Court of Appeals of Illinois, First District, Third Division
INTERSTATE BANKERS CASUALTY COMPANY, a/s/o Jose Mendoza Gonzalez, and JOSE MENDOZA GONZALEZ, Plaintiffs-Appellants,
ALBERTO HERNANDEZ, Defendant-Appellee.
Appeal from the Circuit Court of Cook County. 12 M1 011661 The Honorable James E. Snyder, Judge Presiding.
COUNSEL FOR APPELLANTS: Beermann Pritikin Mirabelli Swerdlove LLP, of Chicago, IL (Alvin R. Becker, Deane B. Brown, Katherine A. Grosh).
COUNSEL FOR APPELLEE: Law Offices of Laura A. Holwell, of Chicago, IL (Laura A. Holwell, Christopher Holwell).
Presiding Justice Hyman and Justice Mason concurred in the judgment and opinion.
¶ 1 The issue presented to us in this case is whether the mandatory binding arbitration of insurance subrogation claims enacted under section 143.24d of the Illinois Insurance Code (215 ILCS 5/143.24d (West 2012)), effective January 1, 2012 (Pub. Act 97-513, § 5 (eff. Jan 1, 2012)), is unconstitutional because it violates the right to trial by jury. The constitutionality of section 143.24d is a matter of first impression.
¶ 2 BACKGROUND
¶ 3 On January 9, 2012, plaintiff, Jose Mendoza Gonzalez, was involved in a car accident with defendant, Alberto Hernandez, in Chicago, Illinois. On the date of the accident, Gonzalez was insured for collision coverage under a policy of automobile insurance issued by plaintiff Interstate Bankers Casualty (Interstate). Hernandez was insured by Unique Insurance Company.
¶ 4 On March 26, 2012, Gonzalez and Interstate, as Gonzalez's subrogee, brought a two- count negligence complaint, with a jury demand, against Hernandez. The complaint alleged that Interstate made payments to Gonzalez under its insurance policy as a result of the accident with Hernandez. Count I alleged that as a direct and proximate result of Hernandez's negligent acts, Interstate's subrogor Gonzalez suffered property damage to his vehicle in the amount of $1, 154.47, plus the costs of suit. Count II of the complaint alleged that as a direct and proximate result of Hernandez's negligent acts, Gonzalez suffered property damage to his vehicle and loss of use. Gonzalez sought judgment against Hernandez of $500, plus costs of suit.
¶ 5 On April 4, 2012, Hernandez filed a motion to dismiss pursuant to section 2-615 of the Illinois Code of Civil Procedure (735 ILCS 5/2-615 (West 2012)), arguing that the complaint should be dismissed because it is barred by section 143.24d of the Illinois Insurance Code (215 ILCS 5/143.24d (West 2012)), which became effective on January 1, 2012 (Pub. Act 97-513, § 5 (eff. Jan. 1, 2012)). In their response to the motion to dismiss, plaintiffs argued that section 143.24d is unconstitutional because it deprives plaintiffs of their constitutional right to trial by jury in a negligence action. Plaintiffs also argued that there was no way to adjudicate their property damage claim through the court system because section 143.24d requires arbitration unless both parties mutually agree to another forum and Hernandez did not agree to litigate the case in another forum.
¶ 6 On April 18, 2012, the circuit court entered an order allowing plaintiffs leave to file a brief in opposition to the motion to dismiss challenging the constitutionality of section 143.24d and required plaintiffs to provide a copy of their brief to the Illinois Attorney General as notification of the constitutional challenge. Defendant did not file a reply in support of his motion to dismiss. On September 27, 2012, the circuit court granted defendant's section 2-615 motion to dismiss both counts of plaintiffs' complaint with prejudice. Plaintiffs timely appealed.
¶ 7 ANALYSIS
¶ 8 Plaintiffs argue on appeal that dismissal of their complaint was improper because section 143.24d of the Illinois Insurance Code (215 ILCS 5/143.24d (West 2012)) is unconstitutional in that it violates the right to a jury trial. In reviewing the grant of a motion to dismiss, we accept as true all well-pleaded factual allegations. Majca v. Beekil, 183 Ill.2d 407, 416 (1998). The dismissal of a complaint pursuant to section 2-615 of the Illinois Code of Civil Procedure (735 ILCS 5/2-615 (West 2012)) is reviewed de novo. Also, whether a statute is constitutional is a question of law, which we also review de novo. People v. Devenny, 199 Ill.2d 398, 400 (2002). Illinois courts have not had an opportunity to pass on the constitutionality of this particular provision yet, and so the constitutionality of section 143.24d is a matter of first impression.
¶ 9 Section 143.24d requires the arbitration of physical damage subrogation claims between insurers pursuant to the Nationwide Inter-Company Arbitration Agreement (NICAA), where the amount in controversy, exclusive of the costs of arbitration, is less than $2, 500. 215 ILCS 5/143.24d(a) (West 2012). Notably, however, the enactment applies to all insurers, even those who did not agree to sign the NICAA, thus binding all insurance companies to this mandatory arbitration provision. Insurers are not required to sign the NICAA (215 ILCS 5/143.24d(b) (West 2012)), but they are bound to arbitration in accordance with the terms of and rules adopted pursuant to the ...