Jury instructions are a judge’s written directions to a jury concerning the laws relating to the case under consideration. They are critically important because a jury uses the instructions as a guide in determining which party will win and what the award will be.

There are 100s of instructions to be found in the Illinois Civil Jury Instructions and counsel involved in an insurance dispute should review and understand all potentially applicable instructions as they move forward in the litigation.

There are many critical jury instructions in Illinois addressing insurance issues. For example, the instruction on Liability Insurance, 3.03 states that “Whether a party is insured has no bearing whatever on any issue that you must decide. You must refrain from any inference, speculation, or discussion about insurance.”

When reviewing the damages to be awarded to a party, it is important that the attorney understand and review complicated instructions such as 710.07, Insurance Bad Faith–Measure of Damages, that provides that:

“If you decide for the plaintiff on the question of liability, you must then award the amount of money which will compensate the plaintiff for the damages proved by the evidence to have resulted from _________________________ of insurance company’s negligence or bad faith. The plaintiff’s damages are $ __________ sum [which is the amount of the judgment entered in favor of the plaintiff and against _______________ of insured (minus the amount received by the plaintiff from _________________________ of insurance company under the policy) (and) (minus the amount received by the plaintiff from another insurance company) (and) (minus ______________________________________ any other allowable offset(s))].”

The Illinois Civil Jury Instructions Companion Handbook helps to make sense of the intricate civil jury instructions and offers guidance to both judges and attorneys.

David Roe has penned the Thomson West, Illinois Civil Jury Instructions Companion Handbook, 2008 - 2009 Edition to address this complicated legal area.

This 576 page resource is a companion to Illinois Pattern Jury Instructions, providing guidance to judges and attorneys on using that resource as a research and case-planning Illinois Civil Jury Instructions Companion Handbooktool. It contains examples of jury instructions given by Illinois judges and requests for instructions submitted by attorneys for parties in a wide variety of cases, including motor vehicle accidents, construction accidents, premises liability, products liability, medical malpractice, breach of contract, and intentional torts.

The Illinois Pattern Jury Instructions are the official Illinois civil pattern jury instructions for civil cases with jury trials. The instructions are written by the Illinois Supreme Court Committee on Pattern Jury Instructions in Civil Cases. When attorneys and judges seek guidance on when and how to inform a jury of the law, burden of proof and related matters, they turn to the pattern jury instructions.

Publisher: Thomson West, Softcover, 576 pages, 2008.

The changes also include the addition of a welcome comments section to provide insight into the reasoning behind the rules and add clarity and case law where applicable. Fortunately for Illinois attorneys, in addition to reading and comparing the modification to the former rules themselves, there are numerous avenues to explore and understand the rules including CLE programs by organizations such as the ARDC and online at www.ApexCLE.com. A few of the highlights are set out here.

Protections for Clients and Attorneys

The Rules of Professional Conduct also includes several new rules, including Rule 1.18 which broadens the protections provided clients under the Rules to include prospective clients. An individual seeking an initial consultation with an attorney need no longer worry about sensitive information presented during the consultation. An attorney is prohibited from revealing or using the information revealed during a consultation with a prospective client. Further, these prospective clients are protected if an attorney is currently representing a client with interests that are materially adverse to the prospective client.

If the matter is sufficiently related to the representation of the current client and the information could be significantly harmful, the lawyer or firm will be disqualified from representing the current client. However, if both the affected client and prospective client have given informed consent, or the attorney who received the sensitive information took reasonable care to minimize her exposure, timely screened herself off from the client’s matter, and will receive no fees from the current client, then a firm may continue to represent the current client.

Lawyers acting as mediators and arbitrators are addressed within Rule 2.4 which attempts to remedy the potential for confusion within the mediation process. This rule attempts to remove the confusion, requiring attorneys acting as neutrals to inform unrepresented parties they are not acting as an attorney and explain the difference between an attorney as a neutral party and an attorney representing client. The level of explanation and detail of the information required is not yet clear. The comments to the Rules recognize that varying levels of understanding exist and provide that:

… The lawyer should inform unrepresented parties of the important differences between the lawyer’s role as third-party neutral and a lawyer’s role as a client representative, including the inapplicability of the attorney-client evidentiary privilege. The extent of disclosure required under this paragraph will depend on the particular parties involved and the subject matter of the proceeding, as well as the particular features of the dispute-resolution process selected.

