FIRST DIVISION June 9, 2014

No. 1-12-3700

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT

BRIANNAH COOK, a Minor, By and Through ) Appeal from the Circuit Court of BRUCE COOK, Her Father and Next Friend, ) Cook County. ) Plaintiff-Appellant, ) ) No. 05 CH 21326 v. ) ) AAA LIFE INSURANCE COMPANY, ) Honorable James R. Epstein and ) Honorable Michael B. Hyman, Defendant-Appellee. ) Judges Presiding.

JUSTICE DELORT delivered the judgment of the court, with opinion. Justice Hoffman concurred in the judgment and opinion. Justice Cunningham specially concurred, with opinion.

OPINION

¶1 An insured mother died in a tragic accident just a few days after she had fortuitously paid

up the delinquent premiums on a life insurance policy payable to her three-year-old daughter.

An innocuous mix-up at the insurance company over that last-minute payment precipitated an

avalanche of litigation. Although the company offered to pay on the policy, the daughter’s father

and grandfather, both attorneys, refused the offer and demanded substantial penalties from the

company over the brief payment delay. Along the way, the grandfather’s law firm took one-third

of the girl’s insurance policy proceeds as a contingency fee. We agree with the two chancellors 1-12-3700

who heard the case below that the insurance company was only responsible to pay the face

amount of the policy and therefore affirm.

¶2 BACKGROUND

¶3 Briannah Cook, a minor, sued defendant AAA Life Insurance Company (AAA Life)

through her father, Bruce Cook (Bruce). The suit concerned a life insurance policy issued for

Briannah’s benefit on the life of Bruce’s late wife and Briannah’s mother, Camille Cook

(Camille). The complaint alleged four claims, including violations of the Illinois Consumer

Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq.

(West 2000) (counts I and IV), breach of contract (count II), and damages for vexatious and

unreasonable delay in settling an insurance claim under section 155 of the Illinois Insurance

Code (215 ILCS 5/155 (West 2000)) (count III). The court below granted summary judgment

for AAA Life on counts I, II, and IV. AAA Life also prevailed after a bench trial on count III.

The court also denied Bruce’s motions to join additional parties and amend his complaint and for

sanctions. Bruce has appealed virtually every substantive order rendered against him.

¶4 The facts adduced through summary judgment and at trial are essentially uncontested. In

August 2002, Camille applied for a $200,000 life insurance policy from AAA Life, naming

Briannah as the beneficiary. AAA Life accepted the application and issued the policy to

Camille. In May 2005, AAA Life mailed Camille a reminder that she must pay $67.50 for three

months of premiums, due on May 14, 2005. The notice stated:

“TO CONTINUE YOUR INSURANCE WITH ITS VALUABLE

PROTECTION YOU MUST PAY THE AMOUNT DUE BEFORE THE END

OF THE GRACE PERIOD WHICH EXPIRES JUNE 15, 2005.”

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Camille did not pay this premium before June 15, 2005. In July 2005, Camille sent a check for

$135 to AAA Life, and the check was duly honored and paid by her credit union on July 19,

2005. Five days later, on July 24, Camille drowned in a boating accident.

¶5 On July 26, 2005, Bruce informed AAA Life of his wife’s death. The AAA Life agent

told Bruce that the policy had lapsed for nonpayment and no restorative payment had been made

after the lapse date. It was not until making further investigation that Bruce discovered an entry

for Camille’s July 2005 payment in her check register.

¶6 On July 28, 2005, Juna Putvin, an AAA Life customer service representative, who was

unaware of Camille’s death, wrote Camille that because her “premium payment ha[d] not been

received and the grace period ha[d] expired,” her coverage was “now in lapse status as of May

14, 2005.” Putvin’s letter stated that AAA Life “would consider” reinstating the policy if

Camille submitted a reinstatement application to AAA Life “for approval.” The letter concluded

with an admonition that “until reinstatement has been approved by our Underwriting Department

your coverage will remain lapsed.”

¶7 On August 30, 2005, Rufus Cook (Rufus), Bruce’s father and an attorney, wrote to AAA

Life making a claim on the policy and advising it that Bruce and Briannah were being

represented by Rufus’s law firm, Cook & Revak, Ltd. (the Cook firm). Rufus included a copy of

Camille’s final check to AAA Life showing the July 19, 2005, processing date.

¶8 On September 16, 2005, Brenda White, an AAA Life claims representative, responded to

Rufus’s letter, stating the policy had lapsed for nonpayment of premiums prior to Camille’s

death. She also stated that the reinstatement form was sent on July 28, 2005 and because

Camille was already deceased at that time and therefore unable to complete the application, the

policy “could not be reinstated and therefore remained lapsed,” and the premium would be

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refunded. AAA Life mailed the refund to the Cook firm on September 21, 2005. On the same

day, Brenda told Rufus that he would need to send a formal demand letter to her manager, Sherry

Young, who would then forward the letter to AAA Life’s legal department.

¶9 On September 23, 2005, Bruce signed a contingent fee agreement with the Cook firm on

behalf of Briannah, agreeing to pay the firm (1) one-third of the policy proceeds from any

settlement with AAA Life that occurred before filing a lawsuit, or (2) 40% of any settlement or

judgment if it was necessary to file a lawsuit. On October 11, 2005, Rufus sent an unfiled class

action complaint to Brenda along with the $135 AAA Life check. The letter demanded full

payment of the policy and indicated that AAA Life might be liable for an additional 60%

statutory penalty and other damages.

¶ 10 On October 21, 2005, Diane Coudurier, an assistant general counsel for AAA Life, sent

an internal email to Brenda stating that there was no basis to deny coverage under the policy.

She noted that policy was “in force at the time of death,” was “not contestable” and “would be

payable without investigation” because the premium check cashed by AAA Life brought the

coverage up to date and there was “no indication that the insured’s health had changed.” She

asked for an immediate response “to keep the lawsuit from being filed.”

¶ 11 Brenda then advised Diane to contact Sherry and Diane responded: “If Sherry approves I

will send the claim form out with my letter to the attorney, since he is handling this matter for the

beneficiary.” On the same day, Diane wrote a letter to Rufus advising him that AAA Life acted

reasonably when it initially found that evidence of insurability was not met. However, upon full

consideration of the relevant facts, including that the death was accidental, she had

recommended that coverage be granted upon completion of an enclosed application.

