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Curtis v. Pekin Insurance Co.

OPINION FILED APRIL 8, 1982.

FLORA MAY CURTIS, PLAINTIFF-APPELLANT,

v.

PEKIN INSURANCE COMPANY, DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Ford County; the Hon. RICHARD M. BANER, Judge, presiding.

JUSTICE MILLS DELIVERED THE OPINION OF THE COURT:

Rehearing denied May 10, 1982.

Suit on fire insurance policy.

Service of process on insurance company delayed for 20 months.

Dismissed with prejudice for lack of diligence in service of process.

We affirm.

On October 26, 1978, plaintiff purchased a fire insurance policy from defendant. The policy contained the standard 12-month limitation of actions clause prescribed by Rule 23.01, section 3, of the Illinois Departmental Regulations (Department of Insurance):

"Suit. No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within 12 months next after the inception of the loss."

Plaintiff's home was destroyed by fire on February 5, 1979. Plaintiff filed suit against defendant, seeking judgment in the amount of the policy limit, on April 2, 1979. There then followed a 20-month period of almost complete inactivity. During this time, the court, on its own motion, issued two notices to proceed, and a summons was issued, but not served. No other significant progress was made in the cause during this period. A second summons was issued on December 9, 1980, and an agent of defendant was finally served with process on December 10, 1980.

Defendant filed a motion to dismiss on December 18, 1980. As grounds for dismissal, defendant alleged, inter alia, plaintiff's lack of diligence in obtaining service of process prior to the expiration of the applicable limitation period. Following a hearing on April 9, 1981, the court allowed defendant's motion and dismissed the suit with prejudice pursuant to Supreme Court Rule 103(b) (Ill. Rev. Stat. 1979, ch. 110A, par. 103(b)). On May 7, 1981, plaintiff filed a motion for vacatur and reconsideration. Apparently, neither party called this motion for a hearing, and it was denied without a hearing on May 28, 1981.

The principal point of contention in this case is whether the standard 12-month limitation-of-actions clause, which must be included in all fire insurance policies issued in Illinois pursuant to Illinois Department of Insurance Rule 23.01, is a statute of limitations for purposes of Supreme Court Rule 103(b) (Ill. Rev. Stat. 1979, ch. 110A, par. 103(b)), which reads as follows:

"Dismissal for Lack of Diligence. If the plaintiff fails to exercise reasonable diligence to obtain service prior to the expiration of the applicable statute of limitations, the action as a whole or as to any unserved defendant may be dismissed without prejudice. If the failure to exercise reasonable diligence to obtain service occurs after the expiration of the applicable statute of limitations, the dismissal shall be with prejudice. In either case the dismissal may be made on the application of any defendant or on the court's own motion."

Plaintiff contends that the 12-month limitation-of-actions clause contained in the policy is essentially contractual, as opposed to statutory, in nature and requires only the actual filing of suit within the 12-month period. Since the policy's limitation-of-actions clause does not specifically require service of process within the 12-month period, plaintiff contends that such a requirement should not be engrafted onto the insurance contract by virtue of Supreme Court Rule 103(b). Defendant, on the other hand, asserts that since inclusion of the 12-month limitation-of-actions clause in all fire insurance policies issued in the State is mandated by regulations of the Illinois Department of Insurance, promulgated pursuant to statutory authority, the clause is the equivalent of a statute of limitations enacted by the legislature.

Plaintiff relies principally on Roth v. Northern Assurance Co. (1964), 32 Ill.2d 40, 203 N.E.2d 415. A close examination of the policy considerations underlying Roth, however, reveals that the case hurts plaintiff's position much more than it helps. The Roth court addressed the issue of the applicability of section 24(a) of the Limitations Act (Ill. Rev. Stat. 1963, ch. 83, par. 24(a)) to the standard fire insurance policy limitation-of-actions clause. At the time of the Roth decision, section 24(a) of the Limitations Act provided that "if the plaintiff be nonsuited" and the time for bringing the action had run during the pendency of the action in which the non-suit was entered, the plaintiff could commence new action within one year. The plaintiff in Roth brought suit on a fire insurance policy in Federal ...


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