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Burgo v. Illinois Farmers Ins. Co.

OCTOBER 11, 1972.

JOSEPH BURGO ET AL., PLAINTIFFS-APPELLANTS,

v.

ILLINOIS FARMERS INSURANCE COMPANY, DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Cook County; the Hon. EDWARD F. HEALY, Judge, presiding.

MR. PRESIDING JUSTICE DIERINGER DELIVERED THE OPINION OF THE COURT:

Rehearing denied November 22, 1972.

This is an appeal from a judgment of the Circuit Court of Cook County, wherein the court denied arbitration on an uninsured motorist clause in an insurance policy. The action was brought by the plaintiffs-insureds, Joseph and Louis Burgo, against the defendant insurance company, Illinois Farmers Insurance Company, to compel the defendant to submit to arbitration pursuant to the Uniform Arbitration Act. Ill. Rev. Stat. 1969, Ch. 10.

The issues on appeal are: (1) whether a provision in the insurance policy shortens the applicable statute of limitations, which allows the insured two years to file a cause of action against another motorist for injury to one year, is void as against public policy; and (2) whether the provision is void as against public policy because it places a limitation upon the plain meaning of the uninsured motorist statute, which provides for protection against uninsured motorists.

The plaintiffs were insured by the defendant insurance company under an automobile policy. In its answer to the complaint the defendant says its correct legal title is Farmers Insurance Exchange, but no further point is made of the name, and the proceedings went to judgment under the title of Illinois Farmers Insurance Company.

The accident which precipitated this litigation occurred on February 1, 1969. The plaintiffs and the defendant could not agree as to the amount due as compensation for injuries, and a demand for arbitration was made upon the defendant by letter on July 10, 1970. A complaint was filed against the defendant on July 29, 1970, when the defendant refused to appoint an arbitrator. On December 7, 1970, plaintiffs filed suit against the uninsured motorist involved in the accident of February 1, 1969. The uninsured motorist provision of the policy issued by the defendant provides:

"To pay all sums which the owner or operator of an uninsured motor vehicle would be legally responsible to pay as damages to the insured because of bodily injury sustained by the insured, caused by accident, and arising out of the ownership, maintenance or use of such uninsured motor vehicle * * *."

The Illinois Farmers Insurance Company defends on the grounds of failure to comply with the condition precedent as set forth in the insurance agreement and for the failure of the plaintiffs to demand arbitration within one year of the accident as set forth in the insurance agreement. The relevant part of the policy provides:

"(3) no cause of action shall accrue to the insured unless within one year from the date of accident (a) suit for bodily injury has been filed against the uninsured motorist in a court of competent jurisdiction, or (b) agreement as to the amount due under this Part II has been concluded, or (c) the insured has formally instituted arbitration proceedings."

The record shows none of these conditions was met. Each party filed a motion for summary judgment, and after a hearing the court entered judgment in favor of defendant insurance company and dismissed plaintiff's complaint.

The plaintiffs allege the one-year limitation provision of the insurance agreement is invalid and unenforceable and contrary to Section 755a of Chapter 73, Illinois Revised Statutes, 1969, which provides for mandatory uninsured motorist coverage. Plaintiffs contend the uninsured motorist provision places the insured in the same position as though the offending party had complied with the Financial Responsibility Act of Illinois. Under the statute of limitation for personal injury in Illinois, the plaintiffs would have two years in which to file suit and seek a determination of the amount they are entitled to recover. Section 755a of Chapter 73, relating to uninsured motorist coverage, provides:

"(1) On or after an effective date of this amendatory Act of 1963, 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 shall be renewed or delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged 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 Motor Vehicle Law,' approved July 11, 1957, as heretofore and hereafter amended, 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, except that the named insured shall have the right to reject such coverage only on policies delivered, renewed or issued for delivery prior to July 1, 1967."

The purposes of Section 755a have been set forth in several previous cases. In Putnam v. New Amsterdam Casualty Co. (1970), 48 Ill.2d 71, the Supreme Court of Illinois said:

"[W]e believe the reasonable purpose of the statutory uninsured motorist provisions is to assure that compensation will be available to policy holders, in the event of injury by an uninsured motorist, to at least the same extent compensation is available for injury by a ...


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