West Bend Mutual Insurance v. Norton
406 Ill. App. 3d 741
| Ill. App. Ct. | 2010Background
- Norton sought attorney fees under §155 for vexatious and unreasonable delay in her uninsured motorist claim against West Bend.
- Circuit court granted West Bend summary judgment, holding no vexatious or unreasonable delay.
- Parties agreed to arbitrate Norton's uninsured motorist claim; arbitration ultimately awarded Norton $7,113.61.
- West Bend offered the arbitration amount; Norton rejected it and continued litigation.
- Norton filed a counterclaim under §155; court granted West Bend summary judgment dismissing the counterclaim.
- Appellate court affirmed, holding West Bend did not act vexatiously or unreasonably and the trial court did not abuse its discretion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether West Bend's conduct was vexatious and unreasonable delaying the claim. | Norton contends delay and denial were vexatious. | West Bend had a bona fide defense and pursued arbitration. | Not vexatious; court affirmed. |
| Whether West Bend had a bona fide defense to Norton's uninsured motorist claim. | West Bend lacked a legitimate defense and delayed payment. | There was a bona fide dispute over coverage and policy obligations. | Bona fide defense found; upheld. |
| Whether Norton's notice and cooperation failures breached the policy and delayed coverage. | Norton breached notice/ cooperation, justifying delay. | Delay stemmed from bona fide disputes; Norton’s conduct did not create delay. | Delay not attributable to West Bend; upheld. |
| Whether West Bend's declaratory action while arbitration proceeded was improper and evidence of vexatious delay. | Declaratory action shows inconsistent posture and estoppel. | Declaratory action denied coverage issues; not improper. | Not shown as vexatious delay; affirmed. |
Key Cases Cited
- Mobil Oil Corp. v. Maryland Casualty Co., 288 Ill.App.3d 743 (1997) (section 155 requires vexatious and unreasonable delay with bona fide defense)
- McGee v. State Farm Fire & Casualty Co., 315 Ill.App.3d 673 (2000) (bona fide defense essential to §155 analysis; not mere unsuccessful challenge)
- Buais v. Safeway Insurance Co., 275 Ill.App.3d 587 (1995) (delay permissible when caused by bona fide coverage dispute; not a duty to settle)
- Gaston v. Founders Insurance Co., 365 Ill.App.3d 303 (2006) (abuse of discretion standard governs review of §155 vexatiousness finding)
- Smithberg v. Illinois Municipal Retirement Fund, 192 Ill.2d 291 (2000) (summary-judgment review is de novo)
- Wolfe v. Wolf, 375 Ill.App.3d 702 (2007) (noting limitations on estoppel arguments in related context)