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Kemling v. Country Mutual Insurance Co.

OPINION FILED JUNE 30, 1982.

MAX KEMLING, ADM'R OF THE ESTATE OF RUTH KEMLING, DECEASED, PLAINTIFF-APPELLEE,

v.

COUNTRY MUTUAL INSURANCE COMPANY, DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Du Page County; the Hon. CARL HENNINGER, Judge, presiding.

JUSTICE NASH DELIVERED THE OPINION OF THE COURT:

Rehearing denied August 6, 1982.

Defendant, Country Mutual Insurance Company, appeals from a declaratory judgment of the circuit court of Du Page County estopping it from contesting in a pending arbitration hearing the negligence of an uninsured motorist as the proximate cause of injury sustained by plaintiff, Max Kemling.

On February 23, 1979, plaintiff was injured and his wife, Ruth Kemling, killed in a collision between an automobile driven by plaintiff, in which his wife was a passenger, and an uninsured vehicle driven by John Menig. Kemling's automobile was covered by a policy of insurance issued by Country Mutual which contained an uninsured motorist provision by which the insurance company agreed to pay for injuries sustained by plaintiff and his family in such a collision if the uninsured motorist was liable. The insurance contract also provided that if the parties were unable to agree as to the uninsured motorist's liability and the amount of damages, those questions would be submitted to binding arbitration in which the rules of evidence applicable in a court of law would apply.

On November 21, 1980, the claim of Max Kemling, as administrator of the estate of Ruth Kemling, deceased, was submitted to a panel of arbitrators selected pursuant to the contract. The arbitrators found in favor of the estate and awarded it damages of $82,500. No record was required to be made of the arbitration proceedings and none was made.

Max Kemling, as administrator of the estate of Ruth Kemling, deceased, filed a complaint for confirmation of the award in the circuit court pursuant to section 11 of the Uniform Arbitration Act (Ill. Rev. Stat. 1979, ch. 10, par. 111). Thereafter, Max Kemling, individually, filed an amendment to the complaint adding count II in which he sought a declaratory judgment that Country Mutual was estopped from contesting any liability issues or the negligence of the uninsured motorist in the pending arbitration claim of Max Kemling for his own personal injury. After hearings, the trial court entered an order confirming the arbitrators' award to the estate of Ruth Kemling and further ordered that Country Mutual was estopped from contesting in any arbitration hearing the issue of negligence of the uninsured motorist, John Menig, as being a proximate cause of the collision giving rise to the claim of Max Kemling, individually, for personal injuries under the policy of insurance issued to him by Country Mutual. It is the latter order from which Country Mutual appeals.

The primary question offered for our resolution by this appeal is whether the doctrine of res judicata applies to issues determined in arbitration proceedings.

Defendant contends the circuit court lacks jurisdiction under the declaratory judgment act (Ill. Rev. Stat. 1979, ch. 110, par. 57.1) or the Uniform Arbitration Act (Ill. Rev. Stat. 1979, ch. 10, par. 101 et seq.) to limit the issues to be submitted or the procedures followed in arbitration, and that collateral estoppel cannot be applied to bar the scope of arbitration. Plaintiff argues that as section 14 of the Uniform Arbitration Act provides for the enforcement of a judgment confirming an arbitration award "as any other judgment" (Ill. Rev. Stat. 1979, ch. 10, par. 114), the doctrine of estoppel by verdict applies to preclude the parties from relitigating the same issues.

• 1 It has been held that arbitration is in the nature of a judicial inquiry with its object to achieve a final and binding disposition of differences between parties, both present and prospective, with the force of an adjudication precluding the parties from relitigating the same subject. (Flood v. Country Mutual Insurance Co. (1968), 41 Ill.2d 91, 93, 242 N.E.2d 149, 151; White Eagle Laundry Co. v. Slawek (1921), 296 Ill. 240, 244, 129 N.E. 753, 754-55; Pillott v. Allstate Insurance Co. (1977), 48 Ill. App.3d 1043, 1046-47, 363 N.E.2d 460, 463; Rosee v. Board of Trade (1976), 43 Ill. App.3d 203, 239-40, 356 N.E.2d 1012, 1036-37, cert. denied (1977), 434 U.S. 837, 54 L.Ed.2d 99, 98 S.Ct. 127.) The arbitrators become judges of fact and law by choice of the parties, and their honest decision within the scope of the submission should be final. Sherfy v. Graham (1874), 72 Ill. 158, 159; American Invsco Realty, Inc. v. Century 21, Rohter & Co. (1981), 96 Ill. App.3d 56, 58-59, 420 N.E.2d 692, 695, appeal denied (1981), 85 Ill.2d 562; Country Mutual Insurance Co. v. National Bank of Decatur (1969), 109 Ill. App.2d 133, 137, 248 N.E.2d 299, 302, appeal denied (1969), 42 Ill.2d 583.

