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31 July 2000

JUSTICE HUTCHINSON delivered the opinion of the court:

Plaintiff, Todd McGee, filed a complaint against defendant,State Farm Fire and Casualty Company, seeking an award pursuant tosection 155 of the Illinois Insurance Code (the Insurance Code)(215 ILCS 5/155 (West 1998)). Defendant filed a motion to dismisspursuant to section 2--619 of the Code of Civil Procedure (theCode) (735 ILCS 5/2--619 (West 1998)). The trial court granted defendant's motion, and plaintiff timely appeals. Interveningplaintiff, Premier Building Contractors, Inc. (Premier), is not aparty to this appeal. We reverse and remand.

Because defendant argues that an examination of the common-lawrecord provides evidence sufficient to defeat plaintiff's claim, weset forth the procedural history of this case in some detail. OnJanuary 15, 1996, plaintiff's home was damaged by a fire. Plaintiff reported the loss to defendant, his insurer. Plaintiffcontracted with Premier, a public adjuster, to negotiate asettlement with defendant on his behalf. Plaintiff subsequentlycanceled his contract with Premier, rehired Premier, and canceledhis contract with Premier a second time. Although plaintiffaccepted payments for temporary housing and personal property loss,the parties were unable to reach an agreement regarding plaintiff'sclaim for damage to the dwelling.

On January 3, 1997, defendant sent a letter to plaintiff'sattorney demanding an appraisal in accordance with the insurancecontract. The letter also contained the following statement:

"Please be advised that the one year period in which to filesuit has not been extended. The policy language pertaining toSuit Against Us is as follows:

8. Suit Against Us. No action shall be brought unlessthere has been compliance with the policy provisions. The action must be started within one year after the date of lossor damage. This one year period is extended by the number of daysbetween the date that the proof of loss was filed and the date theclaim is denied in whole or in part.

Therefore, [plaintiff] has until January 15, 1997, in which tofile suit against us."

On January 15, 1997, plaintiff filed a three-count complaintfor breach of contract against defendant, alleging that defendantowed him $183,960 for the cost of repair to the dwelling, $33,700for loss of use of the dwelling, and $2,686 for damage to personalproperty. On April 28, 1997, defendant tendered to plaintiff acheck in the amount of $96,750.69 payable to plaintiff, hismortgagee, and Premier. On May 8, 1997, plaintiff returned thecheck to defendant with a letter stating that he disputed Premier'sinterest in the insurance proceeds. The letter further statedthat, although defendant believed he was entitled to a greater sum,he would be willing to accept a check payable only to him and hismortgagee as partial payment.

On June 2, 1997, Premier filed a petition to intervene,alleging that it was entitled to 10% of any recovery plaintiffmight receive from defendant. On the same date, defendant filed amotion to dismiss and compel an appraisal, arguing that plaintiff'ssuit was premature because an appraisal was a condition precedentto filing a breach of contract action. Defendant also filed amotion for leave to file a complaint for interpleader alleging that defendant was indifferent to the claims of plaintiff, hismortgagee, and Premier, that $96,750.69 represented the actual cashvalue of the damage to the dwelling, and that it was willing totender that amount to the court for ultimate disbursement to theremaining parties. The trial court granted Premier's petition tointervene and continued the matter for hearing on defendant'smotions.

On July, 7, 1997, the trial court denied defendant's motion todismiss plaintiff's complaint, ordered the parties to submit toappraisal, stayed the contract action pending completion of theappraisal, and denied defendant's motion to file a complaint forinterpleader.

On September 10, 1997, plaintiff presented a motion for thecourt-ordered selection of an umpire, alleging that the parties'appraisers had verbally agreed to the selection of an umpire asrequired by the appraisal provision of the insurance contract butthat defendant's appraiser had refused to confirm the selection inwriting. The trial court found that the issue might be moot andcontinued a hearing on the motion. The record reveals that onSeptember 10, 1997, the parties' appraisers agreed in writing tothe selection of an umpire.

On November 11, 1997, the appraisers entered an awardsettlement of $197,247, including $188,071 for loss of thedwelling, $2,949 for loss of contents, and $6,227 for additionalliving expenses. Plaintiff's appraiser dissented and stated thetotal loss was $225,163.07.

On January 7, 1998, the trial court vacated the stay ofproceedings entered on July 7, 1997, pursuant to the agreement ofthe parties. On February 4, 1998, defendant filed a motion todismiss plaintiff's complaint, alleging that it had paid theappraisal award in full with the exception of $25,000 that it heldin response to Premier's claim pending direction from the court. Defendant argued that its liability under the insurance policy andany liability under the complaint had been discharged by payment.

The matter was continued several times while the courtresolved various motions involving discovery violations andplaintiff's counterclaim against Premier.

On September 2, 1998, the trial court granted plaintiff'scounsel leave to withdraw and continued the matter to October 8,1998. On that date, substitute counsel filed an appearance onbehalf of plaintiff. Following several continuances, the trialcourt granted plaintiff leave to file an amended complaint onDecember 1, 1998.

On December 15, 1998, plaintiff filed an amended complaint. The complaint included three counts sounding in breach of contractand added a fourth count alleging violation of section 155 of theInsurance Code and requesting attorney fees, costs, and statutorydamages as provided in section 155. Count IV alleged thatdefendant caused unreasonable delays in the handling and settlingof the claim. Count IV contained over 50 paragraphs, and plaintiffalleged, inter alia, the following: (1) plaintiff requested a copyof the insurance policy covering his property the day after thefire, but defendant failed to provide a copy for approximately 10months; (2) as a result, plaintiff was unaware of the applicableappraisal provisions of the policy; (3) plaintiff hired Premier toassist in his claim for damage to the dwelling on January 15, 1996,but terminated the contract on January 19 as the result of adisagreement regarding potential settlement; (4) plaintiff informeddefendant that he intended to negotiate his claim directly; (5)defendant informed plaintiff that it would only negotiate asettlement of the dwelling damage with a licensed contractor andthat, because Premier had begun evaluating plaintiff's claim, usinganother licensed contractor would seriously delay resolution of theclaim; (6) plaintiff rehired Premier as a result of defendant'srepresentations; (7) Premier estimated the cost of repair at$245,000, an amount in excess of the $189,300 policy limit, andfurnished evidence of its estimate to defendant; (8) defendantoffered to settle the claim for $110,000 based on its owninvestigation of the damage; (9) plaintiff rejected defendant'sinitial offer; (10) defendant subsequently raised its offer to$138,334, and plaintiff rejected the revised offer; (11) Premierthen informed plaintiff that it had initially overestimated hisloss and submitted a revised estimate of $204,000; (12) defendantsubsequently offered to settle plaintiff's loss for $149,600; (13)Premier urged plaintiff to accept the offer but failed to informhim that the amount would be discounted to $96,750.69 fordepreciation; (14) plaintiff refused the offer, but Premieraccepted the offer on his behalf without authority; (15) whenplaintiff learned of the purported settlement agreement, heterminated his contract with Premier and immediately informeddefendant that the offer had been accepted without authority; (16)plaintiff hired a second contractor, who prepared an estimate of$232,000 for the dwelling loss; (17) defendant failed to respond tothe revised estimate for more than 1