Client Property and Retainer Agreements

Rule 1.15, governs the safekeeping of client property and underwent several changes which warrant much more examination than can be provided here. Section b provides that an attorney can deposit their own funds into a client trust account for the sole purpose of paying bank fees, but only in an amount necessary for that purpose. Provisions within Rule 1.15 that allowed for a lawyer to deposit their own funds into a client account to avoid incurring bank service charges have been removed.

Retainer agreements have received extensive court review and commentary over the last few years. The rules establish clear requirements for advanced payment retainer agreements, and limit their use to “only when necessary to accomplish some purpose for the client that cannot be accomplished by using a security retainer.” An advanced payment retainer agreement must be in writing and signed by the client, using the words “advance payment retainer” to describe the retainer.

An advance payment retainer must also include the reason for the advance payment retainer and its particular usefulness to the client; a statement that the retainer will not be held in a client trust account, that it will no longer be the property of the client, and that it will be deposited in the lawyer’s general bank account; a detailed explanation of how the funds will be utilized; and that the client has the option to employ a security retainer, however if the attorney is unwilling to proceed without a security retainer, the agreement must state and provide the attorney’s reasons for not doing so.

Advertising beyond Paper and Pen

The modified Rules now address a wide range of attorney advertising within Rule 7.2. The former rule addressed advertising in telephone directories, legal directories, newspapers or other periodicals, billboards, radio or television but did not include any electronic media existing via the Internet. The rule has been modified to provide that a “lawyer may advertise services through written, recorded or electronic communication, including public media.” For those attorneys posting blind ads for legal services on social networks and boards such as Craigslist, they may wish to review the slightly modified, but continuing, requirement that “Any communication made pursuant to this Rule shall include the name and office address of at least one lawyer or law firm responsible for its content.”

The present day update carries over to Solicitation under Rule 7.3 which has been modified and prohibits live personal contact by an attorney through real-time-electronic means, such as an instant messaging program or text messaging.

The modified Rules address changes in the legal profession that are merely a reflection of the changes in the evolving electronic society. Further information is posted on the Illinois Supreme Court’s website and in the Ethics section at www.ApexCLE.com where there are additional resources for attorneys on Illinois Professionalism and online CLE. The resources include Professionalism CLE, ethics material, and ethics links. In addition, ApexCLE publishes the annual State of The Practice: A Review of Illinois Ethics and Professionalism Investigations.

As a professional, a malpractice judgment is collectable against an attorney’s own personal assets. The risk to assets may be reduced but, insurance has no value if coverage is lost.

It is likely that most attorneys may never read their own malpractice policy; those that do discover an overabundance of nearly incomprehensible clauses or conditions.  For example, when does an attorney have knowledge of facts which could reasonably support a claim? It remains undecided what “having knowledge” means and what may “reasonably support a claim.” Understanding what is a “claim” and when to provide “notice” will reduce financial exposure and provide a small piece of mind.

Not knowing when to report a claim may jeopardize coverage and put the attorney’s own personal assets at risk. CLE seminars can provide invaluable practical education. ApexCLE.com provides a variety of CLE seminars addressing insurance coverage that provide legal resources and guides for managing a legal practice, understating liability policies and reducing risk. 

Reading The Policy Is Critical

One key to understanding an attorney’s notice obligation is to examine the notice provisions within a policy. There are several notice requirements within a typical malpractice policy that require the attorney to inform the insurance company upon the happening of an event or the discovery of facts that may lead to a claim. The failure to carry out these obligations may jeopardize policy coverage. While the receipt of a summons and complaint for malpractice presents a seemingly obvious example of a time to provide notice, there are many subtle facts that may indicate a need to provide notice of a claim to an insurance company before a complaint is filed.

A typical malpractice policy provides coverage for damages due to a claim arising out of any act, error or omission resulting from rendering or failing to render professional services. Malpractice policies are issued on a “claims made” basis. A claims made policy is characterized by coverage for negligent acts or omissions only if the acts are discovered during and brought to the attention of the insurer within the policy term.

Notice to the insurer becomes a substantial requirement under the policy. Policy coverage is triggered when two events occur: (1) the claim is made during the policy period, and (2) the claim is reported during the policy period. The notice requirement in an insurance policy enables an insurer to make a timely and thorough investigation of a claim and is considered a valid condition precedent to coverage.

