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Country Mut. Ins. Co. v. Nat. Bank of Decatur

MAY 22, 1969.

COUNTRY MUTUAL INSURANCE COMPANY, PETITIONER-APPELLEE,

v.

THE NATIONAL BANK OF DECATUR, ADMINISTRATOR OF THE ESTATE OF RONALD LEE BROWN, DECEASED, RESPONDENT-APPELLANT. COUNTRY MUTUAL INSURANCE COMPANY, PETITIONER-APPELLEE,

v.

RAYMOND WATTLES, ADMINISTRATOR OF THE ESTATE OF DARRELL WAYNE WATTLES, DECEASED, RESPONDENT-APPELLANT.



Appeals from the Circuit Court of Macon County; the Hon. A.G. WEBBER, III, Judge, presiding. Judgments affirmed.

CRAVEN, J., DELIVERED THE OPINION OF THE COURT.

Rehearing denied July 1, 1969.

This is an appeal in two separate cases by administrators of deceased automobile passengers from orders and judgments of the circuit court vacating and setting aside the awards made by an arbitrator in two arbitration proceedings held pursuant to arbitration clauses in automobile insurance policies issued by Country Mutual Insurance Company under uninsured-motorist endorsements.

The accident involved occurred May 13, 1962, when Ronald Lee Brown and Darrell Wayne Wattles, passengers in an automobile driven by George Campbell, allegedly driven at a high rate of speed, were injured and died that date from such injuries. The driver of the automobile had no liability insurance. Decedents had insurance policies containing uninsured-motorist endorsements.

While The National Bank of Decatur, as administrator of the estate of Judy Burns, another passenger who died from injuries received in the same accident, filed suit against Virgil Hanks, the driver of another car involved in such occurrence, and received a $5,000 settlement of that case, no suits against Hanks were filed for the wrongful deaths of Ronald Brown or Darrell Wattles.

On April 21, 1965, nearly three years after the deaths, appellants filed demands for arbitration with the American Arbitration Association under the uninsured-motorist endorsements to the policies issued by Country Mutual Insurance Company to Wattles and Brown. Answers to these demands were filed asserting that the claims were barred by the provisions of the Illinois Wrongful Death Statute which made their filing within the two-year statutory period a condition of the cause of action. The cases were heard by an arbitrator appointed by the American Arbitration Association. He entered an award in favor of the administrator of the estate of Ronald Lee Brown, deceased, for $17,500 and an award in favor of the administrator of the estate of Darrell Wayne Wattles, deceased, for $16,000.

Upon applications to the circuit court to vacate the awards, the court vacated and set aside the awards, which orders we have on appeal.

The precise matter presented is whether the arbitrator's awards were properly vacated. The trial court held the arbitrator had exceeded his powers in granting awards in that the two-year statute of limitations in wrongful-death actions applied and that the rights of action had expired when the demands for arbitration were filed.

We are confronted with the question of the trial court's vacating awards of an arbitrator concerning an issue which the parties contracted to arbitrate, and the further question of whether the two-year limitation period in Illinois for commencing wrongful-death actions bars recovery (Ill Rev Stats 1967, c 70, pars 1 and 2), or whether the ten-year statute of limitations as to written-contract actions is applicable to the claims presented (Ill Rev Stats 1967, c 83, par 17).

In 1961, Illinois enacted the Illinois Uniform Arbitration Act (Ill Rev Stats 1967, c 10, par 101, et seq.). Our Supreme Court, in Flood v. Country Mut. Ins. Co., 41 Ill.2d 91, 242 N.E.2d 149 (1968), interpreted that statute in connection with an uninsured-motorist endorsement clause in a standard automobile insurance policy which was virtually identical to the clause in the instant cases. Among other provisions of the statute, the court, in that case, recognized that the statute empowered courts to vacate arbitrators' awards, setting forth the grounds and procedures for such action. (Ill Rev Stats 1967, c 10, par 112.)

While there was considerable conflict in the cases passing upon arbitration at common law, even at common law an arbitration award could be reviewed by the courts. Arbitration awards have been set aside upon a showing of fraud, corruption, evident partiality, that the arbitrator exceeded his authority, irregularities in the proceeding which deprived a party of a fair and impartial hearing, gross errors of fact or law, a plain mistake of law if the submission agreement required the arbitrator to determine the rights of the parties according to law, and a mistake of law if the award showed on its face that the arbitrator intended to decide according to the law but mistook or misconstrued it. These common-law grounds of vacation were fully discussed in White Star Min. Co. v. Hultberg, 220 Ill. 578, 77 N.E. 327 (1906). See also 6 CJS, Arbitration and Award, §§ 104-105.

The arbitration clause in the instant policy endorsement provides: "Such person and the Company each agree to consider itself bound and to be bound by any award made by the arbitrators pursuant to this endorsement." Appellants contend that by this clause the parties agreed to be bound by the arbitrator's awards. This clause does not purport to and could not waive or bar the parties from all rights of court review of the awards. Section 12 of the Uniform Arbitration Act (Ill Rev Stats 1967, c 10, par 112), among other grounds for a court vacating an arbitration award, sets forth the ground that "(3) The arbitrators exceeded their powers; . . . ." As was said in Arlington Towers Land Corp. v. John McShain, Inc., 150 F. Supp. 904, 923 (DC Dist Columbia 1957):

"Although the Arbitration Agreement specifically provides that the award of the Arbitrator shall be final and binding, that neither party will contest such findings and that neither party will appeal from any portion of the final judgment, there appears to be no doubt but that the plaintiffs are within their rights in challenging the Arbitration award, particularly on the grounds that the Arbitrator exceeded his authority and upon the grounds of fraud, bias and prejuduce."

[2-4] There are certain legal rights and doctrines which the parties cannot waive or stipulate away. Some examples of these are: the requirement of law of filing a timely notice of appeal (McHale v. Marrs, 48 Ill. App.2d 171, 197 N.E.2d 736 (2nd Dist 1964)) and the requirement that the tribunal have jurisdiction of the subject matter of a case (Lawn Savings & Loan Ass'n v. Quinn, 81 Ill. App.2d 304, 225 N.E.2d 683 (1st Dist 1967)). Of the same nature as these is the right of judicial review. If, in fact and in law, there was no cause of ...


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