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Zimmerman v. Illinois Farmers Insurance Company

November 15, 2000

JUDITH ZIMMERMAN, PLAINTIFF-APPELLEE,
v.
ILLINOIS FARMERS INSURANCE COMPANY, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Du Page County. No. 98--L--746 Honorable James W. Jerz, Judge, Presiding.

The opinion of the court was delivered by: Justice Hutchinson

Plaintiff, Judith Zimmerman, presented an underinsured motorist claim to defendant, Illinois Farmers Insurance Company. The parties submitted the claim to arbitration, and the arbitrator entered an award in plaintiff's favor. After a dispute arose regarding the application of a setoff provision in the insurance policy, plaintiff filed suit to enforce the award. The trial court granted summary judgment in favor of plaintiff for the full amount of the arbitration award. Defendant appeals, contending that summary judgment was improper because (1) as a matter of law the arbitration award was subject to a setoff equal to the amount plaintiff recovered from the underinsured motorist and (2) genuine issues of material fact existed that precluded summary judgment. We affirm.

BACKGROUND

On September 15, 1994, plaintiff was struck by an automobile while crossing a public roadway. The driver of the automobile was insured under a policy with a limit of liability of $100,000. The driver's insurer subsequently tendered the full $100,000 to plaintiff in settlement of her claim against the driver.

At the time of the accident, plaintiff was covered by an automobile liability policy issued by defendant that included underinsured motorist coverage with a limit of liability of $250,000 per person. The policy included a setoff provision that limited the amount of underinsured motorist coverage to the lesser of:

"1. The limits of liability reduced by all amounts paid in damages to the insured person by or for any person or organization who may be liable for the bodily injury; or

2. The unrecovered amount of damages established by any agreement, settlement, or judgment with or for the person(s) or organization(s) legally liable for the bodily injury."

The terms of the policy applied the same procedural requirements to both underinsured and uninsured motorist coverage. The policy contained an arbitration provision that provides in pertinent part:

"The arbitrator shall determine (1) whether the Insured person is legally entitled to recover damages from the owner or operator of an uninsured motor vehicle, and (2) the amount of payment under this part, if any, as determined by this policy or any other applicable policy."

On November 16, 1995, plaintiff filed a demand for arbitration of the claim with the American Arbitration Association (the AAA). In a section of the arbitration demand form entitled "Amount Claimed," plaintiff wrote "$250,000.00 minus any contractual setoff."

On April 14, 1997, the parties arbitrated plaintiff's claim before an arbitrator selected by the AAA. On April 21, 1997, the arbitrator made an award in favor of plaintiff. The award provides:

"THE UNDERSIGNED ARBITRATOR(S), designated in accordance with the Arbitration Agreement entered into by the *** Parties, and having been duly sworn and having heard the proofs and allegations of the Parties, AWARDS AS FOLLOWS:

ILLINOIS FARMERS INSURANCE shall pay to JUDITH ZIMMERMAN the sum of ONE HUNDRED FORTY-NINE THOUSAND TWO HUNDRED ...


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