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Johnson v. State Farm Mutual Automobile Insurance Company

July 13, 2001

PATRICIA JOHNSON, PLAINTIFF-APPELLEE, AND THOMAS C. RICH, AND RICH, NALEFSKI & DOWLING, P.C., PLAINTIFFS,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, DEFENDANT-APPELLANT.
PATRICIA JOHNSON, PLAINTIFF-APPELLANT, AND THOMAS C. RICH, AND RICH, NALEFSKI & DOWLING, P.C., PLAINTIFFS,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of St. Clair County. No. 98-MR-77 Honorable Patrick M. Young, Judge, presiding.

The opinion of the court was delivered by: Justice Rarick.

UNPUBLISHED

Rule 23 Order filed June 8, 2001; Motion to publish granted July 13, 2001

The plaintiff, Patricia Johnson, brought an action in the circuit court of St. Clair County against State Farm Mutual Automobile Insurance Company (State Farm). Johnson was injured in an automobile collision with an uninsured motorist. As a result, she incurred medical expenses totaling $12,528.99. Johnson submitted a claim to State Farm for payment of medical expenses under the medical payment provisions of her policy. In response, State Farm paid the medical payment coverage (MPC) limit of $5,000. Johnson subsequently made a claim under the uninsured-motorist (UM) provision of her policy, and she made a demand for arbitration. The arbitrators awarded $22,000. State Farm offset the $5,000 it had already paid Johnson and issued her a check in the amount of $17,000.

Johnson and attorney Rich thereafter filed a four-count complaint against State Farm. In count I of her third amended complaint, Johnson asserted a claim under Illinois's common-fund doctrine. In count II, Johnson alleged that State Farm failed to pay her the full amount due on the arbitration award. In counts III and IV, attorney Rich asserted that State Farm owed attorney fees under the common-fund doctrine.

State Farm moved to dismiss pursuant to section 2-619 of the Code of Civil Procedure (725 ILCS 5/2-619 (West 1998)). On March 12, 1999, the trial court dismissed count I with prejudice, dismissed count II, but declined to dismiss counts III or IV. With respect to count I, the trial court ruled that Johnson, a non-attorney, could not recover under the common-fund doctrine. With respect to count II, the trial court reasoned that State Farm was entitled to deduct the $5,000 MPC benefits from the arbitration award pursuant to the terms of the nonduplication and reimbursement provisions of the MPC. With respect to counts III and IV, the trial court found that the plaintiff had adequately alleged a common-fund fee claim against State Farm. The trial court reasoned that the application of the common-fund doctrine would place the parties in the same position they would be in if two policies or another insurer were involved. The court noted that State Farm took an adversarial role in the arbitration proceedings and was seeking to benefit from the services of Johnson's attorney.

The trial court subsequently entered an order pursuant to Supreme Court Rule 308 (134 Ill. 2d R. 308), finding that its March 12, 1999, order involved certain questions of law as to which there are substantial grounds for difference of opinion and that an immediate appeal might advance the ultimate termination of the litigation. The questions are:

"1. *** [W]hether the equitable 'common fund' doctrine in Illinois is applicable to require a defendant insurer to pay fees to its policyholder's lawyer where:

(a) the lawyer has represented the defendant insurer's policyholder in arbitration of the policyholder's claim against the defendant insurer for Uninsured Motorist benefits; and

(b) the defendant insurer was actively represented by its own retained counsel in the arbitration of the uninsured motorist claim.

2. The issues for interlocutory appeal raised by plaintiffs are:

A. In an uninsured/underinsured motorist arbitration, do the arbitrators in determining the question, 'What amount, if any[?]', under the policy[] have the authority to consider other policy provisions that effect [sic] the total arbitration amount awarded?

B. Under the policy, does the arbitration award in an uninsured/underinsured claim include an award of medical expenses?

C. In an uninsured/underinsured motorist claim does the insurer represent the uninsured/underinsured tortfeasor?" (Emphasis in original.)

This court granted both parties' applications for leave to appeal, and the parties filed separate appeals. In case No. 5-99-0599, Johnson appealed the trial court's dismissal of count II of her complaint. In case No. 5-99-0597, State Farm appealed the trial court's refusal to dismiss counts III and IV of Johnson's complaint. On the court's own motion, these cases were consolidated for disposition under case No. 5-99-0597.

Generally, an appeal under Rule 308 is limited to the question that is identified by the trial court. Jones v. City of Carbondale, 217 Ill. App. 3d 85, 576 N.E.2d 909 (1991). Where necessary, however, this court can go beyond the certified question to consider the appropriateness of the order giving rise to the appeal. In re Lawrence M., 172 Ill. 2d 523, 670 N.E.2d 710 (1996); Billerbeck v. Caterpillar Tractor Co., 292 Ill. App. 3d 350, 685 N.E.2d 1018 (1997). In the present case, we find it necessary to address the appropriateness of the trial court's order.

Johnson argues that the $22,000 awarded by the arbitrators was in excess of the $5,000 State Farm had already paid under the MPC and that State Farm improperly deducted the $5,000 from the arbitration award. She maintains that the authority of the arbitrators to enter an award was limited by the terms of the policy to enter an award for bodily injury only and that bodily injury, as defined by the policy, does not include medical expenses. Johnson contends that because a UM award cannot include medical expenses, the arbitrators' determination that she suffered damages in the amount of $22,000 could not have included the same $5,000 in medical bills that State Farm had already paid under her MPC. Johnson also argues that in determining the amount of damages, the arbitrators had the authority to consider other policy provisions that affect the total amount ...


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