APPEAL from the Circuit Court of Cook County; the Hon. BEN
EDELSTEIN, Judge, presiding.
MR. JUSTICE MCNAMARA DELIVERED THE OPINION OF THE COURT:
The plaintiffs, Joseph and Virginia Baron, appeal from the entry of summary judgment in favor of the defendant, Coronet Insurance Company. Plaintiffs are insured under an automobile liability and uninsured motorist policy. The policy had been issued by defendant's predecessor, but was acknowledged and assumed by defendant. Plaintiffs began this action to recover damages for the alleged failure of the defendant to pay damages sustained by plaintiffs as a result of an accident caused by an uninsured motorist. Plaintiffs charged that this failure was a breach of defendant's obligations under the uninsured motorists coverage provisions of the policy. Plaintiffs on appeal maintain that there existed genuine issues of material fact warranting trial as to whether they had satisfied all requirements of the policy or that the defendant had waived formal compliance with the policy. In granting summary judgment, the trial court considered various pleadings, affidavits, exhibits, previous reports of proceedings, and memoranda furnished by both sides.
This case has a lengthy history going back to July 21, 1963, the date of plaintiffs' automobile accident with a Mr. Caterino Villereal. On July 24, 1963, defendant acknowledged in writing that it had been notified of the accident. On September 3, 1963, plaintiffs filed a negligence action against Villereal in the circuit court of Lake County. At the same time, plaintiffs' counsel informed defendant that he had learned Villereal had no liability insurance coverage in effect at the time of the accident. Plaintiffs' counsel attached to that letter to defendant a copy of the summons and complaint against Villereal.
On September 23, 1963, defendant received a letter from its own attorney which discussed an attempt by defendant to have an attorney file an appearance for Villereal, the uninsured motorist, so as to defeat their own insureds' claim against him. Referring specifically to the suit of Baron v. Villereal, the letter reads in part as follows:
"I have further instructed Mr. Feldman [an investigator for defendant's attorney] to contact the uninsured third party for authorization to file an appearance and answer in his behalf in the lawsuit filed in Lake County."
On March 24, 1964, plaintiffs' attorney wrote defendant informing it of plaintiffs' desire to settle the matter with defendant rather than to proceed with the lawsuit. The letter recited that if a reasonable settlement could not be reached, plaintiffs would be willing to submit the matter to arbitration as required by the policy. Defendant made no written response to this letter.
According to the testimony of one of the defendant's own employees at a subsequent garnishment hearing, plaintiffs' attorney wrote a number of letters to defendant to which there was no written reply. These letters extended from 1964 to 1966. At the same garnishment hearing, plaintiffs' attorney testified that in 1964 he had been in telephone contact with a Mr. Gerstein, an employee of defendant. Gerstein replied to one of the aforementioned letters by telephone and requested additional time to study the file. Plaintiffs' attorney further testified that after several additional requests for delay by Gerstein, the witness called Gerstein and demanded to know whether defendant was going to arbitrate the claim. Gerstein replied that "we are not going to arbitrate anything."
On January 8, 1965, as part of the stream of correspondence to defendant, plaintiffs' attorney wrote the following letter discussing the possibility of arbitration between the two parties:
"Because you are not a member of the American Arbitration Association, any demand by your insured for arbitration would impose a $200 cost burden or more, we find it expedient to proceed to verdict in the Lake County Circuit Court pursuant to pleadings already forwarded to you in compliance with policy provisions. If you wish to pay the costs of arbitration and serve notice of your demand we would honor your demand if made within a reasonable time. In any event we shall notify you of the verdict and amount of judgment against the uninsured motorist, Caterino Villereal, after the case has been tried."
Plaintiffs' counsel subsequently informed defendant that because of its failure to enter into negotiations or arbitration, plaintiffs would pursue the action against Villereal to judgment. On May 10, 1966, judgment for $2,500 was entered against Villereal in favor of each plaintiff. Plaintiffs then filed the aforementioned garnishment action against defendant in Lake County for payment under the uninsured motorist provision of the policy. On November 9, 1967, the trial court ruled in favor of plaintiffs and awarded them $5,000 damages from the Villereal suit. This court, Second District, reversed that judgment. (Baron v. Villereal (1968), 100 Ill. App.2d 366, 241 N.E.2d 227.) The court ruled that garnishment was not a proper remedy whereby plaintiffs could recover in this situation. The court, at page 374, stated that:
"However, we are not adjudicating the question of whether or not the plaintiffs, in a proper action, can recover against Coronet under the facts of this case."
As a result of that decision, plaintiff filed the present action in the circuit court of Cook County. Plaintiffs alleged that they had performed all the conditions of the insurance policy required of them. They asked for damages under the uninsured motorist provision in the amounts of the judgments against Villereal as well as for $1,000 each under section 155 of the Insurance Code (Ill. Rev. Stat. 1967, ch. 73, par. 767) for vexatious refusal to make payment to plaintiffs. Defendant filed a motion for judgment on the pleadings. On August 3, 1971, that motion was denied.
On March 1, 1974, defendant filed its motion for summary judgment which is the subject of the present appeal. This motion, with insignificant exceptions, is identical to the motion for judgment on the pleadings which had been denied. The motion for summary judgment recited that plaintiffs' prosecution of the suit against Villereal was in violation of the policy; that the policy required an arbitration demand which was never given; and that the appellate court's previous decision barred the action as res judicata. It also stated that the judgment against Villereal included bodily injury damage as well as property damage, and that only the former was covered by the policy. Attached to the motion were affidavits and other documents.
These exhibits included an affidavit of defendant's claim manager stating that he had held that position from 1963 until the time of the filing of the present suit. To his knowledge, ...