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¶ 12 That did not satisfy the Cook family, however. On November 3, 2005, Rufus responded

to Diane’s letter, acknowledging AAA Life’s offer to pay the $200,000 policy proceeds, but

demanding AAA Life resolve Bruce’s claims for $485,000, including the face amount of the

policy with prejudgment interest, the $60,000 “provided by statute for such cases” and $100,000

in “exemplary damages.” The letter stated that AAA Life’s representative had “falsely” stated

that the policy had lapsed even though it had already cashed the premium check. It claimed that

AAA’s failure to disclose its knowledge that the premium was paid was “fraudulent as a matter

of law.” The letter rejected payment of the policy, noting that Briannah’s net proceeds were now

diminished because of the contingency fee. The letter went on to threaten AAA Life with an

additional claim for violation of state consumer protection laws.

¶ 13 Because life insurance proceeds in such a large amount cannot be paid directly to a

minor, AAA Life inquired about the existence of Briannah’s minor’s estate. Rufus sent a second

letter to Brenda on November 3, admitting that he could not provide any conservatorship or

guardianship papers for Briannah because no such documents existed. AAA life explained that it

would not pay Cook the policy proceeds unless a trust was established for Briannah’s benefit.

Rufus provided AAA life with a declaration of trust executed by Bruce, but a few days later, he

wrote to Diane expressing his dissatisfaction with her handling of the claim. After receiving no

response, the Cook firm filed this lawsuit on December 12, 2005.

¶ 14 Bruce moved for a temporary restraining order against AAA Life, but the court suggested

that a guardian should be appointed for Briannah through the probate court. A week later, Bruce

filed a petition in probate court seeking to be appointed as the guardian of Briannah’s estate. On

that same day, the Cook firm sent AAA Life’s counsel notice of an attorney’s lien on 40% of the

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policy proceeds. On January 10, 2006, the probate court issued letters of office appointing Bruce

as guardian of Briannah’s estate.

¶ 15 On January 31, 2006, AAA Life filed a petition to adjudicate lien in the probate case.

AAA Life sought to pay the $200,000 to Briannah’s estate and requested that the court direct the

estate to make any distributions. The probate court declined to adjudicate the attorney’s lien,

finding the matter was subject to jurisdiction of the chancery court. AAA Life then filed an

interpleader counterclaim in this case seeking to deposit the policy proceeds with the court. On

the same day, Bruce filed a citation to recover assets in the probate case. As part of the

agreement resolving the citation, AAA Life tendered a $200,000 draft to Bruce in his capacity as

the guardian of Briannah’s estate.

¶ 16 The Cook firm then sought court approval of its contingency fee. The probate court

appointed a guardian ad litem to determine the amount of attorney fees the Cook firm could take

from Briannah’s estate. On the recommendation of the guardian ad litem, the probate court

entered an order awarding the Cook firm $66,666.66 in attorney fees. The parties then

proceeded to litigate Bruce’s complaint and AAA Life’s affirmative defenses in the chancery

case.

¶ 17 The summary judgment proceedings primarily examined whether the policy had lapsed at

the time of Camille’s death. Two different contracts were at issue: the group insurance

certificate issued to Camille and the group term, life insurance policy. The certificate states that

“[t]his certificate is a legal contract between the Certificateholder [Camille] and AAA Life

Insurance Company.” The certificate further provides, “This certificate, with a copy of the

application and any attached riders form the entire contract.” As to nonpayment of premiums,

the certificate states:

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“Grace Period

We will allow a thirty-one (31) day grace period for all premiums due, except

the first one. During this period the coverage will remain in force. If the

premium due is not paid by the end of the grace period, the coverage provided by

the Certificate will lapse. All insurance ends when the Certificate lapses. If Your

death occurs during the grace period, We will deduct from the amount otherwise

payable, that part of the unpaid premium which is applicable to the grace period.

Reinstatement of Insurance

If We terminate insurance for non-payment of premium, You may reinstate

coverage within ninety (90) days following the last unpaid premium due date.

You must pay all overdue premiums and provide Us with satisfactory Evidence of

Insurability. The reinstated Certificate will not cover a loss which occurred

during the lapse period.”

The certificate defines “Evidence of Insurability” as “proof satisfactory to Us that an Insured is

an acceptable risk under the Group Policy.” The certificate defines “Group Policy” as the

“Group Life Insurance Policy bearing the number LTL-97” and “issued to the Policyholder by

Us.” The certificate further provides that “[i]f there is a difference between the provisions of this

Certificate and the Policy, the provisions of the Policy will govern.”

¶ 18 The group policy is a contract between AAA Life and the American Automobile

Association (the Association) which reads in part:

“Entire Contract

This Policy, its appendices, endorsements, riders, and the application made by

the Policyholders (a copy of which is attached), and the Certificate, applications

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made for insurance, riders and any endorsements, form the entire contract

between the Company [AAA Life] and the Policyholder [the Association].”

The group policy also states:

“AAA Life Insurance Company *** has issued this Policy in consideration of

the Policyholder’s [the Association] application and the payment of premiums,

and agrees to pay the benefits as stated herein.

This Policy issues to the Policyholder and any papers made a part of it,

including the application for this Policy, and each application for Certificate of

Insurance are part of this agreement.”

The group policy allows AAA Life to issue certificates to eligible members of the Association:

“Certificate of Group Insurance

We will provide an individual Certificate of Group Insurance (Certificate) for

issue to each Insured whose application for insurance has been approved by Us.

The Certificate is a summary of the insurance under this Policy. The Certificate

along with any attached riders, and a copy of the Insured’s application for

insurance under this policy for the entire contract.

***

If there is a difference between the provisions of this Policy and a Certificate,

the provisions of this Policy will govern.”

The grace period and reinstatement provisions in the group policy are virtually identical, except

that the group policy does not require the insured to “provide [AAA Life] with satisfactory

Evidence of Insurability” to reinstate the insurance after the grace period.

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¶ 19 The evidence showed that premium payments mailed to AAA Life are sent to a post

office box, where all the checks are automatically processed by a bank. The money then goes to

one of two places. If the certificate or policy number, the due date, and the frequency of

payment are all satisfactory, the payment is deposited in AAA Life’s premium account.

However, if there is an issue with the check or certificate, the bank places the funds into a

suspense account. AAA Life then reviews its suspense reports to determine why funds were

rejected into the suspense account. Here, because AAA Life believed that Camille’s certificate

had lapsed for nonpayment of premiums and required a new application, Camille’s July 2005

payment was rejected and placed into the suspense account.

¶ 20 Judge Epstein denied Bruce’s motion for summary judgment on counts I, II, and III of his

complaint and granted AAA Life’s cross-motion for summary judgment on counts I, II, and VI.

He determined there were issues of genuine material fact as to count III, the sole remaining

claim. Judge Hyman later denied AAA Life’s own motion for summary judgment on count III

and denied Bruce’s motion to add parties and to amend the complaint. The matter proceeded to a

bench trial before Judge Hyman on February 29, 2012.

