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Buchalo v. Country Mutual Ins. Co.





APPEAL from the Circuit Court of Cook County; the Hon. RICHARD L. CURRY, Judge, presiding.


Michael Buchalo (plaintiff) appeals from an order dismissing with prejudice his petition to compel arbitration filed against Country Mutual Insurance Company (defendant).

The petition alleged plaintiff was injured by the negligence of a hit-and-run driver on March 27, 1976. Defendant had issued a personal vehicle policy to plaintiff. The identity of the negligent driver was never determined.

The complaint also alleged a legal conclusion that plaintiff "has complied with all terms and conditions of his policy of insurance." It alleged defendant has refused to name an arbitrator and to arbitrate. Plaintiff prayed arbitration be compelled under the Uniform Arbitration Act (Ill. Rev. Stat. 1977, ch. 10, par. 101 et seq.).

The policy of insurance contains this uninsured motorist endorsement by which defendant agreed:

"To pay all sums which the Insured * * * shall be legally entitled to recover as damages from the owner or operator of an Uninsured Vehicle because of bodily injury, * * * sustained by the Insured, caused by accident and arising out of the ownership, maintenance or use of such Uninsured Vehicle; provided, * * * determination as to whether the Insured or such representative is legally entitled to recover such damages, and if so the amount thereof shall be made by agreement between the Insured or such representative and the Company or, if they fail to agree, by arbitration."

Concerning arbitration, the policy provides:

"If the Insured and the Company do not agree as to the Insured's right to recover damages for such injury or as to the amount payable as damages under this Section, then each party shall, upon written demand of the Insured or upon written demand of the Company, select a competent and disinterested arbitrator. The two arbitrators so named shall select a third arbitrator, or if unable to agree thereon within thirty days, then upon the request of the Insured or the Company such third arbitrator shall be selected by a judge of a court of record in the county and state in which such arbitration is pending. The arbitrators shall then hear and determine the question or questions so in dispute, and the decision in writing of any two arbitrators shall be binding upon the Insured and the Company, * * *."

Defendant filed a motion to dismiss the petition. This motion cited the following policy provision imposing a limitation period:

"No suit, action or arbitration proceedings for the recovery of any claim under this Section shall be sustainable in any court of law or equity unless the insured shall have fully complied with all of terms of this policy, nor unless commenced within two (2) years after the occurrence of the loss."

The motion to dismiss averred plaintiff's petition was filed September 15, 1978, after expiration of the two-year period. The motion also averred plaintiff did not allege he had filed a written demand for arbitration within two years of the occurrence.

• 1 This motion was properly filed under section 45 of the Civil Practice Act. (Ill. Rev. Stat. 1977, ch. 110, par. 45.) This motion admitted the properly pleaded factual allegations of the complaint (Johnston v. City of Bloomington (1979), 77 Ill.2d 108, 111, 395 N.E.2d 549), but not legal conclusions stated by the pleader (Zagar v. Gomberg (1978), 66 Ill. App.3d 611, 612, 384 N.E.2d 426). This motion raised an issue of law as to whether the petition for arbitration was timely filed under the policy.

But, on December 18, 1978, plaintiff filed an unverified "statement of facts." This document alleged that on April 2, 1976, defendant was notified by plaintiff's counsel in writing of the accident and plaintiff's claim. On April 29, 1976, defendant took a written statement from plaintiff regarding the claim, and an "oral demand for arbitration" was made to defendant's claim adjuster. On July 10, 1976, plaintiff's counsel sent notice to defendant demanding arbitration but stating that arbitration would not be necessary if defendant negotiated in good faith with a view toward settlement. Negotiations were conducted by the parties until terminated by defendant.

Also on December 18, 1978, plaintiff filed his "petition in answer to defendant's motion to dismiss." This unverified document alleged plaintiff made oral demand for arbitration on April 29, 1976, to defendant's claim adjuster. It alleged that on July 10, 1976, plaintiff's counsel sent a written demand for arbitration to defendant. The document then proceeded with a legal argument raising contentions such as the uninsured motorist provision being void as against public policy. Appended to this document is an affidavit by counsel for plaintiff alleging that on April 29, 1976, at the home of plaintiff, the attorney made an oral demand for arbitration to defendant's claim adjuster. The claim adjuster "agreed the oral demand was ...

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