Appeal from the Circuit Court of Cook County Honorable Bernetta D. Bush, Judge Presiding.
The opinion of the court was delivered by: Justice O'mara Frossard
Norma Price was involved in a hit-and-run accident and obtained an arbitration award for uninsured motorist benefits. Defendant refused to pay the arbitration award. Plaintiff, the estate of Norma Price, filed a two-count complaint seeking: (1) confirmation of the arbitration award plus interest and costs pursuant to section 11 of the Uniform Arbitration Act (710 ILCS 5/11 (West 1998)); and (2) statutory penalties, costs, and attorney fees pursuant to section 155 of the Illinois Insurance Code (215 ILCS 5/155 (West 1998)) alleging that defendant, Universal Casualty (Universal), failed to participate in the arbitration and refused to pay the award, which constituted vexatious and unreasonable conduct under section 155.
The trial court granted Universal's motion to dismiss. Plaintiff appealed. We reversed and remanded for further proceedings, finding that "plaintiff has presented sufficient evidence of a section 155 violation to withstand defendant's section 2-1110 motion." Estate of Price v. Universal Casualty Co., 322 Ill. App. 3d 514, 520 (2001). In so finding, we note as follows:
"Specifically, defendant's attitude was to delay settlement and payment of this claim; defendant required plaintiff to bring suit; defendant did not offer any settlement until the trial court ruled against it; and defendant refused to comply with the court's order awarding plaintiff interest from the date of the arbitration award." Estate of Price, 322 Ill. App. 3d at 518.
On remand, the trial court found that Universal's conduct was vexatious and unreasonable and allowed plaintiff to file a fee petition. Plaintiff filed a brief and argument in support of her petition for penalties, attorney fees and costs and Universal filed a response to the petition. The trial court conducted a hearing on the petition and awarded plaintiff $5,000 in penalties pursuant to section 155 and $31,226.50 in attorney fees, which included $596.50 in costs. Universal appeals the issue of attorney fees only.
The petition for fees must indicate specific facts, including the services performed, by whom they were performed, the time expended and the hourly rate charged. Fiorito v. Jones, 72 Ill. 2d 73 (1978). "Once presented with these facts, the trial court should consider a variety of additional factors such as the skill and standing of the attorneys, the nature of the case, the novelty and/or difficulty of the issues and work involved, the importance of the matter, the degree of responsibility required, the usual and customary charges for comparable services, the benefit to the client [citation], and whether there is a reasonable connection between the fees and the amount involved in the litigation." Kaiser v. MEPC American Properties, Inc., 164 Ill. App. 3d 978, 984 (1987). The trial court's decision as to what constitutes reasonable compensation in the context of attorney fees will not be disturbed absent an abuse of discretion. Chicago Title & Trust Co. v. Chicago Title & Trust Co., 248 Ill. App. 3d 1065, 1072 (1993).
Mindful of these principles we address defendant's challenge to the fee petition. We note the trial court on remand found that Universal's conduct was vexatious and unreasonable under section 155 and allowed plaintiff to file a fee petition. This case presents a challenge to attorney fees recovered in the context of section 155. We review section 155 before turning to the specific fee petition at issue in this case.
Section 155 is intended to penalize vexatious delay or rejection of legitimate claims by insurance companies. If the insurer vexatiously delays or rejects legitimate claims, it is responsible for the expense resulting from the insured's efforts to prosecute the claim. Verbaere v. Life Investors Insurance Co. of America, 226 Ill. App. 3d 289 (1992). When an insured must resort to bringing a declaratory action against the insurer in order to enforce its right to coverage in an underlying lawsuit, the insured may recover section 155 attorney fees incurred in both the underlying case and the declaratory action. Mobil Oil Corp. v. Maryland Casualty Co., 288 Ill. App. 3d 743 (1997).
Section 155 indicates as follows:
"Attorney fees. (1) in any action by or against a company wherein there is in issue the liability of a company on a policy or policies of insurance or the amount of the loss payable thereunder, or for an unreasonable delay in settling a claim, and it appears to the court that such action or delay is vexatious and unreasonable, the court may allow as part of the taxable costs in the action reasonable attorney fees, other costs, plus an amount not to exceed any one of the following amounts:
(a) 25% of the amount which the court or jury finds such party is entitled to recover against the company, exclusive of all costs;
(c) the excess of the amount which the court or jury finds such party is entitled to recover, exclusive of costs, over the amount, if any, which the company offered to pay in settlement of the ...