¶ 21 After trial, Judge Hyman entered judgment in favor of AAA Life and against Bruce on

count III, and denied Bruce’s motion for sanctions. Later, he denied Bruce’s additional posttrial

motion for sanctions against AAA Life and its attorney. This appeal, which requests us to

reverse virtually every decision made by the two trial judges, followed.

¶ 22 ANALYSIS

¶ 23 Summary Judgment on Counts I and IV

¶ 24 The construction of an insurance policy and the determination of the parties’ rights and

obligations thereunder are questions of law appropriate for resolution by summary judgment.

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Continental Casualty Co. v. Donald T. Bertucci, Ltd.,

(2010) (citing

Zurich Insurance Co. v. Raymark Industries, Inc.,

(1987)). “‘Summary

judgment is proper if, when viewed in the light most favorable to the nonmoving party, the

pleadings, depositions, admissions, and affidavits on file demonstrate that there is no genuine

issue as to any material fact and that the moving party is entitled to judgment as a matter of

law.’” Farmers Automobile Insurance Ass’n v. Danner,

(quoting Lazenby v. Mark’s Construction, Inc.,

(2010)). We review the trial

court’s decision to grant or deny a motion for summary judgment de novo.

(citing

Millennium Park Joint Venture, LLC v. Houlihan,

(2010); see also Joe

Cotton Ford, Inc. v. Illinois Emcasco Insurance Co.,

(2009) (finding

review of a grant of summary judgment in an action for declaratory judgment is reviewed de

novo).

¶ 25 The purpose of summary judgment is to determine whether triable issues of fact exist and

is proper where the pleadings, depositions, and admissions on file, together with any affidavits

and exhibits, when viewed in the light most favorable to the nonmoving party, establish there is

no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.

O’Connell v. Turner Construction Co.,

(2011) (citing Busch v. Graphic

Color Corp.,

(1996)).

¶ 26 When reviewing a trial court’s grant of summary judgment de novo, we are “limited to

deciding whether the [trial] court correctly concluded that no genuine issue of material fact had

been raised and, if none was raised, whether judgment as a matter of law was appropriate.”

Chicago Transit Authority v. Clear Channel Outdoor, Inc.,

(2006)

(citing William Blair & Co. v. FI Liquidation Corp.,

(2005)). An issue

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is “genuine” only if there is evidence to support the position of the nonmoving party. N.W. v.

Amalgamated Trust & Savings Bank,

(1990). To determine whether

a genuine issue of material fact exists, we “must construe the evidence strictly against the

movant and liberally in favor of the opponent.” Chicago Transit Authority,

(citing William Blair & Co,

)).

¶ 27 Bruce argues that the trial court’s grant of summary judgment in favor of AAA Life on

the Consumer Fraud Act counts I and IV was in error. He asserts the trial court incorrectly

analyzed the procedure for reinstating Camille’s coverage by characterizing the conflict between

the policy and the certificate as a mere “disagreement,” when the policy’s more generous

provisions clearly governed. Bruce explains that AAA Life had a duty to follow the policy’s

reinstatement requirements but misrepresented the requirements for reinstating coverage and

denied coverage on that basis. He also argues that the two counts properly alleged that AAA

Life knowingly misrepresented the terms of the policy, failed to implement procedures for

prompt investigation and settlement of claims, and refused to pay the claim without conducting a

reasonable investigation. Furthermore, Bruce contends that the trial court’s reasoning for finding

that these claims are preempted by section 155 of the Insurance Code was erroneous because

recovery is permitted not only for deceptive conduct, but also for unfair conduct.

¶ 28 “[I]t is settled that the Consumer Fraud Act was not intended to apply to every contract

dispute or to supplement every breach of contract claim with a redundant remedy.” Zankle v.

Queen Anne Landscaping,

(2000). Thus, “[a] breach of contract,

without more, is insufficient to sustain a cause of action cognizable under the Consumer Fraud

Act.” Brody v. Finch University of Health Sciences/The Chicago Medical School,

(1998) (citing Lake County Grading Co. of Libertyville, Inc. v. Advance Mechanical

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Contractors, Inc.,

(1995)). The Consumer Fraud Act prohibits, in the

course of trade or commerce:

“Unfair methods of competition and unfair or deceptive acts or practices,

including but not limited to the use or employment of any deception, fraud, false

pretense, false promise, misrepresentation or the concealment, suppression or

omission of any material fact, with intent that others rely upon the concealment,

suppression or omission of such material fact.” 815 ILCS 505/2 (West 1992).

The elements of a cause of action under the Consumer Fraud Act include: “(1) a deceptive act or

practice; (2) the intent that the plaintiff rely on the deception; and (3) that the deception occurred

in the course of trade or commerce.” Zankle,

.

¶ 29 Bruce did not establish a claim under the Consumer Fraud Act because he did not

identify any “deceptive act.” Camille’s policy states: “If a premium due is not paid by the end of

the grace period, the coverage provided by the Certificate will lapse.” Camille’s policy lapsed

for nonpayment when she failed to pay her overdue premiums before June 15, 2005, the end of

her grace period. The key issue is whether Camille’s July 2005 payment effectuated

reinstatement of her policy. The policy provides that the insured may reinstate coverage within

90 days following the last unpaid premium due date, but that the reinstated policy will not cover

a loss which occurred during the lapse period. The certificate also allows reinstatement within

90 days but, in contrast to the policy, requires “Evidence of Insurability” before reinstatement

becomes effective. The policy and certificate indicate that when there is a difference between

the two, the policy controls.

¶ 30 Relying on the certificate, AAA Life initially determined that Camille’s payment did not

reinstate her policy because she did not provide evidence of her insurability. However, Bruce,

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relying on the policy, claimed that no such evidence was required to reinstate the policy. Here,

the parties’ disagreement about the procedure for reinstating Camille’s coverage does not imply

that AAA Life engaged in fraudulent or deceptive behavior, implicating the Consumer Fraud

Act. Instead, we agree with the trial court that it constitutes a mere difference of opinion

regarding contract interpretation insufficient to invoke the Consumer Fraud Act. There is no

evidence in the record to suggest that AAA Life had a practice of lying to policyholders about

the receipt of payments or that all of AAA Life’s agents knew that Camille’s payment had been

received and processed at AAA Life’s lockbox. We cannot deem AAA Life’s statements as

rising to the level of deceit or fraud.

¶ 31 Additionally, we agree that the Consumer Fraud Act claim is preempted by section 155

of the Insurance Code. “[A]n insurer’s conduct may give rise to both a breach of contract action

and a separate and independent tort action.” Cramer v. Insurance Exchange Agency,

(1996) (citing Kelsay v. Motorola, Inc.,

(1978)). Section 155

provides an extracontractual remedy when an insurer’s misconduct is vexatious and

unreasonable. Id. at 523. “A plaintiff may bring an independent tort action for insurer

misconduct if the plaintiff alleges and proves the elements of the separate tort.” Young v.

