motion for summary judgment, the nonmoving party bears the burden of refuting the motion by setting forth specific facts showing the existence of a genuine issue of fact for trial. Shlay v. Montgomery, 802 F.2d 918, 920 (7th Cir. 1986); Celotex Corp. v. Catrett, 477 U.S. 317, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). When assessing the validity of a summary judgment motion, the court must view all evidence in the light most favorable to the nonmoving party and draw all inferences in the nonmoving party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).

 The determination of the parties' summary judgment motions in this case turn on the proper reading of the State Farm Insurance Policy No. 93-18-7446-0 ("the policy"), effective May 24, 1988 to May 24, 1989, entered into by State Farm and McGuffey. In pertinent part, Section II of the policy states:

 We cover the following in addition to the limits of liability:

 1. Claim expenses. We pay:

 a. expenses incurred by us and costs taxed against any insured in any suit we defend; . . .

 The plaintiff contends that State Farm is obligated to pay the attorney's fees and expenses awarded to her by the court since Section 1988 establishes that attorney's fees in civil rights cases constitute costs and since State Farm's contract with defendant McGuffey states that State Farm will pay all costs taxed against the insured in any suit State Farm elects to defend. State Farm counters that it is not obligated to pay the fees and costs assessed against the defendant because attorney's fees do not constitute costs and State Farm did not elect to defend McGuffey's case as the plaintiff suggests.

 State Farm argues that the term "costs" as used in its insurance contract with McGuffey cannot include attorney's fees as the plaintiff suggests because the common understanding of the term "costs" and its historical use do not intend the term to encompass attorney's fees. However, attorney's fees and litigation expenses, while generally not recoverable as costs, can be recovered if provided for by statute or contract between the parties. Hall v. Cole, 412 U.S. 1, 4, 36 L. Ed. 2d 702, 93 S. Ct. 1943 (1973). Of particular importance in this case, Section 1988 provides for such recovery. The statute clearly states that an individual prevailing on a civil rights claim may receive "a reasonable attorney's fee as part of the costs." 42 U.S.C. § 1988. The Supreme Court and the Seventh Circuit have upheld this reading of Section 1988 on numerous occasions. See, e.g., Marek v. Chesny, 473 U.S. 1, 87 L. Ed. 2d 1, 105 S. Ct. 3012 (1985); Hutto v. Finey, 437 U.S. 678, 57 L. Ed. 2d 522, 98 S. Ct. 2565 (1978); Argento v. Village of Melrose Park, 838 F.2d 1483 (7th Cir. 1988); Szabo Food Service, Inc. v. Canteen Corp., 823 F.2d 1073 (7th Cir. 1987).

 Indeed, in Argento, the Seventh Circuit specifically applied Section 1988's grant of attorney's fees as costs to an insurance contract provision similar to the provision at issue in this case. 838 F.2d 1483. The defendant insurance company in Argento argued that the pertinent policy, which stated that the insurer would pay "all costs taxed against the insured in any suit defended by the company," did not contemplate the payment of attorney's fees as costs. Id. at 1499. Since the court found that Section 1988 specifically designates that fees are allowed as part of costs, the court held that regardless of the ...

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