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Marcheschi v. Illinois Farmers Insurance Co.

August 03, 1998


The opinion of the court was delivered by: Justice O'mara Frossard

Appeal from the Circuit Court of Cook County

92 L 15843

Honorable Ian Levin, judge Presiding.

Plaintiff Angelo Marcheschi brought this action under section 155 of the Illinois Insurance Code (215 ILCS 5/155 (West 1996)) alleging that defendant Illinois Farmers Insurance Company vexatiously and unreasonably refused to settle an uninsured motorist claim arising from an automobile accident in which plaintiff was injured. Defendant filed a motion to dismiss under section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West 1996)) based on its claim the appropriate statute of limitations had expired. Defendant's motion was denied. In a bench trial, the trial court awarded plaintiff $18,750 as permitted by section 155, $8,075 in attorney fees related to the arbitration of the uninsured motorist claim, and $7,968.75 in prejudgment interest. The trial court denied plaintiff attorney fees in the prosecution of the present action. From these orders, defendant appeals and plaintiff cross-appeals.

The issues on appeal are: (1) whether the trial court properly determined that section 155 of the Insurance Code is not a statutory penalty to which a two-year statute of limitations must apply; (2) whether the trial court correctly determined that defendant unreasonably and vexatiously delayed the settlement of plaintiff's uninsured motorist claim under section 155; and (3) whether the trial court properly awarded prejudgment interest to plaintiff. On cross-appeal, the issue is whether the trial court acted within its discretion in awarding limited attorney fees to plaintiff and in its denial of plaintiff's petition for fees in the present action.

We answer the above in the affirmative and affirm the trial court's decision on appeal.


On December 22, 1992, plaintiff filed a complaint against defendant seeking recovery under section 155 of the Insurance Code based on defendant's refusal to settle his claim for uninsured motorist benefits within the applicable policy limits. Following the accident, which occurred on December 9, 1983, defendant promptly paid plaintiff $25,000, which was the limit of his uninsured motorist coverage. However, plaintiff was a member of a class action lawsuit in which his insurance policy was reformed and the uninsured motorist coverage limit was increased from $25,000 to $100,000.

Following the class action, plaintiff demanded $75,000, or the remainder of the policy limits from defendant. In August 1988, defendant offered $40,000 in settlement, and in December of 1988, plaintiff made a counteroffer of $40,000 plus prejudgment interest. When defendant failed to accept this counteroffer, it expired and plaintiff again made a demand for $75,000 plus prejudgment interest. After plaintiff underwent a physical examination, defendant made an offer of $50,000 on June 21, 1989, which plaintiff declined. Testimony at trial indicated that, shortly thereafter, defendant was given settlement authority in the amount of $75,000, which was not extended to plaintiff prior to arbitration.

The arbitration hearing took place on January 3, 1990. The panel assessed plaintiff's damages in the amount of $215,000 and found defendant liable for the $75,000 policy limit.

In his complaint, plaintiff sought to recover attorney fees for the arbitration, arbitrator's fees and other litigation expenses, prejudgment interest, and 25% of the difference between the amount defendant offered in settlement and the amount plaintiff recovered via arbitration pursuant to section 155.

In its answer, defendant admitted plaintiff was a member of the class action, that the policy limits had been increased and that plaintiff demanded $75,000. However, defendant sought to strike a portion of the pleadings as being argumentative and improperly pleading details of evidence. The answer also admitted defendant had offered $40,000 on October 26, 1988, and that following arbitration it promptly paid the remaining $75,000 to plaintiff. Defendant's answer denied breaching any duty to plaintiff and denied liability under section 155.



Defendant first challenges the trial court's denial of its section 2-619 motion to dismiss and asserts that plaintiff's section 155 claim was a statutory penalty that was not brought within the applicable two-year statute of limitations. Plaintiff argues that relief under section 155 does not constitute a "statutory penalty" for purposes of the two-year statute of limitations set forth in section 13-202 of the Code of Civil Procedure (735 ILCS 5/13-202 (West 1996)), and that the five-year statute of limitations applicable to "all civil actions not otherwise provided for" is appropriate in this case. See 735 ILCS 5/13-205 (West 1996).

A motion to dismiss under section 2-619 admits both the truth of the facts alleged in support of the claim and the legal sufficiency of the claim, but it raises an affirmative matter which it asserts defeats the claim. Barber-Colman Co. v. A&K Midwest Insulation Co., 236 Ill. App. 3d 1065, 603 ...

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