Allstate Insurance Co.,

(2004) (citing Cramer,

).

“Mere allegations of bad faith or unreasonable and vexatious conduct, without more, however,

do not constitute such a tort. Courts therefore should look beyond the legal theory asserted to the

conduct forming the basis for the claim.” Cramer,

. When the conduct is

merely a breach of contract or conduct proscribed by section 155, a Consumer Fraud Act claim

on that basis is preempted by section 155. Young,

(holding that the

plaintiffs’ Consumer Fraud Act claim was preempted by section 155 because it was a claim for

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failure to pay insurance policy proceeds and “[b]ased on Cramer, a separate tort claim is not

necessary and is inapplicable *** because a contractual remedy is available to plaintiffs”).

¶ 32 While AAA Life initially denied coverage, it changed course shortly thereafter and

appropriately paid the proceeds. AAA Life’s conduct was neither inherently deceptive nor

unfair. Accordingly, counts I and IV were preempted by section 155 of the Illinois Insurance

Code. See also Evans v. International Village Apartments,

(1988)

(“In Illinois, if the named plaintiff’s personal cause fails, the entire class action must fail.”).

Because there was no genuine issue of material fact with regard to counts I and IV, the court

correctly granted summary judgment to AAA Life on these counts.

¶ 33 Motion to Join Additional Parties

¶ 34 Bruce argues that the trial court erred when it denied his motion to join two defendants,

“American Automobile Association, Heathrow, FL” (the Association), and “Signet Trust

Company, Trustee for AAA Group Insurance Trust, Washington D.C.” (Signet). He moved to

join these defendants about 14 months before trial, arguing they were necessary parties. Bruce

asserts that he should be permitted to join these parties because they owed Camille a fiduciary

duty as her agents. He claims they had a fiduciary duty not to allow “AAA [Life] to impose

different and more stringent reinstatement terms than those set by the [p]olicy and then on that

basis to deny her coverage.” In other words, according to Bruce, they acted in concert with AAA

Life to impose the certificate’s reinstatement policy while ignoring the controlling policy

provisions.

¶ 35 The Code of Civil Procedure provides that any person may be made a defendant who is

alleged to have a claim or interest in the controversy or transaction out of which the controversy

arose, or whom it is necessary to join for the complete determination of any question involved in

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the case, or against whom liability is asserted arising out of the same transaction. 735 ILCS 5/2-

405(a) (West 2010). In assessing whether joinder is proper, a court considers whether the claims

arise out of closely related transactions and whether there is in the case a significant question of

law or fact that is common to the parties. Boyd v. Travelers Insurance Co.,

(1995). “A reviewing court will not disturb a trial court’s ruling on discovery matters unless

there is a manifest abuse of discretion.” Atlantic Mutual Insurance Co. v. American Academy of

Orthopaedic Surgeons,

(2000) (citing Schneiderman v. Kahalnik,

(1990)).

¶ 36 We agree with the trial court’s decision to deny Bruce’s motion to join the Association

and Signet because Bruce presented no significant questions of law or fact that are common to

the parties in this case. While Bruce contends there is an agency connection between these

entities, he failed to produce any hard facts necessary to establish the existence of an agency

relationship between the Association and/or Signet and Camille, nor any purpose such a

relationship would have, but merely assumed that one existed. The policy designates the

Association as the policyholder and does not designate it as AAA Life’s agent. Instead, he

merely claims that these additional defendants had some sort of duty to make sure that the

policy’s terms, and not those of the certificate, were controlling. We know of no such duty and

cannot discern one from the policy documents. Accordingly, the trial court did not abuse its

discretion in denying his motion. Boyd,

.

¶ 37 Motion to Amend Complaint

¶ 38 Bruce asserts that the trial court erred by denying his motion to file a postsummary

judgment amended complaint. Bruce sought to amend counts I though IV of the complaint, and

also moved to add count V, alleging that AAA Life fraudulently misrepresented that the policy

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had lapsed and a new application was required for reinstatement. In another proposed claim,

count VI, he alleged a conspiracy to defraud against AAA Life and also sought to add the

Association as a defendant. He based these proposed amendments on alleged newly-discovered

evidence, including that he did not learn until 2010 after Sandra was deposed that AAA Life was

continuing to apply the certificate’s inapplicable reinstatement provision. By doing so, Bruce

alleged that AAA Life continued to deny coverage to insureds who paid overdue premiums

within the 90-day lapse period (the only requirement specific in the policy) but who passed away

without having submitted a reinstatement application.

¶ 39 The Code of Civil Procedure states in relevant part: “Before or after the entry of a

summary judgment, the court shall permit pleadings to be amended upon just and reasonable

terms.” 735 ILCS 5/2-1005(g) (West 2010). In deciding whether a postsummary judgment

amendment is proper, the following four factors are considered: (1) “whether the proposed

amendment would cure the defective pleading,” (2) “whether other parties would sustain

prejudice or surprise by virtue of the proposed amendment,” (3) “the timeliness of the proposed

amendment,” and (4) “whether plaintiff has had previous opportunities to amend the pleadings.”

Lewis v. American Airlines, Inc.,

(1997) (citing Loyola Academy v.

S&S Roof Maintenance, Inc.,

(1992)).

¶ 40 Section 2-1005(g) does not allow a plaintiff to amend a cause of action on which the

defendant was granted summary judgment unless depositions and affidavits indicate that the

plaintiff can replead the claim under another theory. Steinberg v. Dunseth,

(1995). “As a rule, the circuit court’s ruling to allow or deny an amendment is a

matter of discretion and will not be reversed absent an abuse of discretion.” Board of Directors

of Bloomfield Club Recreation Ass’n v. The Hoffman Group, Inc.,

(1999). A

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trial court abuses its discretion when it refuses to allow a plaintiff to amend his complaint when a

cause of action can be stated if the amendment is permitted. Moiseyev v. Rot’s Building &

Development, Inc.,

(2006).

¶ 41 The trial court did not abuse its discretion by denying Bruce’s motion to amend his

complaint. The proposed revisions of counts I through IV still rendered them almost identical to

their predecessors. The court had already disposed of counts I, II, and IV through summary

judgment in favor of AAA Life, and count III was set for trial. There is no indication whatsoever

that repleading of these three counts would have removed the defects that resulted in their

unfavorable disposition through summary judgment. As to Bruce’s fraudulent misrepresentation

claim, count V, he failed to establish detrimental reliance on any alleged misrepresentation.