• 2 The doctrine of res judicata is based upon requirements of justice and public policy which reflect the consideration that there be an end to litigation after each party has had a full opportunity to present all pertinent facts. (Palya v. Palya (1980), 87 Ill. App.3d 472, 474, 409 N.E.2d 133, 135.) A judgment by a tribunal having jurisdiction of the parties and subject matter should be conclusive as to the facts in question and issues determined in the first proceedings when the same issue is again raised between those parties. C.I.S., Inc. v. Kann (1979), 76 Ill. App.3d 109, 110-11, 394 N.E.2d 916, 918, appeal denied (1980), 79 Ill.2d 625; Chas. Ind. Co. v. Cecil B. Wood, Inc. (1965), 56 Ill. App.2d 30, 36, 205 N.E.2d 786, 789, appeal denied (1965), 32 Ill.2d 625.

• 3, 4 Collateral estoppel or estoppel by verdict, a branch of res judicata, prohibits relitigation of an issue essential to and actually decided in an earlier litigation by the same parties or their privies. (City of Chicago v. Westphalen (1981), 93 Ill. App.3d 1110, 1119-20, 418 N.E.2d 63, 71; Turzynski v. Liebert (1976), 39 Ill. App.3d 87, 90, 350 N.E.2d 76, 79.) Under the modern view, identity of party for application of estoppel is satisfied so long as the party against whom its application is sought, Country Mutual in this case, is identical in both actions and had a full and fair opportunity to contest an issue which was necessarily determined in the prior proceeding. C.I.S., Inc. v. Kann (1979), 76 Ill. App.3d 109, 111, 384 N.E.2d 916, 918, appeal denied (1980), 79 Ill.2d 625; Chidester v. Cagwin (1966), 76 Ill. App.2d 477, 486, 222 N.E.2d 274, 279, appeal denied; Chas. Ind. Co. v. Cecil B. Wood, Inc. (1965), 56 Ill. App.2d 30, 36-37, 205 N.E.2d 786, 789, appeal denied (1965), 32 Ill.2d 625; see Pinto Trucking Service, Inc. v. Motor Dispatch, Inc. (N.D. Ill. 1980), 485 F. Supp. 484; Butler v. Stover Brothers Trucking Co. (7th Cir. 1977), 546 F.2d 544.

Country Mutual contends the Uniform Arbitration Act, adopted by Illinois, grants the circuit court only limited jurisdiction over arbitrable disputes confined to the power to compel or stay arbitration, to enforce awards and to vacate, modify or correct awards made under specified circumstances. (Ill. Rev. Stat. 1979, ch. 10, pars. 102, 111-114.) It argues that as the relief sought by plaintiff's declaratory judgment action is not prescribed in the statute the court lacked authority to enter the judgment from which it appeals, citing Illinois Power Co. v. Miller (1956), 11 Ill. App.2d 296, 302, 137 N.E.2d 78, 81-82.

• 5-7 Subject matter jurisdiction is the fundamental power of the court to hear and decide a case on its merits; it does not simply mean jurisdiction of the particular case before it, but the class of cases to which that case belongs. (Merit Chevrolet, Inc. v. Department of Revenue (1965), 33 Ill.2d 207, 212, 210 N.E.2d 470, 473-74; Pecora v. Szabo (1981), 94 Ill. App.3d 57, 67-68, 418 N.E.2d 431, 438-39, appeal denied (1981), 85 Ill.2d 567.) In Illinois, circuit courts have original jurisdiction over all justiciable matters (Ill. Const. 1970, art. VI, sec. 9; Lopin v. Cullerton (1977), 46 Ill. App.3d 378, 380, 361 N.E.2d 6, 8, appeal denied), and while the General Assembly may limit the trial court's power substantively by statute, it may not limit the trial court's power procedurally to construe statutory rights. (Palella v. Leyden Family Service & Mental Health Center (1980), 79 Ill.2d 493, 499, 404 N.E.2d 228, 231; Skilling v. Skilling (1982), 104 Ill. App.3d 213, 219, 432 N.E.2d 881, 886; Lopin v. Cullerton (1977), 46 Ill. App.3d 378, 380, 361 N.E.2d 6, 8, appeal denied.) The test of jurisdiction is to be found in the nature of the case and the relief which is sought. People ex rel. Person v. Miller (1977), 56 Ill. App.3d 450, 457, 371 N.E.2d 1012, 1018, appeal denied (1978), 71 Ill.2d 605.

• 8 Here, the nature of the relief sought by plaintiff was a declaration as to the legal effect, if any, of the first arbitration on the pending arbitration which presented a dispute admitting of immediate and definitive determination pursuant to the declaratory judgment statute. No relief was sought by plaintiff under the arbitration act. The scope of declaratory judgment relief is broad, liberal and unrestricted by technicalities. (In re Estate of Moerschel (1980), 86 Ill. App.3d 482, 485, 407 N.E.2d 1131, 1134; Young v. Hansen (1969), 118 Ill. App.2d 1, 6, 249 N.E.2d 300, 303.) It is designed not to supplant existing remedies, but as an alternate or additional remedy to facilitate the administration of justice and to settle and fix rights of the parties based upon an actual justiciable controversy. (Miller v. County of Lake (1980), 79 Ill.2d 481, 487, 404 N.E.2d 222, 225; Illinois Gamefowl Breeders ...


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