Wanda Norton sued West Bend Insurance seeking payment for an uninsured motorist claim. West Bend declined to pay, arguing that the uninsured motorist was only “uninsured” because Norton failed to notify the motorist’s insurance company about her lawsuit against the motorist or about the judgment in her favor. West Bend’s motion for summary judgment was denied, so West Bend asked the court for declaratory judgment on whether Norton’s actions precluded coverage under her policy with West Bend. The declaratory judgment was stayed while the parties pursued arbitration, and Norton eventually sued West Bend for vexatious and unreasonable delay under section 155 of the Illinois Insurance Code (215 ILCS 5/155 (1)(a) (West 2004)). The trial court dismissed Norton’s claim, and Norton appealed.
The appellate court ruled that the trial court did not abuse its discretion in finding that West Bend had a bona fide defense to Norton’s claim and was entitled to pursue that defense. The court held that it was clear enough that the delay was in fact attributable to Norton’s rejection of the arbitration award, not anything West Bend had done.
The court further held that it was not unreasonable or vexatious for Norton to ask for declaratory judgment after its summary judgment motion was denied. The trial court’s denial of summary judgment simply reflected that the issue of whether Norton violated the policy was one of fact rather than one of law. It did not take a position on the ultimate merits of the issue.