Cramer,

. The evidence indicates that Bruce did not rely on AAA Life’s

representations that the policy lapsed. Instead, Bruce immediately retained counsel and began

aggressively litigating the reinstatement dispute surrounding Camille’s policy.

¶ 42 The proposed conspiracy to defraud claim, count VI, alleges a number of unsupported

legal conclusions, including that the Association was a trustee and fiduciary for the group

policyholder’s beneficiaries, the Association is an alter ego of AAA Life, and the Association

has somehow supported AAA Life in violating the terms of the policy. The proposed count

simply did not allege the elements of a conspiracy. Karas v. Strevell,

(2008)

(a “[c]ivil conspiracy consists of a combination of two or more persons for the purpose of

accomplishing by some concerted action either an unlawful purpose or a lawful purpose by

unlawful means”).

¶ 43 Bruce’s motion to amend his complaint was also untimely, as he filed it on September 19,

2011, almost six years after he filed his original complaint on December 12, 2005. The addition

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of claims and parties at that late juncture would have required additional discovery and would

have prejudiced AAA Life because the proposed claims depended on evidence different from

that already gathered.

¶ 44 The case of Grove v. Carle Foundation Hospital,

(2006), is

instructive on this point. There, the trial court denied a motion for leave to amend the complaint

two years after the original complaint had been filed. In affirming the trial court, the appellate

court held that the evidence supporting the amendment was not “inextricably intertwined” with

the evidence supporting the alleged negligent acts already plead in the original complaint.

. The court noted that the focus is on whether the proposed amendment alters

the nature and qualify of proof required for the defendant to defend the claim. Accordingly, we

find that the trial court did not abuse its discretion in denying Bruce’s motion to amend his

complaint. Cf. Pietka v. Chelco Corp.,

(1982) (an amendment was

proper because it relied on “essentially the same” evidence as the other claims and could have

been presented without delay).

¶ 45 Bench Trial on the Vexatious Delay Claim

¶ 46 Bruce argues that the trial court erred in granting judgment in favor of AAA Life after

trial on count III, because the evidence showed that AAA Life’s delay in paying the insurance

proceeds was vexatious and unreasonable as contemplated by section 155. Accordingly, Bruce

not only asks us to reverse the order below, but also for $126,666 in statutory attorney fees and

costs under section 155.

¶ 47 The sole issue at trial was whether AAA Life’s settling of Bruce’s claim violated section

155 of the Illinois Insurance Code. That section states, in relevant part:

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“In any action by or against a company wherein there is in issue the liability of a

company on a policy or policies of insurance or the amount of the loss payable

thereunder, or for an unreasonable delay in settling a claim, and it appears to the

court that such action or delay is vexatious and unreasonable, the court may

allow as part of the taxable costs in the action reasonable attorney fees, [and]

other costs *** .” (Emphasis added.) 215 ILCS 5/155(1) (West 2012).

By enacting this law, our legislature sought to effectuate a balance between the “individual

insured party’s need for compensation and the broad societal interest in avoiding excessive

damage awards that result in price increases to all policyholders.” Kush v. American States

Insurance Co.,

(7th Cir. 1988). In other words, its purpose is to punish

insurance companies for vexatiously delaying or rejecting legitimate claims by holding insurers

responsible for the “expense resulting from the insured’s efforts to prosecute the claim,” and

discouraging them from using their “superior financial position by delaying payment of

legitimate contractual obligations” to profit at the insured’s expense. (Emphases in original and

internal quotation marks omitted.) Neiman v. Economy Preferred Insurance Co.,

(2005). Thus, “[t]he allowance of fees and penalties under [s]ection 155 is within

the judgment and discretion of the trial court, and its determination thereon will not be disturbed

on review absent an abuse of discretion.” Keller v. State Farm Insurance Co.,

(1989) (citing National Tea Co. v. Commerce & Industry Insurance Co.,

(1983)).

¶ 48 Whether a delay is vexatious and unreasonable is a question of fact that must be assessed

based on the totality of the circumstances, taken in broad focus. Keller,

(citing Fassola v. Montgomery Ward Insurance Co.,

(1982)). “Neither

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the length of time, the amount of money involved, nor any other single factor taken by itself is

controlling in determining if a delay is vexatious or unreasonable.”

(citing Deverman v.

Country Mutual Insurance Co.,

(1977)). In examining the

circumstances, courts have considered factors such as “the insurer’s attitude, whether the insured

was forced to file suit to recover, and whether the insured was deprived of the use of its

property.” Mobil Oil Corp. v. Maryland Casualty Co.,

(1997).

Additional considerations include whether there is a bona fide dispute concerning coverage, the

extent of the insurance company’s evaluation and investigation of the claim, and the adequacy of

communications between the insurance company and the insured. Buais v. Safeway Insurance

Co.,

(1995).

¶ 49 In those circumstances “where a bona fide dispute concerning coverage exists, costs and

sanctions are inappropriate.” State Farm Mutual Automobile Insurance Co. v. Smith,

(2001). “Bona fide” is defined as “‘[r]eal, actual, genuine, and not feigned.’” McGee v.

State Farm Fire & Casualty Co.,

(2000) (quoting Black’s Law

Dictionary 177 (6th ed. 1990)). If an insurance company’s delay is grounded in a bona fide

dispute over coverage, delay will not violate section 155, but that dispute must be rationally

based in fact.

. In other words, in order to state a claim under section 155, an “insured

cannot merely allege that the insurer’s conduct was vexatious and unreasonable, but she or he

must include a modicum of factual support.”

(citing Bedoya v. Illinois Founders Insurance

Co.,

(1997)).

¶ 50 As is relevant here, “[g]roup insurance policies are those issued by insurance companies

to a group policyholder, such as an employer, association or union.” Hofeld v. Nationwide Life

Insurance Co.,

(1975). A certificate is then issued to participating insureds.

20 1-12-3700

The master policy is the primary contract under Illinois law and “must first be looked to in

construing group insurance policies.”

The Hofeld court explained:

“Commonly, the certificates summarize the more important provisions of the

policy terms as they apply to the insured. Often it is stated that the certificates do

not constitute a part of the insurance contract. [Citation.] It may even be

suggested by statute that only the master policy, the application of the employer

and the individual applications shall constitute the entire contract. [Citation.] The

individual insured normally sees only the certificate issued to him. If it contains

provisions conflicting with those in the master policy, the certificate normally will

be held to control. Courts have so held either under the theory that the certificates

are a part of the total contract under the particular language of the certificate or on

the theory of estoppel.”

