APPEAL from the Circuit Court of Cook County; the Hon. FRANCIS
X. CONNELL, Judge, presiding.
MR. JUSTICE DOWNING DELIVERED THE OPINION OF THE COURT:
Maierine Barbour (hereinafter plaintiff) brought suit against Carol Ann Slaughter (hereinafter defendant) to recover monies for damages sustained in an automobile collision. Plaintiff discovered that defendant was an uninsured motorist and attempted to recover her claim pursuant to the uninsured motorist provision of her insurance policy with Heritage Insurance Company (hereinafter Heritage). No settlement was reached between plaintiff and her insurer, Heritage. Plaintiff reduced her claim against defendant to a judgment in the amount of $3,750 plus costs. Plaintiff then brought garnishment proceedings against Heritage for this amount. Plaintiff prevailed in the garnishment action and Heritage appeals.
The issues raised on review are: (i) did Heritage waive its right to arbitration; and (ii) did plaintiff's failure to obtain Heritage's written consent to secure a judgment against defendant free Heritage of its liability on such judgment.
The facts revealed by the record on review are as follows: Plaintiff and defendant were involved in an automobile collision on November 18, 1968. On June 6, 1969, plaintiff filed suit, in the circuit court of Cook County, against defendant to recover for the injuries sustained in that collision. Defendant answered and counterclaimed against plaintiff. Plaintiff served notice of the counterclaim on her insurer, Heritage. In March of 1970 plaintiff notified Heritage's counsel of the discovery that defendant had no insurance coverage and suggested an attempt be made to continue the cause generally in order to negotiate pursuant to the uninsured motorist provisions of plaintiff's policy with Heritage. In July 1970 plaintiff advised Heritage by certified mail of her intent to proceed under the uninsured motorist provisions of her policy. Plaintiff's letter included a demand for arbitration naming her choice of an arbitrator and requesting that Heritage name its arbitrator. In August 1970 Heritage named its arbitrator.
On December 30, 1970, the State of Illinois Department of Public Works and Buildings, Division of Highways, Bureau of Traffic (hereinafter Department) informed Heritage by letter that defendant had submitted a report and apparently complied with all provisions of the Illinois statutes concerning financial responsibility. *fn1 Upon receiving this information, Heritage told its arbitrator not to proceed to arbitration since there was a question as to defendant's status as an uninsured motorist. Heritage continued its correspondence with the Department and was notified on March 22, 1971, that it had been determined that defendant had not complied with the Illinois Safety Responsibility Law. However, Heritage continued its refusal to arbitrate.
On March 26, 1971, plaintiff attempted to arrange an arbitration date with Heritage's arbitrator, but that attempt was answered with a letter from the arbitrator indicating he had received information that defendant was not uninsured at the time of the collision. Plaintiff then secured letters from defendant's attorney and Home and Automobile Insurance Company (defendant's insurer from March 8, 1968, to September 8, 1968) indicating that defendant was an uninsured motorist on November 8, 1968, the date of the collision. On August 6, 1971, defendant's counsel, who swore defendant had told him she had no insurance on the date of the collision, was granted leave to withdraw as defendant's counsel.
On October 25, 1971, plaintiff requested that Heritage take over the common law case against the defendant since it was an uninsured motorist matter, and that Heritage review the matter to determine if it could be disposed of short of arbitration since they were having difficulty getting all of the arbitrators together. Heritage did not respond. On June 6, 1972, plaintiff obtained a default judgment against defendant in the sum of $3,750 plus costs.
On September 20, 1972, plaintiff notified Heritage by letter of this judgment and requested payment pursuant to the uninsured motorist provisions of Heritage's policy. Heritage responded requesting that plaintiff appear and make a sworn statement, and that plaintiff present proof of her damages as well as of defendant's status as an uninsured motorist. Plaintiff answered suggesting Heritage examine its file and the claim file covering the matter and inform plaintiff what, if anything, was lacking in the way of documentation. In response, by letter dated November 22, 1972, Heritage labeled the matter one for arbitration and substituted a new arbitrator for the one named in response to plaintiff's request for arbitration in July of 1970.
Unsuccessful in her efforts to resolve the issue, plaintiff filed garnishment proceedings against Heritage on November 30, 1973. Heritage defaulted and on January 4, 1974, a conditional judgment of $4,010.20 (plaintiff's default judgment of $3,750 plus costs) was entered in plaintiff's favor. On February 15, 1974, Heritage was given leave to file an appearance, answer, and motion to dismiss. Thereafter, the circuit court received briefs, heard oral arguments, and on August 27, 1974, entered an order confirming the conditional judgment entered against Heritage.
Heritage, relying on the uninsured motorist provisions of the insurance agreement between plaintiff and Heritage, contends the judgment against the defendant may not be recovered from Heritage. Heritage contends its liability must be settled by arbitration and that the judgment against the defendant is not binding on Heritage because Heritage never gave its written consent for the filing of the suit as required by the insurance agreement.
Illinois law provides that all insurance policies insuring against bodily injury or death resulting from the operation of a motor vehicle must cover the assured from injuries sustained at the hands of an uninsured motorist. Ill. Rev. Stat. 1967, ch. 73, par. 755a.
The policy between plaintiff and Heritage provided for uninsured motorist coverage and, in pertinent part, stated:
"If any person making claim hereunder and the Company do not agree that such person is legally entitled to recover damages from the owner or operator of an uninsured automobile because of bodily injury to the insured, or do not agree as to the amount payable hereunder, then each party shall, upon ...