For a variety of reasons ranging from embarrassment to fear of a premium increase, many attorneys are reluctant to report a potential claim before suit is received. This may prove to be a mistake. After a policy is issued, there are two primary notice requirements within a malpractice policy. An attorney is normally required to notify the insurance company when they have knowledge of facts which could reasonably support a claim and to give immediate written notice of the claim to the insurance company.

The Definition Of A “Claim”

Knowing how a claim is defined within a policy is perhaps the single most important piece of information an attorney learns from their policy. If an attorney were to read only one section of their policy, they would be wise to read the definition of a “claim.” With this knowledge, the attorney has the tools to decide when to examine the policy further or provide notice of a claim to the insurance company.

A “claim” will likely have several alternative definitions that are operative at the same time such as a demand communicated to the attorney for damages for professional services, a lawsuit served on the attorney seeking damages for professional services; or, an act, error or omission by an attorney which has not resulted in a demand for damages but which an insured knows or reasonably should know, would support such a demand; the last definition posing the most difficult interpretation.

When Does An Attorney “Know” About A Claim?

In order to establish that an insured could have reasonably foreseen circumstances which might result in a claim, a court will apply an objective, rather than a subjective, evaluation of the facts. The court in Gibraltar Cas. Co. v. A. Epstein and Sons, Intern., Inc., 206 Ill.App.3d 272 (Ill.App. 1 Dist., 1990) examined policy language that required actual knowledge. In Gibraltar, a claim arose due to roof repair work. Before a policy was in effect, the claimant’s attorney sent a letter stating that a preliminary investigation revealed that the claimant had been “substantially damaged” due to the attorney’s “negligence, nonfeasance and malfeasance.”

In order to establish that the letter provided sufficient notice of a claim so as to bar coverage, the insurance company was required to establish that the letter imputed actual “knowledge of a claim” to the policy holder, not just a reasonable expectation of a claim. The court held that the letter did not constitute notice of a claim sufficient to void the policy.

Another court has found that a letter written to an attorney by a lawyer questioning legal advice given by the addressee in a particular instance did not constitute a “claim” under an insurance policy, only an inquiry. Hoyt v. St. Paul Fire & Marine Insurance Co., 607 F2d 864 (9th Cir.1979).

Know the Notice Requirement

Each policy and fact situation may present a different outcome. The important point to remember is that in a claims made policy, quick and written notice of a claim preserves the coverage while delay and procrastination jeopardizes coverage paid for by the attorney. A review of a professional liability policy with a goal of learning the definition of a “claim” and notice requirement will preserve coverage and protect an attorney’s personal assets.

The Illinois Insurance Code, set out in full below, allows, but does not require, attorney fees if there was an unreasonable delay in settling a claim and such action or delay was vexatious and unreasonable. There has been much litigation on the meaning of vexatious and unreasonable. The general meaning has established a very high hurdle resulting in the recovery of attorney fees only in the most outrageous of situations. Even if successful in a claim for attorney fees, there are several limits which effectively cap the recover at $60,000.

There are often various bills pending in the Illinois legislature that seek to refine, repeal, or revise the 155 attorney fee statute. For example, HB0229 (not passed) proposed to revise section 155 to allow unlimited attorney fees in any action against a company where the company has committed fraud.

The statute in effect at this time, January 1, 2010, provides as follows:

Illinois Insurance Code, 215 ILCS 5/155, Attorney fees.

(1) 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, other costs, plus an amount not to exceed any one of the following amounts:

(a) 60% of the amount which the court or jury finds such party is entitled to recover against the company, exclusive of all costs;
(b) $60,000;
(c) the excess of the amount which the court or jury finds such party is entitled to recover, exclusive of costs, over the amount, if any, which the company offered to pay in settlement of the claim prior to the action.

(2) Where there are several policies insuring the same insured against the same loss whether issued by the same or by different companies, the court may fix the amount of the allowance so that the total attorney fees on account of one loss shall not be increased by reason of the fact that the insured brings separate suits on such policies.
(Source: P.A. 93‑485, eff. 1‑1‑04.)

As reported in the Chicago Daily Law Bulletin, on October 17, 2003, a fire broke out at the County Building at 69 West Washington in the Chicago Loop. As a result of the fire, 22 lawsuits were filed by the injured people and surviving family members on behalf of the six people that died in the blaze. All claims were settled in one of the largest civil settlements ever in Cook County history; over $100 million.

