American Service Insurance Company v. China Ocean Shipping Company
2014 IL App (1st) 121895
| Ill. App. Ct. | 2014Background
- American Service Insurance issued a policy with a $1 million liability limit,, COSCO and Interpool were insureds under the policy.
- A multivehicle accident on October 1, 2003 caused eight deaths and numerous injuries, triggering underlying lawsuits against Zepeda, Frontline, COSCO, and Interpool.
- In 2007 the circuit court held ASA had a duty to defend and indemnify COSCO and Interpool; the court ordered ASA to pay defense costs and prejudgment interest if necessary.
- COSCO and Interpool filed petitions for fees and costs; in May 2008 the court awarded over $1.07 million in attorney fees, costs, and prejudgment interest against ASA.
- ASA appealed, and this court affirmed the duty to defend and held the initial fee award was ripe and not requiring an evidentiary hearing; numerous fee-issue objections were waived or decided.
- In December 2011 COSCO and Interpool filed a supplemental fee petition; ASA sought discovery and an evidentiary hearing, which the court denied on law-of-the-case grounds; in March 2012 the court granted the supplemental petition and denied Section 155 sanctions and held prejudgment interest appropriate; ASA sought reconsideration, which was denied, and the appellate court ultimately affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether law of the case barred discovery | ASA argues discovery on other insurers is barred by law of the case. | COSCO/Interpool argue no bar under law of the case. | Law of the case barred discovery on those issues. |
| Whether an evidentiary hearing was needed on the supplemental fee petition | ASA requested an evidentiary hearing on reasonableness of fees. | COSCO/Interpool contended no hearing required; fees presumptively reasonable. | No evidentiary hearing required; fees deemed prima facie reasonable; burden on ASA to show need for hearing. |
| Whether the supplemental fee petition was reasonable | ASA contends entries are excessive or improper, some are block billed. | COSCO/Interpool maintained fees were reasonable and responsive to prior rulings. | Supplemental fees were reasonable under the applicable standard. |
| Whether prejudgment interest was proper | ASA argues the amount wasn’t liquidated or easily computed. | COSCO/Interpool assert it is recoverable as part of the award. | Prejudgment interest properly awarded. |
Key Cases Cited
- Krautsack v. Anderson, 223 Ill. 2d 541 (2006) (law-of-the-case governs relitigation in same case)
- Zabinsky v. Gelber Group, Inc., 347 Ill. App. 3d 243 (2004) (law-of-the-case binding effect across stages)
- Emerson Electric Co. v. Aetna Casualty & Surety Co., 352 Ill. App. 3d 399 (2004) (stability and consistency in litigation; law-of-the-case considerations)
- Kajima Construction Servs., Inc. v. St. Paul Fire & Marine Insurance Co., 227 Ill. 2d 102 (2007) (targeted tender doctrine; allocation of defense duty among multiple policies)
- Taco Bell Corp. v. Continental Casualty Co., 388 F.3d 1069 (7th Cir. 2004) (presumptive reasonableness of fees; when evidentiary hearing is warranted)
- Preferred Personnel Services, Inc. v. Meltzer, Purtill & Stelle, LLC, 387 Ill. App. 3d 933 (2009) (distinguishing issues in fee petitions; law-of-the-case interplay)
- New Hampshire Insurance Co. v. Hanover Insurance Co., 296 Ill. App. 3d 701 (1998) (easiness of computing prejudgment interest; liquidated amount)
- Federal Insurance Co. v. Binney & Smith, Inc., 393 Ill. App. 3d 277 (2009) (standard for reviewing prejudgment interest decisions)