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Allstate Insurance Co. v. Horn

NOVEMBER 26, 1974.


APPEAL from the Circuit Court of Cook County; the Hon. ROBERT J. DOWNING, Judge, presiding.


Allstate Insurance Company (Allstate) appeals from an order of the circuit court of Cook County which dismissed, on the merits, Allstate's action for declaratory judgment and confirmed an arbitration award in favor of John Horn. Horn has cross-appealed and seeks, in the event that the judgment of the circuit court is either reversed or remanded, a reversal of an earlier order denying defendant's motion for summary judgment.

The facts are virtually undisputed. Allstate issued Christ Lindbom an automobile liability policy which included uninsured motorist coverage in the amount of $10,000. The policy provided, inter alia:

"Allstate will pay all sums which the insured shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury, sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of such automobile.

The `insured' means:

1. The named insured and his relatives;

2. Any other person occupying an insured automobile; * * *."

The policy defined "occupying" as "in or upon, or entering into or alighting from" the insured vehicle.

Shortly after midnight on May 31, 1969, the defendant, John Horn, was riding in the Lindbom vehicle which was being driven by Bruce Lindbom, a relative of the named insured. Lindbom parked the car on the northeast side of Clybourn Avenue, which runs northwest to southeast and is six lanes wide including a lane in each direction for parked cars. Both parties exited the car, walked across to the south side of Clybourn and entered a restaurant. Subsequently, the parties exited the restaurant and were preparing to cross Clybourn to the Lindbom vehicle. Upon stepping from the sidewalk Lindbom and defendant walked between two parked cars on the south side of the street. At that point an automobile operated by an uninsured motorist was proceeding northwest on the north side of the street. The driver crossed the centerline, entered the southeast bound lanes and struck Lindbom and defendant while they were standing 2 feet from the parked cars in the southbound lane closest to the parked vehicles. At the time the parties were injured they were at a point approximately 24 feet from the Lindbom vehicle.

On June 5, 1969, plaintiff received a notice of attorney's lien, indicating that a certain law firm was representing Bruce Lindbom in a claim against plaintiff for personal injuries under the above quoted uninsured motorist provision. In reply to this lien plaintiff sent a form letter to Lindbom informing him that the claim could not be identified and that Allstate needed the policyholder's name and address, the policy number, and the date and location of the accident. Through a telephone conversation with Lindbom, plaintiff learned that defendant Horn had been with Lindbom at the time of the accident. On June 23, 1969, before any investigation of the occurrence had been conducted, plaintiff sent defendant a form letter which is customarily sent to parties reported to be with an insured at the time of an accident. The letter requested defendant to fill out the enclosed "Notice of Injury-Proof of Loss" form, and to have his doctor complete certain medical reports. The letter further stated that when Allstate received the requested reports and final medical bills, defendant's claim would be processed for payment. Allstate did not receive any response to the letter.

In December of 1970, Lindbom's claim was adjusted and settled. *fn1 The first document plaintiff received indicating that defendant was making an uninsured motorist claim was a copy of a "Demand for Arbitration" which had been filed with the American Arbitration Association (hereinafter Association). A copy of the demand was received by plaintiff on February 1, 1971, a year and 8 months after plaintiff's letter to defendant. Plaintiff did not have an open file on the claim at this time, and upon receipt of the demand, Allstate forwarded the notice to legal counsel.

On March 2, 1971, the arbitration hearing was set for April 21, 1971. On March 8, 1971, plaintiff's attorneys sent a letter to defendant's attorneys stating that Allstate had received the demand for arbitration and requested that defendant appear in counsel's office on April 29, 1971, for the purpose of taking his statement pursuant to a condition of the uninsured motorist endorsement. The letter further stated:

"In addition, we wish to inform you that a coverage question exists on this file. We will be unable to proceed with an arbitration hearing until same is resolved."

A copy of this letter was sent to the Association. On March 11, 1971, the Association wrote a letter to plaintiff's counsel acknowledging receipt of the above letter. The Association then sent a copy of this letter to defendant's attorneys and requested that the claimant, John Horn, file a reply to Allstate's assertion that a coverage question existed. The claimant did not ...

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