In a modern day twist to David and Goliath, a small security company refused to accept its insurance company’s refusal to defend the company in the Loop Fire litigation. On December 19, 2008, after battling the insurance company’s wrongful denial of insurance for over four years, the Illinois Appellate Court ruled in favor of the security company, requiring Clarendon America Insurance Company to defend B.G.K. Security Services, Inc. for the claims raised against it in the Loop Fire litigation.

David Roe briefed and argued the appeal in this matter. The opinion is available for review.

Mount Prospect Lawyer Pens Auto Insurance Book

November 26, 2008

Mt. Prospect attorney David Roe recently authored “the most comprehensive” legal analysis of Illinois automobile insurance law in the country. The 500-page resource provides discussions of statutes and case law, along with practice tips and strategic and tactical advice from experts in the field of automobile insurance law. Topics covered include insurance in the context of business use, personal use, contract creation, and interpretation and life activities.

Roe assists clients in Arlington Heights, Mt. Prospect, Glenview and Northbrook out of his office in the Chicago Loop.

He has represented individuals, businesses and insurance clients across the United Sates ranging from Internet start-up companies to Fortune 500 corporations.

Most recently, he litigated insurance coverage issues before the Illinois Appellate Court arising from the Chicago Loop Fire.

That litigation settled for over $100 million on April 28, 2008. The disaster involved 22 victims at 69 W. Washington in Chicago on Oct. 17, 2003.

Illinois Insurance Lawyer

Illinois Insurance Attorney Handling Insurance Coverage Disputes

• Litigation of insurance coverage disputes under commercial general liability policies, attorney professional liability, homeowner insurance, car insurance, property insurance, and rental car insurance.
• John Burns and Institute of London Targeted Tenders under a CGL, car, professional or personal lines policy.
• Coverage issues arising from pollution exclusions, toxic tort, mold, flood, construction defects and similar general liability issues.
• Insurance Policy Limits, UM, UIM Limits and allocation or coordination of insurance coverage.

Business Representation and Litigation, Assisting Corporate Counsel and Attorneys

Car Insurance and Injury Representation

Chicago Insurance lawyer assisting clients nationally and in Chicago, Illinois and the suburbs including Arlington Heights, Glenview, Northbook, Mount Prospect, Wheeling, Des Plaines and Buffalo Grove.

In Craig, an insurer waived the issue of the plaintiff’s misrepresentations by failing to raise it until more than two years after receiving the claim and more than one year after an arbitration award.

The claimant was insured under an automobile insurance policy issued by United and notified United of an uninsured-motorist claim from an accident on August 4, 2002. An arbitration award was entered in favor of the claimant.

United refused to pay the arbitration award claiming a breach of contract, based on an investigation that showed that the claimant did not own the car in the accident.

United alleged that the claimant made false statements about the ownership of the car on the application for insurance.

A waiver occurs when a party intentionally relinquishes a known right, either expressly or by conduct inconsistent with an intent to enforce that right. United failed to raise the misrepresentation issue for more than two years and therefore waived the right to assert the waiver issue.

Craig v. United Automobile Insurance Company, — N.E.2d —, 2007 WL 3085387 (1 Dist., 2007)

In this car vs. bicycle crash, the policy holder was driving his son to preschool. While stopped at an intersection, an individual on a bicycle rode into the car, causing the front passenger-side window to shatter. The driver’s eye was injured from the broken glass. The individual on the bicycle was not covered by an insurance policy. The driver made a claim under his car insurance policy for uninsured motorist benefits.

The insurance company denied benefits claiming that the bicycle did not qualify as a motor vehicle. The policy did not define a motor vehicle so the court looked to the statutes for guidance.

The Illinois Insurance Code, section 215 ILCS 5/143a(1) provides:

“No policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle that is designed for use on public highways and that is either required to be registered in this State or is principally garaged in this State shall be renewed, delivered, or issued for delivery in this State unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in Section 7- 203 of the Illinois Vehicle Code for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit-and-run motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom.”

“Motor vehicle” is not defined in the Illinois Insurance Code but it is defined in the Illinois Vehicle Code section 625 ILCS 5/1–100 et seq. as “[e]very vehicle which is self-propelled and every vehicle which is propelled by electric power obtained from overhead trolley wires, but not operated upon rails, except for vehicles moved solely by human power and motorized wheelchairs.”

