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Lauren Rein v. State Farm Mutual Automobile Insurance

March 4, 2011

LAUREN REIN,
PLAINTIFF-APPELLANT,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County. No. 09 CH 22568 The Honorable LeRoy K. Martin, Judge Presiding.

The opinion of the court was delivered by: Presiding Justice Garcia

PRESIDING JUSTICE GARCIA delivered the judgment of the court, with opinion.

Justices McBride and R.E. Gordon concurred in the judgment and opinion.

OPINION

The circuit court granted summary judgment to defendant State Farm Mutual Automobile Insurance Company in plaintiff Lauren Rein's declaratory action seeking a judgment that she was entitled to insurance coverage following an injury-causing, hitand-run accident. The circuit court held Rein's action was barred by State Farm's automobile policy provision requiring any arbitration or suit seeking uninsured motorist coverage be "commenced within two years after the date of the accident." Rein asserts her letter to State Farm sent six days before the two-year period expired, which stated her "intention to pursue an Uninsured/Underinsured Motorist Claim," timely commenced the arbitration proceedings based on the appellate court's most recent decision from the Fifth District interpreting a similar automobile policy provision.

We decline to follow the Fifth District case. Instead, we follow two older First District cases that rejected a similar contention by an insured that the arbitration process was timely commenced based on a letter sent by the insured's attorney that did not expressly request arbitration or disclose an arbitrator on the insured's behalf within two years of the accident as required by the express terms of the automobile insurance policy. Consequently, we affirm.

BACKGROUND

On April 5, 2007, Rein was injured in a hit-and-run, two-vehicle accident where the other driver was never identified. Rein was insured by a State Farm automobile insurance policy that provided coverage for bodily injury caused by the driver of an uninsured vehicle, including a " 'hit-and-run' land motor vehicle whose owner or driver remains unknown." On March 30, 2009, Rein's counsel gave notice to State Farm via facsimile and certified mail stating that he represented Rein with regard to her auto accident. No prior contact between Rein and State Farm regarding the accident is disclosed in the record. Counsel's letter stated in pertinent part:

"YOU ARE HEREBY NOTIFIED that it is our intention to pursue an Uninsured/Underinsured

Motorist Claim against State Farm Insurance under the above-captioned policy on behalf of Laura A. Rein. Please open a claim file on this matter.

Upon receipt of this letter, please contact the undersigned so we may discuss the matter in greater detail."

State Farm received the facsimile on March 30, 2009, and the certified letter on April 2, 2009. State Farm denied Rein's claim some time thereafter. Rein's letter made no mention of arbitration.

Rein filed a declaratory action on July 9, 2009, to compel

State Farm to arbitrate her uninsured motorist claim.

On December 1, 2009, State Farm moved for summary judgment pursuant to section 2-1005 of the Code of Civil Procedure (735 ILCS 5/2-1005 (West 2008)) contending Rein was barred from seeking arbitration by an express provision of the policy: "Under the uninsured motor vehicle coverages, any arbitration or suit against us will be barred unless commenced within two years after the date of the accident." State Farm argued Rein's letter did not "commence" arbitration within two years of the accident consistent with interpretations of similar limitations provisions by two First District cases: Buchalo v. Country Mutual Insurance Co., 83 Ill. App. 3d 1040, 404 N.E.2d 473 (1980), and Shelton v. Country Mutual Insurance Co., 161 Ill. App. 3d 652, 515 N.E.2d (1987).

Rein responded there is only one appellate court and the Fifth District case of Hale v. Country Mutual Insurance Co., 334 Ill. App. 3d 751, 778 N.E.2d 721 (2002), as the most recent explication on the issue, was controlling. Quoting Hale, Rein conceded her counsel's letter was "not perfect" but her implied intent to commence arbitration was sufficient. Hale, 334 Ill. App. 3d at 755.

State Farm urged the circuit court to disregard Hale, which gave a broader interpretation than Buchalo and Shelton to a similar limitations provision.

At oral arguments on the motion, Judge LeRoy K. Martin did not disagree with Rein's broad claim that a circuit court sitting in the First District was bound by all appellate court decisions regardless of the district. However, Judge Martin concluded that Hale conflicted with Buchalo and Shelton, which, as First District cases, he was bound to follow. Judge Martin granted summary judgment to State Farm.

This timely appeal ...


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