Appeal from the Circuit Court the 18th Judicial Circuit, of DuPage County, Illinois No. 97--L--574 Honorable Hollis Webster Judge, Presiding
The opinion of the court was delivered by: Justice Breslin
The issue before the court is whether an insurance policy's underinsured motorist arbitration provision is contrary to public policy if it permits a trial de novo for awards in excess of the minimum liability set forth in the Illinois Safety Responsibility Law (625 ILCS 5/7--100 et seq. (West 1996)). The trial court concluded that such a structure is contrary to public policy and entered a judgment confirming an arbitration panel's award in favor of the insured, Dennis Parker. Defendant American Family Insurance Company (American Family) appeals. We affirm.
Parker was injured in a motor vehicle accident while he was a passenger in a car. The vehicle that struck the one in which he was riding had liability insurance limits in the amount of $20,000. Parker filed suit against the driver of that vehicle and settled the case for the $20,000 policy limit. Parker then filed for arbitration with his own insurance company, American Family, as permitted by the arbitration provisions for underinsured motorist coverage in his American Family policy. The pertinent provisions of the policy provided:
We or an insured person may demand arbitration if we do not agree:
1. That the person is legally entitled to recover damages from the owner or operator of an underinsured motor vehicle.
2. On the amount of payment under this part.
Any arbitration award not exceeding the minimum limit of the Illinois Safety Responsibility Law:
2. May be entered as a judgment in any court having jurisdiction.
If any arbitration award exceeds the minimum limits of the Illinois Safety Responsibility Law, either party has a right to trial on all issues in any court having jurisdiction."
An arbitration panel awarded Parker $75,000 less the $20,000 received in the settlement. Parker filed a petition for judgment on the award in the circuit court. American Family moved to dismiss the petition and filed a counterclaim for a trial on all issues. Relying on Fireman's Fund Ins. Co. v. Bugailiskis, 278 Ill. App. 3d 19, 662 N.E.2d 555 (1996), the trial court found that the arbitration clause was one of adhesion and violated public policy. The ...