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Willis v. United Equitable Insurance Co.

Court of Appeals of Illinois, First District, First Division

June 29, 2017

VALENTINA WILLIS and KATHY DOBSON WILLIS, Plaintiffs-Appellees,
v.
UNITED EQUITABLE INSURANCE COMPANY, Defendant-Appellant.

         Appeal from the Circuit Court of Cook County. No. 12 L 12756 Honorable Sophia H. Hall, Judge Presiding.

          JUSTICE HARRIS delivered the judgment of the court, with opinion. Presiding Justice Connors concurred in the judgment and opinion. Justice Mikva specially concurred, with opinion.

          OPINION

          HARRIS JUSTICE.

         ¶ 1 Defendant, United Equitable Insurance Company (UEIC), appeals the order of the circuit court granting summary judgment in favor of plaintiffs, Valentina Willis and Kathy Dobson Willis, on their declaratory judgment claim seeking coverage under UEIC's policy. On appeal, UEIC contends that the court erred in granting summary judgment because the clear terms of the policy require plaintiffs to both unequivocally demand arbitration and appoint an arbitrator within two years of the accident, which plaintiffs did not do. For the following reasons, we reverse and remand for further proceedings.

         ¶ 2 JURISDICTION

         ¶ 3 The trial court granted summary judgment in favor of plaintiffs on February 20, 2015. UEIC filed a notice of appeal on March 3, 2015. On March 22, 2016, this court entered a summary order finding that we lacked jurisdiction to review an appeal where an order has not been entered dismissing or otherwise disposing of UEIC's counterclaim. Willis v. United Equitable Insurance Co., 2016 IL App (1st) 150654-U, ¶ 8. Thereafter, UEIC filed a motion for a finding pursuant to Illinois Supreme Court Rule 304(a) (eff. Mar. 8, 2016), and the trial court entered an order with the requested Rule 304(a) language on August 19, 2016. UEIC filed a notice of appeal on August 24, 2016. Accordingly, this court has jurisdiction pursuant to Illinois Supreme Court Rule 303 (eff. May 30, 2008) and Rule 304(a) (eff. Mar. 8, 2016) governing appeals from final judgments entered below.

         ¶ 4 BACKGROUND

         ¶ 5 The following facts are relevant to the determination in this appeal. On August 5, 2008, Valentina's vehicle was involved in an accident with a stolen rental car from Hertz. Kathy was a passenger in Valentina's car when the accident occurred. At the time, Valentina's vehicle was insured through a policy issued by UEIC. Hertz denied coverage since its car had been stolen, so Valentina sought coverage under the uninsured motorist provision of her UEIC policy.

         ¶ 6 The policy's uninsured motorist coverage contains an arbitration clause stating that if "any person making claim hereunder" and UEIC "do not agree that both the vehicle(s) and the driver(s) of the vehicles [involved in the accident] were not covered by liability insurance at the time of the accident, or do not agree that [the insured] is legally entitled to recover damages from the owner or operator of an uninsured motor vehicle, *** or do not agree as to the amount payable hereunder, then these matters shall be submitted to arbitration." The arbitration clause further provides:

"Any dispute with respect to the coverage and the amount of damages shall be submitted for arbitration to the American Arbitration Association and be subject to its rules for the conduct of arbitration hearings as to all matters except medical opinions. Alternatively, such disputes shall be determined in the following manner: Upon the Insured or the Company requesting arbitration, the insured and the Company shall each select an arbitrator and the two arbitrators so named shall select a third arbitrator. ***If such arbitrators are not selected within 45 days from such request, either party may request that the arbitration be submitted to the American Arbitration Association."

         The UEIC policy also provides that "[i]n no event shall suit, arbitration or appraisal be commenced against the Company more than two years after the date of accident."

         ¶ 7 On August 26, 2009, Valentina's attorney, Jordan Rifis, sent a letter to Ray Aviles at UEIC stating that Valentina would seek "compensation under the uninsured motorist provision" of her UEIC policy. The third paragraph of the letter stated that "[w]e hereby make demand for arbitration if this claim is not resolved within two years after the accident." (Emphasis in original.) On September 11, 2009, Mr. Rifis sent another letter explaining that Hertz "is denying coverage since the person who rented their automobile and who was the only one authorized to drive their automobile was not the driver of the automobile at the time of the accident." The letter renewed the claim for uninsured motorist coverage under the policy and stated that "[w]e hereby make demand for arbitration if this claim is not resolved within one year after the accident." (Emphasis in original.)

         ¶ 8 On February 14, 2011, Mr. Rifis sent a letter stating that he had sent Valentina's medical bills and records to UEIC on December 30, 2010, and also "made a demand for arbitration under her policy." The letter further stated that "[s]ince Ms. Willis' uninsured motorist claim is still not resolved, I renew my request for arbitration." On September 18, 2012, Mr. Rifis filed a claim with the American Arbitration Association (AAA) requesting arbitration in the matter. UEIC rejected Valentina's uninsured motorist claim on September 25, 2012.

         ¶ 9 On November 9, 2012, Valentina filed a complaint against UEIC alleging breach of contract in bad faith. Kathy filed a motion to intervene as plaintiff, which the trial court allowed, and she filed her complaint on January 10, 2013, also alleging breach of contract in bad faith. Valentina subsequently changed counsel and amended her complaint. In her final amended complaint, she and her attorneys (1) alleged bad faith under section 155 of the Illinois Insurance Code (215 ILCS 5/155 (West 2012)), (2) requested a declaratory judgment that the UEIC policy "is in force" and "ordering this matter to uninsured motorist arbitration, " and (3) alternatively pled professional negligence on the part of Mr. Rifis for failure to select and/or name an arbitrator in writing within two years after the accident. Mr. Rifis, however, still represented Kathy, who filed an amended complaint alleging (1) breach of contract and (2) bad faith under section 155 of the Illinois Insurance Code (215 ILCS 5/155 (West 2012)). UEIC filed motions to ...


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