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Illinois Founders Insurance Co. v. Williams

Court of Appeals of Illinois, First District

April 16, 2015

ILLINOIS FOUNDERS INSURANCE COMPANY, Plaintiff and Counterdefendant-Appellee,
DELOISE WILLIAMS, as Administrator of the Estate of Felicia Williams, Deceased, and as Guardian and Next Friend of Dellvonte Gibson, a Minor, Defendant and Counterplaintiff-Appellant, (Julius Moore, Defendant.)

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Appeal from the Circuit Court of Cook County. No. 10 CH 37307. Honorable Leroy K. Martin, Jr., Judge Presiding.

For APPELLANT: A. Leo Wiggins, Jr., Caren Schulman.

For APPELLEE: Michael J. O'Halloran, Keely Hillison.

JUSTICE ELLIS delivered the judgment of the court, with opinion.[*] Justices Howse and Cobbs concurred in the judgment and opinion.


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[¶1] This appeal addresses whether the trial court erred in granting summary judgment in favor of plaintiff-counterdefendant Illinois Founders Insurance Co. (Founders) on a counterclaim for attorney fees and costs pursuant to section 155 of the Illinois Insurance Code (215 ILCS 5/155 (West 2010)). Defendant-counterplaintiff Deloise Williams (defendant), on behalf of the estate of a decedent in a car accident (Felicia Williams) and the decedent's minor son (Dellvonte Gibson), contends that summary judgment was improper because genuine issues of material fact existed as to whether Founders acted vexatiously and unreasonably in settling her claims, which would justify fees and costs under section 155. Defendant also contends that the trial court abused its discretion in denying her leave to file a second amended counterclaim. We conclude that the trial court did not err in granting summary judgment because Founders had a bona fide dispute regarding its coverage of defendant's hit-and-run claim and that defendant has provided an insufficient record to support her other contentions. We affirm the judgment of the trial court.


[¶3] Given the issues presented by this appeal, a thorough development of the facts and procedural history of this case is necessary. On July 18, 1997, Felicia Williams and her son, Dellvonte Gibson, were involved in a car accident. Williams died. Gibson, who was 19 months old at the time of the accident, survived with injuries. Defendant, Gibson's grandmother, was appointed as administrator of Williams's estate and as Gibson's guardian. The car that Williams was driving belonged to Julius Moore, who participated in the proceedings below but is not a party to this appeal. Williams used the car with Moore's permission. Williams was uninsured.

[¶4] The parties offered two possible scenarios that led to this accident and Williams's death. One is that of a single-car accident, in which the car she was driving spiraled out of control, possibly due to a blown-out tire and/or faulty brakes. The second is a hit-and-run scenario, in which a second vehicle collided

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with Williams's car, leading to the fatal crash.

[¶5] Moore was the named insured under a liability insurance policy issued by Founders (the Policy). The Policy covered injuries caused by uninsured motorists (such as Williams) as well as injuries caused by hit-and-run drivers. Defendant's initial claim to Founders was based on the latter--she claimed that the accident resulted from a hit-and-run involving a second, unidentified vehicle.

[¶6] On August 19, 1999, Founders filed a complaint seeking a declaratory judgment that it had " no duties with respect to the accident of July 18, 1997." Founders acknowledged that defendant and Moore had made claims under the hit-and-run provision of the Policy but alleged that neither defendant nor Moore had " produced *** competent evidence that there was physical contact between their vehicle and that of a hit-and-run vehicle" as defined by the Policy.

[¶7] On September 11, 1999, defendant filed a demand for arbitration and, under the heading " Type of Claim," checked the box labeled " Hit and Run." On October 5, 1999, Founders moved to stay arbitration of the hit-and-run claim because it was contesting coverage under that provision. The trial court agreed and stayed the arbitration.

[¶8] On November 1, 1999, defendant moved to dismiss Founders' declaratory judgment complaint, arguing that she was entitled to coverage even if there was no second vehicle involved. Even if no hit-and-run accident occurred, she argued, she could bring an " uninsured motorist" claim, alleging that Williams was a negligent, uninsured driver. In response, Founders emphasized that its declaratory judgment complaint was directed at defendant's " hit-and-run claims, not uninsured motorist claims," and that to date, defendant had " not presented an uninsured motorist claim" alleging that Williams was a negligent driver in a single-car accident. (Emphases in original.)

[¶9] After continuing the case numerous times, the trial court denied defendant's motion to dismiss on January 30, 2001. The record contains no transcripts of the proceedings related to defendant's motion to dismiss. The two-page written order reflecting the trial court's judgment simply states that defendant's motion " is hereby DENIED."

[¶10] Founders' declaratory judgment action first went to trial on June 4, 2004. During the trial, the trial court awarded judgment to Founders on a technical default--defendant had never answered Founders' complaint for declaratory judgment. Defendant appealed that order, and this court reversed and remanded. We held that the trial court erred in concluding that it was compelled to enter judgment in Founders' favor on the technical default and remanded for the trial court to exercise its discretion on the matter. The mandate from our decision issued to the circuit court on October 19, 2006.

[¶11] From October 19, 2006 until April 29, 2009, no party took action regarding Founders' declaratory judgment suit. On April 29, 2009, defendant moved to dismiss the suit for want of prosecution and moved for leave to file a counterclaim.

[¶12] The circuit court denied defendant's motion to dismiss Founders' claim for want of prosecution. The record does not contain a transcript of the hearing on defendant's motion to dismiss for want of prosecution or the trial court's ruling on that motion. Rather than filing an answer, defendant again moved to dismiss Founders' complaint, alleging that the complaint was time-barred. The circuit court denied this motion to dismiss, finding that defendant,

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not Founders, was obligated to reinstate the case after she had prevailed on appeal.

[¶13] The court did, however, grant defendant leave to file a counterclaim seeking attorney fees and costs under section 155 for handling defendant's insurance claim in a vexatious and unreasonable manner. Founders moved for summary judgment on defendant's section 155 counterclaim on November 22, 2010. During the pendency of that motion, that counterclaim was amended, and Founders renewed its motion for summary judgment as to the amended complaint.

[¶14] In count I of her amended counterclaim--the only count at issue on appeal and thus the only one we will discuss--defendant alleged that Founders acted vexatiously and unreasonably in settling her insurance claim, first, by initiating litigation on the coverage question and disputing that the accident was the result of a hit-and-run by a second driver, which defendant alleged was a delay tactic; second, by failing to negotiate the claims; and third, by refusing to arbitrate the claims. Count I did not differentiate with any specificity between defendant's two possible claims for coverage, the uninsured-motorist claim versus the hit-and-run claim.

[¶15] In its motion for summary judgment, Founders argued that, as a matter of law, it had not acted vexatiously and unreasonably as to defendant's hit-and-run claim because the evidence Founders had received as a result of its investigation created a bona fide dispute as to whether the accident was a single-car collision, as opposed to a hit-and-run accident involving a second car. In support of its motion, Founders put forth several pieces of evidence that indicated that, ...

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