¶ 51 “The trial judge, when sitting as the trier of fact in a bench trial, makes findings of fact

and weighs all of the evidence in reaching a conclusion.” Staes & Scallan, P.C. v. Orlich,

(citing Nokomis Quarry Co. v. Dietl,

(2002)). Thus, when a party challenges a trial court’s bench-trial ruling, the appellate court will

“‘defer to the trial court’s factual findings unless they are contrary to the manifest weight of the

evidence.’”

(quoting Nokomis Quarry Co.

). Under this standard of

review, we give great deference to the circuit court’s credibility findings and we will not

substitute our judgment for that of the circuit court “‘because the fact finder is in the best

position to evaluate the conduct and demeanor of the witnesses.’”

(quoting Samour, Inc. v.

Board of Election Commissioners,

(2007)). Additionally, “‘[a] factual

finding is against the manifest weight of the evidence when the opposite conclusion is clearly

21 1-12-3700

evident or the finding is arbitrary, unreasonable, or not based in evidence.’”

(quoting

Samour,

). Therefore, we will not disturb the findings and judgment of the trier

of fact “‘if there is any evidence in the record to support such findings.’”

(quoting Brown v.

Zimmerman,

(1959)).

¶ 52 As a threshold matter, our review of the record establishes that on October 21, 2005,

Bruce knew that AAA Life offered to pay the policy proceeds in full. Here, Rufus specifically

stated in his November 3, 2005 letter to AAA Life that “you [Diane] left [a message] on the

afternoon of Friday October 21[st] advising that AAA [Life] would honor the policy.” However,

at trial, Rufus downplayed this critical evidence by characterizing it as “a little bit of hopeful

whistling in the dark.” The record supports the trial judge’s finding that he was less than

credible on this point. As the trial court explained in its detailed written decision:

“It is not believable that an attorney of Rufus’s caliber and experience would

correspond with an insurance company in anything but the most direct,

straightforward manner. When cross-examined on this point, Rufus dissembled,

evaded answering defense counsel’s questions, and failed to explain his

November 3, 2005 admission. The only believable explanation is that Cook &

Revak received AAA Life’s offer of the $200,000 policy proceeds on October 21,

2005, and then counteroffered on November 3, 2005 for $485,000, which

included in addition to the policy proceeds, $285,000 for attorney’s fees and

exemplary damages. [Bruce’s] characterization of AAA Life’s correspondence as

only ‘recommending’ coverage, or reserving liability of payment are not

believable in light of Rufus’s admission in his November 3 letter and [Diane’s]

testimony.”

22 1-12-3700

¶ 53 Bruce’s first contention that the automated lockbox deposit of Camille’s premium check

constituted an “unconditional acceptance” is without merit. Under the Cullotta test, AAA Life’s

acceptance of the check was conditional. Here, we must consider three factors to determine if

AAA Life’s acceptance of Camille’s July 2005 check was conditional: (1) whether the insurance

company issued a policy document; (2) whether the policy contained conditional language; and

(3) whether the insurer processed “the check as though a cash premium had been paid.” Cullotta

v. Kemper Corp.,

(1979). Under this test, we first note that there is no evidence

that AAA Life issued a policy document in response to Camille’s payment. Next, AAA Life’s

certificate contains conditional language in the form of two conditions precedent to

reinstatement: payment and evidence of insurability. Finally, AAA Life did not process

Camille’s check as through it were a cash premium. Instead, it held the funds in its suspense

account and later tried to return the funds to Bruce. Therefore, on the basis of the Cullotta

factors, AAA Life only conditionally accepted Camille’s July 2005 check.

¶ 54 Additionally, the policy states that it is a contract between AAA Life and the Association.

If there is a “difference” between the group policy and certificate, the policy states that the policy

controls. The certificate conditions reinstatement on “Evidence of Insurability” and the policy is

silent on the issue. However, AAA Life does not view the policy’s silence as a “difference” and

therefore maintains its position that a new application was a condition precedent to reinstatement

of coverage. The trial court found, and we agree, that AAA Life’s interpretation of the policy

and certificate was reasonable. In essence, AAA Life interprets a “difference” to be an express

contradiction and, under this interpretation, the policy’s silence on “Evidence of Insurability”

does not contradict the certificate’s terms. Thus, Diane’s decision on October 21, 2005 to

recommend coverage was a recommendation that AAA Life simply waive any condition

23 1-12-3700

precedent to reinstatement except payment. LaSalle National Bank v. Metropolitan Life

Insurance Co.,

(7th Cir. 1994) (“‘conditions precedent may be waived when

a party to a contract intentionally relinquishes a known right either expressly or by conduct

indicating that strict compliance with the conditions is not required’”). Furthermore, Bruce’s

strained interpretation of the term “difference,” which includes even the slightest departure

between the policy and certificate is also unreasonable. Accordingly, we agree with the trial

court that the difference between AAA Life’s and Bruce’s interpretations for the period July 26

to October 21, 2005 constituted a bona fide dispute over coverage. Therefore, because AAA

Life did not unconditionally accept Camille’s July 2005 check and because there was a bona fide

dispute as to coverage before October 21, 2005, AAA Life’s actions and delay in paying the

policy proceeds were not vexatious and unreasonable.

¶ 55 Next, we agree with the trial court’s analysis that AAA Life’s actions were not improper

for the period of October 21, 2005 to the end of March 2006. A review of the applicable

timeline is instructive here. On November 3, 2005, the Cook firm wrote to AAA Life

demanding $485,000, extra-contractual damages, and also threatened to institute a class action

lawsuit. On the same day, the Cook firm incorrectly informed AAA Life that a guardianship for

Briannah could not be established because her father, Bruce, was still alive. AAA Life wrote to

the Cook law firm the next day explaining that “a legal account such as a trust” should be set up

before the policy proceeds could be paid. A week later, the Cook firm sent AAA Life a

declaration of trust, which set up a trust for Briannah with Bruce as the trustee. Diane reviewed

the document, and decided that she needed to retain outside counsel to evaluate the trust. She

was concerned that if the trust did not protect Briannah’s interests then AAA Life could possibly

be liable to her in the future.

24 1-12-3700

¶ 56 On November 18, 2005, Diane informed the Cook firm of her decision to retain outside

counsel. Our review of the record shows that the Cook firm had no interest in resolving the trust

issue but instead was determined to litigate some sort of potentially lucrative class action suit.

Therefore, the Cook firm’s decision to file the complaint was made after AAA Life had agreed to

pay the claim, which it was well aware of since it was working on the legalities of properly

paying Briannah, who was a minor.

