Appeal from the Circuit Court of Cook County. No. 03 M6 4332. Honorable Edward A. Antonietti, Judge Presiding.
The opinion of the court was delivered by: Justice Cunningham
Liberty Mutual Fire Insurance Company (Liberty Mutual) appeals from an order of the circuit court of Cook County granting James Costello's motion for judgment on the Arbitrator's award. On appeal, Liberty Mutual argues that the trial court erred by: (1) entering judgment on the Arbitrators award; (2) finding that Illinois law applied to the trial court proceedings; and 3) holding that the trial de novo clause of the policy was void and against public policy. For the following reasons we reverse the trial court and remand for further proceedings.
James Costello is an Indiana resident who purchased automobile insurance through Liberty Mutual, which is headquartered in Massachusetts, but does business in Indiana and Illinois. Included in the policy was a provision for damages inflicted by underinsured motorists. Under the endorsement entitled "underinsured motorist coverage," there was an arbitration endorsement which provided as follows:
A. If we and an 'insured' do not agree:
1. Whether that 'insured' is legally entitled to recover damages; or
2. As to the amount of damages which are recoverable by that 'insured'; from the owner or operator of an 'uninsured motor vehicle,' then the matter may be arbitrated. However, disputes concerning coverage under this endorsement may not be arbitrated. Both parties must agree to arbitration. If so agreed, each party will select an arbitrator. The two arbitrators will select a third. If they cannot agree within 30 days, either may request that selection be made by a judge of a court having jurisdiction.
1. Pay the expenses it incurs; and
2. Bear the expenses of the third arbitrator equally.
C. Unless both parties agree otherwise, arbitration will take place in the county in which the 'insured' lives. Local rules of law as to procedure and evidence will apply. [Emphasis added] A decision agreed to by two of the arbitrators will be binding as to:
1. Whether the 'insured' is legally entitled to recover damages; and
2. The amount of damages. This applies only if the amount does not exceed the minimum limit for liability specified by the financial responsibility law of Indiana. If the amount exceeds that limit, either party may demand the right to a trial. This demand must be made within 60 days of the arbitrators' decision. If ...