Appeal from Circuit Court of Champaign County. No. 93L1070. Honorable George S. Miller, Judge Presiding.
As Corrected July 19, 1995.
Honorable James A. Knecht, P.j., Honorable Robert W. Cook, J., Concurring, Honorable Carl A. Lund, J., Specially Concurring
The opinion of the court was delivered by: Knecht
PRESIDING JUSTICE KNECHT delivered the opinion of the court:
In May 1988, plaintiff, Carron Lisnik, was injured in an automobile accident with an uninsured motorist. On August 19, 1993, plaintiff filed a complaint seeking an order requiring defendant, Meridian Mutual Insurance Company, to enter into arbitration of her uninsured motorist (UM) claim. The trial court granted defendant's motion to dismiss on December 21, 1993, concluding plaintiff's suit was barred by the two-year suit limitation period in the policy. On appeal, plaintiff argues: (1) section 143.1 of the Illinois Insurance Code (Code) (215 ILCS 5/143.1 (West 1992)) indefinitely tolled the suit limitation provision in the policy due to defendant's failure to deny her arbitration demand; and (2) defendant should be estopped from asserting the two-year limitations period. We agree and reverse.
Plaintiff was injured in an automobile accident with an uninsured motorist on May 2, 1988. On June 10, 1988, she gave notice of a claim under the UM coverage of her auto insurance policy to defendant. On June 12, 1989, plaintiff submitted a demand of $80,000 for settlement of the claim. On December 11, 1989, plaintiff demanded arbitration of the UM claim and informed defendant she had selected an arbitrator. According to defendant's policy, if an agreement as to coverage or damages could not be reached with an insured on an UM claim, the insured could demand arbitration. Each party would select an arbitrator, and the two arbitrators would select a third arbitrator.
On May 11, 1990, defendant advised plaintiff it had selected an arbitrator, but had told the arbitrator to put the matter on hold pending further investigation and settlement negotiations. On October 30, 1990, defendant offered to settle the claim for $5,000. Plaintiff filed suit seeking an order compelling defendant to arbitrate her UM claim on August 13, 1993. On October 4, 1993, defendant filed a motion to dismiss on the basis of a suit limitation clause in the policy, which provided: "No suit may be brought against us under the Uninsured Motorists Coverage of this policy more than two years after the date of the loss." (Emphasis in original.) Defendant argued "the date of the loss" was May 2, 1990 (two years after the accident), and therefore, the two-year contractual limitation expired May 2, 1992. On December 21, 1993, the court granted defendant's motion to dismiss, concluding the limitations period was tolled until the final correspondence between the parties on October 30, 1990, when defendant offered to settle the claim for $5,000. The court held plaintiff's suit was time-barred because it was not filed until August 19, 1993, more than two years after the limitations period began to run. The court granted plaintiff leave to file an amended complaint to plead any events which might have tolled the limitations period beyond October 30, 1990.
Plaintiff filed a motion to reconsider on January 20, 1994, and attached further correspondence between the parties and the affidavit of her former attorney. On January 17, 1991, defendant reiterated its $5,000 settlement offer. On March 27, 1991, plaintiff rejected the offer and advised plaintiff was undergoing further treatment. The affiant claimed on January 31, 1992, he met with defendant's counsel and advised plaintiff was still undergoing treatment and he would continue further settlement negotiations when her condition stabilized. The trial court denied the motion to reconsider on June 2, 1994, concluding there was no agreement for an indefinite postponement of arbitration until plaintiff's medical condition had stabilized. This appeal followed.
Plaintiff argues the suit limitation provision of the policy was tolled indefinitely pursuant to section 143.1 of the Code due to defendant's failure to deny her arbitration demand. We agree. The suit limitation clause at issue provides no suit may be filed more than two years "after the date of the loss." A suit limitation period running from the date of the "loss" does not begin until it is determined the defendant in a personal injury action is unable to compensate the insured for the damages incurred. McCray v. Merit Insurance Co. (1992), 233 Ill. App. 3d 36, 39, 598 N.E.2d 366, 368, 174 Ill. Dec. 169; see also Silverman v. Economy Fire & Casualty Co. (May 8, 1995, 1st Dist. Gen. No. 1-93-1334, slip op. at 7), Ill. App. 3d , , N.E.2d , ; Glenn v. Prestige Casualty Co. (1993), 246 Ill. App. 3d 909, 913, 617 N.E.2d 84, 86-87, 186 Ill. Dec. 845; Whiting v. Prestige Casualty Co. (1992), 238 Ill. App. 3d 376, 378-79, 606 N.E.2d 397, 399, 179 Ill. Dec. 565.
In this case, plaintiff never sued the alleged uninsured motorist. The two-year statute of limitations for personal injury claims (735 ILCS 5/13-202 (West 1992)) expired on May 8, 1990. After that date, the uninsured motorist's tort liability was established because plaintiff could never recover from him or her. Thus, the date of the "loss" for purposes of the policy limitations period was May 8, 1990. The policy therefore required plaintiff to file suit on or before May 8, 1992. Since she did not file until August 1993, defendant argues her suit is time-barred. However, section 143.1 of the Code provides:
"Whenever any policy or contract for insurance, except life, accident and health, fidelity and surety, and ocean marine policies, contains a provision limiting the period within which the insured may bring suit, the running of such period is tolled from the date proof of loss is filed, in whatever form is required by the policy, until the date the claim is denied in whole or in part." 215 ILCS 5/143.1 (West 1992).
In Hermanson v. Country Mutual Insurance Co. (1994), 267 Ill. App. 3d 1031, 642 N.E.2d 857, 204 Ill. Dec. 956, the plaintiff sustained injuries in an auto accident with an uninsured motorist on December 16, 1989. On May 25, 1990, the plaintiff made a claim for benefits under the UM provisions of her policy. On May 31, 1990, the defendant denied the plaintiff's claim, contending a set-off provision barred recovery. On October 6, 1991, the plaintiff demanded arbitration pursuant to an arbitration clause in the policy. On October 31, 1991, the defendant denied the plaintiff's arbitration demand. The plaintiff then filed a declaratory judgment action seeking UM benefits. The defendant filed a motion ...