¶ 57 We agree with the trial court that AAA Life’s delay to retain outside counsel was

reasonable. Here, AAA Life sought to insulate itself from liability and attempted to get the

probate court to adjudicate the amount of the Cook firm’s fees. Illinois law establishes that any

settlement on behalf of a minor child requires the court’s approval. The trial court relied on an

appellate court ruling in Wreglesworth v. Arctco, Inc.,

(2000), stating:

“Under Illinois law, a minor is a ward of the court when [s]he is involved in

litigation, and the court has a duty and broad discretion to protect the minor’s

interests. [Citations.] That duty to protect is reflected in section 19-8 of the

Probate Act of 1975 *** which requires that the court approve or reject any

settlement agreement proposed on behalf of a minor. Thus neither a guardian nor

a next friend can effectuate settlement of a minor’s suit without court approval.

[Citation.] Similarly, a parent has no legal right, by virtue of the parental

relationship, to settle a minor’s cause of action and court review and approval of a

settlement reached by a parent also is mandatory.” (Internal quotation marks

omitted).

.

Rule 12.15 of the circuit court of Cook County also protects minors’ interests in these

situations. Compliance with both rules is required when there is a presuit settlement.

25 1-12-3700

Cook Co. Cir. Ct. R. 12.15(b)(i) (eff. Sept. 29, 2011); Smith v. Smith,

(2005).

¶ 58 In other words, if AAA Life had made payment to Bruce after receiving the declaration

of trust, it may have subjected itself to future liability. Similarly, if AAA Life had paid

Briannah’s estate $120,000 and paid the Cook firm $80,000 in attorney fees, it could have also

subjected itself to liability. Accordingly, with regard to the October 21, 2005 to the end of

March 2006 time period, Bruce failed to meet his burden that the delay in settling his claim was

due to vexatious and unreasonable conduct on the part of AAA Life.

¶ 59 AAA Life erred when it sent out its July 28, 2005 letter to Camille representing that it

had not received her July 2005 check. AAA Life impliedly acknowledged that error in its

September 2005 letter when it sought to return Camille’s premium payment. Thus, there is no

evidence that the July 28, 2005 letter constituted anything other than a mistake. Illinois courts

have held that that a mistake without more is not considered vexatious conduct. Fassola v.

Montgomery Ward Insurance Co.,

(1982).

¶ 60 The trial court found that the “uncontradicted evidence showed that until 2008, [Diane]

was not aware of [the] difference between the certificate’s and the policy’s reinstatement

provisions.” Here, the span of time was relatively short, AAA Life agreed to pay the policy

proceeds before the lawsuit was filed. Thus, this allegedly wrongful conduct on the part of AAA

Life did not warrant section 155 sanctions.

¶ 61 Posttrial Motion for Sanctions

¶ 62 On appeal, Bruce argues that he is entitled to an award of sanctions under Supreme Court

Rule 137. Here, he contends that based on the number of motions to compel discovery he filed,

the late disclosure of the policy by AAA Life in 2008, and the numerous litigation delays caused

26 1-12-3700

by AAA Life, the trial court erred when it refused to award sanctions for AAA Life’s vexatious

conduct. Therefore, according to Bruce, AAA Life should be held accountable for knowing the

terms of the policy and not disclosing them to him.

¶ 63 Rule 137 provides that every pleading or motion signed by the attorney of record

constitutes a certificate by the attorney that he or she (1) read the pleading or motion, and (2) to

the best of his or her knowledge, the pleading or motion is grounded in fact and warranted by

existing law or a good faith argument for the extension of existing law. Ill. Ct. R. 137 (eff. July

1, 2013). The primary purpose of the rule is to discourage attorneys and parties from filing

frivolous or false matters and asserting claims without any basis in law or fact, by penalizing

those who engage in such wrongful conduct. Baker v. Daniel S. Berger, Ltd.,

(2001). “‘Courts should use an objective standard in determining what was reasonable

under the circumstances as they existed at the time of filing.’ [Citation.] However, to award

sanctions for a needless increase in the cost of litigation, there must be subjective bad faith.”

Morgan Place of Chicago v. City of Chicago,

(citing People v.

Stefanski,

(2007)).

¶ 64 “The standard for evaluating a party’s conduct under Rule 137 is one of reasonableness

under the circumstances existing at the time of the filing.” Patton v. Lee,

(2010). Thus, “[i]f a reasonable inquiry into the facts to support the filing has not been made

to ensure that the facts stated are well grounded, the party, the party’s attorney, or both are

subject to an appropriate sanction that may include an order to pay the other party’s attorney fees

and costs.”

(citing Chicago Title & Trust Co. v. Anderson,

(1988)).

In other words, a court will only award those fees or costs that are caused by the improper filing.

Ill. Ct. R. 137(a) (eff. July 1, 2013) (a sanction “may include an order to pay to the other party or

27 1-12-3700

parties the amount of reasonable expenses incurred because of the filing”). We review a trial

court’s denial of Rule 137 sanctions for an abuse of discretion. CitiMortgage, Inc. v. Johnson,

.

¶ 65 The trial court did not abuse its discretion by denying sanctions against AAA Life. The

issue tried was whether AAA Life made any inaccurate representations in bad faith regarding the

terms of the policy. Both the trial testimony and exhibits showed that Bruce as well as AAA

Life assumed from the outset of the litigation that the terms of the certificate controlled. Hofeld,

) (“The individual insured normally sees only the certificate issued to him. If it

contains provisions conflicting with those in the master policy, the certificate normally will be

held to control.”). Here, both parties assumed that the certificate language was identical to that

of the policy. Bruce did not ask to see the policy until October 4, 2007, and he received a copy

of the policy on March 3, 2008. AAA Life did not know that the policy differed from the

certificate until October 21, 2008, when Bruce’s attorney deposed Diane, AAA Life’s general

counsel. The trial testimony showed that AAA Life did not consult the policy on a regular basis,

and instead referred to the certificate terms to determine coverage. The fact that both Bruce and

AAA Life did not know about the policy and its terms establishes that there was no bad faith in

AAA Life’s pleadings and filings. Thus, the parties did not realize there was a difference

between the language contained in the policy and the language contained in the certificate.

¶ 66 The trial court also noted that, at times, AAA Life represented in its pleadings that it was

quoting the policy, when it was actually quoting the certificate. But here the trial court found

AAA Life’s affirmative statements were not intentional misrepresentations because it was not

aware of any difference between the master policy and certificate until October 21, 2008. It

noted:

28 1-12-3700

“AAA Life’s position that there was no coverage under the certificate and

group policy is grounded in fact and law. The group policy states that it is a

contract between AAA Life and AAA. Where there is a ‘difference’ between the

group policy and certificate, the group policy controls. The certificate conditions

reinstatement on ‘Evidence of Insurability’ and the group policy does not. But

AAA Life does not view the group policy’s silence as a ‘difference,’ and therefore

maintains its position that a new application was a condition precedent to

reinstatement of coverage. This is a reasonable interpretation of the group policy

and certificate.”

