The opinion of the court was delivered by: Justice Karmeier
JUSTICE KARMEIER delivered the judgment of the court, with opinion.
Justices Freeman, Thomas, Garman, Burke, and Theis concurred in the judgment and opinion.
Chief Justice Kilbride dissented, with opinion.
¶ 1 The issue presented in this appeal is whether a two-year contractual limitation on claim arbitration in an auto insurance policy violates Illinois public policy where an Illinois insured was involved in an accident in Wisconsin with an uninsured motorist and that state has a three-year statute of limitations on the commencement of suit for injuries resulting from the accident. In the course of a declaratory judgment action filed by plaintiff, Country Preferred Insurance Company (hereafter Country Preferred), against its insured, defendant, Terri J. Whitehead, the circuit court of Will County denied Whitehead's motion to compel arbitration, and she took an interlocutory appeal from that order. A divided appellate court reversed and remanded, holding, under the circumstances, that the two-year limitation period in the parties' insurance contract violated Illinois public policy. 2011 IL App (3d) 110096. We granted Country Preferred's petition for leave to appeal (Ill. S. Ct. R. 315 (eff. Feb. 26, 2010)), and now reverse the judgment of the appellate court.
¶ 3 The following factual allegations are taken from the parties' pleadings in the declaratory judgment action initiated by Country Preferred on October 30, 2009.
¶ 4 In its complaint for declaratory judgment, Country Preferred stated that Whitehead claimed, "[o]n July 27, 2007," "she was in an automobile accident with a vehicle driven by Mario Lopez-Juarez in the town of Delevan, [sic] State of Wisconsin." Plaintiff alleged: "On October 6, 2009, Whitehead first advised Country Preferred that she was making a demand under the policy as a result of the accident." In support of the allegation, plaintiff attached a copy of a letter from Whitehead's counsel bearing that date. Plaintiff acknowledged that defendant's letter of October 6 "made a demand under the Policy in connection with the accident"; however, plaintiff concluded "it did not make a demand for arbitration or name an arbitrator."
¶ 5 The next paragraph of the complaint provides the policy language at issue in this controversy-the "conditions" section governing "uninsured-underinsured motorists" coverage:
"Legal Action Against Us. No suit, action or arbitration proceedings for recovery of any claim may be brought against us until the insured has fully complied with all the terms of this policy. Further, any suit, action or arbitration will be barred unless commenced within two years from the date of the accident."
¶ 6 The complaint alleged that Whitehead had two years from the date of the accident to make a written demand for uninsured-motorist arbitration-"or until July 27, 2009"-and, because she did not do so within the applicable two-year period, Country Preferred contended she is time-barred from ever making an uninsured-motorist claim under the policy.
¶ 7 Country Preferred requested findings that: (1) Whitehead had two years from the date of the accident to make a written demand for uninsured-motorist arbitration under the policy; (2) Whitehead is time-barred from making or pursuing any uninsured-motorist claim under the policy; and (3) Whitehead has no rights under the policy in connection with the accident.
¶ 8 In Whitehead's answer and counterclaim, filed January 11, 2010, she denied that she first advised plaintiff, by letter dated October 6, 2009, that she was making a demand under the policy. She denied that, as a result of the policy provision at issue, she had two years from the date of the accident to make a written demand for uninsured-motorist arbitration. Finally, Whitehead denied that, because she did not make a written demand for uninsured-motorist arbitration on or before July 27, 2009, she is time-barred from ever making an uninsured-motorist claim under the policy.
¶ 9 In her counterclaim, Whitehead provided factual allegations regarding the parties' communications after the accident. She attached to her pleading copies of all correspondence referenced therein.
¶ 10 According to Whitehead, following the accident, she made a claim with Country Preferred for uninsured-motorist coverage benefits, and Country Preferred assigned a claim number, 102-37190, and a claim representative, Andrea Dunmore. Dunmore, by letter dated October 17, 2007, advised Whitehead: "I need your assistance in settling your claim as quickly and fairly as possible." Enclosed with the letter was a form entitled "Notice of Claim Uninsured Motorist Coverage Underinsured." Whitehead stated that she signed the form provided by Country Preferred in the presence of a notary on November 9, 2007.
¶ 11 Whitehead stated that Dunmore did not settle her uninsured-motorist claim "as quickly and fairly as possible," as Whitehead received a subsequent letter from Dunmore, dated November 26, 2008, in which Dunmore asked Whitehead to "contact our office to discuss your open claim for bodily injury under your uninsured motorist coverage portion of your policy." She noted that the letter bore a different claim number than the one originally assigned to her claim.
¶ 12 Dunmore next wrote Whitehead on February 13, 2009, requesting that Whitehead contact Dunmore on her direct telephone line regarding the injury portion of Whitehead's "open Uninsured Motorist claim." In that letter, Dunmore asked Whitehead to submit itemized medical bills and a list of all medical providers so Country Preferred could "secure their corresponding medical reports" in order to "process and evaluate your claim." Dunmore observed: "Explanation of Benefits from your health insurance company are not medical bills." Whitehead alleged that a records authorization form was also enclosed with Dunmore's correspondence; however, Whitehead's pleading does not speak to its disposition.
¶ 13 Whitehead stated the next correspondence between the parties was a May 5, 2009, letter her attorney wrote to Dunmore advising the latter of counsel's representation. By a separate letter of the same date, counsel advised Dunmore that Whitehead had "placed in [counsel's] hands as her attorney, for collection a certain suit, claim, demand or cause of action against you growing out of the negligence of a certain uninsured motorist *** in an accident on or about July 21, 2007,"*fn1 and that counsel had been retained on account of "such suit, claim, demand or cause of action."
¶ 14 By letter dated May 12, 2009, Dunmore acknowledged counsel's lien concerning Whitehead's "claim" and requested that counsel forward "the specials, supporting material and your tax identification." Dunmore stated: "Upon receipt, I will give your client's claim prompt attention." Again, Whitehead's pleading does not speak to her response to that letter.
¶ 15 From the aforementioned factual allegations, Whitehead concluded that Country Preferred, through Dunmore, was "aware of" Whitehead's uninsured-motorist "claim" soon after the accident occurred-"at least as early as October 2007"-since "Country opened a claim file and sought the assistance of Whitehead to settle her claim." Whitehead acknowledged that Country Preferred apprized her, in correspondence, of its position that there was a two-year "statute of limitations" applicable to her "bodily injury uninsured motorist claim." Whitehead contended it was "vexatious and unreasonable for Country to advise its insured that she [had] a limited period of time to make a claim, which claim had been made and acknowledged by the insurer more than one year earlier."
¶ 16 In paragraph 20 of the first count of her counterclaim, Whitehead set forth what is, in essence, the position that led to the appeal presently before this court. We quote that paragraph, including its subparagraphs, in its entirety:
"20. The two year limitation in the policy Country sold to Whitehead has no application in connection with the July 21, 2007 Wisconsin motor vehicle accident involving Whitehead and ...