First District Illinois Appellate Sets “Abuse Of Discretion” Standard For Section 155 Fee Claim

The trial court ruled in favor of the insured on cross-motions for summary judgment in an insurance coverage dispute. The insured then moved for costs and attorney fees under Section 155 of the Illinois Insurance Code. The trial court denied that motion.

Both parties appealed. The insured argued that the standard of review for the denial of its fee motion was “de novo,” just like for the review of its summary judgment motion. But the appellate court ruled that the proper standard of review was “abuse of discretion” because the Section 155 sanctions motion “did not involve purely legal issues and was presented to the trial court after the court ruled on the parties” summary judgment motions.”

The whole case, Baxter International v. American Guarantee and Liability Ins. Co., No. 1-05-3231 (12/26/06), is available right here. http://www.state.il.us/court/Opinions/AppellateCourt/2006/1stDistrict/December/1053231.pdf