¶ 67 Furthermore, in considering the balance of AAA Life’s pleadings and responses, the trial

court found no evidence of intentional misrepresentation or bad faith conduct on the part of AAA

Life regarding the contents of the policy or any other related issue. Accordingly, the trial court

did not abuse its discretion in denying Bruce’s motion for sanctions under Rule 137.

¶ 68 CONCLUSION

¶ 69 Accordingly, we affirm the judgments of the trial court.

¶ 70 Affirmed.

¶ 71 JUSTICE CUNNINGHAM specially concurring.

¶ 72 I write separately because while I agree with the holding of the majority on a strictly legal

basis, there are many things wrong with this case which leaves me with the feeling that justice

was not served. For example, the trial court found that the plaintiffs were to blame for AAA

Life’s delay in payment. This finding is not supported by the record. The majority in this court

does not make such a statement, but it seems to infer that AAA Life’s action in denying payment

for several months because of its own internal inefficiency was okay and the plaintiffs should

29 1-12-3700

just accept it. When one reads the record in totality, it is easy to see why and how the plaintiffs

were outraged by the behavior and seeming indifference of AAA Life’s staff. It is not a dramatic

leap to understand why plaintiffs were pushed to a point of wanting to make AAA Life

experience some consequences for its actions. So while I believe that the record does not

provide the evidence to reverse the trial court, I take issue with the tone of the trial court’s

opinion and similarly with the tone of the opinion issued by the majority here. This case

exemplifies the maxim: in the world of litigation, victory and justice are not synonymous.

¶ 73 There are two reasons for AAA Life’s victory in the trial court and ultimately before this

court. Neither of those reasons can reasonably be said to establish a moral or legal high ground

for AAA Life. First, and most important, is that the plaintiffs could not prove the lack of a bona

fide belief and dispute by AAA Life that it was not obligated to pay because the insurance policy

had lapsed. In order to meet their proof on this point, the plaintiffs would have had to get the

very employees of AAA Life who caused the problem to admit their actions, attitude and

indifference. This was unlikely. Second, given the lack of proof on the first point, it necessarily

follows that it would be impossible to prove that AAA Life’s bad behavior rose to a level which

justifies the imposition of sanctions by the trial court. I agree that the proper standard of review

of the trial court’s denial of sanctions in this case is abuse of discretion. The abuse of discretion

standard is a steep hill to climb and while I may have reached a different conclusion than the trial

judge, the record does not provide a basis for reversal. So, while the record does not support the

plaintiffs' theory by a preponderance of the evidence, AAA Life’s conduct in its handling this

claim was inappropriate and deserves to be criticized.

¶ 74 The delay by AAA Life in recognizing that Camille had paid the premium and was

therefore covered was occasioned by its own internal procedures. The procedures were

30 1-12-3700

confusing, less than transparent, and unfamiliar to its own staff. The plaintiffs had no control

over that. Even after proof of premium payment by Camille was provided, AAA Life’s staff

continued to stonewall and refuse to meet its obligation to pay the claim. Weeks, then months

passed before there was any hint that the claim would be paid. AAA Life’s actions all took place

in the context of a grieving family dealing with a profound loss. AAA Life’s action must surely

have added another level of anxiety to the family’s grief.

¶ 75 I do not agree with the majority’s statement that, while AAA Life initially denied

coverage, it changed course “shortly thereafter and appropriately paid the proceeds.” Supra ¶ 32.

The majority goes on to say that the insurance company’s conduct was neither inherently

deceptive nor unfair. I agree that the plaintiffs did not prove inherent deception. However, I do

not agree that the process was fair. On the contrary, the plaintiffs were subjected to seeming

indifference and what subsequently turned out to be an admittedly erroneous denial of a

legitimate claim. It is clear that the AAA Life employee who made the initial denial was

unfamiliar with the company’s procedures and did not bother to investigate. Further, it

eventually required a memorandum from AAA Life’s in-house counsel responding to the threat

of a lawsuit by plaintiffs for the claim to be paid. Unlike the majority, I do not consider that

“appropriate” behavior by AAA Life and cannot laud AAA Life for its handling of this claim.

¶ 76 The record is replete with instances of bureaucratic bungling and inexplicable delays by

AAA Life’s employees. One can only guess that they were inept; unfamiliar with company

policies and procedures; insensitive to the plight of their insured’s beneficiary; or intentionally

protracting the process. Whatever the cause, it is clear that the plaintiffs had ample reason to be

frustrated and angry and to believe that they had been wronged. Unfortunately, believing it and

proving it in a courtroom are two different things. There is no indication that AAA Life would

31 1-12-3700

have paid the claim but for the memorandum from their in-house counsel, who acted under the

threat of a lawsuit. Yet, that alone is not enough to establish the proof necessary to give the

plaintiffs the relief they seek.

¶ 77 I find it interesting that the trial court and majority here seem to ascribe improper motives

to the plaintiffs, in seeking to launch a class action lawsuit against AAA Life while seemingly

giving the insurance company a pass on its role in precipitating the conflict in the first place.

The majority’s reasoning infers that all is well with AAA Life’s behavior since the plaintiffs

could not or did not prove that AAA Life’s conduct was anything other than a mistake. It bears

repeating that the mistake, if it was such, was occasioned by intractable indifference and

unfamiliarity with their own company’s policies and procedures by AAA Life’s employees. The

plaintiffs fought back in an appropriate way against a large insurance company which had turned

a deaf ear to a legitimate claim. In my view, but for the plaintiffs’ ability to fight back, the

outcome of the request for payment of this legitimate claim was uncertain.

¶ 78 While the record does not support reversing the trial court’s ruling as to count III of the

plaintiffs’ complaint or on the question of Rule 137 sanctions, I think AAA Life’s conduct was

high handed and inappropriate. Rather than the laudatory tone of the majority’s opinion

regarding AAA Life’s conduct, which in my view gives incentive to such behavior, I would

admonish AAA Life. It should be made aware that its behavior when viewed in totality, while

not actionable, was unacceptable. It should be encouraged to train its staff regarding familiarity

with company policies and procedures and sensitivity to its clients. In this case, the plaintiffs

had the wherewithal to fight back so they eventually got the benefit to which they were entitled.

I believe that their proposed class action lawsuit was aimed at shining light on AAA Life’s

practice of denying legitimate claims in similar cases. Under these facts, I cannot take issue with

32 1-12-3700

that proposition. Accordingly, as a matter of public policy, AAA Life should be sent a strong

message that although it prevailed on the legal claim based on these specific facts, its behavior

does not deserve accolades.

33