A bicycle is defined as a device propelled by human power. The court found that given these legislative distinctions, it is clear that a “bicycle” cannot be considered a “motor vehicle” for the purposes of uninsured motor vehicle coverage.

Consequently, there was no insurance coverage available for the driver under his car insurance policy for the injury to his eye. The leaves open the question of what insurance would be available in the situation. An insurance attorney would review all options for potential coverage including the driver’s medical insurance, the bicyclist’s home owner’s insurance, umbrella insurance, renter’s insurance, employer’s insurance or others.

Standard Mutual Ins. Co. v. Rogers ___N.E.2d___ (Ill.App. 3 Dist., March 20, 2008)

Prejudgment Interest at 5%

Generally, prejudgement interest is recoverable only where allowed by agreement of the parties or by statute.*1 Under the Illinois Interest Act, creditors are allowed to receive interest at the rate of 5% per year for all money due “on any bond, bill, promissory note, or other instrument of writing; on money lent or advanced for the use of another; on money due on the settlement of account from the day of liquidating accounts between the parties and ascertaining the balance; on money received to the use of another and retained without the owner’s knowledge; and on money withheld by an unreasonable and vexatious delay of payment. *2

To recover prejudgment interest under the Act, there must be a fixed or easily calculated amount due from a debtor-creditor relationship that has come into existence by virtue of a written instrument. *3

However, an exception to this rule exists in equity. “`In chancery proceedings, the allowance of interest lies within the sound discretion of the judge and is allowed where warranted by equitable considerations and disallowed if such an award would not comport with justice and equity.’” *4

The Illinois Interest Act, 815 ILCS 205/1 et seq. provides in part that:

Creditors shall be allowed to receive at the rate of five (5) per centum per annum for all moneys after they become due on any bond, bill, promissory note, or other instrument of writing; on money lent or advanced for the use of another; on money due on the settlement of account from the day of liquidating accounts between the parties and ascertaining the balance; on money received to the use of another and retained without the owner’s knowledge; and on money withheld by an unreasonable and vexatious delay of payment. In the absence of an agreement between the creditor and debtor governing interest charges, upon 30 days’ written notice to the debtor, an assignee or agent of the creditor may charge and collect interest as provided in this Section on behalf of a creditor. 815 ILCS 205/2

Postjudgment Interest at 9%

The Illinois Interest on Judgments statute provides in part that judgments “recovered in any court shall draw interest at the rate of 9% per annum from the date of the judgment until satisfied.” If the judgment is against a unit of local government, a school district, a community college district, or any other governmental entity, the rate is 6% per annum.

Interest is computed and charged only on the unsatisfied portion of the judgment and the judgment debtor can stop the interest from accruing by tendering payment of the judgment with costs and interest due up to the date of tender.

Therefore, in order to seek a full recovery of the loss of use of money, a claimant under a contract should review whether to include a claim for interest pursuant to the terms of the agreement, under the Illinois Interest Act, 815 ILCS 205/2, and then as postjudgment interest following the entry of a final judgment.

*1 Tri-G, Inc. v. Burke, Bosselman & Weaver, 222 Ill.2d 218, 255, 305 Ill.Dec. 584, 856 N.E.2d 389 (2006); City of Springfield v. Allphin, 82 Ill.2d 571, 576, 45 Ill.Dec. 916, 413 N.E.2d 394 (1980); First Nat. Bank of Lagrange v. Lowrey, 872 N.E.2d 447 (Ill. App., 2007) .

*2 815 ILCS 205/2

*3 Adams v. American International Group, Inc., 339 Ill.App.3d 669, 674, 274 Ill.Dec. 230, 791 N.E.2d 26 (2003).

*4 (Emphasis omitted.) Tri-G, Inc., 222 Ill.2d at 257, 305 Ill.Dec. 584, 856 N.E.2d 389, quoting Allphin, 82 Ill.2d at 579, 45 Ill.Dec. 916, 413 N.E.2d 394; In re Estate of Wernick, 127 Ill.2d 61, 87, 129 Ill.Dec. 111, 535 N.E.2d 876 (1989) (observing that equitable principles “dictate that when money has been wrongfully withheld the victim receive interest for the wrongdoer’s retention of his money”).